The following discussion and analysis of the financial condition and results of operations of
NuScale Power Corporation(" NuScale Corp") should be read together with our NuScale LLCfinancial statements as of and for the years ended December 31, 2021and 2020 and NuScale Corpunaudited interim condensed consolidated financial statements as of and for the three and nine months ended September 30, 2022and the unaudited interim condensed consolidated financial statements of NuScale LLCas of and for the three and nine months ended September 30, 2021, together with related notes thereto. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those projected in these forward-looking statements as a result of various factors. Unless the context otherwise requires, references in this section to "NuScale," "us," "our" or "we" refer to NuScale Power, LLC(" NuScale LLC") prior to the Transaction, and to NuScale Power Corporation(" NuScale Corp") following the consummation of the Transaction.
Uma observação especial sobre declarações prospectivas
This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q, including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position and business strategy and the expectations, beliefs, intentions, plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "continue," "could," "may," "might," "plan," "possible," "potential," "predict," "project," "will," "would," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about: •our financial and business performance, including financial projections and business metrics; •the ability to maintain the listing of the shares of Class A common stock on the NYSE, and the potential liquidity and trading of such securities; •the ability to obtain regulatory approvals to deploy our SMRs in
the United Statesand abroad; •changes in applicable laws or regulations; •our success in retaining or recruiting, or changes required in, our officers, key employees or directors; •forecasts regarding end-customer adoption rates and demand for our products in markets that are new and rapidly evolving; •macroeconomic conditions; •availability of a limited number of suppliers for our products and services; •increases in costs, disruption of supply, or shortage of materials; •our dependence on a small number of customers, and failure to add new customers or expand sales to existing customers; •substantial regulations, which are evolving, and unfavorable changes or failure by us to comply with these regulations; •product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims; •changes to United Statestrade policies, including new tariffs or the renegotiation or termination of existing trade agreements or treaties; •various environmental and safety laws and regulations that could impose substantial costs on us and negatively impact the ability of our suppliers to operate their manufacturing facilities and of our customers to own and operate our plants; •outages and disruptions of our services if we fail to maintain adequate security and supporting infrastructure as we scale our information technology systems; •availability of additional capital to support business growth; •failure to protect our intellectual property; •intellectual property rights claims by third parties, which could be costly to defend, related significant damages and resulting limits on our ability to use certain technologies; •developments and projections relating to our competitors and industry; •our anticipated growth rates and market opportunities; •the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements; •the potential for our business development efforts to maximize the potential value of our portfolio; •our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; •the inability to develop and maintain effective internal controls; 19 -------------------------------------------------------------------------------- Table of Contents •failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows; •cyber-attacks and security vulnerabilities; and •COVID-19 and other pandemics, including their effect on the foregoing. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. Many factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, and there can be no assurance that future developments affecting us will be those we have anticipated. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to "Risk Factors" in this Quarterly Report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that we currently consider immaterial, or which are unknown. It is not possible to predict or identify all such risks. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. No person should take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future.
Our mission is to provide scalable advanced nuclear technology for the production of electricity, heat, and clean water to improve the quality of life for people around the world. We are changing the power that changes the world by creating an energy source that is smarter, cleaner, safer and cost competitive. Our small modular reactor ("SMR"), known as NuScale Power Module ("NPM"), provides a scalable power plant solution incorporating enhanced safety, improved affordability and extended flexibility for diverse electrical and process heat applications. Our scalable design provides carbon-free energy and at a reduced cost when compared with gigawatt-sized nuclear facilities. Since our founding in 2007, we have made significant progress towards commercializing the first SMR in
the United States. In 2017, we submitted our Design Certification Application ("DCA") to the U.S. Nuclear Regulatory Commission("NRC"). On August 28, 2020, the NRC issued its Final Safety Evaluation Report, representing the NRC's completion of its technical review. On September 11, 2020the NRC issued its Standard Design Approval ("SDA") of our NPM and scalable plant design. With this phase of NuScale's DCA now complete, customers may proceed with plans to develop NuScale power plants with the understanding that the NRC has approved the safety aspects of the NPM and plant design. We expect our operating losses and negative operating cash flow to grow until the commercialization of the NPM. On July 29, 2022, the NRC directed the staff to issue a final rule that certifies NuScale's SMR design for use in the United States. The certification's effective date is 30 days after NRC publishes the rule in the Federal Register.
