Nano Nuclear NNE Q1 2026 Earnings Call Transcript
- - Nano Nuclear NNE Q1 2026 Earnings Call Transcript
Motley Fool Transcribing, The Motley FoolFebruary 18, 2026 at 5:21 AM
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Tuesday, Feb. 17, 2026 at 5 p.m. ET
CALL PARTICIPANTS -
Executive Chairman — Jiang Yu
Chief Executive Officer — James Walker
Chief Financial Officer — Jaisun Garcha
Chief Operating Officer — Matthew James Barry
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TAKEAWAYS -
Cash Position -- Cash and cash equivalents stood at $577,500,000, reflecting a $374,000,000 increase during the quarter, mainly from a $400,000,000 private placement completed in October 2025.
Incentive Awards -- The State of Illinois awarded $6,800,000 in incentives to support Cronos MMR development, illustrating explicit public-sector backing.
Operational Loss -- Loss from operations was $11,600,000, increasing by about $8,000,000 compared to the prior-year period, driven by higher operating expenses focused on Cronos MMR advancement.
Net Loss -- Reported net loss reached $6,500,000, an increase of approximately $3,000,000 over the prior year; interest income of about $5,000,000 on the increased cash balance partially offset the loss.
Cash Used in Operating Activities -- Net cash used in operations rose by roughly $1,000,000 year over year to $4,000,000, primarily due to higher G&A and R&D spending.
Strategic Partnerships -- Signed multiple MOUs, including with DS Danzic (South Korea, for manufacturing and localization), Ameresco (EPC integration for federal/commercial sites), and Barupon (feasibility study for up to 1 GW deployment for an AI data center campus).
Cronos MMR Licensing Progress -- Completed site characterization and drilling at the University of Illinois, integrated findings into the planned construction permit application to the U.S. Nuclear Regulatory Commission, and signed a formal MOU with the University's Board of Trustees.
Timeline for Commercialization -- Management anticipates submission of the NRC construction permit application in the coming months and targets initial construction at the University of Illinois in mid to late 2027, with an operational prototype by 2030 subject to further acceleration opportunities.
Canada Expansion -- Acquired Global First Power (now True North Nuclear) and advanced toward a formal license in Canada, broadening the company’s regulatory and operational footprint.
Supply Chain Initiatives -- Advanced discussions for key long-lead components, with strategic focus on securing nuclear-grade graphite and TRISO fuel through prospective commercial and manufacturing partnerships.
Vertical Integration -- Actively exploring and executing on supply chain integration, highlighted by affiliate LISS Technologies’ radioactive material license in Tennessee and intended $1,380,000,000 investment in a commercial enrichment facility at Oak Ridge.
Revenue Diversification Potential -- Management cited intent to capture value across the nuclear fuel cycle, including conversion, enrichment, and transportation.
Index Inclusion -- Added to the Morgan Stanley National Security Index during the quarter, raising the company’s institutional investor visibility.
The call emphasized ongoing advancement in Cronos MMR licensing, with key site and regulatory milestones reached at the University of Illinois and expansion of commercial efforts through feasibility studies and MOUs with large prospective customers. Management outlined ongoing progress in vertical integration, securing enrichment, graphite, and TRISO fuel supply, while also leveraging robust liquidity following a $400,000,000 capital raise to pursue M&A and supply chain control. Nano Nuclear Energy (NASDAQ:NNE) highlighted its entry into new markets, including South Korea and Canada, and articulated intent to de-risk deployment through manufacturing partnerships and operational localization. Acknowledged sector trends, including demand growth from AI data centers and energy security policies, were presented as structural tailwinds specific to Cronos’ market positioning.
Management stated, "We remain on track to submit our construction permit application to the NRC in the coming months," positioning Nano Nuclear Energy as an early full-scale microreactor builder in the U.S.
Direct collaboration with the University of Illinois is limited to the first prototype, with subsequent commercial rights retained exclusively by Nano Nuclear Energy.
The Cronos MMR platform’s technical basis leverages over $120,000,000 of legacy investment and five decades of gas-cooled reactor deployment data, supporting management’s claim of a derisked licensing/scale-up pathway.
CEO James Walker explained that component standardization and reliance on established non-nuclear supply chains for most plant elements reduce exposure to regulatory and sourcing delays outside of fuel and graphite.
Fuel strategy is currently focused on low-enriched uranium (LEU) due to supply advantages, with future substitution flexibility for high-assay low-enriched uranium (HALEU) incorporated into licensing plans.
DS Danzic’s engagement includes plans for localized mass manufacturing of Cronos reactors to address anticipated power bottlenecks across Korea and East Asia.
Management signaled additional near-term partnership, acquisition, and supply announcements are likely as fuel supply, manufacturing, and component contracts are finalized.
INDUSTRY GLOSSARY -
MMR (Micro Modular Reactor): A small-scale, factory-fabricated nuclear reactor designed for modular deployment and scalable power delivery.
TRISO fuel: Tri-structural isotropic particle nuclear fuel, prized for its robustness and high-temperature safety in advanced reactor designs.
LEU (Low-Enriched Uranium): Uranium fuel with less than 20% U-235 enrichment, typically used in commercial nuclear reactors.
HALEU (High-Assay Low-Enriched Uranium): Uranium enriched to between 5%-20% U-235, enabling advanced reactor performance but requiring more stringent handling controls.
EPC (Engineering, Procurement, Construction): Turnkey contracting structure for large complex projects, covering design, acquisition, and buildout.
EPCM (Engineering, Procurement, Construction Management): A project delivery method where the contractor manages design, procurement, and construction activities on behalf of the owner.
Full Conference Call Transcript
Thank you, Matthew, and thank you, everyone joining the call today. Nano Nuclear Energy Inc continues to differentiate itself as a microreactor developer with
Jiang Yu: a focus on vertical integration across the nuclear fuel supply chain. We are advancing our Cronos MMR, a high-TRL high-temperature gas-cooled reactor design backed by decades of operating history and meaningful prior capital investment, which we believe can significantly de-risk future construction licensing and deployment. We expect a compact modular design of our Cronos MMR system to support factory fabrication, repeatable construction, and learnings that can accelerate deployment timelines and drive cost efficiencies over time. Importantly, we believe the inherent safety profile of our Cronos MMR can enable a smaller footprint, colocation, and off-grid deployment, unlocking high-value applications previously unavailable to traditional nuclear reactors.
