Nuscale POWER (SMR) risk factors, FY2024 10-K

Risks Related to Our Structure and Governance

1. 01If NuScale LLC were treated as a corporation for United States federal income tax or state tax purposes, then the amount available for distribution by NuScale LLC could be substantially reduced and the value of NuScale Corp shares could be adversely affected
2. 02In certain cases, payments under the Tax Receivable Agreement may exceed the actual tax benefits NuScale Corp realizes

Risks Related to NuScale’s Business and Industry

1. 03We have not yet entered into a binding contract with a customer to deliver NPMs, and there is no guarantee that we will be able to do so
2. 04Competitors in China and Russia currently operate commercial SMRs and may have advantages in marketing their SMRs to potential customers
3. 05Any delays in the development and manufacture of NPMs and related technology may adversely impact our business and financial condition
4. 06We have not yet delivered NPMs to customers, and any setbacks we may experience during our first commercial delivery and other demonstration and commercial missions could have a material adverse effect on our business, financial condition and results of operation, and could harm our reputation
5. 07We have incurred significant losses since inception, we expect to incur losses in the future, and we may not be able to achieve or maintain profitability
6. 08The cost of electricity generated from nuclear sources or our NPMs may not be cost competitive with future electricity generation sources in some markets, which could materially and adversely affect our business
7. 09Loss of government incentives to use nuclear power may have an adverse impact on the market for SMRs
8. 10The market for SMRs generating nuclear power is not yet established and may not achieve the growth potential we expect or may grow more slowly than expected
9. 11Our commercialization strategy relies heavily on our relationship with ENTRA1, Fluor and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate
10. 12We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy
11. 13Any failure to effectively incorporate updates to the design, construction and operations of NuScale SMR-based plants to ensure cost competitiveness could reduce the marketability of the NuScale design and has the potential to impact deployment schedules
12. 14If manufacturing and construction issues are not identified prior to design finalization, long-lead procurement, and/or module fabrication, then those issues will be realized during production, fabrication or construction and may impact plant deployment cost and schedule
13. 15We and our customers operate in a politically sensitive environment, and the public perception of nuclear energy can affect our customers and us
14. 16Our supply base may not be able to scale to the production levels necessary to meet sales projections
15. 17We are highly dependent on our senior management team and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy
16. 18We expect we will require additional future funding
17. 19If we are unable to continue as a going concern, 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
18. 20Our ability to protect our patents and other proprietary rights may be challenged and is not guaranteed, exposing us to the possible loss of competitive advantage
19. 21We enjoy only limited geographical protection with respect to certain patents and may not be able to protect our intellectual property rights throughout the world
20. 22We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market NPMs
21. 23We may be subject to claims of ownership and other rights to our patents and other intellectual property by third parties
22. 24Our SDA applications may not be approved, and any rework necessary to address NRC concerns could significantly delay the commercialization of our products
23. 25Our design is only approved in the United States, and we must obtain approvals on a country-by-country basis before we can complete the sale of our products abroad, which approvals may be delayed or denied or which may require modification to our design
24. 26Our customers must obtain additional regulatory approvals before they construct power plants using our NPMs, and approvals may be denied or delayed
25. 27Our customers could incur substantial costs as a result of violations of, or liabilities under, environmental laws
26. 28Our business is subject to a wide variety of extensive and evolving government laws and regulations. Changes in and/or failure to comply with such laws and regulations could have a material adverse effect on our business
27. 29Any future widespread public health crises, similar to COVID-19, could negatively affect various aspects of our business, make it more difficult for us to meet our obligations to our customers, and result in reduced demand for our products and services
28. 30We are subject to cybersecurity risks
29. 31Changes in tax laws or regulations may increase tax uncertainty and adversely affect results of our operations and our effective tax rate
30. 32We may become involved in litigation that may materially adversely affect us

Risks Related to Ownership of Our Shares of Class A Common Stock

1. 33Our Organizational Documents designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for substantially all disputes between NuScale Corp and its stockholders
2. 34The price of shares of Class A common stock may be volatile
3. 35These market and industry factors may materially reduce the market price of shares of Class A common stock regardless of our operating performance
4. 36NuScale Options will become exercisable for shares of Class A common stock, which, if exercised, would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders
5. 37An active trading market for our securities may not be sustained. In addition, we may be unable to maintain the listing of our securities on the NYSE in the future
6. 38Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Class A common stock
7. 39We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased and will continue to increase our costs and the risk of non-compliance
8. 40We have in the past and may in the future be subject to short selling strategies that could result in a reduction in the market price of our Class A common stock
9. 41We may be subject to securities litigation, which is expensive and could divert management attention

Risks Related to Being a Public Company

1. 42We have identified a material weakness in our internal control over financial reporting. Failure to remediate the material weakness or any other material weaknesses that we identify in the future could result in material misstatements in our financial statements