Company: LEU
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001065059-25-000058
Chunk: 3

Company: CENTRUS ENERGY CORP
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 2
Chunk 3
---
 chain challenges had created difficulties for DOE in securing enough 5B Cylinders for the entire production year under Phase 2. During time periods when 5B Cylinders were insufficient, the Company was able to continue operations of the cascade, but did not produce HALEU as it did not have 5B Cylinders to store the enriched uranium. Due to these delays, Centrus was unable to achieve contractual delivery of the 900 kilograms of HALEU UF6 by the date set for the end of Phase 2 performance. Centrus’ contractual delivery obligation of 900 kilograms by November 2024, was conditioned on DOE’s ability to provide the 5B Cylinders on a timeline that allowed for continuous production throughout Phase 2 of the contract. In light of the delays, on November 5, 2024, the HALEU Operation Contract was modified to extend the Phase 2 period of performance to June 30, 2025. On June 25, 2025, the Company announced that it had produced and contractually delivered to the DOE 900 kilograms of HALEU under the HALEU Operation Contract, thereby achieving the Phase 2 production target. As of June 30, 2025, the total Phase 2 contract value and funded value is $169.1 million. The fee for the Phase 2 period of performance that was extended beyond November 30, 2024 was not definitized and is subject to negotiation. 

On June 17, 2025, the DOE issued an amendment to the HALEU Operation Contract that split the first three-year option period into a first option period of one year (“Option 1a”) and a second option period of two years (“Option 1b”). The amendment establishes a target cost and fee for Option 1a of approximately $99.3 million and $8.7 million, respectively, and a target cost and fee for Option 1b of $163.5 million and $15.2 million, respectively. Additionally, the Amendment acknowledges that the estimated cost associated with Option 1b is insufficient to support full performance due to known cost increases since award of the HALEU Operation Contract, and indicates that the Company will need to submit a revised cost proposal for review and negotiation prior to DOE’s consideration of Option 1b. In conjunction with the amendment, the DOE exercised Option 1a and extended the period of performance to June 30, 2026. As of June