Terrestrial (IMSR) Q3 2026 Earnings Call Transcript

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DATE

Tuesday, Nov. 10, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations and Public Relations - Tyler Gronbach
• Chief Executive Officer - Simon Irish
• Chief Financial Officer - Brian Thrasher

TAKEAWAYS

• Cash and Investments -- $276.3 million as of Sept. 30, 2026, compared to $283.4 million at the end of the second quarter.
• Net Loss -- $11.0 million for the third quarter, compared to a net loss of $9.4 million for the second quarter.
• Research and Development Expenses -- $4.4 million, an increase of $900,000 sequentially driven by fuel testing and lease costs at the RELLIS site.
• General and Administrative Expenses -- $8.5 million, reflecting a $500,000 increase over the prior quarter due to stock-based compensation for new hires.
• Quarterly Cash Burn -- $7.1 million, representing a monthly burn rate of $2.4 million compared to $2.2 million in the second quarter.
• Share Repurchase Authorization -- $25 million, authorized by the Board of Directors to be funded with existing cash on hand.
• NRC Topical Reports -- three submissions completed in 2026, including reports on graphite qualification and the separation of thermal and electrical facilities.
• Commercial Pipeline -- 10 active project discussions, representing energy market verticals such as data centers and industrial process heat.
• Natural Gas Bridge Timeline -- 3 to 5 years to operational status, which management estimates is 2 to 3 years faster than combined cycle natural gas plants.
• IMSR Power Capacity -- 195 megawatts electric per reactor unit, with a standard two-unit facility totaling 390 megawatts electric.
• Total Liabilities -- $8.6 million at quarter-end, which includes no long-term debt.
• Share Capitalization -- 105.9 million total shares issued and outstanding, consisting of 82.7 million common shares and 23.2 million exchangeable shares.
• Fuel Enrichment Standard -- 5% or less, which management noted avoids reliance on High-Assay Low-Enriched Uranium (HALEU) supply chains.
• Gas Turbine Lead Times -- 5 to 7 years for large turbines, contributing to supply chain bottlenecks in the natural gas sector.
• Government Funding Opportunities -- 2027 potential for public sector funding to support pilot projects TETRA and TEFLA.
• Fully Diluted Share Count -- 400,000 share increase during the third quarter, resulting from equity awards granted to new personnel.

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RISKS

• Thrasher stated, "We expect cash burn to increase in future quarters as we ramp project spending, including TETRA and TEFLA," noting the rising capital requirements for pilot reactor and fuel programs.
• Irish noted that "combined cycle natural gas plants are running into severe supply chain bottlenecks, and projects are experiencing large cost escalations," which impacts the competitive lead times for alternative power sources.

SUMMARY

Terrestrial Energy Inc. (NASDAQ:IMSR) reported progress on its pre-licensing engagement with the Nuclear Regulatory Commission and the expansion of its commercial project pipeline. Management highlighted the submission of three topical reports during 2026, focusing on graphite qualification and the regulatory separation of thermal and electrical facilities. The company introduced the IMSR natural gas bridge as a strategic initiative to provide earlier power to industrial customers by integrating natural gas thermal energy into the plant's non-nuclear systems. Financial results reflected a sequential increase in research and development spending, while the company maintained a debt-free balance sheet with $276.3 million in liquid assets.

• The company appointed David Williams as Chief Commercial Officer to lead customer partnership contracting and advance commercial opportunities for IMSR plant projects.
• Management reported the selection of the IMSR as the advanced nuclear technology supplier for Ameresco's power project at the U.S. Army's Aberdeen Proving Ground.
• CEO Irish stated, "The IMSR plant design has the potential to offer a fast, practicable, competitive, and capital-efficient natural gas bridge by integrating nuclear and gas thermal energy supply."
• Engineering firms Hatch Limited and Worley Limited completed analysis confirming the gas bridge can reduce time to power by 2 to 3 years compared to combined cycle plants.
• The graphite qualification program utilizes performance data from tests in the NRG high-flux reactor in Petten to support NRC licensing requirements.
• DOE projects TETRA and TEFLA are designed to generate the technical and performance data needed to support commercial-scale production and operation.
• The company stated its commercial IMSR plant is one-sixth the size of a modern light water reactor but has 100-fold the capacity of most microreactors in DOE programs.

