Item 1A. Risk Factors
RISK FACTORS
The below is a summary of principal risks to our business and risks associated with ownership of our common stock. The risks and uncertainties described below should be carefully considered, together with all other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock. Our business, results of operations, financial condition, or prospects could also be harmed by risks and uncertainties not currently known to us or what we currently do not believe are material. In the event that any of the risks actually occur, our business, results of operations, financial condition, and prospects could be adversely affected and could lead to a decline in the market price of our common stock.
Risk Factors Summary
The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 1A “ Risk Factors ” in this Annual Report for a more thorough description of these and other risks.
• We have not yet constructed any powerhouses or entered into any binding power purchase agreement with any customer to operate a plant or deliver electricity or heat, and there is no guarantee that we will be able to do so in the future. Our limited commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounter, and our total potential addressable market.
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• We are an early‑stage company with a history of financial losses (i.e., negative cash flows), and we expect to incur significant expenses and continuing financial losses at least until our powerhouses become commercially viable, which may never occur.
• Acquisitions, divestitures, or joint ventures involve unknown risks and could result in operating difficulties or other consequences that may have adverse effects on our business and operating results.
• Our powerhouses, like many advanced fission reactors, are expected to rely at least in part on HALEU or plutonium-based fuels, either partially or for a period of time until recycled used nuclear fuel is available. HALEU and plutonium-based fuels are not currently available at scale.
• Building new fuel fabrication facilities (including plutonium-based fuel fabrication facilities) and new fuel recycling facilities is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
• We rely on a limited number of suppliers for certain materials and supplied components, some of which are highly specialized and are being designed for first‑of‑a‑kind or sole use in our powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotopes facilities.
• Our business operations rely heavily on securing agreements with suppliers for essential materials and components that will be used to construct our powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotope production facilities.
• Our ability to enter into agreements with potential new customers to provide power may be limited by certain terms, including purchase options, rights of first refusal, rights of first offer, and “most favored nation” provisions, of our existing agreements and future agreements into which we may enter.
• Customers and other third parties may rescind or back out of non‑binding agreements for various reasons, which could adversely affect our revenue streams, project timelines, and overall financial performance.
• We depend on key executives, management, directors, and other highly skilled personnel to execute our business plan and conduct and oversee our operations, as applicable. The departure of key personnel or our failure to successfully recruit and retain skilled personnel could have a material adverse effect on our business.
• Power purchase agreements are a key component of our anticipated business model for sales of power, and customers may be able to void all or part of these contracts under certain circumstances, which could significantly impact our financial performance and operational stability.
• There is limited precedent for independent developer construction and operation, use of power purchase agreements, and other behind‑the‑meter or off‑grid business models relating to deployment of fission power plants.
• There is limited commercial operating experience for the facilities of the type, configuration, and scale we plan to employ, particularly when comparing our metal‑fueled fast reactors to that of the existing fleet of large light water reactors, which creates risks in cost and timeline estimates. The lack of recent domestic commercial experience, particularly with respect to labor and supply chain management, and other factors may result in greater than expected development and construction costs, deployment timelines, maintenance requirements, differing power output, and greater operating expenses.
• Competition from existing or new competitors or technologies domestically and internationally could cause us to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.
• Our investment in recycling may not provide the return we expect. The market for recycled nuclear fuel in the U.S. may never be established or may be smaller or grow more slowly than expected.
• Our business plan primarily involves the concurrent development of two configurations of our powerhouses (i.e., 15 MWe and 75 MWe), may also include the development of other configurations of our powerhouses (e.g., 100 MWe and higher), and makes certain assumptions with respect to learnings, efficiencies and regulatory approvals as a result of this development approach, which may not be accurate or correct. Any adverse change to these assumptions may have a material adverse effect on our business, results of operations, and financial condition.
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• We and our customers operate in a politically sensitive environment, and negative public and political perceptions of us, or more generally, of nuclear energy and radioactive materials could materially and adversely affect us, our customers, and the markets in which we operate.
• Our use of technologies and systems that employ artificial intelligence or large language models, given the dynamic state of such technologies, may cause inadvertent or unexpected impacts that may harm our business.
• Our ability to protect our patents and other intellectual property rights may be challenged and is not guaranteed. If we are unable to protect our intellectual property rights, our business and competitive position may be harmed.
• If we or our third-party providers fail to protect confidential information and experience data security incidents, we may experience adverse effects, including regulatory enforcement consequences, on our business, results of operations, and financial condition.
• Our cost estimates are highly sensitive to broader economic factors, and our ability to control or manage our costs may be limited. Building new powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotope production facilities is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
• Our business is, and the markets in which we compete are, rapidly evolving, including with respect to artificial intelligence products, which make it difficult to forecast demand for our power.
• The nature of our business requires us to interact with various governmental entities, making us subject to the policies, priorities, regulations, mandates, and funding levels of such governmental entities and we may be negatively or positively impacted by any change thereto.
• Our powerhouses, fuel fabrication facilities (including plutonium-based fuel fabrication facilities), fuel recycling facilities, and radioisotope production facilities will be highly regulated by the U.S. government, including the NRC and DOE, as well as foreign, state, and local governments. We have not received any approval or licensing to date, nor have we submitted our updated custom combined license application (“COLA”) to the NRC, and approval or licensing of these designs or facilities, and the timing of such approval or licensing, if any, is not guaranteed. Our potential international expansion will subject us to additional U.S. and foreign regulations.
• Changes to trade policies, including higher tariffs, restrictions, and other economic disincentives to trade, may lead to operational delays, higher procurement and operational costs, and increased regulatory and compliance complexities, resulting in supply chain disruptions and higher prices and lower demand for devices and services we sell.
• We will require additional future funding to support our operations and implementation of our growth plans.
• The market price of our common stock is, and could remain, highly volatile. Purchasers of our common stock could incur substantial losses.
• Our failure to effectively implement controls and procedures required by Section 404(a) of the Sarbanes‑Oxley Act could negatively impact our business.
Risks Related to Our Business and Operations
We have not yet constructed any powerhouses or entered into any binding power purchase agreement with any customer to operate a plant or deliver electricity or heat, and there is no guarantee that we will be able to do so in the future. Our limited commercial operating history makes it difficult to evaluate our prospects, the risks and challenges we may encounter, and our total potential addressable market.
Our business plan to construct and operate our powerhouses is subject to reaching binding agreements with potential customers for electricity or heat delivered by our powerhouses. If no potential near‑term customer enters into binding power purchase agreements with us, our planned construction and operation of our powerhouses could be significantly delayed. Such delays would result in delayed revenue and could hinder our ability to gain market traction with other potential customers. This could have a material adverse effect on our business and financial condition. We have entered into contingent, non‑binding agreements related to the purchase of power with potential customers, which may not result in binding agreements for the purchase of electricity or heat from our powerhouses. In addition, we have been tentatively selected to provide electricity and heat to Eielson Air Force Base, outside of Fairbanks, Alaska; however, this has not been
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finalized and is subject to our completion of various requirements set forth by the U.S. Air Force. As a result of our limited commercial operating history and ongoing changes in our new and evolving industry, including evolving demand for our products and services and the potential development of technologies that may prove more efficient or effective for our intended use cases, our ability to forecast our future results of operations and plan for and model future growth is limited and subject to a number of uncertainties. Therefore, there can be no assurance that our internal estimates relating to the size of our total addressable market will be correct. In addition, our expectations with respect to our total potential addressable market may differ from those of third parties, including investors or securities analysts.
We have a limited commercial operating history in a rapidly evolving industry. The markets for electricity and heat generated by nuclear power plants, nuclear reactor design, nuclear reactor production, nuclear fuel design, nuclear fuel supply, used nuclear fuel recycling, nuclear fuel fabrication, nuclear waste management, and services related to any or all of the foregoing may not continue to develop in a manner that we expect or that otherwise would be favorable to our business. We have encountered and expect to continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly evolving industries. Accordingly, we may be unable to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as a result of a range of supply chain, geopolitical, macroeconomic, and design complexities, delays, changed circumstances, or changed market conditions arising from these factors, and our results of operations in future reporting periods may be below the expectations of investors or analysts. If we do not address these risks successfully, our results of operations could differ materially from our estimates and forecasts or the expectations of investors or analysts, causing our business to suffer and our common stock price to decline.
We have limited experience in operating a company that builds and operates commercial nuclear power plants or that directly provides customers heat or power.
We have limited experience operating a company that builds, operates, or maintains commercial nuclear power plants or that directly provides customers with energy as electricity or heat. Our management may not be fully aware of many of the specific requirements of operating such a company. We believe our primary business approach of providing power directly to customers as opposed to licensing designs or selling powerhouses is unique in the nuclear power industry. As a result of our business model and the lack of experience of our management, our management’s decisions and choices may not take into account standard managerial approaches that commercial nuclear power companies commonly use, some of which may not be directly relevant to our business. Our operations, earnings, and ultimate financial success could suffer due to our management’s lack of experience.
We are an early‑stage company with a history of financial losses (i.e., negative cash flows), and we expect to incur significant expenses and continuing financial losses at least until our powerhouses become commercially viable, which may never occur.
We expect our operating expenses to increase over the next several years and to continue to incur operating losses for the foreseeable future as we continue to expand and develop, and we may need additional capital from external sources.
Our construction and delivery timeline estimates for our powerhouses, facilities, and other equipment may be extended due to a number of factors, including the degree of pre‑fabrication, standardization, on‑site construction, long‑lead procurement, contractor performance, supply chain constraints, plant pre‑operational and startup testing, and other site‑specific considerations.
The success of our business will depend in large part on our ability to successfully construct our powerhouses and deliver heat and electricity to potential customers on‑time and on‑budget at guaranteed performance levels, which may encourage subsequent customers to have greater confidence in our business. The success of our business will also depend in part on our ability to construct fuel fabrication and recycling facilities. There is no guarantee that all necessary components will be commercially available, and substantial development of new supply chains might be necessary. Additionally, we cannot guarantee the level of quality of these third‑party supplies or import and export requirements or limitations that might be stipulated by the NRC or DOE for the procurement of these components. There is no guarantee that the planned construction, delivery, and performance of our powerhouses or the equipment we need to fabricate and recycle fuel will be successfully manufactured, delivered in a timely manner, or be on budget or that our third‑party suppliers and contractors will deliver timely or on budget; plant pre‑operational and startup testing, including tests mandated as license conditions by the NRC, will be successfully completed on‑time; we will not experience , operational or process , or other during our first commercial deployment or any planned deployment thereafter; or the construction of our fuel fabrication and recycling facilities will be completed at the cost and on the timeline we expect. We depend, and will continue to depend, on third‑party contractors to perform many of the essential activities needed to deploy our powerhouses. We do not directly control the performance of these contractors and our contracts with them may not provide adequate remedies if they to perform. We are starting to employ risk-sharing structures to mitigate the risks associated with the construction, delivery, and performance of our powerhouses and our fuel fabrication and fuel recycling facilities. Any or we may experience for our first commercial delivery or in establishing our fuel fabrication or
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recycling facilities as well as any failure to obtain final investment decisions for future orders could have a material adverse effect on our business, results of operations, and financial condition and could harm our reputation.
Acquisitions, divestitures, or joint ventures involve unknown risks and could result in operating difficulties or other consequences that may have adverse effects on our business and operating results.
Acquisitions, divestitures, or joint ventures, including our acquisition of Atomic Alchemy, may fail to achieve their intended results, and their activities may disrupt or have a negative impact on the Company’s business or to our financial condition and operating results. The pursuit of acquisitions, divestitures, or joint ventures could create unforeseen operating difficulties and expenditures. Some of the areas in which we face risks include:
• diversion of management time and focus from operating our business to challenges related to acquisitions, divestitures, and other strategic arrangements;
• failure to complete acquisitions, divestitures, or joint ventures on a timely basis, if at all, could restrict our ability to realize the expected financial or strategic goals of a transaction;
• failure to successfully integrate the acquired operations, technologies, services, and personnel (including cultural integration and retention of employees) and further develop the acquired business or technology;
• implementation of accounting controls (or remediation of financial control deficiencies), procedures, and policies at the acquired company;
• integration of the acquired company’s accounting, human resources, and other administrative systems, and the coordination of product, engineering, and sales and marketing functions;
• transition of the acquired company’s operations, users, and customers onto our existing platforms;
• failure to accomplish commercial, strategic, or financial objectives with respect to investments, joint ventures, and other strategic arrangements;
• liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, data privacy and security issues, violations of laws, commercial disputes, employment disputes, tax liabilities, warranty claims, product liabilities, and other known and unknown liabilities; and
• litigation or other claims in connection with the acquired company, including claims from former employees, customers, former stockholders, or other third parties.
Our failure to address these risks or other problems encountered in connection with our past or future acquisitions, divestitures, and other strategic arrangements could cause us to fail to realize their anticipated benefits, incur unanticipated liabilities, and harm our business generally.
Our acquisitions and other strategic arrangements could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or impairment of goodwill and/or purchased long-lived assets, and restructuring charges, any of which could harm our financial condition and operating results.
Our powerhouses, like many advanced fission reactors, are expected to rely at least in part on HALEU or plutonium-based fuels, either partially or for a period of time until recycled used nuclear fuel is available. HALEU and plutonium-based fuels are not currently available at scale. Access to a domestic supply of HALEU or plutonium-based fuel requires regulatory approval, and may require additional third‑party development and investment and/or significant government assistance. If we are unable to access HALEU, plutonium-based fuels, or recycled used nuclear fuel, our ability to manufacture fuel and to produce power will be adversely affected, which could have a material adverse effect on our business, results of operations, and financial condition .