We pair this foundation with a focus on vertical integration across critical aspects of the nuclear fuel supply chain, which we believe will give us an advantage over our competitors, uniquely positioning us to expedite reactor deployment, benefit from growing nuclear renaissance, and enhance long-term economics of our reactors. Turning to our Q1 highlights, we continue to make meaningful progress across business during this quarter. Our Cronos MMR continues to advance towards licensing and construction. We completed site characterization and drilling at the University of Illinois and are incorporating those results into our planned construction permit application to the U.S. Nuclear Regulatory Commission.
We also signed a formal MOU with the Board of Trustees at the University of Illinois, detailing the next steps as we advance the project. The State of Illinois announced that we will receive $6,800,000 in incentive awards, underscoring growing support for advanced nuclear technology. In Canada, continue to make progress towards initiating formal license following our acquisition of Global First Power, now rebranded as True North Nuclear. And lastly, we are advancing discussions with numerous supply chain partners for key components and LEAP items, as well as discussions with commercial enrichment provider and TRISO manufacturers to procure fuel for our first Cronos MMR prototypes.
On the commercial side, we signed a feasibility study agreement with Bob Rupan to evaluate the potential deployment of many Cronos MMR systems to provide up to one gigawatt of power for their AI data center and manufacturing campus under development. We believe this announcement highlights the potential scalability of our platform for customers with significant energy needs. Nano Nuclear Energy Inc is also expanding its pipeline of potential data center, industrial, and military customers interested in Cronos for a range of power needs.
Nano Nuclear Energy Inc saw growing interest for potential strategic partners highlighted by a recent MOU with DS Stancic to explore localization, manufacturing, and deployment opportunities for Kronos reactors in South Korea and the broader Asian region. DS Dansik is a leading South Korean industrial enterprise with extensive capabilities in energy, chemical processing, and advanced manufacturing, providing a strong platform to support commercialization of our technology. We also signed a MOU with Ameresco to explore integration of their EPC capabilities for the deployments for our Cronos MMR systems on federal and commercial sites.
These announcements reflect a broader trend of interest from strategic partners, including established companies with decades of experience with large-scale energy and industrial infrastructure projects who recognize the value proposition of Cronos. As it relates to our strategic focus on vertical integration, also made progress towards expanding our conversion and transfer transportation capabilities through active exploration partnerships and acquisitions. In addition, our strategic affiliate LISS Technologies received a key radioactive material license for Tennessee's demonstration facility, while also announcing plans to invest $1,380,000,000 over time to build a commercial enrichment facility in Oak Ridge, Tennessee, supported by its patented laser enrichment technology. Each of these announcements reinforce our progress in securing our nuclear fuel supply chain.
From a financial perspective, we raised gross proceeds of $400,000,000 through an October private placement, significantly strengthening our balance sheet and extending our operational runway. This capital raise included participation from a growing base of institutional investors, reflecting increased confidence in our strategy and execution. We were also added to the Morgan Stanley National Security Index, further expanding our visibility among institutional investors. Our Q1 progress reflects our continued execution, advancing Cronos towards licensing, construction, expanding commercial traction, working to expand our vertical integration across the nuclear fuel supply chain, and maintaining our strong financial position to support execution of our long-term strategy.
We believe our progress to date differentiates technology and strategy have positioned us to be a key benefactor of the global nuclear renaissance, driven by several durable secular growth trends. These include growth in demand and reliable baseload energy for AI data centers, industrial reshor ing, and a broader electrification. Energy sustainability independence, and climate mandates. And unprecedented policy support. Recent developments in the U.S. power markets are bringing increased focus on each of these trends. Electricity demand tied to AI data centers and other power-intensive applications is expanding faster than the new generation and transmission can be delivered, creating rising concerns around power availability, grid expansion, and energy affordability.
In January, the administration supported an emergency organized by the largest regional grid operator, aimed at driving 15-year power purchase agreements to fund an estimated $15,000,000,000 of new generation. The same grid operator is also considering colocation generation policies to help large energy users bring supply closer to demand. While these actions are important and reflect a growing recognition of current power bottlenecks, they alone are unlikely to close the structural gap between demand growth and reliable supply. Against that backdrop, we believe assets capable of delivering high uptime, long-term cost certainty, and operational resilience independent of constrained grid infrastructure are likely to command a meaningful premium in the future.
We view our Cronos MMR as an ideal future solution to address these challenges, which are expected to intensify in the years ahead. By offering the potential to provide behind-the-meter or off-grid base flow power directly to the end users and customers, we can help meet expected demand growth without driving higher costs for everyday Americans. In short, the recent actions across the country are reinforcing the need for global nuclear renaissance, and highlighting what we have long believed. Reliable, clean baseload energy is a strategic necessity, and we are building our Cronos MMR as a next-generation solution aligned with national priorities, customer needs, and long-term economics of the AI-driven energy future.
Before handing the call over to our CEO, James, I will briefly highlight why we view 2026 as an important year with multiple potential catalysts offering the opportunity to create shareholder value. First, we expect progress towards regulatory licensing of Cronos in the U.S. and Canada. We are targeting submission of a construction permit application to the NRC in the coming months to formally begin the U.S. licensing process. This submission will represent a key milestone that could set the stage for initial instruction at the University of Illinois in mid to late 2027. Second, we see potential for several commercial announcements this year, reflecting growing interest in our Cronos MMR from customers in several markets.
Third, we are advancing discussions on commercial partnerships and acquisition opportunities across nuclear fuel supply chain, providing the potential to address key bottlenecks in areas like conversion and field transportation. And lastly, we expect additional progress towards strategic partnerships that could accelerate and derisk large-scale deployment of our reactors, while also significantly expanding commercial opportunities globally. With that, I will turn the call over to James.
