Company overview

Terrestrial Energy Inc. is a developer of Generation IV nuclear plants using its proprietary Integral Molten Salt Reactor (IMSR) technology. The company was incorporated more than 12 years ago and is now headquartered in the United States following a redomiciliation in 2024. It employs approximately 80 staff focused on IMSR development and commercialisation.¹

The IMSR plant consists of two operating reactor units housed in a standardised dual nuclear facility producing 822 megawatts thermal (MWth) or 390 megawatts electric (MWe) of net output. The design is built on more than 65 years of molten salt reactor research originating from Oak Ridge National Laboratory, combining a SALEU once-through fuel cycle with an integral core architecture in which all primary reactor components are sealed inside a replaceable “Core-unit” vessel.

Terrestrial Energy has received more than USD $130 million in capital to date, including government grants totalling approximately USD $30.1 million from the United States, Canada, and the United Kingdom. The company generated its first customer revenues in 2020 and 2021 through pre-construction engineering services, and reported USD $8 million in revenues from site- and use-specific engineering work in 2021. In February 2025, Texas A&M University selected Terrestrial Energy in a competitive request-for-proposal process to site a commercial IMSR plant at its RELLIS campus, with a goal of reaching 1 gigawatt of generating capacity at that site by the mid-2030s.

Technology and business model

The IMSR’s key technical distinction is its use of molten fluoride salt as both coolant and fuel carrier. Operating at 585°C and atmospheric pressure, the reactor generates thermal energy at temperatures competitive with conventional coal-fired boilers, enabling it to supply high-grade industrial process heat as well as electricity. By contrast, conventional Generation III and III+ light-water reactors (including small modular reactors) operate at approximately 270-299°C under high pressure of 55-150 bar, limiting their application to electricity generation only.²

The IMSR’s fuel advantage is commercially significant. Most competing Generation IV reactor designs require High-Assay Low-Enriched Uranium (HALEU), enriched to between 15% and 20% U-235 and priced at approximately USD $32,600 per kilogram of uranium. The IMSR uses SALEU at under 5% enrichment, available from established Western suppliers including Centrus, Westinghouse, Orano, and Urenco at approximately USD $2,700 per kilogram of uranium. The United States Department of Energy initiated a new HALEU proliferation risk study in 2025, which Terrestrial Energy’s investor materials cite as indicative of further delays to HALEU supply.

Terrestrial Energy’s business model generates revenue across four segments spanning the full lifecycle of each IMSR plant. Pre-construction services cover site selection and licensing studies. Construction services and component supply cover approximately 30% of total plant cost, with the remaining 70% contracted to engineering, procurement, and construction firms and other suppliers. The post-construction phase generates recurring revenue through replacement Core-unit supply every seven years and ongoing IMSR fuel salt supply over a 50-plus year operational life. Plant construction is financed by customer owner-operators and their investors, not by Terrestrial Energy, which keeps the company’s own capital requirements comparatively low.

Note: Unit economics reflect Terrestrial Energy management estimates at Nth Commercial Plant (NCP) status, based on detailed cost engineering work with prospective customers in 2020-2021. Source: Terrestrial Energy investor presentation, March 2025.

The IMSR plant design holds a portfolio of 90 patents pending or granted across six invention families. The company has secured supply agreements and contracts with blue-chip industrial partners including KSB, L3Harris, Siemens Energy, BWXT, Orano, Westinghouse, Urenco, and Cameco, among others. It has active MOUs and commercial development agreements with organisations including Argonne National Laboratory, Schneider Electric, Energy Solutions, Viaro Energy, and Texas A&M University.

The addressable market framing centres on two linked demand pools in OECD economies: the industrial process heat market (estimated at USD $800 billion) and the electricity generation market (estimated at USD $600 billion), giving a combined current serviceable addressable market of USD $1.4 trillion projected to grow to USD $1.9 trillion by 2050.

Financial performance

Terrestrial Energy is pre-revenue at scale and does not report audited financial results in the publicly available deal materials. The company generated its first revenues in 2020 from pre-construction engineering services, and disclosed USD $8 million in revenues in 2021 from site- and use-specific engineering work. The company has raised more than USD $130 million to date, inclusive of government grants, over its more than 12-year corporate history.

The investor presentation does not include a full profit-and-loss statement or cash flow disclosure, which is consistent with a pre-commercial stage nuclear technology developer. The unit economics model presented is based on Nth Commercial Plant projections and management estimates developed from 2020-2021 cost engineering studies with prospective customers; these figures do not include inflation adjustments and are subject to revision.