Existing commercial nuclear infrastructure, including enrichment facilities and fuel fabrication facilities, in most cases were designed and are currently licensed to produce uranium in pellet and rod form, with enrichment of the isotope Uranium 235 up to 5%, according to the World Nuclear Association and NRC. Our powerhouses are expected to rely, in part, on HALEU or plutonium-based fuels that are not currently available at scale domestically.
Supplying fresh HALEU to our powerhouses could require continued modifications to, and NRC licensing of, existing commercial uranium enrichment and fuel fabrication facilities, none of which are currently owned or operated by us. Currently, HALEU for our commercial powerhouses is available only in limited quantities globally. In the U.S., HALEU
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can be sourced in small amounts from the DOE, and a small but growing supply is being produced domestically and made available at high prices by Centrus Energy Corp. (“Centrus”) and others.
Despite U.S. government initiatives, including $700 million in funding for HALEU development (supported by the Energy Act of 2020 and the Inflation Reduction Act of 2022) and the DOE’s request for proposals to purchase low-enriched uranium (LEU) from domestic sources on June 27, 2024, the HALEU program is still in its early stages, and significant progress is required to achieve reliable and scalable production. It is possible that the U.S. government may release feedstock, initially in the form of highly enriched uranium (HEU), that could be down-blended to HALEU for commercial use. However, the ability to process HEU into HALEU is currently limited to a few licensed third parties in the U.S., and these entities do not yet produce commercial-scale HALEU. Additionally, these third parties may require regulatory approvals, infrastructure modifications, and process changes to scale up their operations. Additionally, some industry participants may be slow to implement required infrastructure upgrades or to obtain NRC licenses or other regulatory approvals needed to enable the enrichment and fabrication of HALEU. These challenges could impair our ability to secure adequate HALEU supplies on a predictable schedule and at an acceptable cost.
In addition to HALEU, we are evaluating the use of alternative fuel materials, including plutonium currently designated for the DOE’s dilute-and-dispose programs, that may be made available by the U.S. government for use in advanced reactor applications. Plutonium-based fuel supply originates from U.S. government reserves of plutonium declared excess to defense needs, and the use of plutonium-based fuels may be subject to increased fuel certifications, regulatory uncertainty, cost recovery requirements, secure transportation requirements, and security and proliferation concerns. Delays in obtaining HALEU or plutonium-based fuels could impact key activities such as fuel loading, testing, and operation of our powerhouses, potentially exposing us to cost and scheduling uncertainties. Any such delays may negatively affect the ability of our powerhouses to effectively compete in the market for power and heat production.
Building new fuel fabrication facilities (including plutonium-based fuel fabrication facilities) and new fuel recycling facilities is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
We have received initial third‑party cost estimates related to building our pilot scale fuel fabrication facility and our first‑of‑a‑kind new commercial scale fuel fabrication facility, and we are beginning to plan for construction of our first-of-a-kind new fuel recycling facility. Costs may ultimately be significantly higher than our current estimates, which may affect the marketability, capital and operational costs of our powerhouses, and our expectations with respect to our business plan and future profitability. If these issues arise at such later stages of deployment, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely affect our business, results of operations, and financial condition.
Our estimates for a fuel recycling facility are based upon studies performed at the U.S. national labs and work that is underway through a series of joint Oklo-DOE projects. However, costs may be significantly higher than our current estimates, both in terms of the capital and operational costs of our recycling facilities. There is limited experience with licensing and constructing fuel recycling facilities at commercial scale in the U.S. As a result, the deployment of this facility could be subject to higher costs than expected or be significantly delayed, which could materially and adversely affect our business, results of operations, and financial condition.
We rely on a limited number of suppliers for certain materials and supplied components, some of which are highly specialized and are being designed for first‑of‑a‑kind or sole use in our powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotopes facilities. We and our third‑party vendors may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating needs or obtain such materials on favorable terms including price. Additionally, certain components may only be available from international suppliers.
We do not have manufacturing assets and will rely on third-party manufacturers and construction firms to build powerhouses, fuel fabrication facilities, recycling facilities, radioisotope facilities, and associated equipment. These capabilities and the facilities involve risks including timeline, cost, and financing risk and even if successfully developed, such capabilities will not be available at scale for our earliest powerhouse deployments. Moreover, we are dependent on future supplier capability to meet production demands attendant to our forecasts. If our supply chain cannot meet the schedule demands of the market, our projected sales revenues could be materially impacted. In addition, certain transactions or arrangements that we expect to pursue may not be consummated with third-party suppliers on acceptable terms, or at all, which could delay or prevent the execution of planned business operations.
We rely on a limited number of suppliers for certain materials and supplied components. We may not be able to obtain sufficient materials or supplied components to meet our manufacturing and operating needs, or obtain such materials on favorable terms, which could impair our ability to fulfill our orders in a timely manner or increase our costs of production.
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We do not have significant prior experience in the manufacture of any of the components of radioisotopes facilities, fuel fabrication facilities, fuel recycling facilities, or powerhouses. We have done prototypic fabrication work and are working to establish manufacturing capabilities for components as well as the deployment of a manufacturing facility. Our suppliers’ ability to manufacture components for our radioisotopes facilities, fuel fabrication facilities, fuel recycling facilities, and powerhouses is dependent upon sufficient availability of materials and possibly other supplied components, some of which are highly specialized and are being designed for first‑of‑a‑kind or sole use in our radioisotopes facilities fuel fabrication facilities, fuel recycling facilities, and powerhouses. Any supply chain disruption incurred by our third‑party suppliers or degradation in the quality and processes of our manufacturer partners, may result in delays, cost overruns, or impairments to the development of our radioisotopes facilities, fuel fabrication facilities, fuel recycling facilities, and powerhouses.
Additionally, certain components may only be available from international suppliers, and the imposition of sanctions, tariffs, or material changes in import and export requirements on a nation‑by‑nation basis, on materials or supplied components for our facilities could have a material adverse effect on our operations. Prolonged disruptions in the supply of any of our key materials or components, difficulty qualifying new sources of supply, implementing the use of replacement materials or new sources of supply or any volatility in prices could have a material adverse effect on our ability to operate in a cost‑efficient, timely manner. Such prolonged disruptions could also cause us to experience cancellations or delays of scheduled launches, customer cancellations or reductions in our prices and margins, any of which could harm our business, results of operations, and financial condition.
Our business operations rely heavily on securing agreements with suppliers for essential materials and components that will be used to construct our powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotope production facilities.
The execution, termination, expiration, or failure to renew agreements with our suppliers, including, but not limited to, Siemens Energy, Inc., Amentum Technology Inc., Kiewit, and Centrus, whether due to unforeseen circumstances such as supplier insolvency and regulatory changes or other circumstances, pose significant risks to our supply chain. In the event that such agreements are not successfully maintained or replaced, we may encounter difficulties sourcing required materials and components, leading to deployment delays, increased costs, or an inability to meet customer demand. Any interruption or inability to maintain relationships with current and future suppliers, or failure to secure materials from alternative suppliers, could adversely impact our business, results of operations, and financial condition.
Our ability to enter into agreements with potential new customers to provide power may be limited by certain terms, including purchase options, rights of first refusal, rights of first offer, and “ most favored nation ” provisions, of our existing agreements and future agreements into which we may enter.
Some of our agreements with third parties have contained, and may in the future contain, restrictive contractual provisions in favor of third parties, including, but not limited to, purchase options, rights of first refusal, rights of first offer, and “most favored nation” pricing provisions (collectively, “restrictive contractual provisions”). Such restrictive contractual provisions may adversely affect our ability to enter into agreements with third parties for the purchase of power, limit the amount we are able to charge for our power, prevent us from entering into relationships with potential customers, and negatively impact future revenues. If we do not successfully manage compliance with these restrictive contractual provisions, we may be required to forego revenues from some third parties or reduce the amount we charge certain third parties with most favored nation pricing, which would adversely affect our business, results of operations, and financial condition.
In addition, disputes or legal proceedings relating to such restrictive contractual provisions may arise, which may result in the incurrence of legal costs and diversion of management resources to resolve.
Customers and other third parties may rescind or back out of non‑binding agreements for various reasons, which could adversely affect our revenue streams, project timelines, and overall financial performance.
We have entered into, and may enter into additional non‑binding agreements, such as master power agreements, joint development agreements, memoranda of understanding, and letters of intent, with customers for the purchase of power or to collaborate on projects. Many of these agreements are non‑binding and the underlying contracts may not come to fruition as a result of, among other things, changes in business priorities, financial constraints, regulatory changes, force majeure events, failures to obtain necessary approvals, or failures to meet contractual obligations by either party. The termination of such agreements could adversely affect our business, results of operations, and financial condition. Additionally, any loss of planned customers or projects may result in reputational harm and negatively impact our future business prospects.
Some members of our management team have limited experience in operating a public company.
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Some of our executive officers have limited experience managing a publicly traded company. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage. It is likely that an increasing amount of our executive officers’ time will be devoted to public company management activities, which may result in less of their time being devoted to our day-to-day operations and growth. We may need to add additional personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices, or internal controls over financial reporting to maintain compliance with requirements for public companies in the U.S. The development and implementation of the standards and controls necessary for us to maintain the level of accounting standards required of a public company in the U.S. may require costs greater than expected. We may be required to expand our employee base and hire additional employees to support our operations as a public company, which will increase our operating costs in future periods.
We depend on key executives, management, directors, and other highly skilled personnel to execute our business plan and conduct and oversee our operations, as applicable. The departure of key personnel or our failure to successfully recruit and retain skilled personnel could have a material adverse effect on our business.
Our success depends, in significant part, on the continued services of our senior management team and directors and on our ability to attract, motivate, develop, and retain a sufficient number of other highly skilled personnel, including engineering, science, technology, manufacturing, and quality assurance, regulatory affairs, finance, legal, procurement, marketing, and sales personnel. Our senior management team and directors have extensive experience in the energy and manufacturing industries, and we believe that their depth of experience is instrumental to our continued success. The loss of one or more members of our senior management team or directors, for any reason, including resignation or retirement, could impair our ability to execute our business strategy and have a material adverse effect on our business, results of operations, and financial condition if we are unable to successfully attract and retain qualified and highly skilled replacement personnel.
Competition for the limited number of these skilled personnel is intense. If we are unable to adequately anticipate our needs for certain key competencies and implement human resource solutions to recruit or improve these competencies, our business, results of operations, and financial condition would suffer. Additionally, to properly manage our growth and the scale of our business operations, we will need to hire additional personnel at an accelerated rate. If we are unable to recruit and retain highly skilled personnel, especially personnel with sufficient technical expertise to develop our powerhouses, fuel fabrication facilities, recycling facilities, and fuel, we may experience delays, increased costs, and reputational harm.
Increases in our contractor and labor costs as a result of labor unions organizing, changes in regulations related to labor unions, or increases in employee minimum wages, could adversely affect our future results.
Labor unions may attempt to organize our employees in the future. Certain groups of employees may seek union representation in the future, and, if successful, would enhance organized labor’s leverage to obtain higher than expected wage and benefits costs and resist the introduction of new technology and other initiatives, which can result in increased operating expenses. If we are unable to negotiate acceptable collective bargaining agreements, our operating expenses could increase significantly as a result of work stoppages, including strikes. Additionally, increases in minimum wage rates, or the enactment of new wage-related legislation, may significantly increase our labor costs. Any of these matters could adversely affect our business, results of operations, and financial condition.
Power purchase agreements are a key component of our anticipated business model for sales of power, and customers may be able to void all or part of these contracts under certain circumstances, which could significantly impact our financial performance and operational stability. We may need to find substitute customer power and/or heat offtake or may need to cancel licensing work related to particular customers and sites as a result of changes in customer demand or contracts with customers.
In our power purchase agreements with customers, we will seek to protect ourselves from risks, but there is no guarantee that we can prevent all customers from voiding our contracts in full or in part.
Customers may have the right to terminate or renegotiate these contracts based on a number of factors that will be specified on an agreement‑by‑agreement basis. Given the risk that a customer might void, or attempt to renegotiate, a power purchase agreement, we might ultimately expend resources on a deployment that does not realize expected revenue. Depending on the stage of development of the deployment we may be required to cancel licensing and procurement efforts, resulting in a loss of our investment to that point. Additionally, we may be forced to find substitute customers, which may not purchase energy on as favorable of terms, reducing the expected revenue of the deployment. Attracting new customers could be time‑consuming, and there is no guarantee that we will be able to secure new power purchase agreements on terms that are as favorable as original agreements with certain customers.
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Fluctuations in energy prices could impact the viability of our power purchase agreements, especially if the contract prices are fixed or based on long-term projections. Rapid changes in the energy markets might render our pricing less competitive or less profitable.
Power purchase agreements may include penalties for not delivering sufficient electric and/or heat energy on schedule, which may result in liabilities and reductions in cash flow.
A term occasionally used in power purchase agreements involves penalties that may accrue if either party fails to meet the stipulations of the relevant agreement, including penalties for the power producer, in this case the Company, if adequate power is not provided on time. Such penalties may adversely impact our profitability and financial stability. Additionally, such penalties might lead to cash flow reductions as our financial resources are diverted to remediate. Reduced cash flow may inhibit our ability to invest in growth opportunities, fund operational expenses, and service any future indebtedness, among other financial impacts. Incurring penalties may also harm our reputation in the market, and may put us at a competitive disadvantage to our competitors.
There is limited precedent for independent developer construction and operation, use of power purchase agreements, and other behind‑the‑meter or off‑grid business models relating to deployment of fission power plants.