INDUSTRY GLOSSARY

• IMSR: Integral Molten Salt Reactor, a generation IV nuclear plant design using molten salt as both fuel and coolant.
• NRC: Nuclear Regulatory Commission, the U.S. federal agency responsible for nuclear energy safety and licensing.
• HALEU: High-Assay Low-Enriched Uranium, a fuel enriched between 5% and 20% that is not required for the standard IMSR design.
• Topical Report: A technical document submitted to the NRC to gain approval for specific design methodologies or safety features prior to full licensing.
• TETRA: The company's pilot reactor project designed to collect performance data for commercial scale-up.
• TEFLA: The company's fuel salt production line pilot intended to demonstrate commercial fuel manufacturing.
• RELLIS: The Texas A&M University System campus where site characterization for a commercial IMSR plant is underway.

Full Conference Call Transcript

Operator: Greetings, and welcome to the Terrestrial Energy Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tyler Gronbach, Vice President of Investor Relations and Public Relations. Thank you. You may begin.

Tyler Gronbach: Thank you, operator. Good morning, everyone, and welcome to Terrestrial Energy's Third Quarter 2026 Earnings Conference Call. I'm Tyler Gronbach, Vice President of Investor Relations and Public Relations. Joining me today are Simon Irish, Chief Executive Officer, and Brian Thrasher, Chief Financial Officer. Simon will begin with a review of our strategic and operational progress during the quarter, and Brian will follow with a discussion of our financial results. We will then open the call for questions. Before we begin, I'd like to remind you that we have posted the quarterly results press release and summary slides to the Investor Relations section of our website at terrestrialenergy.com.

I'd also like to remind you that today's discussion will include forward-looking statements about our business, operations, and financial outlook. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. We encourage you to review the risk factors described in our SEC filings for a more complete discussion of these risks. With that, I'll turn the call over to Simon.

Simon Irish: Thank you, Tyler, and good morning, everyone. When we last spoke in August, I reported progress against the 3-pillar framework of business plan execution that we set out in March guidance. Today, I will do the same for the third quarter, including developments since quarter end. I will then provide an update on projects TETRA and TEFLA, our pilot programs with the Department of Energy, and close with the IMSR natural gas Bridge, a high-potential market opportunity for the IMSR plant that the company has been developing.

In the third quarter, we submitted our graphite topical report to the NRC as part of our program of pre-licensing engagement, worked with Vicky Nuclear on site characterization at Texas NMRLs, and disclosed a third commercial IMSR plant project. We announced Terrestrial Energy as the advanced nuclear technology supplier for Ameresco's project to deliver power to the U.S. Army and its Aberdeen proving ground. During the third quarter, we again observed volatility across equity markets and the nuclear tech sector in particular. Looking through this, the fundamentals for nuclear innovation continued to strengthen quarter-on-quarter and year-on-year, as did the broader outlook for nuclear energy demand. In this environment, we're focused on our business plan, its execution, and reporting clear milestones.

Everything we report today points back to the mission we set out when we formed the company well over a decade ago to use nuclear innovation to solve the big problem we're solving with private capital: affordability and capital efficiency of nuclear power supply. Our mission remains to solve that problem quickly and at scale, with fleet deployment of IMSR plants in the 2030s. Our solution is the IMSR plant design with its molten salt reactor technology chosen for its triple operating advantage and for clear, fundamental, compelling reasons. Let me walk through third-quarter progress across the 3 pillars of business plan execution. I will start with our engineering and regulatory programs.

Recall that the IMSR is a graphite-moderated molten salt reactor, a configuration previously demonstrated at National Labs in the United States and as recently as 2023 in China. Graphite is an important material in the reactor core. On September 10, we submitted our graphite topical report to the NRC, the second of at least 3 topical report submissions we set out in March guidance for 2026. The topical report seeks NRC approval of our methodology for qualifying graphite for the IMSR, namely how we select graphite, model its performance in operation, and close any data gaps the NRC requires.