Source: Terrestrial Energy investor presentation and press release, March 26, 2025. LCOE and LCOH are management estimates at NCP status.

The levelized cost of electricity projection of USD $69 per MWh compares favourably with the Lazard 2024 LCOE+ report range of USD $142 to $222 per MWh for legacy nuclear and sits within the range of natural gas combined cycle (USD $45 to $108 per MWh), though these IMSR figures are management projections at fleet-scale deployment rather than independently verified current-build costs.

Deal details

The transaction is structured as a business combination between Terrestrial Energy and HCM II Acquisition Corp., a Nasdaq-listed blank check SPAC sponsored by Hondius Capital Management and led by Shawn Matthews (Chairman and Chief Executive Officer) and Steven Bischoff (President and Chief Financial Officer). The transaction was unanimously approved by the boards of directors of both companies.

The transaction structure includes USD $37.3 million of equity from the conversion of USD $25 million in convertible debt plus accrued interest, converting at a 25% discount at closing. Cash to the balance sheet is estimated at USD $265 million, with approximately USD $15 million allocated to illustrative transaction expenses. Sponsor shares total 5.75 million (4.4% of pro forma shares).

Ownership and funding

All existing Terrestrial Energy shareholders will roll 100% of their equity into the combined entity, retaining 71.2% of pro forma shares outstanding. Terrestrial Energy’s management team, its primary shareholders, HCM II’s sponsor, and certain affiliates of that sponsor have committed to customary lock-up arrangements following closing.

The company’s advisory board includes former United States Secretary of Energy Ernest Moniz (serving as senior counsel), former Canadian Prime Minister Stephen Harper, former BP p.l.c. President and Chief Executive Officer Lord John Browne, and former United States Nuclear Regulatory Commission (NRC) Commissioner Jeffrey Merrifield (serving as legal counsel to the advisory board). The Terrestrial Energy board of directors is supported by executives with backgrounds from leading United States nuclear utilities and engineering firms. The HCM II board includes Mike Connor, a former United States Navy Vice Admiral who led the nuclear submarine fleet.

Since 2015, Terrestrial Energy has received grant funding from the United States federal government (USD $7.877 million), Canadian federal and provincial governments (USD $18.606 million), and the United Kingdom federal government (USD $3.623 million), totalling USD $30.106 million. In 2020, Canada’s federal government invested C$20 million through its Strategic Innovation Fund. The United States Department of Energy Loan Programs Office accepted the company’s application for review for a loan guarantee of up to USD $890 million in 2017 to finance the first United States IMSR plant, with formal due diligence contingent on site and project selection.

Key risks

Regulatory timeline uncertainty. Terrestrial Energy has completed Canada’s CNSC Vendor Design Review (the first Generation IV reactor to do so), but United States NRC licensing remains at the pre-application stage. Formal design certification, site construction licensing, and operating licenses are all outstanding. Any regulatory delays, additional technical clarification requests, or changes in regulatory requirements could materially extend the timeline to first commercial operations beyond the 2034 target and increase capital requirements.

Pre-revenue stage with no delivered plants. Terrestrial Energy has not constructed, delivered, or commissioned a commercial IMSR plant. Unit economics and cost estimates are management projections derived from 2020-2021 cost engineering work with prospective customers, without inflation adjustments and subject to significant change. Capital and operating costs for a first-of-a-kind reactor design are inherently variable and historically tend to exceed initial estimates in the nuclear sector.

SPAC redemption risk. The USD $230 million of cash from HCM II’s trust is subject to shareholder redemptions before closing. If redemptions are significant, total proceeds could fall materially below the projected USD $280 million gross figure, potentially requiring Terrestrial Energy to adjust its business plan, reduce spending, or seek additional capital on less favourable terms.

Substantial additional funding required. The anticipated gross proceeds will not be sufficient to finance the full capital required to commercialise the IMSR at fleet scale. The company will require further equity or debt financing, likely including the USD $890 million DOE loan guarantee (which itself remains subject to formal due diligence, site selection, and government discretion), as well as customer-financed plant construction. No assurance exists that such capital will be available on acceptable terms.

Fuel supply and supply chain concentration. Although SALEU fuel is commercially available from multiple Western suppliers, scaling up a dedicated IMSR fuel salt supply chain (including molten fluoride salt production) requires long-lead contracting and potential new regulatory approvals. Certain key nuclear-grade materials, including graphite for the reactor moderator, are produced in limited quantities and largely outside the United States, creating potential supply chain vulnerabilities.