The deployment of fission power plants by independent developers, as well as the utilization of power purchase agreements and other behind‑the‑meter or off‑grid business models, is relatively novel in the energy industry. As a result, our business faces certain risks and challenges due to the novelty of the business model. The absence of prior experiences may introduce uncertainties that could impact our business projections and subsequent performance. Additionally, the novelty of this business approach, or the perception thereof, might lead to higher perceived risks and, consequently, less favorable financing terms, commercial terms, or higher uncertainty in risk assessments, which may increase the potential for cost overruns and deployment delays.
The unfamiliarity of independent developer fission power plants and alternative business models might affect market acceptance. Potential customers and stakeholders may hesitate to adopt our approach, which could slow market penetration and revenue growth.
Some of our powerhouses may rely on interconnections to distribution and transmission facilities owned and operated by third parties, meaning that those specific deployments are exposed to interconnection and transmission facility development and curtailment risks. Such curtailment risks could impede delivery of our electricity, have a material adverse effect on our revenue and operational performance, occur without compensation, and reduce our ability to fully capitalize on the potential of certain deployments.
Insurers may perceive higher risks associated with limited precedent projects, potentially leading to increased insurance premiums or difficulties in obtaining adequate coverage.
If we fail to manage our growth effectively, we may be unable to execute our business plan, which may result in a material adverse effect on our business, results of operations, and financial condition.
We intend to expand our operations significantly to address our target market. To properly manage our growth, we will need to hire and retain additional personnel, upgrade our existing operational management and financial and reporting systems, and improve our business processes and controls. Our future expansion will include (among other matters):
• hiring and training new personnel;
• completing the designs, licensing, construction, and commissioning of our powerhouses, fuel fabrication facilities (including plutonium-based fuel fabrication facilities), fuel recycling facilities, and radioisotope facilities;
• optimizing applications of our reactors to serve both electric power customers and a broad base of industrial customers interested in utilizing the heat produced by our powerhouses;
• progressing production of radioisotopes by Atomic Alchemy, assessing options to scale production, developing and executing plans to progress the RPP deployment for this business;
• expanding and maintaining quality assurance standards and procurement procedures across our business;
• developing the supply chain necessary to supply components for our powerhouses and other facilities;
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• establishing the supply chain required to source and obtain fuel at acceptable costs;
• developing the processes and technologies to transport radiological materials;
• controlling expenses and investments in anticipation of expanded operations;
• developing the operational capabilities, capacities, and functions necessary to operate our powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotope production facilities;
• prioritizing resources and attention across multiple concurrent critical projects;
• upgrading existing operational management and financial reporting systems and hiring additional personnel to comply with requirements as a public company; and
• implementing and enhancing administrative and functional infrastructure, systems, and processes.
If our operations continue to grow, of which there can be no assurance, we will need to continue to expand our sales and marketing, research and development, customer, commercial strategy, permitting and licensing, products and services, manufacturing, supply, operations, and general and administrative functions. These efforts will require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date. We will also need to continue to develop our manufacturing and operational systems and processes, and there is no guarantee that we will be able to scale the business as currently planned or within the planned timeframe. The continued expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations for such facilities.
Our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring and training employees, finding capacity internally and with third parties to construct our powerhouses and related equipment, delays in production, challenges in scaling‑up fuel recycling capacity, and difficulty sourcing adequate raw materials, such as HALEU. These difficulties may divert the attention of management and key employees and impact our business, results of operations, and financial condition. If we are unable to drive commensurate growth, costs, which include, among other things, lease commitments, headcount, and capital assets, could result in decreased margins, which could have a material adverse effect on our business, results of operations, and financial condition.
There is limited commercial operating experience for the facilities of the type, configuration, and scale we plan to employ, particularly when comparing our metal‑fueled fast reactors to that of the existing fleet of large light water reactors, which creates risks in cost and timeline estimates. The lack of recent domestic commercial experience, particularly with respect to labor and supply chain management, and other factors may result in greater than expected development and construction costs, deployment timelines, maintenance requirements, differing power output, and greater operating expenses.
The lack of commercial experience designing, building, and operating metal-fueled fast reactors like ours could cause us to fail to identify latent design, manufacturing, construction, and operations issues of our powerhouses early enough to avoid negative effects on production, fabrication, construction, or ultimate performance of our powerhouses and related technologies. If these issues arise at later stages of development, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely affect our business, results of operations, and financial condition.
Moreover, the cost and time associated with the construction and maintenance of our metal‑fueled fast reactors may be greater than we expect because of a lack of a domestic labor force with relevant commercial experience and an inexperienced supply chain for this type of reactor. Suppliers, contractors, and service providers often lack relevant commercial experience and price components, labor, and services based on assumptions applicable to NRC-licensed large light water reactors. These pricing assumptions take into account regulatory, quality assurance, and compliance requirements that may not be applicable to our metal-fueled fast reactors, including in cases where we pursue alternative regulatory pathways such as through the DOE. Such misalignment between our regulatory framework and supplier pricing models may result in higher procurement costs and extended procurement timelines. Significant portions of our supply chain are being developed specifically to support our metal-fueled fast reactor technology rather than relying on an established commercial supply base tailored toward serving the existing fleet of large light water reactors.
In addition, there is limited recent commercial operating experience in the U.S. with fuel recycling, fuel fabrication, and radioisotope production facilities of the type and scale we intend to deploy. This lack of commercial operating experience could cause us to fail to identify latent design, manufacturing, construction, and operations issues of our facilities early
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enough to avoid negative effects on production, fabrication, construction, or ultimate performance of our fuel recycling, fuel fabrication, and radioisotope production facilities and related technologies. We may encounter unforeseen challenges in scaling processes for such facilities to commercial production. The longer lead times and reduced pricing transparency we face increases construction and operating costs and impairs our ability to accurately forecast project budgets and schedules, heightening the risk of cost overruns and project delays. Any such outcomes may have a material adverse effect on our business, results of operations, and financial condition and could harm our reputation.
Successful commercialization of new, or further enhancements to existing, alternative carbon‑free energy generation technologies, such as adding carbon capture and sequestration/storage mechanisms to fossil fuel power plants, wind, solar, geothermal, or fusion, may prove to be more cost effective or appealing to the global energy markets and therefore may adversely affect the market demand for our powerhouses, potentially adversely affecting our ability to successfully commercialize our powerhouses.
The expected market for our powerhouses may be superseded or rendered obsolete by new technology or the novel application of existing technology. Our estimates for the total addressable market and expectations with regard to certain unit economics are based on a number of internal and third‑party estimates, including our potential contracted revenue, the number of potential customers who have expressed interest in heat and electricity from our powerhouses, the conversion rate of those potential customers into paying customers, assumed prices, including fuel prices, and production costs for our powerhouses and resulting power, our ability to leverage our current logistical and operational processes, and assumptions regarding our technology and general market conditions. However, our assumptions and the data underlying our estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, reducing the predictive accuracy of these underlying factors. Any material change to our assumptions or expectations may have a material adverse effect on our business, results of operations, and financial condition and could harm our reputation.
The market for alternative carbon‑free energy generation technologies has not yet been established and may not achieve the potential we expect or may grow more slowly than expected. If demand for our powerhouses fails to develop sufficiently, our business and operations could suffer, and we may be unable to achieve or maintain profitability.
The viability and continued growth in demand for alternative carbon‑free energy generation technologies, and in turn, our powerhouses, may be impacted by many factors outside of our control, including:
• market acceptance of nuclear power;
• cost competitiveness, reliability, and performance of our powerhouses compared to conventional and renewable energy sources and products;
• availability and amount of financing to support the development and deployment of our powerhouses;
• availability, continuation, and amount of tax incentives to support the development and deployment of our powerhouses;
• the extent to which the nuclear power industry and broader energy industries undergo regulatory changes to permit broader adoption of nuclear electricity generation;
• the cost and availability of key materials and components used in the production of our powerhouses;
• prices of traditional utility‑provided energy sources; and
• the emergence, continuance, or success of, or increased government support for, other alternative energy generation technologies and products.
Reduction in energy demand or changes in climate‑related policies may change market conditions, reduce our product’s competitiveness, and affect our performance. If demand does not grow, our business and operations could suffer, which would have an adverse impact on our ability to grow our business and we may be unable to achieve profitability.
Competition from existing or new competitors or technologies domestically and internationally could cause us to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.
We operate in a highly competitive energy market and are subject to competition based upon product design, performance, technology, pricing, quality, and services, from competing nuclear suppliers, as well as from alternative means of
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producing electricity and/or heat. There are a number of advanced reactor designs and advanced reactor projects under development in the U.S. Many of these designs are involved in application and pre-application reviews with the NRC. Our products and services will conform to exacting specifications and may carry a higher price than competing non‑nuclear products due to the highly regulated nature of the U.S. nuclear industry. Other companies providing competing technologies could capture customers or market share from us, which could have a material adverse effect on our business, results of operations, or financial condition.
Our business model is novel to the nuclear industry and, if proven successful, may be adopted by competitors. Increased competition could erode profit margins and hinder our market expansion. Moreover, our competitors may develop or adopt technologies that are superior, more efficient, or more effective for prospective customers compared to our technologies (on a price-to-value, operational impact, or other basis), or may adapt more quickly to leverage new or emerging technologies or meet new or evolving regulatory requirements in our target markets. We will need to anticipate and respond to these changes by enhancing our offerings and/or internal processes in order to maintain our competitive position, but we may not be successful in doing so.
For sales and deployments outside of jurisdictions with highly developed nuclear regulatory frameworks, some of our foreign competitors currently benefit from, and others may benefit in the future from, permissive regulatory and licensing regimes and/or from protective measures by their home countries where governments are providing financial support, including significant investments in the development of new technologies. Those competitors may have a competitive advantage if they are able to obtain approvals, or if they can demonstrate to potential customers the value and benefits of their products and services, particularly in jurisdictions that have less stringent nuclear regulatory requirements. These competitors may have access to greater sources of funding to develop and commercialize their power than we do, whether as a result of potential competitive advantages or supportive national governments. This market environment may result in increased pressures on our pricing and other competitive factors.
We believe our ability to compete successfully in designing, engineering, manufacturing, and operating our products and services at significantly reduced costs to customers does, and will continue to, depend on a number of factors, which may change in the future due to increased competition. If we are unable to compete successfully, our business, results of operations, and financial condition could be adversely affected.
The cost of electricity and heat generated from our powerhouses may not be cost competitive with electricity and/or heat generated from other sources, which could materially and adversely affect our business, results of operations, and financial condition.
Many U.S. electricity markets price electric energy, capacity, and ancillary services on a competitive basis, with market prices subject to substantial fluctuations. Other markets remain heavily regulated by state or local utility regulatory authorities, with power purchase decisions by electric utilities subject to various competitiveness or prudence tests. As a result of competitive pressures, some electricity markets experience low marginal energy prices at certain times due to a combination of subsidized generating resources, competitors with low‑cost or no‑cost fuel sources, or market‑design features that create incentives for certain attributes or deliver revenue in unpredictable ways over time, and we may not be able to compete in these markets unless the benefits of our advanced fission power technology and business model are sufficiently valued. Even in markets that price reliable capacity on a long‑term basis, there is no guarantee that advanced fission power will be sufficiently low‑cost so as to clear auction‑style capacity markets or to attract customers to sign power purchase agreements with us on commercially acceptable terms. Signing a power purchase agreement or clearing a capacity auction in any one year is no guarantee of similar outcomes in successive years. Moreover, powerhouses will likely serve a specific number of market segments targeting smaller distributed generation, remote application, or industrial customers, who may have lower cost power/heat alternatives available to them, especially in the near‑term.
Failure of the cost of electricity and heat generated from our powerhouses to be cost competitive with electricity and/or heat generated from other sources, will limit our ability to charge a premium relative to other energy sources, which could materially and adversely affect our business, results of operations, and financial condition.
Changes in the availability and cost of oil, natural gas, and other forms of energy are subject to volatile market conditions that could adversely affect our business, results of operations, and financial condition.
The availability and prices of oil, natural gas, and other forms of energy are subject to volatile market conditions. These market conditions are affected by political, economic, and other factors beyond our control. Decreases in energy prices or increases in nuclear energy costs, including fuel costs and asset deployment costs, relative to other forms of energy may adversely affect our business, results of operations, and financial condition. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive or to adjust their business plans and operations, decreased energy prices may have an adverse effect on our business, results of operations, and financial condition.
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Our investment in recycling may not provide the return we expect. The market for recycled nuclear fuel in the U.S. may never be established or may be smaller or grow more slowly than expected.
We are actively developing fuel recycling capabilities with the goal of deploying a commercial‑scale fuel recycling facility in the U.S. by the 2030s. We currently expect to be the primary, but not the sole, users of the recycled fuel we plan to generate. Challenges that could impact the timeline and costs might arise from necessary activities such as siting, obtaining federal, state, and local permits and approvals, transportation, threatened litigation, access to used fuel for the purposes of recycling, and securing disposal solutions for waste. Our estimates for the total addressable market and expectations with regards to this potential line of business are based on several internal and third‑party estimates, including those for facility deployment, licensing, capital and operational costs, and sales prices for the resulting recycled fuel. The timeline to scale‑up and deploy the necessary technological processes is based upon assumptions regarding our technology and general market conditions. However, our assumptions and the data underlying our estimates may not be correct, and the conditions supporting our assumptions or estimates might change at any time, reducing the accuracy of such estimates. As a result, our investment in fuel recycling technology and this potential line of business may not provide any return, or the return we have projected. In addition, the market for recycling nuclear fuel in the U.S. has not yet been established and nuclear fuel recycling technologies such as ours have limited operational history and have not been proven at scale. Any material change to our assumptions or expectations with respect to the market for recycled nuclear fuel and the technology we plan to utilize may have a material effect on our business, results of operations, and financial condition, and could our reputation.