This methodology is essential to the NRC's ultimate approval of our selected graphite grade for IMSR use, and its implementation is a process referred to as qualification. Qualification requires us to demonstrate to the NRC's satisfaction the performance of graphite under IMSR operating conditions. Terrestrial Energy's graphite qualification program differentiates the company in its sector, as it was started notably early in November 2020. Since then, the company has been collecting graphite performance data from tests in the NRG high-flux reactor in Petent, one of the world's most powerful test reactors. In this test reactor, multiple nuclear graphite grades from multiple suppliers are being irradiated and analyzed over successive cycles.

That process, its analysis, and collected data now underpin the methodology in this topical report. Its conclusion will allow the company to select the most suitable graphite grade from a preferred supplier as well as enable its qualification for licensed use in the IMSR. Given the importance of graphite in the IMSR design, we consider our submission of this topical report to be a noteworthy development. Post-quarter-end, on October 8, we submitted a further topical report following completion of the required engineering and safety analysis. This report recovered the regulatory separation of the IMSR thermal and electrical facility from the IMSR nuclear facility.

The report asked the NRC to confirm that the thermal and electrical facility is a nonnuclear part of the IMSR plant and hence, that it can be constructed and operated without NRC permits and licenses. This has valuable competitive advantages for our business, and I will return to why at the end of my remarks. This top report was the third topical report submission for 2026, meeting the guidance we established at the beginning of the year to submit at least 3 topical reports to the NRC. Each NRC topical report submitted and then approved increases certainty in the regulatory basis for commercial operation of the ISR plant. Turning to the second pillar, supply chain developments.

Over the quarter, we made progress with fuel component and services supply for our DOE projects, TETRA and TEFLA. We established a strategic partnership project agreement with Idaho National Laboratory to provide engineering, nuclear safety, quality assurance, regulatory, digital engineering, and program management support for Project TEFLA. Work under this contract includes fuel salt production for TETRA criticality as well as development of the IMSR fuel salt production process ready for commercial scale-up, which is a key objective of the TEFLA fuel line pilot. At Texas A&M RELLIS, work with Zachry Nuclear is now underway with an engineering services agreement.

This is supporting site characterization in advance of construction engineering and an NRC construction permit application for the planned commercial IMSR plant on that site. Turning to the third pillar, our commercial pipeline of IMSR plant projects. On September 21, we announced our selection as the advanced nuclear technology supplier for Ameresco's power project at the U.S. Army's Aberdeen Proving Ground in Maryland. Ameresco was selected by the Army through a competitive process under its strategic capital initiatives. This is a program to partner with the private sector to modernize military installations. This development builds on the memorandum of understanding we signed with Ameresco in June 2025. Ameresco's project for the U.S.

Army is the second announced project we've disclosed this year. It aligns with our previous guidance provided at the beginning of the year to announce details of 1 to 3 additional projects. It also extends our commercial pipeline into the federal government and defense. Our pipeline of commercial opportunities spans 3 fast energy market verticals, accessible with the IMSR plant's high-temperature thermal energy supply. They cover data centers, industrial process heat and power applications, and grid supply, notably repowering retiring coal plants with an IMSR. Over the quarter, we continue to develop our resources for sustained and efficient growth. Post quarter end, on October 19, we announced the appointment of David Williams as Chief Commercial Officer.

David brings decades of commercial experience across the power sector, most recently at Kiewit Nuclear Solutions and before that, 15 years at Fluor, where he led negotiations on multibillion-dollar agreements for new nuclear power projects. He now leads our customer partnership contracting strategy, advancing commercial opportunities for IMSR plant projects. I would now like to return to our DOE projects, TETRA, our pilot reactor, and TEFLA, our fuel production line pilot. The relationship between the 2 is simple. TEFLA will produce the fuel, and TETRA will run on it. Terrestrial Energy's goal for TETRA and TEFLA has been to maximize their value in our licensing program for commercial operation of an IMSR plant. This is important to emphasize.