acordo de fusão
May 2, 2022, we completed a merger (the "Merger") with NuScale LLCpursuant to the Agreement and Plan of Merger dated December 13, 2021(as amended, modified, supplemented or waived, the "Merger Agreement"), between NuScale Corp(formerly Spring Valley Acquisition Corp.), NuScale LLCand Spring Valley Merger Sub, LLC, a wholly owned subsidiary of NuScale Corp("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub would be merged with and into NuScale LLC(the "Merger"), with NuScale LLCsurviving the Merger (the "Surviving Company"), Spring Valley Acquisition Corpbeing renamed NuScale Power Corporation, and NuScale LLCcontinuing to be held as a wholly controlled subsidiary of NuScale Power Corporationin an "Up-C" structure. On May 2, 2022, the transaction contemplated by the Merger Agreement, including the Merger (collectively the "Transaction"), was completed. The Transaction was accounted for as a reverse recapitalization as provided under GAAP. NuScale Corpis the acquired company, with NuScale LLCtreated as the acquirer. This determination reflects Legacy NuScale Equityholders holding a majority of the voting power of NuScale Corp, NuScale LLC'spre-merger operations being the majority post-merger operations of NuScale Corp, and NuScale LLC'smanagement team retaining similar roles at NuScale Corp.Accordingly, although NuScale Corpis the legal parent company, GAAP dictates that the financial statements of NuScale Corpwill represent a continuation of NuScale LLC'soperations, with the Transaction being treated as though NuScale LLCissued ownership interests for NuScale Corp, accompanied by a recapitalization. The net assets of NuScale LLCare stated at 20
Custo histórico, sem acréscimo de ágio ou outros intangíveis registrados dos efeitos da fusão com Spring Valley.
The following table provides the historical cost of the assets and liabilities assumed as a result of the transaction: Cash
$ 341,462Warrant liabilities (47,532) Total net assets $ 293,930
Principais fatores que afetam nossas perspectivas e resultados futuros
We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from carbon-based and other non-carbon-based energy generators, the risk of perceived safety issues and their consequences for our reputation and the other factors discussed under the section titled "Risk Factors" in Part II, 1A of this filing. We believe the factors described below are key to our success.
Iniciando e expandindo lançamentos comerciais
September 2020, we became the first and only company to receive NRC SDA for an SMR. We believe our commercialization activities are being completed at a pace that can support delivery of modules to a client site as early as 2027. We have an agreement in place with UAMPS to deploy a NuScale 6-module power plant at the DOE's Idaho National Laboratoryas part of UAMPS' Carbon Free Power Project("CFPP"). Commercial operation of the first NPM is slated for 2029. In November 2021, we signed a teaming agreement with S.N. Nuclearelectrica S.A., an entity that operates under the authority of the Romanian Ministry of Energy, to advance the deployment of our NPMs to Romania. Under the teaming agreement, we will evaluate activities associated with the planning, siting and licensing of our NuScale power plant technology at a site that is the location of an existing coal-fueled electricity plant. We expect the site in Romaniato use six modules and to be commercially operable by 2028. We have over 100 potential target customers, including, in addition to UAMPS, ten customers across seven countries that we consider highly interested customers who are considering an NPM power plant deployment in the late 2020s or early 2030s. We believe the long lead-time involved with siting an SMR, the number of customers in our pipeline and the work being performed by these potential customers involving a NuScale deployment project bode well for our potential future success. Regulatory Approvals We expect to submit an application to the NRC for our latest power enhanced design. If approved, the licensed output of our NPM will be raised from 50 MWe to 77 MWe. Approval of the design, which could come in 2024, would increase the cost-competitiveness of our NPM, and we consider obtaining such approval a critical milestone. Other factors that we believe are critical to our future success are country-level approvals of our NPM design. We also believe site-approvals by our customers to be key to facilitating broader adoption of our products and services. Obtaining these approvals before others is critical in maintaining our competitive advantage.