Our business plan primarily involves the concurrent development of two configurations of our powerhouses (i.e., 15 MWe and 75 MWe), may also include the development of other configurations of our powerhouses (e.g., 100 MWe and higher), and makes certain assumptions with respect to learnings, efficiencies and regulatory approvals as a result of this development approach, which may not be accurate or correct. Any adverse change to these assumptions may have a material adverse effect on our business, results of operations, and financial condition.
Our business plan to construct and operate our powerhouses is subject to continued development activities and makes assumptions with respect to learnings, efficiencies, and regulatory approvals as a result of the concurrent 15 MWe and 75 MWe development approach. If assumptions regarding such concurrent development of our powerhouses are not accurate, we may be unable to successfully introduce, market, and sell these configurations of our powerhouses in a timely and cost‑effective manner or properly position and/or price our products, and our business, results of operations, and financial position could be materially impacted.
We compete in a market characterized by rapid technological advances, evolving regulatory standards in software technology and frequent new product introductions and enhancements. To succeed, we may also rely on the development of other configurations of our powerhouses ( e.g. , 100 MWe and higher). The development of other configurations of our powerhouses has inherent risks, including, but not limited to:
• higher-than-expected research and development costs;
• delays or unexpected costs in developing planned and new configurations;
• higher than expected costs and/or timing delays in the construction of powerhouses, fuel fabrication facilities, or fuel recycling facilities;
• delays in obtaining, or failure to obtain, regulatory approvals;
• delays in customer purchase decisions in anticipation of new configurations;
• customer confusion and extended evaluation and negotiation time;
• failure to educate our sales, marketing, and consulting personnel to work with new configurations;
• competition from earlier and more established market entrants;
• market acceptance of earlier configurations; and
• the accuracy of assumptions regarding customer demand.
If we are unable to successfully introduce, market, and sell other configurations of our powerhouses in a timely and cost‑effective manner or properly position and/or price our products, our business, results of operations, and financial position could be materially impacted.
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We and our customers operate in a politically sensitive environment, and negative public and political perceptions of us, or more generally, of nuclear energy and radioactive materials could materially and adversely affect us, our customers, and the markets in which we operate.
Nuclear energy is closely tied to government policies and regulations due to its potential risks and benefits, including risks and benefits relating to issues such as waste disposal, radiation exposure, non-proliferation (particularly as it relates to plutonium), and national security. Governments often play a central role in the approval, regulation, and funding of nuclear projects. Changes in political leadership or shifts in public sentiment can lead to shifts in nuclear energy policies, which can affect the viability and profitability of nuclear businesses. The regulatory framework for nuclear energy is stringent and subject to public scrutiny. Regulatory decisions can influence the cost, timeline, and feasibility of nuclear projects. Public concerns and political pressure can lead to tighter regulations or stricter enforcement of existing ones. Government policies and incentives, often influenced by public opinion and political considerations, can directly impact the growth and competitiveness of nuclear energy. Favorable policies such as subsidies, tax credits, or incentives for clean energy can attract more customers to the nuclear energy sector.
Changing political environments in the U.S. and abroad may amplify the media and political scrutiny we face. Negative publicity about us, including about our management, the efficacy and reliability of our technologies, and our product offerings, even if inaccurate, may adversely affect our reputation and brand. Additionally, the nature and complexity of our business could make us susceptible to various claims, including government investigations, due to changes in the political environment in the U.S. and the heightened regulatory scrutiny of our industry.
Additionally, while we have made intentional efforts to work with legislators, policymakers, and politicians from across the political spectrum, there may be an external perception that we are solely or primarily associated with one political party. In a highly partisan era, that perception can lead to undue and unexpected scrutiny, can subject us to litigation or governmental investigations, and can otherwise cause us to expend significant resources and attention that we might otherwise use on our business operations. Further, actions we take in response to the activities of certain political leaders, government agencies, and customers could harm our brand and reputation. The resulting harm to our reputation could cause certain customers to cease doing business with us, impair our ability to attract new customers or to expand our relationships with existing customers, diminish our ability to recruit, hire, or retain employees, or our standing in professional communities to which we contribute and from which we receive expert knowledge. Any of these factors could impact our business, results of operations, and financial condition.
Successful execution of our business model is dependent upon public support for nuclear power in the U.S. and other countries. The risks associated with uses of radioactive materials in our nuclear facilities and the public perception of those risks can affect our business. Opposition by third parties can delay or prevent the licensing and construction of new nuclear facilities and, in some cases, can limit the operation of nuclear facilities. Adverse public reaction to developments in the use of nuclear power could directly affect our business and indirectly affect our customers’ businesses. In addition, journalists, trade press, and other third parties, potentially including one or more of the agencies with regulatory jurisdiction over us, may publish statements that negatively affect the public or political perception of us. We may also face adverse public or political perception due to a variety of environmental and social factors, including as relevant standards continue to evolve. Stakeholder and policymaker expectations on such matters are not uniform, and any failure to successfully navigate such expectations may result in various impacts. public opinion or political perceptions could result in increased regulatory requirements and costs or increased likelihood that our operations are subject to liabilities or . In the past, public reaction, increased regulatory , and related contributed to extended licensing and construction periods for new nuclear power plants, sometimes construction schedules by decades or more or even down operations at already‑constructed nuclear power facilities.
Incidents involving nuclear energy facilities, including accidents, terrorist acts, or other high profile events involving radioactive materials, could materially and adversely affect the public perception of the safety of nuclear energy, and such adverse effects could potentially decrease demand for nuclear energy, increase regulatory requirements and costs, or result in liability or claims that could materially and adversely affect our business.
Successful execution of our business model is dependent upon public support for nuclear power in the U.S. and other countries. Any significant incident affecting a nuclear energy facility could materially damage public perception of nuclear power. In the past, adverse public reaction to such incidents (for example, incidents involving the Fukushima nuclear power plant in Japan, and incidents at Three Mile Island and Chernobyl) led to increased public and regulatory scrutiny. Such incidents could also impact customer demand for heat, electricity, or fuel derived from nuclear energy. Any of these effects could materially and adversely affect our business, results of operations, and financial condition.
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Our use of technologies and systems that employ artificial intelligence or large language models, given the dynamic state of such technologies, may cause inadvertent or unexpected impacts that may harm our business.
Like many companies, we are using and looking for more opportunities to use artificial intelligence technologies, including those that leverage large language models, in an effort to reduce costs and run our business efficiently. In particular, we are evaluating opportunities to leverage artificial intelligence operations in our research & development efforts, as well as in operational areas like procurement and contract management. Some of these technologies are nascent, and their reliability and effectiveness are unproven. As a result, the resources and time we expend to use such systems may ultimately fail to create efficiencies and may even make us less efficient. Additionally, these systems may hallucinate or generate incorrect outputs that may negatively impact our business or operations in unexpected ways if we fail to identify and screen out such errors, particularly if we are using such technologies in our research and development efforts (for example, if we use such technologies to help us evaluate design parameters).
Additionally, the legal and regulatory framework that applies to the use of artificial intelligence technologies is rapidly evolving. Such evolving laws and regulations may prevent us from being able to effectively use such technologies, may increase operational costs associated with the use such technologies, or may subject us to legal or regulatory liabilities.
Our ability to protect our patents and other intellectual property rights may be challenged and is not guaranteed. If we are unable to protect our intellectual property rights, our business and competitive position may be harmed.
We may not be able to prevent unauthorized use of our intellectual property, which could harm our business and competitive position. We rely upon a combination of the intellectual property protections afforded by patents, trademarks/service marks, copyrights, and trade secret laws in the U.S. and other jurisdictions, as well as commercial agreements, such as confidentiality agreements, assignment agreements, and license agreements to establish, maintain and enforce rights associated with our powerhouses, our fuel fabrication, fuel recycling, radioisotope production, and related proprietary technologies. Given that the underlying technology for our powerhouses is many decades old, we primarily use patents to help ensure that others cannot preclude us from using certain technologies or key design aspects.
Our success depends in part on our ability to obtain and enforce patent protection for our powerhouses and related technologies, but our patent applications may not result in issued patents, given the complexity of questions around patentability and the large number of patents and patent applications in related fields. Failing to obtain patent protection may have a material adverse effect on our ability to prevent others from commercializing products similar to ours.
Even if issued, our patents may be contested, challenged, circumvented, invalidated, or limited in scope in the future. The rights granted under any issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement as compared to the U.S. In addition, the claims of any patents that issue from our patent applications may be narrowed in scope during prosecution, challenged as invalid, or may simply not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. For example, competitors may “design around” our patents.
Additionally, some of our technology has been developed with funding from the DOE. Inventions conceived or first actually reduced to practice under agreements with the DOE (“subject inventions”) grant the United States Government (“USG”) certain rights and impose specific obligations on our ability to practice and license these inventions. Specifically, the USG obtains a worldwide, nonexclusive, nontransferable, irrevocable, paid‑up license to practice or have the subject invention practiced for or on behalf of the USG, and we are generally obligated to ensure that any products embodying or produced through the use of any subject invention will be manufactured substantially in the U.S., unless the USG determines that it is not commercially feasible to do so. Failure to abide by the U.S. competitiveness requirements for domestic manufacture of certain subject inventions may also cause us to forfeit and assign all rights to certain inventions to the DOE. Another right the USG has in subject inventions—although it has never exercised such a right—is march‑in rights whereby the USG may require us to license a patent on reasonable terms under very limited circumstances, such as if we or a licensee are not commercializing the or if there is a of the domestic manufacturing requirement in 35 U.S.C. § 204.
We also rely on unpatented trade secret protection, unpatented know‑how, and continuing technological innovation to develop and help maintain our business and competitive position. We may not be able to prevent the unauthorized disclosure or use of our trade secrets, know‑how, or information that we consider to be confidential, by the parties to these agreements, despite the existence generally of confidentiality provisions and other contractual restrictions. If any of the suppliers, customers, subcontractors, venture partners, employees, and consultants, and other third parties who are parties to these agreements breach or violate the terms of any of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result. It is also possible that our trade secrets, know‑how, or other proprietary information could be obtained by third parties as a result of breaches of our physical or electronic security systems. Even where remedies are available, enforcing a claim that a party or
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our trade secrets is expensive and time consuming, and the outcome of such enforcement is unpredictable. Courts outside the U.S. are sometimes less willing to protect trade secrets. Additionally, our trade secrets could become known or be independently discovered by our competitors. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them, or those with whom they share such technology or information, from using that technology or information to compete with us.
We do not have worldwide patent rights for our powerhouses and related proprietary technologies because there is no such thing as a worldwide patent or “international patent rights.” We also do not have worldwide trademark protection for our brand for similar reasons. Accordingly, we may not be able to protect our intellectual property rights in certain jurisdictions and their legal systems. Our competitors may operate in countries where we do not have patent protection and can freely use our technologies and discoveries in such countries to the extent such technologies and discoveries are publicly known or disclosed in countries where we do have patent protection.
We may need to defend ourselves against intellectual property infringement claims, which may be time‑consuming and could cause us to incur substantial fees and costs.
Companies, organizations or individuals, including our existing and future competitors, may hold or obtain patents, trademarks/service marks or other intellectual property rights that would prevent, limit, or interfere with our ability to develop our intellectual property and make, use, develop, import, offer to sell, or sell the power and heat generated by our powerhouses and related technology, which could make it more difficult for us to operate our company. From time to time, we may receive inquiries from holders of patents or trademarks/service marks inquiring whether we are infringing on their proprietary rights. Companies, organizations, or individuals, including our existing and future competitors, may also seek court declarations that they do not infringe on our intellectual property rights. Companies holding patents or other intellectual property rights similar to our technology may bring proceedings alleging infringement of such rights or otherwise asserting their rights and seeking licenses. In addition, if we are determined to have infringed on a third party’s intellectual property rights, we may be required to do among other things, one or more of the following: (i) cease making, using, offering to sell, selling, or importing our powerhouses or the power and heat generated by our powerhouses that incorporate the intellectual property; (ii) pay substantial ; (iii) pay for and obtain a license from the holder of the intellectual property right, which may not be available on reasonable terms or at all; or (iv) redesign part or all of our technology. In the event of a claim of us and our or to obtain a license to the technology, our business, results of operations, and financial condition could be materially affected. In addition, any , or , whether or not valid, could result in substantial costs and of resources and management’s focus and attention.
We also anticipate licensing patents and other intellectual property from third parties, and we may face claims that the use of this intellectual property infringes on the rights of other third parties. Our rights to indemnification or damages under our license agreements may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors.
Additionally, our confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive intellectual property. Those agreements may not be honored and obligations to assign intellectual property may be challenged or breached. Moreover, there may be some circumstances where we are unable to negotiate for such ownership rights or where others misappropriate those rights.
We may be subject to claims that former employees, collaborators, or other third parties have an interest in our patents or other intellectual property as an owner, a joint owner, a licensee, an inventor, or a co‑inventor. In the latter two cases, the failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, from the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, from conflicting obligations of third parties involved in developing our patented technology, or as a result of questions regarding co‑ownership of potential joint inventions. Litigation may be necessary to these and other inventorship and ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we in any such , in addition to paying monetary , we may ownership of, or right to use or license intellectual property. Such could have a material effect on our business. Even if we are in such , could result in substantial costs and be a to management and other employees.
If we or our third-party providers fail to protect confidential information and experience data security incidents, we may experience adverse effects, including regulatory enforcement consequences, on our business, results of operations, and financial condition.