James Walker: Thank you, Jiang. Let me start with a brief update of our University of Illinois prototype project.
Operator: Which will be essential to advancing our Cronos MMR towards commercial deployment.
James Walker: As Jiang mentioned, we have completed site characterization and drilling
Jiang Yu: and also signed an MOU with U of I's Board of Trustees to outline the next steps for the design, construction, ownership, and operation of our Kronos MMR system on campus. We remain on track to submit our construction permit application to the NRC in the coming months under the Part 50 licensing pathway. Our team is working on the application closely with AECOM and other partners and have begun engaging with the NRC for several months to ensure alignment on scope and technical requirements. In parallel, we are advancing discussions to procure key long lead components including discussions around reactor pressure vessel capacity, fuel enrichment and fabrication, graphite supply, and other key components.
Based on our progress to date, we aim to begin construction in mid to late 2027 and see a realizable roadmap to a full-scale prototype online in or around 2030. Our team is also evaluating opportunities to accelerate this schedule and additional project funding to reduce overall capital costs. Turning to our growing pipeline of commercial opportunities, we believe growing commercial interest has been driven by Cronos' compelling value proposition. Cronos has a strong safety profile that we expect to enable co-location directly at the customer site, and provides the option for off-grid power. Cronos is also particularly well suited for large-scale multiunit deployments where reactors can be connected and scaled over time to match customer demand.
Modular architecture and compatibility factory fabrication and standardized production create the opportunity to capture meaningful economies of scale as we deploy at larger scales. We believe manufacturing efficiencies combined with operational learning curves can position us to achieve highly competitive economics over time, while still delivering the 24/7 reliability and uptime that data centers, industrial customers, and other mission-critical users require.
Jiang Yu: Moreover,
James Walker: Kronos' patented flexible design also provides the ability to serve projects smaller power needs requiring only one or several units, expanding our served available market to new applications, previously unavailable to nuclear energy. During the quarter, we announced a feasibility study with Barupon to evaluate the potential deployment of up to one gigawatt of power to support their AI data center and manufacturing campus. We are actively advancing the study, which includes the site evaluation, project scoping, and timeline development. Following completion, we will aim to perform EPC cost estimates, begin early project development activities, and work towards finalizing a formal agreement to sell our reactors.
Beyond Varupon, we continue to build a growing pipeline of prospective customers across data center, industrial and military applications. The consistent theme across these discussions is the need for reliable baseload power, particularly solutions with favorable footprints that can be deployed behind the meter, reduce grid dependence, and accelerate deployment timelines. Notably, power requirements for these projects range from below 50 megawatts up to 1 GW plus. We also see meaningful opportunities in additional markets where Kronos is well suited, including remote communities, mining operations, and other energy-intensive applications requiring reliable off-grid solutions.
And as Jiang highlighted, we are making progress towards several strategic partnerships we believe can further expand our commercial reach and accelerate deployment beginning with our recent MOU with DS Danzuk. We recently announced a collaboration with DS Danzuk, a leading South Korean industrial company, to accelerate deployment of our Cronos MMR in South Korea. DS Danzig brings deep capabilities and operational experience across energy, chemical processing, and advanced manufacturing, along with long-standing relationships across key industrial and government stakeholders in South Korea. We are confident their credibility within the Korean industrial ecosystem can facilitate engagement with state-owned entities as well as potential Korean industrial customers seeking reliable carbon-free baseload energy.
As such, our collaboration with DS Danzuk has the potential to meaningfully de-risk licensing as well as accelerate site identification and project development, facilitate introductions to prospective customers, and support localization of manufacturing and component production within South Korea. Moreover, we also see this collaboration as a pathway to strengthen project financing opportunities and establish broader strategic partnerships that can accelerate commercialization and deployment in South Korea, one of the world's most sophisticated nuclear and industrial markets, as well as the broader Asia region. Now that we have touched upon Cronos' growing commercial momentum and value proposition, I would now like to elaborate on Cronos' technical differentiation.
Cronos is supported by a proven and well understood foundation with nearly a decade of development and an estimated $120,000,000 invested into its design by its prior owner. Believe this materially derisks the platform and provides a strong technical basis as we advance towards licensing and deployment. Cronos' 15 megawatt electric design builds on high-temperature, gas-cooled technology that has been deployed and validated across multiple countries for more than five decades. Core elements of the design, including TRISO fuel, helium coolant, and graphite moderation, are mature technology supported by extensive real-world operating data.
Beyond the reactor itself, our balance-of-plant strategy prioritizes commercially proven systems including steam generators, turbines, and thermal energy storage technologies already in use in today's concentrated solar plants. We also expect to operate within conservative temperature and pressure parameters that align with successful deployments. As a result, our focus is not on developing new or experimental reactor technology, but on integrating well-understood component into a compact modular microreactor platform that can be licensed, manufactured, and deployed efficiently. With that operating history in mind, I will now outline the key advantages of Cronos as a prismatic high-temperature gas-cooled reactor.
First, on technology readiness, prismatic high-temperature gas-cooled reactors utilize well-characterized materials with established commercial supply chains, and the performance data from prior deployments provides a high tier level foundation for our design. Second, the safety profile is fundamentally different from other reactor types. TRISO fuel retains fission products at extreme temperatures, helium is an inert coolant, and the design relies on passive heat removal. As such, do not expect a credible meltdown pathway, and the core can shut itself down without reliance on active safety systems. Third, prismatic high-temperature gas-cooled reactors are inherently simple. Are a few active systems and high-stress components, and many elements can be commercially off-the-shelf rather than safety grade.
Core configuration itself has no moving parts other than the control rods, and the materials are inert, well understood, contrasting with the complexity of certain other advanced designs. Fourth, we prismatic high-temperature gas reactors like Cronos are especially well suited for export. Use of TRISO fuel presents minimal proliferation risk compared with other fuel technologies, and a superior safety case potentially offers streamlined licensing with international regulators. Fifth, we believe this architecture is uniquely flexible. In particular, the standard design can be deployed for smaller capacities by simply decreasing operating pressure. Flexibility allows Cronos' output to be scaled without redesign to meet the needs of a wide array of customers.