We've constructed both pilot programs to generate the technical and performance data needed to support NRC license applications for our commercial IMSR plants and for a commercial-scale production facility for IMSR fuel salt. With each IMSR at 195 megawatts electric, we are distinguished in the group engaged with the DOE under its reactor pilot program as developing the most powerful commercial reactor design. A commercial IMSR is 1/6 the size of a modern light water reactor. Within the DOE reactor program, its power capacity, however, is over 100x that of the program's many microreactors. Our work with the Department of Energy has been structured to support the commercial development of our IMSR plant, a 390-megawatt electric facility.

Turning to Project TEFLA. Over the quarter, we have finalized an agreement with Idaho National Laboratory and commenced work on the fuel production processes designed to support fuel supply for Project TETRA and then develop and scale to achieve commercial IMSR fuel supply for a fleet of IMSR plants. We again emphasize that our commercial IMSR plant has been designed to use nuclear fuel with low-enriched uranium enriched to no more than 5%. This is the long-established standard for civilian reactor fuel. The IMSR plant does not require any HALEU. And to deploy plants at fleet scale, it avoids reliance on a new uranium enrichment supply chain.

Consequently, we have a far shorter, lower-cost, and lower-risk path to fuel supply at fleet scale. This is an important differentiator that we presented in detail during our second quarter earnings call. It continues to be a competitive advantage as we work to win the race to fleet deployment in the 2030s. As our progress with these 2 projects accelerates, we'll be announcing further developments on project TETRA and TEFLA. I would now like to turn to an important developing market opportunity for the IMSR plant, which I mentioned at the beginning of this call: the IMSR natural gas bridge. Participants in the AI market are in a highly competitive race for market share.

And given the nature of AI, that becomes a competitive race to power. We recognize that the default power solution in this race to power has been combined cycle natural gas plants. However, given the pace of demand growth, combined cycle natural gas plants are running into severe supply chain bottlenecks, and projects are experiencing large cost escalations. These plants require large gas turbines available from only a few worldwide manufacturers, and they have not been able to keep up with demand. The Electric Power Research Institute reports that the lead times for large new gas turbines have stretched to 5 or more years, with some quotes as long as 7 years.

The non-nuclear steam turbines, not gas-fired steam turbines that the IMSR plant utilizes, fit in a far broader manufacturing base where they are largely avoiding such supply constraints and cost escalations. As a result, the IMSR plant design has the potential to offer a fast, practicable, competitive, and capital-efficient natural gas bridge by integrating nuclear and gas thermal energy supply into the operations of the IMSR plant. This provides power far earlier at a remarkably competitive cost. How do we do this? The IMSR natural gas bridge is a simple and efficient extension of the standard IMSR plant design. This consists of the plant's nuclear facility and its discrete thermal and electric facility.

For the IMSR natural gas bridge, the IMSR plant's thermal and electric facility is designed to incorporate natural gas thermal energy supply into its steam supply systems via a molten salt heater. As the thermal and electric facility is remote from nuclear systems, the subject of the NRC's formal response to our October top of report, the facility can be built quickly without an NRC construction permit or operating license, a big advantage. For the IMSR natural gas bridge, the IMSR plant's thermal and electric facility will be upgraded to include a natural gas heater to drive standard steam generators, steam turbines, and electric generators.

When the thermal energy supply from nuclear systems is unavailable during construction of the ISR nuclear facility and during its operating outages, natural gas combustion will be used to back up thermal energy supply, so maintaining operations. This arrangement is highly capital efficient, as it integrates nuclear and natural gas thermal energy supply into one common train of steam supply, turbines, and generators. By avoiding today's gas turbine supply disruption, we anticipate that the IMSR natural gas bridge can be operational within 3 to 5 years, faster than the combined cycle natural gas plant and years before completion of the IMSR nuclear facility.

We believe that, with this framework, the IMSR natural gas bridge becomes commercially relevant in today's race to power. For the customer, this means earlier power. For the project developer and plant owner, this is a shorter route to early revenue generation. For Terrestrial Energy, this would accelerate our order book for deployment of IMSR plants at fleet scale. Over the quarter, we worked with an external engineering firm, Hatch Limited, on cost and schedule estimates. Their work has substantiated our projections of the IMSR natural gas bridge, being able to reduce time to power by 2 to 3 years compared to a combined-cycle natural gas plant, while being competitive on both capital costs and levelized cost of electricity.