Implementação bem-sucedida da primeira usina NPM
A critical step in our success will be the successful construction and operation of the first power plant using our NPM. We expect that the first NPM for the UAMPS facility could be operational as early as 2029 with the remaining five modules achieving commercial operation in 2030. 21
resultados das operações
(in thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue
$ 3,172 $ 297$ 8,366 $ 1,333Cost of sales (1,749) (156) (4,693) (807) Gross margin 1,423 141 3,673 526 Research and development expenses 34,317 26,370 87,325 66,021 General and administrative expenses 18,473 13,686 44,436 32,524 Other expenses 14,731 5,921 34,524 25,222 Loss from operations (66,098) (45,836) (162,612) (123,241) Department of Energy cost share 18,377 18,839 64,016 50,408 Increase (decrease) in fair value of warrant liabilities (2,833) - 3,287 - Other cost share (interest expense) 924 (104) 926 (1,613) Loss before income taxes $ (49,630)$
em comparação com os três meses encerrados
O aumento da receita foi atribuído às atividades de suporte da EPCDA ao programa CFPP, bem como aos serviços de consultoria na área de tecnologias nucleares.
pesquisa e desenvolvimento
Os gastos com P&D aumentaram como resultado de honorários profissionais mais altos associados ao trabalho de projeto de fábrica padrão
Público e administrativo
G&A expenses increased as a result of
$3.1 millionrelated to advertising and marketing expenses, $4.0of higher insurance costs and $1.1 millionin equity-based compensation, partially offset by a decrease of $3.4 millionin compensation costs. Other
Outras despesas aumentaram como resultado
e aumento das despesas com software e hardware
Comparando os nove meses encerrados
mudanças na oferta
Valores totais do ano anterior
O aumento da receita foi atribuído às atividades de suporte da EPCDA ao programa CFPP, bem como aos serviços de consultoria na área de tecnologias nucleares.
pesquisa e desenvolvimento
Os gastos com P&D aumentaram devido
Público e administrativo
G&A expenses increased as a result of
$3.3 millionin compensation costs due to an increase in headcount, $4.5 millionin insurance costs, $2.7 millionin equity-based compensation, and $1.4 millionin marketing and advertising costs as we continue to build brand recognition across the globe.
Outras despesas aumentaram como resultado
Liquidez e recursos de capital
Medimos a liquidez em termos de nossa capacidade de financiar as necessidades de caixa de atividades de pesquisa e desenvolvimento e operações comerciais de curto prazo, incluindo nossas obrigações contratuais e outras. Nossas necessidades atuais de liquidez incluem principalmente atividades de pesquisa e desenvolvimento para o desenvolvimento contínuo de NPM e projeto de planta associado.