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In the ordinary course of business, we collect, store, and transmit confidential information (including, but not limited to, intellectual property, proprietary business information, and personal information). We process this information on our own and third-party computer systems, hardware, software, technology, infrastructure and online sites and networks (collectively, “IT Systems”). It is critical that we do so in a secure manner to maintain the confidentiality, availability, and integrity of such confidential information. While we own some of these IT Systems, we also have outsourced elements of our operations to third parties, and as a result we manage a number of third‑party contractors who may provide IT Systems or otherwise have access to our confidential information. Regarding actual powerhouse deployments, we are subject to the NRC’s and/or DOE's regulations in this area, the violation of which could carry regulatory enforcement action.
Despite the implementation of security measures, our IT Systems and those of our contractors and consultants are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures. Our IT Systems and those of our contractors and consultants also face numerous and evolving cybersecurity risks from diverse threats. These threats may come from a variety of sources including nation-state sponsored espionage and hacking activities, industrial espionage, organized crime, sophisticated organizations, hacking groups, individuals, and fraudulently hired insider threats. Such threats may arise as security from or actions by our employees, contractors, consultants, business partners, and/or other third parties, or as cyber‑attacks by third parties, state-sponsored organizations, hackers, and hacktivists. These cybersecurity may appear through diverse attack vectors, including the deployment of malware, ransomware, ‑of‑service attacks, social engineering, natural , terrorism, war, and telecommunication and electrical , as well as security from or actions by our employees, contractors, consultants, business partners and other means to affect service reliability and the confidentiality, and availability of information. are expected to accelerate on a global basis in frequency and magnitude as actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence—that security controls, detection, and remove forensic evidence. As a result, we may be to detect, , remediate, or recover from future attacks or , or to avoid a material impact to our IT Systems, confidential information, or business. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or in protecting our IT Systems and confidential information. Furthermore, given the nature of complex systems, software, and services like ours, and the scanning tools that we deploy across our networks and products, we regularly identify and track security . We are to comprehensively apply patches or confirm that measures are in place to mitigate all such , or that patches will be applied before are by a actor.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or IT Systems, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of our products could be delayed.
Furthermore, significant disruptions of our internal IT Systems or security breaches could result in the loss, misappropriation, and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including, but not limited to, intellectual property, proprietary business information, export‑controlled information, and personal information), which could result in financial, legal, business, and reputational harm to us. Any such event that leads to unauthorized access, use, or disclosure of personal information, including personal information related to our employees, could harm our reputation directly, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, result in legal claims or proceedings (including class actions), subject us to mandatory corrective action, and otherwise subject us to liability under laws and regulations that protect the privacy and security of personal information, which could result in significant legal and financial exposure and reputational that could potentially have an effect on our business. Additionally, some of our systems may be considered to be infrastructure systems and so we may have additional obligations in response to a cybersecurity attack. We cannot guarantee that any costs and liabilities incurred in relation to an attack or will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security, and processing of personal information could adversely affect our business, results of operations, or financial condition.
In connection with running our business, we process information that relates to individuals, including from our employees and business contacts. We are therefore subject to certain laws and regulations relating to the privacy, security, and handling of personal information. The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment. In some cases, these requirements may be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the U.S., including in relation to cybersecurity incidents.
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It is possible that new laws and regulations, or amendments to or changes in interpretations of existing laws and regulations, may require us to incur significant costs, implement new processes, or change our handling of information and business operations, which could ultimately hinder our ability to grow our business. These risks are particularly pronounced for our business given that we are participating in multiple governmental programs that involve new and novel licensing or other regulatory pathways, which may ultimately be limited as the result of litigation, regulatory challenges, political decisions, or any number of other factors. In addition, any failure or perceived failure by us to comply with laws, regulations, and other requirements relating to the privacy, security, and handling of information could result in legal claims or proceedings (including class actions), regulatory investigations, or enforcement actions. We could incur significant costs in investigating and defending such claims and, if found liable, pay significant or or be required to make changes to our business. These proceedings and any subsequent outcomes may subject us to significant publicity and an of trust. If any of these events were to occur, our business, results of operations, and financial condition could be materially affected.
Macroeconomic Risks Relating to Our Business
We may experience a disproportionately larger impact from inflation and rising costs.
Inflation has resulted in, and may continue to result in, higher interest rates and capital costs, higher shipping costs, higher material costs (including fuel costs), supply shortages, increased costs of labor, and other similar effects. Although the impact of material cost, labor, or other inflationary or economically driven factors will impact the entire nuclear and energy transition industry (including renewable sources of electricity, like solar and wind), the relative impact will not be the same across the industry, and the particular effects within the industry will depend on a number of factors, including material use, technology, design, structure of supply agreements, project management, and others. Such inflation could significantly affect the competitiveness of our technology and our ability to construct and operate our fuel fabrication facilities, fuel recycling facilities, and powerhouses, which could have a material adverse effect on our business, results of operations, and financial condition.
Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, results of operations, financial condition, and cash flows.
Our results of operations could be materially affected by economic and political conditions in the U.S. and internationally, including inflation, deflation, fluctuations in interest rates, fluctuations in exchange rates, availability of capital, energy and commodity prices, trade laws, and the effects of governmental initiatives to manage economic conditions.
Potential customers may delay or decrease spending on our powerhouses and related services as their business and budgets are impacted by economic conditions. The inability of potential customers to pay us for power produced by our powerhouses and related services may adversely affect our earnings and cash flows.
The ongoing military conflict in Ukraine has escalated tensions between the U.S., and its North Atlantic Treaty Organization (“NATO”) allies on one hand, and Russia on the other. The U.S. and other NATO member states, as well as some non‑member states, have imposed sanctions against Russia and certain Russian banks, enterprises, and individuals. Now that there are sanctions on Russian companies supplying HALEU, sourcing HALEU presents a supply chain risk. These circumstances have impacted the commercial availability of HALEU, increased the cost of uranium enrichment services to produce HALEU, and could potentially increase the adverse impact on the price of enrichment services and on our future operations.
Further, the sanctions and related countermeasures by NATO states, including the U.S., and other countries have led to, and are likely to continue to lead to, additional market disruptions, including significant volatility in commodity prices, credit, and capital markets, as well as supply chain interruptions for equipment. These disruptions could have an adverse impact on our operations and financial performance. Global supply chain disruptions have increasingly affected the availability and cost of materials, component manufacturing, and deliveries. Disruptions such as military conflicts, sanctions, and other countermeasures between nations, as well as any escalation in tension between nations, may result in delays in equipment deliveries and cost escalations that could adversely affect our business, results of operations, and financial condition.
Our cost estimates are highly sensitive to broader economic factors, and our ability to control or manage our costs may be limited. Building new powerhouses, fuel fabrication facilities, fuel recycling facilities, and radioisotope production facilities is challenging as a result of many factors, including regulatory and construction complexity, and may take longer or cost more than we expect.
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Capital and operating costs for the deployment of any energy infrastructure, and especially for our first-of-a-kind powerhouses, are difficult to project, inherently variable, and are subject to significant change based on a variety of factors including, but not limited to, site-specific factors, project-specific testing capabilities, customer offtake requirements, regulatory oversight, operating agreements, fuel pricing (including of HALEU and uranium conversion), supply chain availability effects on reactor and power plant performance, inflation, and other factors, many of which have already increased cost estimates since our initial disclosures relating to our Company in connection with the Recapitalization consummated on May 9, 2024. Opportunities for cost reductions with subsequent deployments are similarly uncertain.
We have received initial third‑party cost estimates related to building and fueling our Aurora powerhouses, which similarly include increases to the estimates we previously prepared in connection with the Recapitalization. The cost estimates may continue to increase significantly through design maturity, accounting for supply chain availability and fuel costs, as we progress through the regulatory process, or as a result of other factors, including unexpected cost increases that particularly affect our powerhouses given their first-of-a-kind nature. The actual cost and time required to construct and operate our powerhouses, recycling facilities, and fuel fabrication facilities or to bring our nuclear power to market at scale may vary significantly from our current forecasts. To the extent cost reductions are not achieved within the expected timeframe or magnitude, powerhouses, such as the Aurora, may not be cost competitive with alternative technologies, which may have a material adverse effect on our business, results of operations, and financial condition, and could harm our reputation.
Further, we have received third‑party cost estimates related to building fuel fabrication facilities, many of which have increased since we made disclosures relating to our Company in connection with the Recapitalization. Costs may ultimately be significantly higher than our current estimates, which may affect the marketability, capital, and operational costs of our powerhouses and our expectations with respect to our business plan and future financial performance. In the event these issues arise at such later stages of deployment, deployment could be subject to greater costs or be significantly delayed, which could materially and adversely affect our business, results of operations, and financial condition.
Depending on our available capital resources, we may need to delay or discontinue expected near term expenditures, which could materially impact our business, results of operations, and financial condition by limiting our ability to pursue some of our other strategic objectives or reducing the resources available to further develop our design, sales, and manufacturing efforts.
The direct and indirect impact on us and our value chain from severe weather and other effects of climate change could adversely affect our business, results of operations, financial condition, and cash flows.
Our operations and properties, and those of our value chain, may in the future be adversely impacted by flooding, wildfires, high winds, drought, and other natural disasters and catastrophic events. Climate change is expected to increase the frequency and intensity of certain such events, as well as contribute to chronic changes (such as in weather patterns or water levels) that may result in various adverse impacts. These events can force us or our value chain to suspend operations at impacted properties and may result in significant damage to such properties. Even if these events do not directly impact us or our value chain, they may indirectly impact us and our value chain through increased insurance, energy, or other costs. In addition, although the ongoing transition to non‑carbon‑based energy is creating significant opportunities for us and parts of our value chain, the transition also presents certain risks, including macroeconomic risks related to higher energy costs and energy shortages, among other things. These direct and indirect impacts from climate change could affect our supply chain, results of operations, financial condition, and cash flows.
The occurrence of adverse events, cancellations of significant projects, delays in project timelines, adjustments in cost structures, and other negative developments announced by competitors could have an impact on our operations, financial performance, and future prospects.
The occurrence of newsworthy events in the nuclear industry as a whole, including, but not limited to, the delay of major projects, inflated cost adjustments, fluctuations in product pricing strategies, cancellations of public offerings, customer withdrawals, or supply chain disruptions may adversely affect our business in several ways, including:
• Negative news or events associated with industry peers may lead to decreased investor confidence in the sector, which could impact the broader stock market performance of companies operating within the industry, including us. This could result in fluctuations or declines in our stock price irrespective of our internal performance.
• Adverse events in competitor firms may alter the competitive landscape, affecting market share dynamics, pricing strategies, and overall positioning within the industry. This could impact our ability to retain or expand our market presence.
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• Changes in market dynamics influenced by competitors’ actions, such as inflated cost adjustments or potential cancellations, could lead to effects on our financial stability and profitability, influencing our financial metrics and potentially impacting investor perceptions.
There is no guarantee that we will be insulated from the adverse effects of the foregoing events and the occurrence of any of these events could negatively impact our business, results of operations, and financial condition.
If the market for technologies using artificial intelligence does not grow at the rate some parties expect, our customers or prospective customers may reduce their projected needs for power and/or heat, which may impact the market for our offerings.
Some of our customers and prospective customers operate or otherwise rely on data centers and other similar infrastructure that can support, among other things, the growing demand for technologies that use artificial intelligence. Their business plans, including their construction of or expansion of infrastructure facilities that they intend to power or heat using our offerings, may rely in part on assumptions around the growth of artificial intelligence technologies, which may prove to be unwarranted. If these assumptions prove incorrect, it may impact the business plans of these customers or prospective customers, which may reduce their need for our products or services, and may even lead to them canceling or renegotiating contracts with us. Such market disruptions could adversely affect our business, results of operations, and financial condition.
Our business is, and the markets in which we compete are, rapidly evolving, including with respect to artificial intelligence products, which make it difficult to forecast demand for our power.
The markets in which we compete are rapidly evolving, accordingly our future financial performance will depend in large part on our ability to adapt to new market demands. In recent years, an increasing number of customers and potential customers have been allocating their spending toward artificial intelligence capabilities. The market to provide power for artificial intelligence, machine learning, and generative artificial intelligence workloads is expected to be an intensely competitive and rapidly evolving market, and our future financial performance may depend on our ability to adapt to, and capture new spending, in this market. Our estimates of the market opportunity, including forecasts of the demand for our power and our ability to capture new spending, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. In addition, if the markets in which we compete experience a shift in customer demand, or if customers in these markets focus their new spending on, or shift their existing spending to, other energy solutions, our solutions may not compete as effectively, if at all.
If we are unable to meet the demands of a rapidly evolving market or if our estimates of the market opportunity, including forecasts of the demand for our power, prove to be incorrect, our future cash flows may grow less quickly than anticipated or decline, which could have a material adverse effect on our business, results of operations, and financial condition.
Risks Relating to Compliance with Law, Government Regulation, and Litigation
The nature of our business requires us to interact with various governmental entities, making us subject to the policies, priorities, regulations, mandates, and funding levels of such governmental entities and we may be negatively or positively impacted by any change thereto.
We are subject to a wide variety of laws and regulations relating to various aspects of our business, including with respect to: use and possession of radioactive materials; design, manufacture, operations, marketing, and export of nuclear technologies; employment and labor; tax; data security of the operational and information technology we use; health and safety; and zoning and environmental issues. Laws and regulations at the foreign, federal, state, and local levels may change and may be interpreted in different ways, especially in relation to new and emerging industries, and we cannot always reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes. We cannot guarantee that our measures to monitor these developments and the time and resources we spent to comply with these laws, regulations, and guidelines will be satisfactory to regulators or other third parties, such as our customers, who may also be subject to extensive governmental regulation.
