UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
_________________
Date of Report (Date of earliest event reported): November 29, 2018
Centrus Energy Corp.
(Exact name of registrant as specified in its charter)
Delaware | 1-14287 | 52-2107911 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
6901 Rockledge Drive, Suite 800
Bethesda, MD 20817
(301) 564-3200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On November 29, 2018, American Centrifuge Operating, LLC, a Delaware limited liability company (the “Company”) and a wholly owned subsidiary of Centrus Energy Corp. (“Centrus”), entered into a Services Agreement to Provide Technical and Resource Support, effective November 28, 2018, to X Energy, LLC, a Maryland limited liability company (“X-energy”). Under the terms of the services agreement, the Company will provide (i) technical and resource support to the design and license application development of X-energy’s nuclear fuel production facility and (ii) non-cash in-kind contributions to X-energy subject to a cooperative agreement between X-energy and the United States government. The technical and resource support provided by the Company to X-energy will be performed pursuant to separate task orders issued under and pursuant to the services agreement.
The initial task orders run through September 30, 2019 with deliverables to be completed through November 30, 2019. The awarding of any additional task orders to the Company will be dependent upon the receipt of additional funding.
Depending upon the pricing outlined in the task orders, payment for work performed by the Company pursuant to the services agreement will either be fixed price based or time-and-materials based. The initial task orders provide for time-and-materials based pricing with payments to be made to the Company totaling approximately $4.17 million. The value of the Company’s non-cash in-kind contributions through completion of the initial task order deliverables in November 2019 is expected to be approximately $2.37 million.
The foregoing description of the services agreement does not purport to be complete and is qualified in its entirety by the text of the agreement, a copy of which is expected to be filed as an exhibit to Centrus’ annual report on Form 10-K for the year ending December 31, 2018.
The Company is a party to a few other agreements or arrangements with X-energy, as described in Centrus’ quarterly reports on Form 10-Q.
Centrus, or its subsidiaries, are also a party to a number of other agreements or arrangements with the United States government, as described in Centrus’ annual report on Form 10-K and quarterly reports on Form 10-Q.
Item 7.01 Regulation FD Disclosure.
On November 29, 2018, Centrus issued a press release announcing the event described in Item 1.01 of this report. A copy of this press release is included as Exhibit 99.1 to this report.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Centrus under the Securities Act of 1933 or the Exchange Act. A copy of the press release issued by Centrus in relation to the services agreement is furnished herewith pursuant to Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit | Description | |
99.1 | ||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Centrus Energy Corp. | ||||
Date: | November 29, 2018 | By: | /s/ Marian K. Davis | |
Marian K. Davis | ||||
Senior Vice President, Chief Financial Officer and Treasurer | ||||
EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
November 29, 2018
November 29, 2018
X-energy and Centrus Begin Advanced Nuclear Fuel Fabrication Facility Design
-Work also beginning on license application development-
-Work also beginning on license application development-
BETHESDA, Md. – Centrus Energy Corp. (NYSE American: LEU) has signed a new services contract with X Energy, LLC (X-energy) to proceed with the preliminary design of a facility to fabricate advanced nuclear fuel. The contract builds upon the companies’ prior contract, signed in March 2018, to complete a conceptual design of the facility.
“This collaboration between X-energy and Centrus puts our two companies at the forefront of the effort to supply the fuel for the next generation of nuclear reactors,” said Daniel Poneman, president and CEO of Centrus. “We see great promise in this market and believe the advanced TRISO fuel to be produced in this facility will offer an attractive and competitive solution to power advanced reactors around the world.”
Dr. Pete Pappano, Principal Investigator for X-energy’s DOE Cooperative Agreement and VP of Fuels Production, stated “This collaboration builds off of an already successful effort that concluded with the conceptual layout of the TRISO-X Fuel Fabrication Facility. With this new agreement, X-energy and Centrus will complete the preliminary and final designs of the TRISO-X Facility, positioning the companies to be first to market in the sector of high assay low enriched uranium (HALEU) TRISO-based fuel for advanced reactors and, potentially, accident tolerant fuel for the existing light water reactor fleet.”
Under the agreement, Centrus will provide X-energy with technical expertise and resources to support the preliminary design of a facility to produce X-energy’s uranium oxycarbide (UCO) tristructural isotropic (TRISO) fuel forms. This effort includes detailed nuclear criticality safety analysis, infrastructure design, and balance of plant support systems, as well as initial work on a license application for the facility. Centrus is also providing facility space to X-energy at Centrus’ Technology and Manufacturing Center in Oak Ridge, Tenn., where X-energy and Centrus employees are working together on the project. TRISO fuel forms can meet the requirements for the X-energy Xe-100 high temperature gas cooled reactor, as well as for other advanced nuclear reactor technologies being developed around the world.
The services contract supports the companies’ previously announced joint effort to prepare a deployment plan for X-energy’s TRISO fuel technology; design a cost-effective, highly automated fuel manufacturing process line; and seek funding for a future commercial fuel production facility.
About Centrus Energy
Centrus is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the
Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal.
With world-class technical capabilities, Centrus offers turnkey engineering and advanced manufacturing solutions to its customers. The Company is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future. Find out more at www.centrusenergy.com.
About X-energy
X-energy is an advanced nuclear reactor design and TRISO-based fuel fabrication company. X-energy is developing an innovative nuclear power plant design solution. The Xe-100 is a 200MWt (75MWe) high temperature gas-cooled pebble bed modular reactor that requires less time to construct, uses factory-produced components, cannot melt down, and is "walk-away" safe without operator intervention. In concert with Xe-100 design, X-energy is actively producing TRISO-based fuel forms and is implementing pilot scale manufacturing capacities. Reactor and fuel activities are supported by $38.5M in private investment, a five-year $53M DOE Cooperative Agreement for advanced reactor and TRISO fuel research, and a three-year Cooperative Agreement (funded to $10M) for design and license application development of a commercial TRISO-X HALEU fuel fabrication facility.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) - that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include risks: the continued impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the impact and potential extended duration of the current supply/demand imbalance in the market for low-enriched uranium; pricing trends and demand in the uranium and enrichment markets and their impact on our profitability; risks associated with our reliance on third-party suppliers to provide essential services to us; risks related to actions that may be taken by the U.S. government, the Russian government or other governments that could affect our ability to perform or the ability of our sources of supply to perform under their contract obligations to us, including the imposition of sanctions, restrictions or other requirements; the impact of government regulation including by the U.S. Department of Energy and the U.S. Nuclear Regulatory Commission; failures or security breaches of our information technology systems; potential strategic transactions, which could be difficult to implement, disrupt our business or change our business profile significantly; the competitive environment for our products and services; changes in the nuclear energy industry; the impact of financial market conditions on our business, liquidity, prospects, pension assets and insurance facilities; revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including under Part 1. Item1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017.
Contact
X-energy: Melanie White Lyons, (301) 363-2839, mlyons@x-energy.com
Centrus: Jeremy Derryberry, (301) 564-3392, derryj@centrusenergy.com
Centrus: Jeremy Derryberry, (301) 564-3392, derryj@centrusenergy.com