Subsequent to quarter end, we engaged Worley Limited, one of the world's largest engineering and project delivery firms in the energy sector, for preliminary thermal and process engineering of the IMSR salt heater and steam generator, including plant interface requirements. The combined work puts 2 of the most experienced engineering firms in the energy sector behind our plans to deploy the IMSR natural gas bridge as the first step in IMSR plant commercial operation. On October 8, and with the IMSR natural gas bridge in mind, we submitted the thermal and electric facility top of the report to the NRC. We asked the NRC to confirm that building the thermal and electric facility is not nuclear construction.

That determination would allow it to proceed as a conventional industrial project built, financed, and placed into service before the IMSR nuclear facility is in operation. This is a big commercial advantage. We anticipate further announcements of the IMSR natural gas bridge in future quarters. To close, in March, we set guidance for the year across the 3 pillars of business plan execution. In the third quarter, we delivered against it. We submitted our graphite topical report, initiated Zachary's engineering work at Texas A&M RELLIS, and disclosed details of a third commercial IMSR plant project, Ameresco's project for the U.S. Army at the Aberdeen Proving Ground.

And since quarter end, with our thermal and electric facility topical report, we have delivered on our guidance of at least 3 topical reports this year. With that, I will turn the call over to Brian Thrasher, our Chief Financial Officer, to review our financial results.

Brian Thrasher: Thank you, Simon, and good morning, everyone. Turning to the financials and consistent with prior quarters, I will present on a sequential basis compared to the second quarter of 2026. The theme continues to be disciplined spending aligned to our programs and a clean balance sheet. At quarter-end, we held total cash, cash equivalents, and short-term investments of $276.3 million. This compares to $283.4 million at the end of the second quarter. Cash burn for the quarter was $7.1 million, or approximately $2.4 million per month. This compares to cash burn of $6.4 million for the second quarter, approximately $2.2 million per month. The increase largely reflects higher research and development activity associated with fuel development and testing.

We expect cash burn to increase in future quarters as we ramp project spending, including TETRA and TEFLA. I'll now turn to operating expenses. Research and development expenses were up approximately $900,000 quarter-on-quarter, an increase driven by fuel testing and lease costs related to RELLIS. General and administrative expenses were up approximately $500,000 quarter-on-quarter. This increase was due to stock-based compensation from awards to new hires as the company grows its management resources and headcount. Turning to our capitalization table. The issued and outstanding share count was unchanged during the third quarter of 2026. The fully diluted share count increased by approximately 400,000 shares in the quarter due to equity awards granted to new hires.

Subsequent to quarter end, our Board authorized a share repurchase program of up to $25 million of our common stock. The program will be funded from existing cash on hand and reflects our confidence in the business and the strength of our balance sheet. In summary, cash and cash equivalents make up the vast majority of our assets. We have modest current liabilities and lease obligations combined with no debt. Our balance sheet remains simple and clean. With that, operator, please open the line for questions.

Operator: [Operator Instructions] Our first question comes from the line of Jeff Grampp with Northland Capital Markets.

Jeffrey Grampp: Simon, I wanted to dive into this gas bridge concept that you spent some time on this morning. Any updates you can give on the commercial pipeline there? Do you see this being one of the more advanced opportunities within the prospective customer base given the potential to reduce those cycle times to first power for steam? Just some expansion on commercial opportunities set there.

Simon Irish: Thanks for the question, Jeff. Well, the natural gas bridge as a concept for Terrestrial Energy has been part of our sort of engineering program for quite a few years. We are mentioning it today because we are promoting it. And we're promoting it because we think market circumstances are very well aligned to its actively seeking to use it in our IMSR plant design. If you recall, when we announced our relationship with Riot Platforms, and this is going back several months now, I think into the second quarter, we did talk about the natural gas bridge in that press release. At that point in time, what we have not discussed is what that natural gas bridge looked like.

I think it's important for us to differentiate what we mean by natural gas bridge from what others are doing under the broader banner of a natural gas bridge in the market. This is not using natural gas at the plant level, where in one corner of the plant, you have a combined-cycle natural gas and the other corner of the plant, you have the nuclear facility. And you say that is a natural gas bridge where the point of intersection or integration of the 2 is the switchyard. That's not what we're doing.