$268.6 millionin cash and cash equivalents as of September 30, 2022, compared to $77.1 millionas of December 31, 2021, as well as $50.0 millionin short-term investments that will mature in the first quarter of 2023. We had no debt as of September 30, 2022, compared to $14.0 millionas of December 31, 2021, (which was converted into equity in conjunction with the Transaction). The Transaction resulted in NuScale receiving cash in the amount of $341.5 million, consisting of $235.0 millionin PIPE funding and $145.5 millionin cash in trust, partially offset by transaction costs of $39.1 million. Since NuScale's inception, we have incurred significant operating losses; we have had negative operating cash flow during the three and nine months ended September 30, 2022and 2021; and we have an accumulated deficit of $169.5 millionas of September 30, 2022. Management expects that operating losses and negative cash flows may increase because of additional costs and expenses related to the development of technology and the development of market and strategic relationships with other companies. To date, we have not generated any material revenue. We do not expect to generate any meaningful revenue unless and until we are able to commercialize our NPM and related services. We expect our costs to increase in connection with advancement of our products and services toward commercialization. In addition, with the completion of the Transaction, we expect to incur additional costs associated with operating as a public company. While we believe that the proceeds of the Transaction will be sufficient to reach commercialization of our NPM, certain costs are not reasonably estimable at this time and we may require additional funding and our projections anticipate certain customer-sourced income that is not assured. We believe that based on our current level of operating expenses and currently available cash resources, we will have sufficient funds available to cover R&D activities and operating cash needs for several years. However, considering that we have not yet completed the development of a commercial product and have no meaningful revenue to date, we may require additional funds in future years. Our ability to raise funds through equity offerings may be limited by the significant number of shares that may be publicly sold, including the shares registered for resale under the Registration Statement on Form S-1 that was declared effective by the SECon June 30, 2022. Such sales may negatively affect the market price of our shares of Class A common stock. In particular, a large sale by Fluor, our majority shareholder, could significantly 23 -------------------------------------------------------------------------------- Table of Contents affect our stock price. We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive from such exercises, depends on the trading price of our shares of Class A common stock, which from time to time, has exceeded the $11.50Warrant exercise price, before the Warrants expire. In certain circumstances, the Warrants can be exercised on a cashless basis. Our ability to fund R&D activities and our operating cash needs for several years does not depend on the proceeds we may receive as the result of exercises of Warrants.
Demonstração resumida dos fluxos de caixa para os nove meses encerrados
A tabela a seguir mostra as principais fontes e usos de caixa, equivalentes de caixa e caixa restrito para os períodos apresentados abaixo:
Nine Months Ended September 30, (in thousands) 2022 2021 Net cash used in operating activities
$ (104,728)(73,389) Net cash used in investing activities (51,744) (1,573) Net cash provided by financing activities 366,886 172,715
Aumento líquido em caixa e equivalentes de caixa e caixa restrito (a)
fluxos de caixa usados em atividades operacionais
Our operating cash flow decreased during the nine months ended
September 30, 2022primarily as a result of the purchase of short-term investments, higher cash payments for compensation costs and higher prepaids.
fluxos de caixa das atividades de investimento
In accordance with our investment policy, we purchased
$50.0 millionin 6 month certificates of deposit during the nine months ended September 30, 2022. We had no such purchases during the same period in 2021.
fluxos de caixa das atividades de financiamento
During the nine months ended
September 30, 2022, net cash provided by financing activities primarily consisted of proceeds from the Transaction and the exercise of warrants and options, while the nine months ended September 30, 2021included $192.5 millionin capital raised through sales of NuScale LLCpreferred units and $27.2 millionof proceeds from debt issuance, partially offset by the repayment of $47.5 millionof debt to Fluor, our majority shareholder.
Obrigações e obrigações contratuais
A partir de
arranjos de balanço
In conjunction with
DOE Office of Nuclear Energy Award DE-NE0008935with Utah Associated Municipal Power Systems'("UAMPS") wholly owned subsidiary, Carbon Free Power Project LLC(" CFPP LLC"), we entered into a DCRA, pursuant to which we are developing the NRC license application and performing other site licensing and development activities. Under the DCRA, we may be obligated to refund to UAMPS a percentage of its net development costs up to a specified cap, which varies based on the stage of project development, if certain performance criteria are not met. The maximum reimbursement based on the current stage of project development is $57,000. As of September 30, 2022the net development costs incurred by UAMPS totaled $15,627. Under this agreement, the Company is required to have credit support to fund the amount of its potential reimbursement of these net development costs. The letter of credit requires the Company maintain a deposit in a demand account of a minimum 105% of the aggregate amount available to be drawn under all letters of credit outstanding. This account is included as Restricted cash in the amount of $18,900, on the accompanying condensed consolidated balance sheet and acts 24 -------------------------------------------------------------------------------- Table of Contents as collateral for the $18,000letter of credit covering the total net development costs outstanding at September 30, 2022. This letter of credit is required to be updated on a quarterly basis using an estimated net development costs schedule agreed to by both parties.