We may need to expend substantial efforts to comply with any new and changing relevant and applicable laws and regulations, which may result in increased general and administrative expenses and a diversion of management time and attention. Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate and could have a material adverse effect on our sales, profitability, cash flows, and financial condition, and lead to regulatory delays that could impact our ability to obtain licenses, certificates, authorizations, permits, certifications from regulatory agencies, and/or any other type of regulatory approval.
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Failure to comply with these laws may result in civil and criminal penalties or private lawsuits, or the suspension or revocation of those regulatory approvals, which would prevent us from operating our business. Our powerhouses, fuel fabrication facilities, and fuel recycling facilities are subject to regulations in all jurisdictions related to nuclear safety, environmental, and financial qualification, among other requirements. We require regulatory approval from the DOE and/or the NRC to construct and operate such facilities, and any additional local and state permitting requirements, as needed. Our plans to construct and operate these facilities relies on timely receipt of such regulatory approvals. Such regulatory approval processes may be subject to change, can be technically challenging to address, may result in the imposition of conditions that impact the financial viability of our facilities, and may also provide opportunities for third parties to lodge objections or file petitions against the licensing of our facilities.
Failure to comply with these laws, obtain the required regulatory approvals, or receive exemptions from such regulations, as needed, could result in regulatory enforcement, violations, fines, penalties, or the inability to operate our commercial deployments. Any delays in regulatory approvals could also adversely affect our ability to meet construction and operation timelines and thereby affect our financial performance.
The U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget or appropriations process for any government fiscal year could have an adverse impact on our business, results of operations, and financial condition.
The U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year and consequently having to shut down or operate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have an adverse direct or indirect impact on our business, results of operations, and financial condition.
The U.S. federal government shut down between October 1, 2025 and November 12, 2025, during which time certain regulatory agencies furloughed non-essential federal employees. When the government is not funded, critical activities conducted by certain regulatory agencies are limited or curtailed. A prolonged shutdown may lead to broader economic uncertainty and financial market volatility. These conditions could have a negative impact on our business, results of operations, and financial condition.
The ability of regulatory agencies, such as the DOE and NRC, to review license applications and other regulatory submissions can be affected by a variety of factors, including government budget and funding levels, reductions in workforce, ability to hire and retain key personnel, and statutory, regulatory, and policy changes. In addition, there may be delays in necessary interactions with regulators and other important agencies and contractors due to limitations in employee
resources or forced furlough of government or contractor personnel.
In the event of a government shutdown, the SEC may operate with limited staff or suspend certain functions altogether, which could delay the review or effectiveness of our filings, including registration statements or other financing-related disclosures. Such delays could adversely affect our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue to fund our operations. Our inability to raise capital or our inability to raise capital on favorable terms, could cause the trading price of our common stock to decline.
While we strive to mitigate these risks through contingency planning and government engagement and outreach, the ultimate impact of any government shutdown is difficult to predict and may be outside of our control. Such a government shutdown could have a negative impact on our business, results of operations, and financial condition.
In addition, considerable uncertainty exists regarding how future budget and program decisions will unfold, including the energy spending priorities of the U.S. government, what challenges budget reductions will present for the energy industry and whether annual appropriations bills for all agencies will be enacted by the U.S. government in a given fiscal year and thereafter due to many factors, including, but not limited to, changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding. The U.S. government’s budget deficit and the national debt could have an adverse impact on our business, results of operations, and financial condition in a number of ways, including the following:
• The U.S. government could reduce or delay its spending on, reprioritize its spending away from, or decline to provide, funding for the government programs in which we participate;
• U.S. government spending could be impacted by alternate arrangements to sequestration, which increases the uncertainty as to U.S. government spending priorities and levels; and
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• We may experience declines in revenue, profitability, and cash flows as a result of reduced or delayed orders or payments or other factors caused by economic difficulties of our customers and prospective customers, including U.S. federal, state, and local governments.
These factors may become exacerbated by elevated interest rates and overall interest rate volatility as more U.S. government spending must be appropriated to servicing the national debt. Furthermore, we believe continued budget pressures could have serious negative consequences for the nuclear energy industry and the customers, employees, suppliers, investors, and communities that rely on companies in the nuclear energy industry. Budget and program decisions made in this environment would have long‑term implications for us and the broader nuclear energy industry.
There is no guarantee that the NRC will support the development of our proposed nuclear fuel recycling facility on the timeline we anticipate or at all.
The NRC regulatory framework has not been used to license a used nuclear fuel recycling facility in several decades, and regulations have evolved substantially since the 1970s. Although we have conducted substantial pre-application engagement to align with the NRC staff on regulatory dispositions, there is no guarantee that the NRC will honor these alignments and support processing our application and issuing a license, on our planned timeline or at all. This would result in a reduction in available fuel supply for our powerhouses, increased average fuel cost, and sunk costs on design, licensing, and construction work.
Our powerhouses, fuel fabrication facilities (including plutonium-based fuel fabrication facilities), fuel recycling facilities, and radioisotope production facilities will be highly regulated by the U.S. government, including the NRC and DOE, as well as foreign, state, and local governments. We have not received any approval or licensing to date, nor have we submitted our updated custom COLA to the NRC, and approval or licensing of these designs or facilities, and the timing of such approval or licensing, if any, is not guaranteed. Our potential international expansion will subject us to additional U.S. and foreign regulations.
Our commercial powerhouses, including our planned plants in Idaho and Ohio, commercial fuel fabrication facilities, and commercial fuel recycling facilities will be subject to NRC licensing and approvals. Our RPP facilities in Idaho are subject to DOE licensing requirements and will in the future transition such licensing and become subject to NRC licensing requirements. They may also be highly regulated by other U.S. federal and state level governmental authorities and regulatory bodies in other jurisdictions in which we may establish operations. Under the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”) and the implementing NRC regulations, members of the public, state, or tribal governments may request a public hearing opposing the issuance of any NRC permit or license, or challenging portions of the license or permit application or of the NRC’s review. Certain NRC actions also include provision for a mandatory administrative hearing regardless of whether any contentions are submitted in conjunction with the action. These hearing processes may delay or prevent the issuance of required regulatory approvals ( i.e. , permits or licenses) for our powerhouses, fuel fabrication facilities, and fuel recycling facilities. Additionally, any facilities, commercial or otherwise, that may be located on DOE land may be subject to additional oversight from the DOE. Our planned fuel facility in Idaho will require oversight from the DOE and will require approvals prior to construction and operation. Any deployments that require new or novel licensing or permitting pathways might introduce additional uncertainties and complexities.
Additionally, state or local jurisdictions may also have, or could elect to develop, regulations specific to the siting, construction, operation, and decommissioning of commercial nuclear facilities or the transportation of radiological materials that could impact our deployment timelines and business model. For example, we may need to undergo additional licensing or permitting to account for state or local environmental or energy regulations (including, interconnection permits that may be required to actually operate our powerhouses and transmit generated power). Our potential international expansion will increase our exposure to U.S. export control laws as well as laws and regulations of foreign jurisdictions the impact of which cannot be predicted at this time. Exports to other countries will require cooperation from the U.S. and other governments and may result in shortages and delays if not accomplished within assumed timelines or costs. Additionally, we may require U.S. approvals in order to import certain materials and components that may be predominantly produced outside of the U.S. In addition to nuclear safety regulation, we will be subject to other nuclear regulatory controls such as nuclear material safeguards and non-proliferation restrictions and liability insurance regimes.
We must obtain governmental licenses to transport, possess, and use radioactive materials, including isotopes of uranium, in our powerhouses, fuel recycling, and fuel fabrication operations. These are generally granted as part of operations licensing, but failure to obtain or maintain, or delays in obtaining, such licenses could impact our ability to generate electricity and/or heat for our customers and have a material adverse effect on our business, results of operations, and financial condition.
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Notwithstanding previous regulatory engagement with the NRC and DOE or other actions to date, no powerhouse in the Aurora product family has been licensed or approved by the NRC or DOE. Additionally, no commercial nuclear reactor that is not water cooled is currently operating in the U.S. under an NRC‑issued or DOE-issued license, and no advanced fission technology has been approved for commercial operation by the NRC or DOE.
Related to operations, the NRC has the authority to issue notices of violation for violations of Title 10 of the Code of Federal Regulations, executing the Atomic Energy Act, NRC’s regulations and conditions of licenses, certificates of compliance, and orders. The NRC has authority to impose civil penalties (the maximum amount of which is adjusted annually to account for inflation) or additional requirements and to order cessation of operations for violations of these requirements. Penalties under the NRC regulations and applicable agency guidelines could include substantial fines, imposition of additional requirements, or withdrawal or suspension of licenses or certificates and criminal penalties. Any penalties imposed on us could adversely affect our results of operations and liquidity.
Legacy Oklo started working with the NRC to pilot a COLA application with a new structure in 2018 and formally submitted a COLA in 2020. The COLA was partially reviewed by the NRC and denied without prejudice in 2022, with the NRC identifying additional information it required. While we have been actively working to address technical, policy, and programmatic matters ahead of the submission of our updated COLA, we cannot guarantee that we will be able to meet our expected timeline or any timeline for which the NRC will accept our COLA for review or subsequently approve our COLA.
Our planned rapid deployment includes the use of a reference and subsequent COLA approach, or R‑COLA and S‑COLA, where NRC safety decisions from the R‑COLA are incorporated by reference or copied into the staff evaluation for the S‑COLA. This is designed to enable review efficiencies for subsequent COLAs. However, this approach has not yet been used to review COLAs for nuclear reactors that are not water‑cooled or for custom COLAs; accordingly, whether this approach will result in the anticipated review efficiencies is still unclear.
If the NRC disagrees with our licensing approach, the technical bases supporting the nuclear safety and environmental impact evaluations, or finds policy issues associated with the COLA, the initial and subsequent COLA processes could take longer than currently expected, or a license may not be granted at all, which could materially and adversely affect our business. Further, the NRC could impose conditions in a license that are not acceptable to us or our customers, which could materially and adversely affect our business. Any delays, conditions, or unexpected requirements may increase costs for us or our customers and may result in uncertainty regarding the ability to deploy our technology in a predictable way, which may adversely impact our competitiveness.
Unresolved used nuclear fuel storage and disposal policy issues and associated costs could have a significant negative impact on our plans to recycle used fuel as a potential fuel source for our powerhouses. Additionally, U.S. policy related to storage and disposal of used fuel from our power plant and/or negative customer perception of risks relating to these policies could have a significant negative impact on our business, results of operations, and financial condition.
During the licensing process, a nuclear power plant operator must indicate how it will decommission its power plant and must have a “standard contract” with the DOE related to the disposal of the fuel waste created during its operating life. Therefore, although we expect to use existing used nuclear fuel as well as our own recycled used fuel for decades into the future, establishing a fuel disposal process for a first-of-a-kind facility may lead to timeline uncertainty and challenging decisions on optimal uses of fuel assets.
Specifically, the Nuclear Waste Policy Act of 1982 requires the DOE to provide for the permanent disposal of certain forms of used nuclear fuel. In 1987, Congress amended the Nuclear Waste Policy Act to identify Yucca Mountain, in Nevada, as the only site that the DOE could consider for a permanent repository. The DOE has since failed to pursue the licensing of Yucca Mountain. There is a potential in the future that operators will have to bear the costs of developing and maintaining these used fuel storage facilities.
As such, the establishment of a national repository for the storage and/or permanent disposal of used fuel, such as the one previously considered at Yucca Mountain, Nevada, the timing of such a facility’s opening and the ability of such a facility to accept used fuel from our powerhouses, and any related regulatory action, could impact the costs associated with our powerhouses’ storage and/or disposal of used fuel. Moreover, an inability to utilize used fuel for the purpose of developing recycled fuel for our powerhouses, either due to policy issues or technical limitations, could also impact the costs associated with our powerhouses. These issues could be material to our operations if potential customers view our usage or disposal of used fuel as problematic, detrimental or a negative factor when considering purchasing power produced by our reactors.
Our operations and business plans could be significantly impacted by changes in federal, state, and local government politics, policies, and priorities.
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We currently operate amidst significant bipartisan support for advanced nuclear power technologies at the U.S. federal level, and have successfully been able to work with legislators, policymakers, politicians, and regulators across the political spectrum. That environment could change: changes in the political climate, in policies, or in priorities by the legislative or executive branch could have impacts on the leadership at the NRC, the DOE, the U.S. Department of Homeland Security, the U.S. Environmental Protection Agency, or any other federal agency that affects policy related to nuclear power. Each of these agencies themselves may experience changes in policies and priorities that impact our operations and business plans. Federal, state, and local policies and priorities could affect regulatory oversight, supply chain availability, tax and other financial incentives or costs, availability of financing, labor force initiatives or restrictions, and many other possible areas.
Further, while we have intentionally made efforts to work with a wide range of legislators, policymakers, politicians, and regulators with a variety of political views and affiliations, one or more of those third parties may have or may in the future take actions, make statements, or adopt positions that alienate others of differing political affiliations or viewpoints. To the extent that we are or become affiliated with such a person, such alienation may make it more difficult for us in the future to build bipartisan support for efforts supportive of advanced nuclear power technologies, may subject us to disproportionate scrutiny, may alienate customers or potential customers, and may cause harm to our reputation, which could have a material adverse impact on our business, results of operations, and financial condition.
The DOE and NRC also have the authority to issue new regulatory requirements or to change existing requirements. Changes to the regulatory requirements could require us to incur additional expenses to retrofit any of our nuclear facilities under the respective agency's jurisdiction to bring them into compliance or otherwise adversely affect our business, results of operations, and financial condition.