What we're doing is actually embracing the concept of what it means to integrate natural gas into a nuclear plant, and we're doing it in our thermal electric facility, and we're doing it within the Molten Salt loop. It's a very different concept. It's a very unique concept. And I think from a financial perspective, it has very, very compelling financial characteristics, particularly with respect to capital efficiency because we're using the same train, the same train of steam generation, steam turbines, and generators into the switchyard. So you're using the same amount of the same capital that you're deploying in the natural gas bridge; you're using that equipment later when you bring the nuclear systems online.

Jeffrey Grampp: And for my follow-up on TETRA and TEFLA, can you just give us some updates there on kind of next steps? It sounds like you guys are making some nice progress across supply, fuel components, et cetera. What plans to do to progress those projects and break down?

Simon Irish: So I mean, Jeff, for the very near future, you're going to see more of the same. We did announce the expansion of supply chain activities, suppliers, and contractors that has been going on in the third quarter. There will be extension of that into the fourth quarter as well. So you will see that extension in the fourth quarter and the first quarter next year. We will be providing further updates on both projects.

Operator: Our next question comes from the line of Craig Irwin with ROTH Capital Partners.

Craig Irwin: So Simon, the announcement of your project award with Ameresco at the Aberdeen Proving Grounds is an important milestone. It's something that helps all of us follow the company's visibility on how the commercial plan is going to take shape. Can you maybe share with us the breadth of similar conversations you might be having with other players out there? Are we talking about a handful of players? Are we talking about maybe a dozen, a couple of dozen? And how would you categorize the level of maturity of these different conversations with this group of customers? Are these things that could result in announcements over the course of the next year?

Simon Irish: Well, Craig, thanks for that question. So we provided details of our pipeline of commercial opportunities, where we have a pipeline of 10 commercial opportunities, which represent active project discussions. We have, at the beginning of the year, provided guidance on how many we would expect given the progress of those discussions, and some of them were framed as an MOU. We would provide details over the course of the year on those projects. At the beginning of the year, we said it would be 1 to free; we are at the moment at 2. So, 2 additional projects to provide further details on 2 additional projects.

The first one was the details of our relationship with Riot, which was 1 of the 10, and we pulled the curtain on that in the second quarter and provided further details on that. And the additional one was quite recently was the Ameresco project. So you should continue to expect from us, with respect to our projects to not only provide over the coming quarters, not only provide details on how we are progressing with each individual project, but you'd also expect from us to provide details on what we're doing and the progress we're making with those other projects. So at the moment, we disclosed details of 3 of the 10, the general pipeline of 10.

And as we go forward, you should expect to hear from us on those additional projects.

Craig Irwin: So then, if we could talk a little bit more about Project TETRA. So if you could clarify for us, I believe this is the project that will be the first that you energize, or at least not necessarily for the first full-fledged reactor. You've been very conservative about what you've said or disclosed publicly around plans for this reactor. So I know that's intentional. But is there a timeline that you can share with us for when you would expect to share details on the project size, the selection of relevant partners on the project, and other commercial parameters?

I would expect one would be that it would be a smaller-scale project given the potential for it to be substantially less expensive than a full-scale plant. When do you expect to be able to maybe share some of these details with us?

Simon Irish: Well, I did speak earlier about the progress we're making on the supply chain front. We're still in commercial discussions with a number of key suppliers. Once those discussions have been finally concluded with a contract, we will be able to provide details on the timeline for these projects. So I will not, at this point, talk about the timeline. I think we're moving quickly. We're moving in a satisfactory way. In terms of what TETRA actually is, it is a pilot plant, and it's a pilot plant that fits into a program of engineering and regulatory work, which, Craig, is 10 years old. I mean, we're not just pursuing, in isolation, a science experiment to make a reactor critical.

That's not what we're doing. This sits within a structured engineering and regulatory program, which has already gone through the Canadian regulator. And we're using this OTA award process with the alternative authority that we're securing from the DOE to get this pilot reactor up super quickly. We're using that, I think, in a very intelligent way to collect the data that we need to collect. And it doesn't have to be a full-size reactor. I mean, the intelligent way of doing this is to realize what data you need to collect on a system that's representative of the main system, which is 195-megawatt electric. And that is what TETRA is about.