políticas e estimativas contábeis significativas
Our financial statements have been prepared in accordance with GAAP. Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amount of expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our financial statements. Our significant accounting policies are described in Note 3 within our "Notes to the Unaudited Condensed Consolidated Financial Statements". Additional information about our critical accounting policies follows:
contas a receber
Accounts receivable includes reimbursement requests outstanding from
DOEawards and are recognized as eligible costs are incurred. Such treatment creates symmetry with our incurrence of qualifying costs. Accounts receivable are presented net of related deferred DOEcost share liabilities that have the right of offset. We do assess the probability of collection from the DOEin establishing the fair value of recorded amounts.
verificação de receita
We recognize fixed price contract revenue with multiple performance obligations as each obligation is completed. We allocate the transaction price to each performance obligation using an estimate of the stand-alone selling price of each distinct service in the contract. Revenue recognized on contracts that have not been billed to customers is classified as a current asset under Accounts Receivable on the Balance Sheet. Amounts billed to clients in excess of revenue recognized are classified as a current liability under Deferred Revenue. We recognize time and material contracts revenue over time, matching continuous transfer of control to the customer. We account for these contracts as a single performance obligation and recognize revenue using the percentage-of-completion ("POC") method, based on contract cost incurred to date compared to total estimated contract cost. The POC method (an input method) is the most faithful depiction of our performance because it directly measures the value of the services transferred to the customer. Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed as incurred unless they are expected to be recovered from the client. We exclude all taxes assessed by governmental authorities from our measurement of transaction prices that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of revenue or cost of sales.
Geralmente oferecemos garantias limitadas para o trabalho realizado sob nossos contratos de engenharia. Os períodos de garantia geralmente se estendem por um período limitado após a conclusão real do nosso trabalho.
Because our SMR is designed to be sold on a modular basis, we are limited under
U.S.GAAP in our ability to recognize revenue on a POC basis. Other companies with a less-standardized approach might be able to use POC, which would have the effect of accelerating their recognition of profit ahead of us, given our use of completed contract accounting.
Remuneração baseada em ações
Equity-based compensation is measured using a fair value-based method for all equity based awards. The cost of awarded equity instruments is recognized based on each instrument's grant-date fair value over the period during which the grantee is required to provide service in exchange for the award. The determination of fair value requires significant judgment and the use of estimates, particularly with regard to Black-Scholes assumptions such as stock price volatility and expected option lives to value equity-based compensation. Equity-based compensation is recorded as a general and administrative expense and other expense in the statements of operations. 25 -------------------------------------------------------------------------------- Table of Contents We measure the fair value of each option grant at the date of grant using a Black-Scholes option pricing model. We estimate the expected term of options granted based on historical experience and expectations. We use the treasury yield curve rates for the risk-free interest rate in the option valuation model with maturities similar to the expected term of the options. Volatility is determined by reference to the actual volatility of several publicly traded companies that are similar to us in our industry sector. We do not anticipate paying any cash dividends in the foreseeable future and therefore use an expected dividend yield of zero in the option valuation model. Forfeitures are recognized as they occur. All equity-based payment awards subject to graded vesting based only on a service condition are amortized on a straight-line basis over the requisite service periods. There is substantial judgment in selecting the assumptions which we use to determine the fair value of such equity awards and other companies could use similar market inputs and experience and arrive at different conclusions with respect to those used to calculate fair value. Using alternative assumptions could cause there to be differences in the resulting fair value. If the fair value were to increase, the amount of expense that would result would also increase. Conversely, if the fair value were to decrease, the amount of expense would decrease.
Eleições contábeis para uma empresa emergente em crescimento
Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-EGCs, and any such election to not take advantage of the extended transition period is irrevocable. We expect to be an EGC at least through the end of 2022 and will have the benefit of the extended transition period. We intend to take advantage of the benefits of this extended transition period.
Demonstrações contábeis modernas
A Administração acredita que não há novas diretrizes contábeis emitidas, mas ainda não vigentes, que tenham impacto relevante nas demonstrações financeiras atuais da Companhia.
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