Beyond the regulatory requirements to construct and operate our nuclear facilities, additional DOE, state, and local regulations may apply to our nuclear facilities, which could introduce additional complications and timeline delays for deployment. For example, with respect to our Aurora powerhouse at INL, the Company has been granted a site use permit and provisional acceptance for a specific location; the provisional acceptance still exposes us to significant uncertainty based on pre-existing uncharacterized site conditions, which could impact our deployment timelines. Changes in leadership and vision for INL could result in the DOE deprioritizing siting the Aurora powerhouse, resulting in significant time delays for deployment. Additionally, certain aspects of our current fuels research and development activity take place within INL, and such activities are subject to DOE regulation ( i.e. , authorization and contractual requirements). DOE may place additional requirements or restrictions on us which could adversely affect our business.
Additionally, changes in federal, state, or local government policies and priorities can impact our nuclear fuel operations. These could include changes in interpretations of regulatory requirements, increased inspection or enforcement activities, changes in budgetary priorities, changes in tax laws and regulations and other government actions or inaction. Any of these local, state, and federal agencies may have the authority to impose civil penalties and additional requirements, which could adversely affect our results of operations.
We currently have several government cost-share awards related to recycling R&D work, which could be affected by our failure to comply with certain laws and regulations.
As a recipient of federal funds under grants and cooperative research and development agreements, in addition to our ordinary contractual obligations, we must comply with various statutes and regulations applicable to entities that perform agreements or awards involving funding to or from government entities. We must also comply with various national policy requirements that are prescribed by statute, Executive Order, policy guidance issued by the Executive Office of the President, or other regulations.
Our performance under our U.S. government awards and our compliance with the terms of those awards and applicable laws and regulations are subject to periodic audit, review, and investigation by various agencies of the U.S. government, and the current environment has led to increased regulatory scrutiny and sanctions for non‑compliance by such agencies generally. Compliance with these laws and regulations affects how we do business and may impose added costs on our business. Failure to comply, however, may lead to civil or criminal penalties, including whole or partial suspension or termination of our U.S. government awards, and/or suspension or debarment from contracting with federal agencies.
We are subject to export control, import and sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate such laws and regulations. Unfavorable changes in these laws and regulations or government licensing policies, our failure to secure timely government authorizations under these laws and regulations, or our failure to comply with these laws and regulations could have a material adverse effect on us and our ability to expand and thereby affect our business prospects, results of operations, and financial condition.
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The inability to secure and maintain required export licenses or authorizations could negatively impact our ability to compete successfully or market our powerhouses outside the U.S. For example, if we were unable to obtain or maintain licenses to export nuclear technology or certain hardware to a particular country, we would be effectively prohibited from exporting our powerhouses to, or operating our powerhouses in, such country, which would limit the number of customers to those in the U.S. and in countries where we are able to secure licenses (or where licenses are not required). In addition, various countries have enacted permitting and licensing requirements that could limit our ability to procure supply chain components and to service customers in those countries. Similarly, if export control laws and regulations prevent us from sharing certain export controlled information with suppliers we intend to use to operate our business or build or develop our powerhouses or other facilities, we may not be able to work with certain suppliers, which may impact our financial condition, business plans, and the competitiveness of our offerings.
Failure to comply with export control, import and sanctions laws and regulations could expose us to civil or criminal penalties, fines, investigations, more onerous compliance requirements, loss of export privileges, debarment from government contracts, or limitations on our ability to enter into contracts with the U.S. government. Any changes in export control regulations or government licensing policy, such as that necessary to implement U.S. government commitments to multilateral control regimes, may restrict our market size.
We could incur substantial costs as a result of violations of, or liabilities under, environmental laws. We are subject to laws and regulations governing the use, transportation, and disposal of toxic, hazardous and/or radioactive materials. Failure to comply with these laws and regulations could result in substantial fines and/or enforcement actions.
Our operations are subject to a variety of federal, state, and local environmental, health and safety laws and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous, non‑hazardous, and radioactive materials and waste, and remediation of releases of hazardous materials. Additionally, we are responsible for decommissioning of facilities where we conduct, or previously conducted, commercial, NRC‑licensed, operations.
We may be liable if we fail to comply with federal, state, and local environmental, health and safety laws and regulations. Failing to comply with such laws and regulations, including failing to obtain any necessary permits, could result in substantial fines or enforcement actions. This might require us to stop or curtail operations or conduct or fund remedial or corrective measures, make additional investments into safety‑related improvements or perform other actions. The enactment of more stringent laws, regulations, or permit requirements or other unanticipated events may arise in the future and adversely impact the market for our products, which could materially and adversely affect our business, results of operations, and financial condition. We could incur substantial costs as a result of a violation of, or liabilities in connection with, environmental laws.
We will seek to cover gaps in nuclear liability coverage in our contracts, but such coverage may not always be possible as an operator of nuclear reactors, and such liability could materially and adversely affect our business, results of operations, and financial condition.
We will seek to cover gaps in nuclear liability coverage in our contracts, but such coverage may not always be possible as an operator of nuclear reactors. The costs of defending a claim arising out of a nuclear incident or precautionary evacuation not otherwise covered by insurance or an indemnity, and any damages awarded as a result of such claim, could adversely affect our business prospects, results of operations, and financial condition. Prospective future customers may also require that we comply with their own unique requirements relating to their compliance with policies, priorities, regulations, controls, and mandates, including provision of data and related assurance for environmental, social, and governance related standards or goals, and such compliance may add cost and timeline uncertainty or risk.
In the U.S., nuclear liability law is codified at 42 U.S.C. 2210 (along with subsequent amendments, the “Price‑Anderson Act”). The Price‑Anderson Act and its implementing NRC regulations channel legal liability to certain licensees (such as operators of nuclear reactors) for third‑party offsite damages caused by a nuclear incident or a precautionary evacuation due to a possible or actual nuclear incident, and requires these licensees to maintain robust coverage that would protect against any such liability. Outside of the U.S., international nuclear liability conventions and national nuclear liability laws legally channel liability for offsite nuclear damage to the nuclear reactor operator and require operators to maintain insurance up to the established liability limits. In all jurisdictions that subscribe to international nuclear liability principles (essentially, all countries with operating nuclear reactors and many with research reactors), operator liability for offsite nuclear damage is covered by mandatory insurance. However, if we were to operate in a country that does not have a nuclear liability regime or one where the regime does not meet international nuclear liability standards, we could be financially liable for damages arising from nuclear or evacuation, which could have an effect on our business, results of operations, and financial condition. Further, there is no international nuclear liability regime that covers every jurisdiction and thus gaps exist where we could be liable for transboundary nuclear in countries that are not party to a nuclear liability treaty.
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Neither the Price‑Anderson Act nor international nuclear liability conventions and national domestic nuclear liability laws cover on‑site loss or damage to property due to a nuclear incident. Rather, most nuclear regulators (including the NRC) require nuclear operators to maintain on‑site property damage insurance. If an incident resulting in onsite property damage is not otherwise covered by the mandatory insurance policy maintained at the facility, then we could be potentially liable for damages arising from such incident, which could have an adverse effect on our business, results of operations, and financial condition.
Changes in governmental agency budgets as well as staffing shortages at national laboratories and other governmental agencies may lengthen our estimated timelines for regulatory approval and construction.
Certain of our powerhouses, fuel fabrication facilities, and fuel recycling facilities are dependent upon collaborations with national laboratories and/or various regulatory approvals. Government agency budgets and staffing are driven by the priorities of leadership at federal agencies as well as policymakers. Changes in governmental agency budgets, personnel, and any resulting staffing shortages may delay our powerhouses, fuel fabrication facilities, and fuel recycling facilities and/or delay or prevent the issuance of required regulatory approvals ( e.g. , permits or licenses) for our nuclear facilities.
Operating a nuclear power plant in an unusual environment whether due to unusual siting or in an industrial application has additional risks and costs compared to conventional electric power and heat applications.
We focused on a technology with inherent safety characteristics and have designed powerhouses such that we anticipate being able to serve customers in unusual environments, which we believe is a key gap in current U.S. energy infrastructure. For example, these unusual environments may include areas that are far away from typical urban infrastructure or resources, experience permafrost or higher seismic activity, or are in closer proximity to population centers. Additionally, remote environments are often in harsh climates and can be difficult to transport and travel to when required during operations. As such, deployments in unusual environments could bear additional risks and costs that may exceed our business projections or have surprising or unpredicted impacts on costs and schedules for deployment, operation and/or maintenance of our powerhouses, including costs associated with the licensing process, configuration control of the plant, minimum operating staff, training, security infrastructure, radiation protection, government reporting, and nuclear insurance, all of which may be cost prohibitive or reduce the competitiveness of technology.
Our ability to rely on global supply chains for source components and/or raw materials may be impacted by tariffs, trade disputes, or other changes in trade policy or trade regulation.
We plan to rely on global supply chains to source components and materials essential for our business, including for our powerhouses and other facilities. The imposition of new or increased tariffs, trade restrictions, or other changes in trade policy by the U.S. or other countries could increase our costs of materials and components, require us to find alternative suppliers, or force adjustments to our pricing structure. These changes could reduce our profit margins, may impact our licenses or may require additional regulatory approval, or could otherwise disrupt our business operations.
In particular, recent global trade tensions and policy shifts have created an unpredictable environment for businesses operating across international borders. Changes in trade agreements, sanctions, export controls, and customs regulations may limit our ability to source materials from certain countries or entities, potentially forcing rapid and costly adjustments to our supply chain. Trade policies can change with limited notice, making long-term planning difficult and increasing operational costs.
While we attempt to mitigate these risks through diversification of our supplier base, inventory management strategies, and contractual protections, there can be no assurance that these measures will be effective. Any significant disruption to our supply chain resulting from tariffs or trade policy changes could have a material adverse effect on our business, financial condition, and ability to meet projected deadlines and milestones.
Changes to trade policies, including higher tariffs, restrictions, and other economic disincentives to trade, may lead to operational delays, higher procurement and operational costs, and increased regulatory and compliance complexities, resulting in supply chain disruptions and higher prices and lower demand for devices and services we sell.
We depend on suppliers to provide us, directly or through other suppliers, with items such as equipment for the development of our powerhouses, other components and raw materials. Changes or proposed changes in U.S. or other countries’ trade policies that result in higher tariffs, restrictions, and other economic disincentives to international trade may materially increase the costs we incur in developing, deploying and maintaining our powerhouses. A certain portion of the increased costs may be absorbed by certain suppliers, but some suppliers may struggle to absorb the increased costs, especially over the long term, potentially leading to supply disruptions or cost pass-throughs to us, which may lead to an
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increase in our expenditures. In addition, rapid changes in trade policies may negatively affect procurement timelines and supplier relationships and may introduce new compliance requirements. We may face potential delays in sourcing critical equipment due to customs clearance and supply chain bottlenecks, and material changes to cost structures could pressure our expenses and customer pricing.
Our attempts to mitigate potential disruptions to our supply chain and offset procurement and operational cost pressures, such as through alternative sourcing and/or increases in the selling prices of some of our products, may not be successful. Higher prices for our customers may make it more difficult to attract new customers or cause increases in customer churn. Furthermore, we may not be able to offset any cost increases through productivity and cost-saving initiatives. To the extent that cost increases result in significant increases in our expenditures, or if our price increases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if our revenues decrease, our business, results of operations, or financial condition may be adversely affected.
We may become involved in litigation that may materially adversely affect us.
From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time‑consuming, divert management’s attention and resources from the operation of our business, and cause us to incur significant expenses or liability or require us to change our business practices. Because of the potential risks, expenses, and uncertainties of litigation, from time to time, we may settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business.
If it appears that we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations, and other liabilities and restrictions on our operations that could significantly and adversely affect our business.
We are subject to governmental regulation at the federal, state, and local levels in many areas of our business, such as employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, procurement regulations, intellectual property laws, supply chain laws, cost and accounting principles, anti-corruption laws, lobbying laws, and data privacy and security laws. While we attempt to comply with all applicable laws and regulations, there can be no assurance that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times, or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulations.
If we fail to comply or appear to fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions, or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, disgorgements, or debarments from government contracts. The cost of compliance or the consequences of non-compliance could have a material adverse effect on our business, results of operations, and financial condition and could cause reputational harm and impede our growth and retention efforts. In addition, government agencies may make changes in the regulatory frameworks within which we operate that may require us to incur substantial increases in costs in order to comply with such laws and regulations.
We may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events.
We may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts by our company’s employees or those of companies providing services to our company, inadequate or failed internal processes or systems, or from external events, such as security threats affecting our ability to operate. We rely on our employees to follow our policies and processes as well as applicable laws in their activities. Risk of illegal acts or failed systems is managed through our company’s infrastructure, controls, systems, and people, complemented by a focus on enterprise-wide management of specific operational risks such as fraud, bribery, and corruption, as well as personnel and systems risks. Specific programs, policies, standards, and methodologies have been developed to support the management of these risks. However, these cannot guarantee that such conduct does not occur, and if it does, it can result in direct or indirect financial , reputational impact or regulatory consequences.
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In addition, non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, and financial condition.
Risks Relating to Our Capital Resources
The amount of time and funding needed to bring our powerhouses to market and to develop our recycling and fuel fabrication facilities may exceed our expectations, and we may need to make significant adjustments to our business plan or significantly delay, scale back, or discontinue the deployments of our facilities and/or some or all of our research and development programs and may need to seek additional capital.