So as I said, it's not the single pursuit of the headline. From our end, there's far, far more to what TETRA and TEFLA are than that. It sits within a 10-year engineering and regulatory effort. And once we have just returned to the comments I made at the very start of my response, as we conclude our supply chain relationships, we'll be providing more detail on both projects. Both of them are very important to the overall engineering and regulatory objectives of the company, certainly in 2027. So we're looking forward to providing further updates in the coming quarters.

Craig Irwin: Then, last question, if I may. You shared numbers around Project TETRA and Project TEFLA that are careful. You've not given the expectation of third-party financing. Government support is a potential opportunity, both at the state and federal level. Is there maybe an update there? Are you seeing more things available where you might be eligible for support that could defray the actual cash cost of the customer? How do you see the potential there?

Simon Irish: Well, certainly, projects TETRA and TEFLA fall under the category of nonrecurring engineering effort. So the base case is going to be funded off our balance sheet because they're not going to be commercial operations. Those 2 projects are not going to produce anything directly. They're not designed to be commercial operations. But nonetheless, we recognize that those 2 activities do position the projects as candidates for public sector funding. So there are certainly possibilities for us to announce public sector funding support for one or both of those projects in 2027. So from a funding perspective, that's the alternative of funding these 2 projects off our balance sheet.

Operator: Our next question comes from the line of Rob Brown with Lake Street Capital Markets.

Rob Brown: I wanted to loop back on the natural gas bridge concept or plan. Just what are sort of the key milestones that you're looking for over the next, say, 12 to 18 months in the development of that? Do you need to develop supply chain for the salt loop? Or just a sense of what the milestones are that you're looking for?

Simon Irish: Yes. So there will be some supply chain developments on the component supply chain developments on the salt loop side. We have, at this point, done a sufficient amount of work with Hatch and Worley to feel confident that we can discuss this more broadly. As I said earlier, we have mentioned it and commented on it for, I would say, a fair number of years now. But it's the work we've done with Hatch and Worley that gives us the confidence to make this a topic of discussion on an earnings call. But we are continuing to do our engineering work, Rob. We are continuing to do our procurement work as well.

And those 2 activities, I think, will point to the direction of the announcements that we'll be making in the coming quarters on this initiative.

Rob Brown: And then I think you haven't given exact numbers, but you said a compelling kind of use case. But is it sort of an efficiency? How do you think about the efficiency and some of the cost elements and --

Simon Irish: Yes. From a qualitative perspective, we can offer something that is a very, very different system. And when you look at the features of the system, you go, this system must surely be more capital efficient than any possible alternative system. So it's a steam turbine; it's not a nuclear steam turbine. Anything that's a nuclear steam turbine comes with a hefty, hefty cost premium. So, for the start, we don't use an end-stamp steam turbine in our plant. That's whether we're using a natural gas bridge or not. But we're using a steam turbine, not a combustion turbine; we can get better access from a supply perspective to steam turbines. That steam turbine is used for 2 systems.

The natural gas thermal system drives it, and the nuclear systems also drive it. If you go back upstream, you have a steam generator, and again, the same statement: it's driven by those 2 systems. If you go back upstream, you have what drives the steam generator; you have a heat exchanger from nuclear systems, and you have a molten salt heater from natural gas systems. So the ability for us to integrate really, really expensive components into one powertrain of components is, I think, quite unique.

And it does point in a compelling way to why this is going to be, we believe, a very, very efficient way of integrating natural gas and using it as a bridge to quick power, why this is such an exciting concept for a nuclear power plant.

Operator: Our next question comes from the line of Alex Fuhrman with Lucid Capital Markets.

Alex Fuhrman: Congratulations on all the progress that you've been making on your initial projects here. I wanted to ask about the recent $25 million share repurchase authorization. Obviously, you guys have a really big balance sheet. How do you consider and think about the trade-off between all the opportunities you're working on moving towards commercialization and the opportunity to buy back your own stock here at these levels?