And lastly, we believe these characteristics could enable lower long-term maintenance and stronger economies of scale. And inert coolant passive safety, and advanced fuel reduce the need for complex chemistry controls and high-maintenance systems. Combined with a simpler design and greater use of non-specialized commercial components, we see opportunity for reduced operating costs, lower maintenance costs, and favorable cost scaling over time. Our focus on vertical integration stems from our belief that one of the largest constraints to deploying advanced reactors at scale the reactor technology, but fuel availability. We are working to gain exposure to several critical stages of the fuel cycle.
Starting with enrichment through our collaboration with our affiliate, LISS Technologies, LISS owns the only U.S.-origin patented laser enrichment technology, and our relationship with LISS has the potential to provide Nano Nuclear Energy Inc with a differentiated uranium enrichment solution. In parallel, we are exploring opportunities to build our capabilities in conversion and fuel transportation through strategic commercial partnerships and acquisitions. Further progress in each of these areas cannot only de-risk future reactor deployments, but also positions Nano Nuclear Energy Inc to generate revenue across the nuclear fuel cycle while remaining aligned with federal funding opportunities and national energy security needs. With that, I will turn the call over to our CFO, Jaisun to provide financial highlights.
Jiang Yu: Thank you, James. Now provide a summary of our Q1 financial performance. Our overall cash position increased significantly during the quarter, ending the period with cash and cash equivalents of $577,500,000. This was an approximate $374,000,000 increase
Jaisun Garcha: during the quarter ended December 31, driven by the net proceeds of our successful October 2025 private placement
Jiang Yu: placement.
Jaisun Garcha: We are confident our substantial cash balance and proven ability to raise capital at scale position us well to accelerate development and commercialization of the Cronos MMR. Our strong financial position also provides flexibility to pursue value accretive opportunities via M&A and strategic partnerships to enhance our vertical integration. Turning to the income statement, Q1 loss from operations was $11,600,000. The higher year-over-year loss resulted from an approximate $8,000,000 increase in operating expenses. A substantial majority of these expenses focused on advancement of our Cronos MMR and other strategic growth opportunities. Q1 net loss totaled $6,500,000, up approximately $3,000,000 from the comparable prior-year period.
The net loss was lower than the loss from operations, as we earned approximately $5,000,000 of interest income on our larger cash balance. Net cash used in operating activities increased by approximately $1,000,000 from the prior-year period to $4,000,000. This resulted from the aforementioned increase in G&A and R&D expenses. Net cash used in investing activities totaled $3,100,000 and included payments for our Oak Brook, Illinois Engineering facility. Before turning the call over to the operator for Q&A, I would like to reiterate that our strong balance sheet places us in a great position to our strategy of advancing our Cronos MMR and enhancing our vertical integration.
As we look ahead, we will continue to generate value for shareholders by allocating our time and capital prudently toward opportunities offering compelling return on investment. With that, I will now turn the call over to the operator to open up the call for Q&A.
Operator: Thank you. We will now be conducting a question and answer session. Maybe necessary to pick up the handset before pressing the star keys. Our first question comes from the line of Sameer S. Joshi with H.C. Wainwright. Please proceed with your question.
James Walker: Hey, good afternoon, guys, and thanks for taking my questions.
Jaisun Garcha: So the One Strategic Alliance you announced with the DS Danzig Group, Are there any
James Walker: sort of milestones or catalysts over the next
Sameer S. Joshi: twenty to eighteen months that we should be watching out for?
James Walker: Hi, Sameer. So, yes, I am quite pleased to answer the question about this actually because the plan with DS Danzig is actually pretty large one. So what they actually wanted was that they envision massive bottlenecks with regard power for their for their industry. And so when we went over there, me and the technical team, we were talking to them about how we actually create a manufacturing facility there. And we have we have worked with them in the interim models to break down the reactor intersections. And how we would manufacture those sections. What can be done in Korea, what cannot be.
So what has been happening over the last few months is we have been looking at what can be fabricated in Korea, what can be sourced there, where materials were going to be come from because one major thing that companies looking at is that great, you build a reactor and it gets licensed. How are going to mass manufacture that reactor? So we are obviously turning our attention to that in the U.S. But the Astanzik wants to do the same thing with our reactor in Korea. So what we are likely going to see over the coming year is just more development in that direction.
We were all going to put together a plan about how we arrive as a centralized local core manufacturing to take to keep the southern market initially, but it is really the whole East Asia region where there is a huge demand for the product. So I in terms of what you are going to see, you are going to see more engagement with us in DS Danzuk. You are going to see that MOU advancing into more critical planning stages. At some point, you are going to start seeing it is difficult to say exactly the timelines now, you are going to see in the factories that are going to be built for the purposes of mass manufacturing reactor.
And you are going to see additional partnerships between us and them regarding certain street key strategic things like partnerships on graphite acquisitions and fuel supply and things like that. To get things into place. The other the other part as well you are going to see is that there is a big demand for this. You are probably going to see some related news about interaction with the government.
With KHNP, with big vendors in South and ultimately, as you will see, increasing contracts between ourselves and customers in the region, regarding, offtake agreements for power, PPA agreements, those kind of things as we look to actually so that when we hit that period when we have the reactor fully constructed and licensed, we were then readily able to start manufacturing reactor immediately achieve economies of scale, and then start installing those reactors on mass.
Sameer S. Joshi: Understood. Thanks for that color, James. So should we also talk about strategic partnerships worldwide, but also within the U.S. And North America. Should we also include like a EPC kind of a strong partnership signed in this region?
James Walker: Yeah. So it is this is a very good point actually because now is that we are on the verge of submitting our construction term. We have we have we are very close to finishing that submission. Now when that goes in, that means that we can pivot the technical team to be able to refocus on what the next big stages are. And one of the big next stages is going to have to be how we mass manufacture these things. Now beyond that, there becomes a larger question. Say we have we have 10 sites, a dozen sites, whatever it is. We need to service.