Bringing our powerhouses to market as well as developing our fuel recycling and fuel fabrication facilities will take a significant amount of time and funding. Any shortfall in research, development, and other funding; delay in achieving fuel development milestones; uncertainty in regulatory licensing timelines; or adverse public reaction to developments in the use of nuclear power could result in significant delays and cost overruns and could adversely affect our ability to construct and operate our powerhouses, fuel fabrication facilities, or fuel recycling facilities. At this stage, we cannot accurately predict the complete amount of funding or the time required to successfully construct and operate our powerhouses, fuel fabrication facilities, or fuel recycling facilities. The actual cost and time required to construct and operate our powerhouses, fuel fabrication facilities, or fuel recycling facilities or to bring our to market at scale may vary significantly from our current forecasts depending on, among other things:
• results of our research and product development efforts;
• changes in the focus and direction of our research and product development programs;
• competitive and technological advances;
• costs of filing, prosecuting, defending, and enforcing claims with respect to patents;
• regulatory approval processes;
• development of our fuel recycling process;
• development of our fuel fabrication process;
• development of our radioisotope production facilities and the supporting supply chains;
• limitations and impediments to supply chains;
• adverse public reaction to the developments in the use of nuclear power;
• availability and cost of HALEU; and
• other costs associated with commercialization of these technologies.
Any material change to our assumptions or expectations with respect to our timeline and funding needs, or any material overruns or other unexpected increase in costs or delays, may have a material adverse effect on our business, results of operations, and financial condition and could harm our reputation.
In addition, we may need to make significant adjustments to our business plan or significantly delay, scale back, or discontinue the deployments of our facilities, including our fuel fabrication facilities and fuel recycling facilities, and/or some or all of our research and development programs and may need to seek additional capital. Depending on our available capital resources, we may need to delay or discontinue expected near‑term expenditures, which could materially impact our business, results of operations, and financial condition by limiting our ability to pursue some of our other strategic objectives and/or reducing the resources available to further develop our design, sales, and manufacturing efforts.
In order to fulfill our business plan, we may require additional funding. Such funding may be dilutive to our investors, may result in a decline in the market price of shares of our common stock, and no assurances can be provided as to the availability or terms of any such funding. Any such funding and the associated terms will be highly dependent upon market conditions and the progress of our business at the time we seek such funding.
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Additional financing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities or business strategies and we may be required to delay, scale back, or terminate some or all of our research and development programs, each of which could harm our business, operating results, and financial condition. If we incur debt, the debt holders would have rights senior to holders of our common stock to make claims on our assets, and the terms of any debt could restrict our operations (including our ability to pay dividends on our common stock), limit our ability to incur liens or additional debt, repurchase our securities, make certain investments, and/or engage in certain merger, consolidation, or asset sale transactions. Furthermore, to the extent we raise additional capital by issuing additional equity securities, including under employee benefit plans, stockholders will experience dilution, the relative voting strength of each previously outstanding share of common stock may be , the market price of the shares of our common stock may , and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.
We have the ability to issue additional equity securities or securities convertible into equity securities, which would lead to dilution of our issued and outstanding common stock.
We may from time to time issue additional equity securities or securities convertible into equity securities, which would result in dilution of our existing stockholders’ equity interests in us. Our board of directors has the authority to issue, without vote or action of stockholders, preferred shares in one or more series, and has the ability to fix the rights, preferences, privileges, and restrictions of any such series. Any such series of preferred shares could contain dividend rights, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences, or other rights superior to the rights of holders of our common stock. In addition, we are authorized to issue, without stockholder approval, up to an aggregate of 500 million shares of common stock, of which approximately 286,512,150 million shares remained unissued and unreserved as of December 31, 2025. We are also authorized to issue, without stockholder approval (except as required by the rules of the NYSE), securities convertible into either common stock or preferred stock. We may issue such shares in connection with financing transactions, joint ventures, mergers and acquisitions, or other purposes. In addition, our stockholders will experience additional dilution when performance or restricted share units vest and settle, when we issue equity awards to our employees under our equity incentive plans, or when we otherwise issue additional equity.
We will require additional future funding to support our operations and implementation of our growth plans.
Based on our recurring losses and management’s expectations that significant ongoing operating expenditures will be necessary to successfully implement our business plan and develop our powerhouses, fuel fabrication facilities, and fuel recycling facilities, we will require additional funding to continue our operations through commercialization. If we are unable to raise additional funding, we may be forced to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.
We do not expect to generate meaningful revenue unless and until we are able to finalize development and commercialization of the Aurora product line, and we may not be able to do so on our anticipated timetable, if at all. We expect our expenses and capital expenditures to increase in connection with our ongoing activities, including developing and advancing the Aurora product line, obtaining a COLA, and completing our manufacturing preparation and trials. In addition, we expect to incur additional costs associated with operating as a public company. Certain costs are not reasonably estimable at this time, and we may require additional funding. Our forecasts anticipate certain customer‑sourced income that is not guaranteed.
Our primary source of funding to support our operations has been from capital raises. We have concluded that no substantial doubt exists about our ability to continue as a going concern for the one-year period following the issuance date of the accompanying consolidated financial statements.
Our business plan includes the use of investment tax credits, production tax credits, and other forms of government funding to finance the commercial development of our powerhouses, and there is no guarantee that our projects will qualify for these credits or that government funding will be available in the future.
Our business plan depends in part on federal, state, and local government policies and incentives that support the development, financing, ownership, and operation of renewable energy generation projects. These policies and incentives include investment tax credits, production tax credits, accelerated depreciation, renewable portfolio standards, feed‑in‑tariffs and similar programs, renewable energy credit mechanisms, and tax exemptions. If these policies and
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incentives are changed or eliminated, or we are unable to use them, it could result in a material adverse impact on our business, results of operations, and financial condition.
Changes in tax laws could adversely affect our business prospects and financial results.
We will be subject to taxes in the U.S. and certain foreign jurisdictions. The taxes we owe in the jurisdictions where we conduct business activities may be adversely affected by changes in tax laws or regulations, including but not limited to, substantive changes in, reductions in, or the repeal or expiration of, tax incentives. Due to economic and political conditions, tax rates in various jurisdictions, including the U.S., may be subject to change. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in available tax incentives, changes in the valuation of deferred tax assets and changes in tax laws or their interpretation. We may be subject to income tax audits by various tax authorities. An adverse resolution by one or more taxing authorities could have a material impact on our finances. There is no assurance that taxing authorities or courts will agree with the positions reflected on our tax returns, in which case interest and penalties could be imposed that may have a material adverse effect on our business, results of operations, and financial condition. Further, we may be unable to utilize any net operating losses in the event a change in control is determined to have occurred.
Our actual operating results may differ significantly from our guidance. Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “Risk Factors” section could result in our actual operating results being different from our guidance, and the differences may be adverse and material.
From time to time, we may release guidance in our shareholder letters, quarterly investor company update conference calls, quarterly company update presentations, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which includes forward‑looking statements, will be based on projections prepared by management. These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent expert or outside party compiles or examines the projections. Accordingly, no such person expresses any opinion or any other form of assurance with respect to the projections.
Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, political, economic, and competitive uncertainties and contingencies, many of which are beyond our control, such as public health emergencies and the Russia‑Ukraine conflict, and are based upon specific assumptions with respect to future business decisions, some of which will change. The rapidly evolving market in which we operate may make it difficult to evaluate our current business and our future prospects, including our ability to plan for and model future growth. We intend to state possible outcomes as high and low ranges, which are intended to provide a sensitivity analysis as variables change. However, actual results will vary from our guidance, and the variations may be material. The principal reason that we release guidance is to provide a basis for our management to discuss our business outlook as of the date of release with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons. Investors are urged not to rely upon our guidance in making an investment decision regarding our common stock.
Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “ Risk Factors ” section could result in our actual operating results being different from our guidance, and the differences may be adverse and material.
Our financial results may vary significantly from quarter to quarter.
We expect our revenue and operating results to vary from quarter to quarter. We may incur significant operating expenses during the start‑up and early stages of large contracts and may not be able to recognize corresponding revenue in that same quarter. We may also incur additional expenses when contracts are terminated or expire and are not renewed.
Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “ Risk Factors ” section and the following factors, among others:
• the terms of customer contracts that affect the timing of revenue recognition;
• variability in demand for our services and solutions;
• commencement, completion, or termination of contracts during any particular quarter;
• timing of product deliveries;
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• timing of award or performance incentive fee notices;
• timing of significant bid and proposal costs;
• the costs of remediating unknown defects, errors, or performance problems of our product offerings;
• variable purchasing patterns under blanket purchase agreements and other indefinite delivery/indefinite quantity contracts;
• restrictions on and delays related to the export of nuclear articles and services;
• costs related to government inquiries, regulatory investigations or interactions, or litigation;
• strategic decisions by us or our competitors, such as acquisitions, divestitures, spin‑offs and joint ventures;
• strategic investments or changes in business strategy;
• changes in the extent to which we use subcontractors;
• seasonal fluctuations in our staff utilization rates;
• changes in our effective tax rate, including changes in our judgment as to the necessity of the valuation allowance recorded against our deferred tax assets; and
• the length of sales cycles.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock.
Securities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. Moreover, if certain analysts fail to commence coverage of us, the market price and volume for our common stock could be adversely affected.
Risks Related to Being a Public Company
The market price of our common stock is, and could remain, highly volatile. Purchasers of our common stock could incur substantial losses.
The trading price of our common stock is, and could remain, volatile and subject to significant fluctuations. The trading price of our common stock depends on many factors, including those described in this “ Risk Factors ” section, many of which are beyond our control and may not be related to our operating performance. We do not intend to pay cash dividends on our common stock for the foreseeable future.
Furthermore, the stock markets in general have experienced extreme volatility, which has sometimes been unrelated to the operating performance of issuers. The trading price of our common stock may be adversely affected by third parties trying to drive down or drive up the market price. Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines or otherwise exhibits volatility, and their activities can negatively affect our stock price and increase the volatility of our stock price. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
We may face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards.
We may in the future become subject to claims and litigation alleging violations of the securities laws or other related claims, which could harm our business and require us to incur significant costs. In the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often
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been instituted against such companies. We are generally obliged, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments. Regardless of the outcome, litigation may require significant attention from management and could result in significant legal expenses or settlement costs that could have a material impact on our business, results of operations, and financial condition.
Some provisions of Delaware law and our certificate of incorporation and bylaws may deter third parties from acquiring us and diminish the value of our common stock.
Our certificate of incorporation and bylaws provide for, among other things:
• the ability of our board of directors (the “Board”) to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change in control;
• a classified board of directors with staggered, three‑year terms, which could delay the ability of stockholders to change the membership of a majority of our Board;
• a prohibition on cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
• advance notice requirements for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings; and
• certain limitations on convening special stockholder meetings.
In addition, in our certificate of incorporation, we have not opted out of Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in certain “business combinations” with any “interested stockholder” for a three‑year period following the time that the stockholder became an interested stockholder, unless:
• prior to such time, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
• upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of voting stock outstanding at the time the transaction commenced, excluding certain shares; or
• at or subsequent to that time, the business combination is approved by our Board and by the affirmative vote of holders of at least two‑thirds of the votes of our outstanding voting stock that is not owned by the interested stockholder.
Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of the votes of our outstanding voting stock. For purposes of this provision, “voting stock” means any class or series of stock entitled to vote generally in the election of directors.
Under certain circumstances, this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with us for a three‑year period. This provision may encourage companies interested in acquiring us to negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our Board approves either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These provisions also may have the effect of preventing changes in our Board and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
These provisions in our certificate of incorporation and our bylaws, as well as Delaware law, may discourage, delay or prevent a transaction involving a change in control of us that is in the best interest of its minority stockholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts. These provisions could also make it more difficult for stockholders to nominate directors for election to our board of directors and take other corporate actions.
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Our failure to effectively implement controls and procedures required by Section 404(a) of the Sarbanes‑Oxley Act could negatively impact our business.
As a public company, we are subject to Section 404 of the Sarbanes‑Oxley Act and are required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes‑Oxley Act are significantly more stringent than those required of a privately held company. Effective internal control over financial reporting is necessary for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet reporting obligations.
If our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness of our internal control over financial reporting at such time as it is required to do so, and material weaknesses in our internal control over financial reporting are identified, we could be subject to regulatory scrutiny and a loss of public and investor confidence. Such scrutiny and loss may prevent us from obtaining capital on favorable terms, or at all, or result in litigation from investors and stockholders, which could have a material adverse effect on our business, results of operations, and financial condition. In addition, if we do not maintain adequate financial and management personnel, processes, and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in the price of our common stock and affect our business, results of operations, and financial condition. To comply with public company requirements, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff. to comply with the Sarbanes‑Oxley Act could potentially subject us to sanctions or by the SEC, the NYSE, or other regulatory authorities, which would require additional financial and management resources.
We are no longer a "smaller reporting company" and the reduced reporting requirements applicable to smaller reporting companies will no longer apply to us.
Although we are permitted to provide in this Annual Report scaled disclosures permitted for a smaller reporting company, beginning with our first quarterly report on Form 10-Q for the quarter ending March 31, 2026, we will no longer be permitted to rely on exemptions from those requirements that are applicable to smaller reporting companies. We expect that the loss of smaller reporting company status and compliance with these additional requirements may place a burden on our financial and management resources and increase our accounting, legal, and financial compliance costs associated with corporate governance requirements applicable to us as a public company, including under the rules and regulations of the SEC, the Sarbanes-Oxley Act, the Securities Act, and the Exchange Act, as well as the NYSE rules, and make some activities more time consuming. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. Furthermore, if our additional disclosures in future SEC filings are perceived as insufficient or inadequate by investors or regulatory authorities, the market price of our stock could decline and we could be subject to actions by stockholders or regulatory authorities.