Simon Irish: Thank you, Alex. We have announced a program a couple of weeks back to repurchase $25 million of our stock, and that decision was taken because of the confidence we have in our business opportunities in 2027. Also, we've got a strong balance sheet position. I think we've got a within the sector, I think we've got a notably strong balance sheet position. And at this point in time, I think it signals a great deal about the prospects of our business in 2027.

Alex Fuhrman: And then obviously, your cash burn is going to accelerate at least a little bit as you get closer to commercialization and bring on some more hires. Can you just give us a rough way of framing how many years of OpEx runway you have with your balance sheet, assuming you do use the full $25 million?

Simon Irish: So I'll just pass this to Brian Thrasher, our Chief Financial Officer, to respond.

Brian Thrasher: Thanks, Alex, for the question. Yes, we've not provided specific guidance in terms of how long the runway is at this point. We do expect that cash spend will increase as we invest in these projects, notably TETRA and TEFLA in the coming quarters, but we've not provided specific guidance on the run rate.

Operator: Our next question comes from the line of Seth Basham with Wedbush Securities.

Seth Basham: My first question is back on the natural gas bridge. You mentioned Hatch helped you estimate the LTOE coming out of that technology. Could you share some more information on what the LTOE looks like?

Simon Irish: We haven't provided details. And for the moment, we're not prepared to provide guidance in a quantitative way. But the hatches analysis certainly has given us confidence to say this is a powerfully competitive alternative, both in cost and schedule, to building a combined cycle natural gas plant and saying that's the way you run a natural gas bridge.

Seth Basham: All right. We'll await that in the future. And as it relates to the topical report that you've recently submitted to NRC on the thermal and electric topic, when do you expect to hear back from NRC on that? And when can we see that finalized?

Simon Irish: Yes. Seth, the process for any topical report and any application to the NRC is that it's docketed. And then once it's docketed, the NRC goes, well, now it's docketed, then I'll undertake our work. I'm not prepared to provide that guidance at this point in time. We have recently submitted it. We do believe that we're confident in the safety analysis we've undertaken, and we expect to be able to point to the NRC's adjudication on this point in the near future. So we think it's going to be a matter that the NRC can deal with on a timely basis. There's some precedent to this as well, Seth, because others have taken similar topics to the NRC.

And as a proxy, you can see the time frame that they were subject to from submission to NRC adjudication.

Operator: Our final question this morning comes from the line of Derek Soderberg with Cantor Fitzgerald.

Derek Soderberg: I've got a question on the natural gas bridge as well. What do lead times look like for sourcing the new natural gas equipment? I was wondering if you could talk about that. And then would you be the entity that's funding for purchasing the natural gas equipment? And I've got a follow-up.

Simon Irish: No, Derek, we would not anticipate that this initiative would displace the principal business model we're pursuing. So you would have a project developer that would be doing the procurement and financing the procurement, financing construction and they also wishing to own and operate the unit. The engineering effort we've undertaken so far with Hatch and Worley has not extended to a full initiative to secure components at this point in time. But we do wish on this earnings call to point out that we are now focused on this initiative and the results we've got back so far are very encouraging.

Derek Soderberg: And then, as my follow-up, just a quick update on the fuel piece. I was wondering where the fuel cell is going to come from for TETRA? And then just a quick update on when TEFLA will produce the first fuel? Just a quick update on that.

Simon Irish: Yes. I mean, Derek, this is the schedule question. And the schedule question, I think it's been raised already on the call. We are still in contractual negotiations with some of the key suppliers in these projects. And I don't wish to comment on the schedule at this point in time until we have concluded those negotiations. But the fuel piece is one of those components.

Operator: Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Irish for final comments.

Simon Irish: Thank you. The objective of our business strategy is not a singular race to first plant, but to win the race to fleet deployment by delivering a commercially competitive nuclear solution that energy markets require and that can be adopted at fleet scale. The world needs new sources of clean, firm, affordable energy, and the IMSR plant is designed to supply that. The IMSR Natural Gas Bridge is one example of how we're working to help large energy customers overcome their supply challenges sooner. Quarter-on-quarter, the fundamentals supporting our business continue to strengthen as they have done so for many years. We look forward to updating you on our progress next quarter. Thank you for joining us today.

Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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