Now that is a lot of local construction crews that need to be coordinated. And so the EPC element to this becomes quite important. Because when you are doing that kind of digging that well for the reactor to go into because some drinks.
Matthew James Barry: Steel, storing that concrete. That is all stuff that Nano Nuclear Energy Inc does not have to be involved, and it can locally
James Walker: contract out. But that is still a huge amount of coordination. You might have seen partnerships between ourselves and Ameresco and Hatch. And previously, actually, even, Hyundai, I think, we were involved in looking at how we deploy this reactor. Around the world. So the EPCM part of this is going to be a fairly large component of how we deploy here. So we have made a few announcements as we begin to look at how we deploy these things, how it gets coordinated. That is obviously a very separate thing to DS Danzip where they are where they are going to be an industrial factory. Factory partner. So they would not be doing EPC.
But we those EPC contractors in the U.S. are going to be very important. In South Korea, they are going to be just as important as well.
Sameer S. Joshi: Understood. Thanks for that clarification. And then just one last one, the construction permit, should we see any like news prior to your, submitting the application, also is it on track for, like, first half of this year? It is on track for the first half this year. It is actually going very well at the moment. We have been quite aggressive about it. So we have worked the team pretty hard on this one because
James Walker: it is it is a very big difference data. There is actually not many companies there might be a lot of reactor companies that are sprouting up because it is a hot market. But there is nobody putting in for a construction permit because it is it is a big difference between a paper reactor that you can make in your bedroom and an application to actually build. There is a lot of technical that need to go into it. I would not say we are going to announce anything prior to the submission specifically on this, but we will announce when it gets submitted. Because it is it is important to let industry know where we are.
And it is as well a very good indicator for the market that we are this is a very credible thing that is being taken forward. At a time when there is not a lot of reactors being constructed. And hey, if we stick to our timelines, we should still be the first company in the U.S. to build a full-scale licensed microreactor system.
Sameer S. Joshi: Understood. Thanks, Jim. Congrats on the progress and good luck. Thank you.
Operator: Our next question comes from the line of Nate Pendleton with Texas Capital Bank. Please proceed with your question.
Matthew Barry: Good afternoon and congrats on the continued progress. Staying on the same topic, James, in your prepared remarks, you mentioned looking at ways to accelerate the 2030 timeline. The UC project. You elaborate on the potential pathways there?
James Walker: Sure. So, it is a it is a very good question. So obviously, there is what has happened very recently is there has been a huge amount of government pressure that has come on to the NRC to try and expedite timelines. And you have seen that manifest in things like the formal licensing period where it being firstly reduced to 18 months, and then subsequently 12 months. So there is a possibility there that the licensing process is expedited for us.
Now I would say with our 2030 timeline, we have not factored into consideration these adjustments because we want to be as conservative as possible, but there is also a reality to the assessment of a reactor system for any regulator anywhere in the world. And their principal focus is safety. And to do to interrogate that property for any design, it is still very difficult to expedite that even if you throw people at the problem. So the 2030 timeline could be expedited. It is certainly possible. But it is prudent, I think, for us to stick to that because there is a there has been a tendency in recent years of companies to make very ambitious date targets.
And I think all of those are going to be missed now. Or they are just going to keep evaluating and moving things right. Do not really want to be in that in that situation. If we if we if we say 2013, if it gets delivered earlier, great. If there are expedited timelines that benefit us as well, fantastic. I would say that aside from those sort of things, obviously, we will work on the construction get all that expedited, we have we have got a lot of resources already that we can pay to the for the construction of this. A lot of it will depend on industry and supply chains and those kind of things.
But those things we are already identifying now and working on. So it is a lot of it is already derisked. The other thing I would say too is that what is missed a bit in industry is that a lot of companies might be focused very in the near term on getting their first reaction constructed and licensed. And obviously, that is a very important milestone. But when you hit that period and you have a reactor that can be commercially sold, how do you actually get economies of scale? You need to be able to mass manufacture it.
When we talk about expediting the timelines, it would be very nice to hit 2030 and be in a position where we are actually able to start mass selling the reactor. And that is going to mean that over the next few years while the reactor is being constructed, we do actually refocus a lot of our attention on reactive core manufacturing facilities, how these things are going to be mass produced. How the EPCM contracts are going to get into place for coordinating localization? So there is two answers to the question. One, there is a lot of initiatives that can benefit us. It can move our timeline forward.
And the other part is that if we really want to expedite ourselves as a business, we need to attack this problem now. So once this once the construction permit goes in, we really want to focus people’s energy on getting these what can actually be manufactured in the U.S. Can how much can we centralize them? All of these different considerations will come into it. Which partners do we need to bring in to make certain components? Let us centralize their production capacities within this facility as well.
All of this is going to be very important so that we hit the ground running when it gets to 2030, hopefully earlier, but, again, the reason why we have not adjusted those timelines is that we have we have you know, myself and a lot of others in Nano Nuclear Energy Inc, we have we have done a lot of licensing before. And we are we are very familiar with what is typically involved. And even though there are pressures on the NRC to expedite things, it still seems prudent to us to keep the longer timelines because the evaluation process it is difficult to see how it could be shortened substantially from what it currently is.
Jiang Yu: Yes. That makes
Matthew Barry: complete sense. So thanks for that detail. And then shifting gears a little bit for my follow-up. Can you talk a bit about your decision to announce the request for information for Loki MMR specifically, options are your team looking at for that reactor design? And have you received any notable feedback? So we did. So the interesting part about this was that the LOKI design can be thought of a bit like a scaled down Cronos reactor. So as we work on Cronos, it has immediate benefits for the for the advancement of the low key reactor. But the low key reactor was originally envisioned as being a solution for space power.
Now when we began looking at actually attributing more resources towards low key, the you know, we looked at who the previous interest
James Walker: came from, and that was predominantly things like Blue Origin, NASA. These kind of groups were interested because it was a very advanced space reactor type. And there was the this kind of examination of additional resources being allocated into low key was coming at the same time when there was an emerging bigger push into space. And we realized actually we were in a very advantageous position to produce a working system that could actually supply power for a lot of these initiatives. So whether it was zero gravity or low gravity because it was a base. And this could be for, you know, a variety of different applications in the space program.
