NUSCALE POWER Corp

Current report

In addition to the other information set forth in this Quarterly Report on Form 10-Q, investors should carefully consider the risk factors discussed in Part I, Item 1A. “Risk Factors” ofthe Company’s 2024 Annual Report on Form 10-K, which could materially affect our business, financial condition, results of operations, or reputation. We do not believe that there have been any material changes to the risk factors disclosed inthe Company’s 2024 Annual Report on Form 10-K, other than as set forth below. The risks described inthe Company’s 2024 Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, results of operations and/or reputation.

Current report

Our commercialization strategy relies heavily on our relationships 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.

Current report

We rely heavily upon our relationship with ENTRA1 to commercialize our NPM and our other products and services, as well as our relationships with Fluor, the largest stockholder in NuScale, and other investors and strategic partners. Pursuant to the Strategic Alliance Agreement, ENTRA1 is our exclusive global strategic partner and holds the exclusive rights for the worldwide commercialization, distribution, sales and development of our products, services and power plants. We granted Fluor certain rights to provide engineering, procurement and construction services in connection with NuScale’s general plant design, project-specific designs and services typically performed by Fluor or its direct competitors. Similarly, we have entered into certain agreements with Doosan Heavy Industries and Construction Company, Ltd., IHI Corporation, and Sarens Nuclear & Industrial Services, LLC for certain planning, engineering, manufacturing and support activities, and JGC Holdings Corporation, an affiliate of Japan NuScale Innovation, LLC, related to the EPC and commissioning of the first NuScale SMR-based plant, with Samsung C&T Corporation related to certain EPC activities; and with GS Energy with respect to project development in certain markets.

Current report

Our strategic partners may have interests that diverge from our interests, and which may hinder our ability to negotiate sales to customers. If we lose our agreements with strategic partners, we may need to find new contractors who may have less experience designing and building nuclear plants, developing NuScale SMRs, or commercializing our products and services. In addition, in the event of a termination of the Strategic Alliance Agreement with ENTRA1, there will be restrictions on our ability to pursue certain opportunities without ENTRA1 or to contact or enter into any arrangement with anyone that has a relationship with ENTRA1. The termination of any of the Strategic Alliance Agreement, the agreements with Fluor to provide engineering, procurement and construction services, the agreements with Doosan Heavy Industries and Construction Company, Ltd., IHI Corporation, and Sarens Nuclear & Industrial Services, LLC, or those with JGC Holdings Corporation, Samsung C&T Corporation, or GS Energy could substantially hinder our ability to expand our production capacity and installation of NuScale power plants and could materially adversely affect our business, prospects, financial condition, results of operations and/or reputation.

Current report

Changes in US trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

Current report

The US government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements. It has also initiated or is considering the imposition of tariffs on certain foreign goods. Changes in US trade policy have resulted in many US trading partners adopting responsive trade policies, and additional responsive trade policies could be adopted in the future. These measures could also result in increased costs for goods imported into the United States. This in turn could require us to increase prices to our customers, or, if we are unable to increase prices, result in lowering our margin on products sold.

Current report

Our long-lead time components are manufactured overseas, and tariffs on such components would increase our costs to the extent those components are imported into the US. If there are retaliatory tariffs imposed by countries to which we are exporting, we may not be able to pass the cost through to our customers or our products could be less competitive as compared to competitors.

Previous report

We are and may become involved in litigation that may materially adversely affect us.

Previous report

We are currently named in a number of purported class action lawsuits (see “Legal Proceedings”), and from time to time, we are and may become involved in various legal proceedings relating to other matters, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings, such as the SEC’s current request for information regarding our employment, severance, and confidentiality agreements. 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.

Previous report

One of the existing shareholder class action lawsuits claims in part that NuScale LLC breached its prior LLC operating agreement or breached a duty of good faith and fair dealing in amending the LLC operating agreement in the Transaction without obtaining the consent of former common unit holders of NuScale LLC as a separate class. This class action lawsuit claims in part that the conversion of preferred units to common units, which occurred in conjunction with the merger, was inequitable to common unit holders. Plaintiffs are now seeking to amend their complaint to add a claim that this conversion itself breached the operating agreement.

Previous report

The other shareholder class action lawsuit claims that NuScale and members of management made materially false and/or misleading statements and failed to disclose material adverse facts about the Company’s business, operations and prospects, and specifically about certain of the Company’s agreements with customers. While two causes of action were filed, these lawsuits have been consolidated before the same judge in the federal district court in Oregon.

Previous report

While we disagree with all of the plaintiffs’ claims included in the class action lawsuits, the risk of loss if plaintiffs prevail would be material to the Company. Because of the potential risks, expenses and uncertainties of litigation and investigations, we may, from time to time, settle disputes and other proceedings, even where we believe that we have meritorious claims or defenses. Because litigation and investigations are inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business.

Previous report

Please see the 2023 Form 10-K for a complete list of our risk factors.