But we are not a space industry either. We are not we do not have space engineers people who are involved in that space. So if we are going to pursue this, it needs to be done in partnership with groups that are involved in that space and know what they are doing. So when we put out the RFI, effectively, we were looking for partners already involved in that, and they were looking for power. So what we can say is that there are a number of companies that were looking for power that were not involved in that space. Launch companies people like that. So we did we did receive a large number of RFIs.
And I say, I believe we just completed
Jaisun Garcha: a submission with one at the moment. Obviously, it is
James Walker: these are very early days, we are just putting our toe in the water of the space industry. And it is not to say that Lohi could not be applied in terrestrial environments either, but certainly we want to take advantage of the interest in the space industry Loki had a big head start on a lot of other space reactor types. Years and years and millions and millions of investment. And so that is that is what precipitated the our interest to partner with people in the existing space industry. Because nuclear, we know very well. Space industry, a little bit foreign to us.
Matthew Barry: Got it. Well, thanks for taking my questions, congrats again.
Jiang Yu: Thank you.
Operator: Thank you. Our next question comes from the line of Jeffrey Scott Grampp with Northland Capital Markets. Please proceed with your question.
Jaisun Garcha: Good evening, guys. Thanks for the time. James, I am curious with respect to the supply chain and some of the work you guys are doing to engage various partners and strategics there, what is your all kind of assessment on
Jeffrey Scott Grampp: the longest lead times or most challenging parts of that puzzle that need to get solved sooner rather than later? And is there any imminent need from your standpoint to solve any of these say, calendar '26? Or would you say you have a little bit of time given the timing with engaging with the NRC, getting the permit, that sort of thing?
Jiang Yu: Thanks. So this is this is actually a very good question. I think it is pertinent to anybody involved
James Walker: in the nuclear space at the moment. So what I would say the advantage we have with Kronos is the vast majority of components are not that specialized. So the complete adjacent plants that converts the thermal output of the reactor into electricity as an example. So basic turbine systems
Matthew James Barry: even things like heat exchangers, control rod mechanisms,
James Walker: the citadel thing, these are all things that can be built independently of NRC involvement. Obviously, they need to be up to a certain standard, which we can ensure. But the vast majority of components, we do not need to worry about the long lead times. These are things that can be readily manufactured now or there are immediate solutions that are very obvious that can be put together in short order. Now there are there are actually components, though, that are no longer lead items.
Matthew James Barry: So there is a number like, our reactor and a number of other reactors use, nuclear-grade graphite.
James Walker: And I would say that is an item that needs special consideration. Because there is only, as far as I know, three nuclear-grade graphite producers in the world. I think two are in China and one is in Japan. Now what that means is that obviously, there is going to be a lot of demand for these things, but it is also it is too much to expect more nuclear-grade graphite to come online anytime soon. The reason why is that principally a lot of these manufacturers of this substance are located at the mine site. So first of all, you need, you know, the graphite mine.
And then to get yourself to a point where you reach that sort of certification level, where you are where you are at an acceptable level of quality, that can take a substantial amount of time. So the time to bring a mine online, to get producing, and then get it certified, you could be looking at more than ten years. So I expect at some point in the future, North America will bring on some nuclear-grade graphite line. But for the next few years, what we expect to do is just buy or even maybe even co-build production lines to make our graphite block with these manufacturers.
So that is probably going to take us some investment that goes into that. We are obviously talking with them. We know what their prices are, and we are arranging for the first and first of a kind and second of a kind cause with these with these suppliers now. So that is obviously important part of it. The other major part for the U.S. is the fuel supply. Now the U.S. is obviously throwing money back at the problem. DOE’s put billions of dollars back into things like enrichment. But there is there is bigger bottlenecks beyond that.
There is conversion considerations to provide the feed grade now it is actually investing a substantial amount of labor and involved with can have its own uranium hexafluoride. That it can then provide to enrichment companies. So it keeps ownership of that fuel. But the but for everybody involved in this, you know, that enrichment capacity to come online, whether it is Centris, or Arano or LISS Technologies or General Matter or even Urenco increasing their capacity. The timelines on that are a little bit uncertain. So that is principally also why Nano Nuclear Energy Inc has opted to use to make a reactor that can utilize LEU? Because that is fuel that can be manufactured today.
Now there is there is going to be that is fine because most of the answer is use HALEU fuel. That means that even they might even have much longer wait times to get towards that fuel than we do because, one, they are going to need a several things. They are going to need a Category 3 site to be upgraded to a Cat 2 site. That could take some time by the facility be licensed up to a level to it so it can handle Cat 2 material. So 10% to 20% material. That is that could be a long lead time too. We do not have to wait for that, which is fortunate.
We could benefit from HALEU fuel and the reactor will have the ability to switch out the LEU for HALEU in the future. But we want to get going as soon as possible. But the fuel supply thing needs a lot of consideration. And then related to that also is the fabrication of the TRISO. There are there are several companies that are really leading in this space. I would say, Standard Nuclear in partnership with Framatome, Framatome obviously has a huge experience with fuel. And BWXT, again, very experienced company, very competent.
So there is no there is I do not think there is any risk that these big companies do not know how to do this kind of thing. What could happen with them is that there could be a bit of a bottleneck on fuel supply just because of the demand. So getting in now and putting in the orders is going to be very important. And then two, the what we are weighing up at the moment is the right contract. Because even though we understand the first of a kind reactor might be expensive, we need to have a sustainable fabrication toll fee applied to the material that we supply the fabricators. They can make the TRISO.
Well and this is principally our strategy too. We are going to invest very heavily into the fuel supply, so we can own our own fuel. And supply it to the fabricators so we do not get in get stuck. But they will still have to increase their capacity probably to meet the market expectations. And I would say those are principally the main the main issues not issues exactly, but longer lead items that need consideration. But beyond those, even the reactor vessel that, you know, the capability exists to do that in North America.
It is those it is those longer lead items, the fuel and the graphite, I think, which need more consideration and earlier engagement to derisk.
Jeffrey Scott Grampp: Great. I really appreciate that James. You kind of hit on the follow-up that I was hoping to ask. On the fuel side of things. You guys have been seemingly increasingly vocal about some acquisition or strategic opportunities to put some capital to work there. So I was just hoping to get a little bit of an update on, I guess, level of maturity or intensity of conversations with different companies in that endeavor or just any kind of yeah, I guess, updates on what we could see from you guys in that avenue of the cycle? Thanks.
James Walker: Sure. So I have I have got to be a little bit careful because, obviously, it is not public information at the moment. But I do not think it is any great secret that we have been very concerned about the fuel supply chain. And because we are obviously very focused now as we get on in advancement about mass manufacturing reactor, we want to make sure the fuel supply is in place. And part of that over the last few years has involved us looking at fuel supply options. And that involves, obviously, we had a related party transaction called LISS Technologies that we were behind the creation of.
And that was obviously that is a separate entity that we have a partnership with for enrichment. It is all Cameco Tech. It had very good results in the nineties. So that is that has reasonable levels of confidence that we will get that to a place where it can eventually enrich. But the lead time on that is still going to be after when we want to get going with the mass manufacturing reactors. So that means that we need to be working with companies like Euronco that are enriching now. They can enrich your LEU, which is the fuel that we need for our reactor.
But even then, if you look at enrichment, you look at all the build back of enrichment, all that actually creates the next bottleneck, which is the u uranium hexafluoride. So we identified this, I think, back as early as 2023. And for a while, we were in discussions with countries like Namibia, which were large uranium producers about potentially building facilities in country. To take yellow cake and make it into that uranium hexafluoride product for export. Do not mind saying that we have found better options than that. And we have made substantial progress with government the national governments on the acquisition of some of these some of these facilities.
I cannot I cannot I cannot give a lot more details at the moment, but I would expect you will see sometime this year some big announcements in space as we complete some of those discussions and acquisitions.
Jeffrey Scott Grampp: Alright. Well, stay tuned. Best of luck. Thank you, guys.
Jiang Yu: Thank you.
Operator: Next question comes from the line of Sherif Almirabi with BTIG. Please proceed with your question.
Jiang Yu: Hey, thanks for taking my questions. I missed I missed a little bit of your response on
Jeffrey Scott Grampp: LU versus halo fuel, but I thought it was pretty interesting. So a couple more on that.
Jaisun Garcha: From a regulatory point of view, are we talking about a separate regulatory process
Jiang Yu: at NRC or CNSC to use one versus the other? Or is it kind of one approval to run at any enrichment level?
James Walker: It is it is a good question because when we do get to the reactor license, we will almost certainly get it licensed so it is, so we can demonstrate that it could operate with HALEU fuel. We are we are in a nice position to be able to do. And the reason why is the operating parameters that we use for our reactors are enormous. So for instance, if we are operating at, 600 degrees centigrade, the melting temperature is 1,800. And when you have got that kind of margin, then the safety case that you submit to the NRC for a higher fuel higher enriched fuel is fairly straightforward.
I do not I do not think a lot of companies are in that kind of advantage position. So when they are licensing their reactors, they will do it. At HALEU level directly. Whereas our safety parameters basically allow us to do it simultaneously. The main challenge, I think, with the HALEU is that it is not that it cannot be done. Like, it is or, you know, we have been in and higher up to HEU levels for decades. It is it is really the fact that in the U.S. at the moment, there is no commercial two site. I think VDO XT does have a CAT 1 site, obviously, that is very centered towards military.
It would make everything very expensive if you have manufactured through there. So it is a question of the ARC will need to upgrade sites to CAT 2, they will need to upgrade fuel facilities to be able to handle HALEU fuel and the increased proliferation concerns that attribute to that fuel. Now those proliferation concerns go away once fabricated, but it is still a process the NRC will need to go through for that enrichment of fuel. So it is it is an interesting thing. We want to take advantage of Haylou fuel as much as everybody else.
But, like, having that option to license the reactor immediately so it can be deployed with LEU and then once the HALEU is available, immediately switch it out without further licensing engagement. Is going to be very important part of the strategy here.
Jeffrey Scott Grampp: Yeah. That is interesting. It sounds like it is not as binary as for other
Jiang Yu: operators. So just one more on University of Illinois. You guys signed that MOU kind of lengthening your relationship. It looks like Illinois will lend a hand designing the reactor. So do they retain a commercial stake when you look to commercialize your design down the road?
James Walker: No. So they will be the owners and operators of the first of a kind React system. And they will they will supply a huge amount of labor and resources into this project to make sure the first of a kind reactor is built. But beyond that, we own and operate the design of this reactor and the commercial venture at URUC will be Nano Nuclear Energy Inc’s exclusively. Now the University of Illinois, the big benefit to them is obviously a reaction system that provides them clean energy. Their campus system. And also, it is obviously they have got a big nuclear engineering department that they all benefit from involved in this.
So it is obviously a big draw you know, if you are nuclear engineers to say we are building this next-generation Gen IV reactor system. So they get immediate benefits from this first of a kind, but beyond this, once we have a commercial venture, that will be a strictly Nano Nuclear Energy Inc Nano Nuclear Energy Inc endeavor.
Jiang Yu: Great. Hey, thanks for taking my questions.
Matthew Barry: No problem. Thank you.
Subhasish Chandra: Our next
Operator: question comes from the line of Subhasish Chandra with Stonex. Please proceed with your question.
Jaisun Garcha: Yes. Hey, James. Couple of, I guess, NRC questions. So first, the licensing, so you got on the reactor, to what degree is the balance of plant in that process and as you sort of address these various use cases, does that again go to the NRC?
Sameer S. Joshi: So just
Jaisun Garcha: sort of confused there on where that distinction is. Between the reactor and balance of plant.
James Walker: No. It is it is actually a very good question because, instance, you know, ironically, most of most of the Cronos MMR system is not is not a nuclear system. So for instance, even though, you know, your reactor vessel is it needs to be nuclear qualified up to a certain level so it could house the reactor itself. It is it can still be manufactured, in a facility that the NRC does not need to oversee that facility. So if you are fabricating that reactor vessel, that facility does not need inspection. Now the component does need to meet a certain standard.
So there is still when you even get to those sort of parts that are instrumentally important in a reactive deployment, there is still that nuance. Think when the NRC mostly care about safety systems, how safe a reactor is. And so their assessment only becomes relevant when it is a nuclear device. So okay. You know, the balance of plants, so you could say things like the entire adjacent plant. So you have got the secondary cool loop that stores power that creates essentially a battery, so you could ramp up and ramp down very quickly. A non-nuclear device that is a heat sink device. Sits outside the NRC.
The adjacent plant where you have the turbine systems convert heat to electric. Again, that would be the roughly the same sort of contraption you would find for a gas operation as you would for a nuclear operation. Again, that sits outside of the NRC. Now as you get closer to the reactor, then it becomes a bit more blurry. To say, for instance, the Citadel, which is the cavity, reactor sits in, so you dig that into the ground. Now, obviously, that can be built by local contractors. Can be concreted, and steel can be put in.
Now the standard has to be up to scratch, and you need to be able to demonstrate that it has met those requirements. But the construction itself is not as relevant as the operation of the reactor system. Because what is what is likely going to happen here that I think it is I think it is Part 52 Subpart F. It allows for the once a reactor is licensed at the NRC, like, Cronos will be in, say, 2030, the all the subsequent reactors off that will inherently be licensed to be deployed. So you would not need much more regulatory engagement, and you are going to have a big cost saving as a result of that.
Now there is some nuance to that because they you still need to be able to supply the NRC with information that they would need at any one time wanted to inspect a reactor. So they are still going to have to do the geolog geotechnical drilling. Make sure you have all that data. You can demonstrate the ground meets the criteria the NRCIicated. The there might have to be inspections of the cores that are being mass produced. Those might need to be inspected to make sure they are up to grade. But you know, provided you are meeting all of those criteria, you could you could still deploy dozens of those reactors.
Across the country without further regulatory engagement. But, yeah, the majority of the system can be what we anticipate doing is a centralized manufacturing facility where we do a lot of things like the reactive protection control mechanism, the helium service systems, the molten salt loops, the instrumentation, the electrical systems. Operator training, know, those kind of aspects. Those are still mostly mechanical engineering items. And the majority of the reactor comes under that. And that a lot of that stuff can be done under, say, ISO standards rather than NQA-1 you know, nuclear-grade standards.
It does it does break down, but it gets a lot easier after that first reactor is licensed because then you have your template your standards that you need to meet. And provided you meet those, the actual the actual necessity for further regulatory engagement drops off quite dramatically.
Matthew Barry: Yes. Thank you.
Jaisun Garcha: Then I guess to the AI question, I think initially AI was about looking through the vast trove of documents and perhaps making it a little bit easier and less repetitive and things like that. But think lately in the last, you know, few weeks or so, they are talking about, bringing digital twins for simulation of these you see I mean, we see that having a real-time effect in other sectors, of course. And given how lengthy the licensing process is, you see some of this you know, having a very material effect on the licensing process?
Sameer S. Joshi: I sort of you yeah. Sorry. Go ahead. Thank you.
James Walker: No. No. I was going to say, like, that is my actual big hope because I have been involved in licensing before, and it is an enormously complicated thing. So just to just not trying to throw Vogtle under the bus. But as you know, for instance, Vogtle is being built being built very competently. But say for instance, the regulator suddenly says, well, what about this component of this reactor that was installed two years ago? Well, that is already buried in concrete. Well, how do we know it is safe?
Did it meet know, where is the where is the checklist with regard you know, the inspection of this component before it was installed and it was encased in concrete. Well, we do not have that. Well, that means we need to dig it up. That means there is going to be a delay to the reactor. That means there is going to be an additional cost component that is going to know, that is why Vogtle is so expensive because you get these things. Now ultimately, that example there is human error.
Either someone missed that component needed to be qualified or it got installed without anyone realizing that they had to submit it for qualification or something like that. If you have an AI system, my hope here is that it would actually be able to identify very quickly what needs to be needs to be qualified, what needs to be identified, and you actually will reduce the human error of it down substantially because it will creep into it. If you are thinking just to it is difficult to even put into you know, the to explain how complicated a licensing process can be.
But if you if you think about a warehouse and you were to fill it with a four sheets of paper, that contain the licensing documentation, you would fill a warehouse it would be that much paper, millions and millions of documents. It is a crazy a crazy process. Now for a human, that is it is you know, even if you are 99.99% perfect, that still means thousands and thousands of errors. Just because of the size of the undertaking you are you are going through. My hope here is that AI can substantially reduce the risk of things being missed.
And there is no reason why a computer that is operating like that, that is very familiar with the process, that is been exposed to recent licensing data documentation, could not immediately identify what needs to be focused on, what does need to be done at certain stages. I think that could be a big step forward for nuclear to reduce times of licensing errors in terms of you know, components get missed, they get buried in concrete, like the example I gave. The definitely that would definitely help us enormously. It will help the whole industry, and I cannot see why that will not happen. And that is my big hope for AI.
It is not so much reading through all of our submissions and making sure things. It is it is what needs to be done and when what has been missed, what could potentially be missed. That kind of thing. I think that looks very plausible. If that is plausible, then that makes our life a lot easier. And it will make reactors a lot cheaper in the long run.
Jaisun Garcha: Yeah. Fingers crossed here as well. Thank you. No problem.
Subhasish Chandra: Resume for closing
Jiang Yu: I want to thank everyone again for joining us on today's call. The interest and enthusiasm of our investors and market participants is important to us, and we are very grateful for your support. We look forward to providing additional updates in the future. Have a great evening.
Operator: Thank you. And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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