Q1 2021 Lightbridge Corp Earnings Call
Thank you for standing by and welcome to the Library Corporation business update and first quarter 2021 Conference call. Please note that today's call is being recorded it is now my pleasure to introduce <unk>.
Matthew <unk> director of Investor Relations for My Bridge Corporation.
Thank you Catherine and thanks to all of you for joining US today. The company's earnings release was distributed after the market closed yesterday and can be viewed on the investor Relations page of <unk> website at Www Dot L T grades dot com.
Joining us on the call today is Seth Gray Chief Executive Officer, along with Larry Goldman Chief Financial Officer.
Sherri Hollaway accounting manager Andre Boucher cost executive Vice President for nuclear operations, and Jim Fornoff, Vice President for nuclear program management.
I would like to remind our listeners that any statements on this call that are not historical facts are forward looking statements.
Today's presentation includes forward looking statements about the company's competitive position and product and service offering.
During today's call words, such as expect anticipate believe and intend will be used in our discussion of goals or events in the future. This presentation is based on current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from such estimates.
These and other risks are set forth in more detail in my bridge is filing with the Securities and Exchange Commission <unk> does not assume any obligation to update or revise any such forward looking statements, whether as a result of new developments or otherwise.
And with that I would like to turn the call over to our first speaker, Seth Gray Chief Executive Officer of like Bridge Hello, Seth.
Hello, Matt and thank you. Thank you all for joining us to discuss flight bridges first quarter 'twenty 'twenty. One results, we enter 2021 on a very positive trajectory in terms of our fuel development activities highlighted by our announcement yesterday that we have successfully demonstrated our proprietary manufacturing.
Yes for three low six foot rods using surrogate materials. The surrogate rods were manufactured through our co extrusion process and our lens designed for small modular reactors or S. M ours.
Andrew <unk> will provide an overview of this process after my remarks.
This manufacturing is important for like breach for many reasons.
We are beginning to physically produce rods utilizing our technology between production abroad, and our two gained vouchers.
This is all beginning to move to tangible products that are backed by our extensive patent portfolio.
We are designing light bridge fuel to enable small modular reactors to more efficiently load volume ramping up and down in power as renewables are available, replacing fossil fuel plants in.
In addition, we expect this technology to reduce the cost of generating electricity from an S. M R which.
So the business case for deploying large numbers of S M ours to deliver reliable power and meet climate goals.
Our development steps are also applicable to the existing large lightwater reactors.
Last month day.
Oh, he awarded light bridge, a second game funding voucher to support development of light bridge fuel in collaboration with the Pacific Northwest National Laboratory P&L.
The scope of the project is to demonstrate light bridges casting process using depleted uranium.
A key step in the manufacture of like bridge fuel.
The total project value is approximately $664000 with three quarters of this amount funded by D. O E for the scope performed by P&L. We expect the project will begin later this quarter.
We are pleased with our ongoing efforts at Idaho National Lab, our iron out performing under our funding voucher from the department of Energy's gain program we.
We are designing an experiment for testing our fuel samples in the advanced test reactor at I N. L. We anticipate our work under this voucher will be completed in the second half of this year.
Being awarded to funding vouchers by the federal government through the D O.
With access to their teams of experts and world class facilities, which are unmatched in the private sector allows light bridge to take meaningful strides in our fuel development program.
In addition, these funding awards further validate our patented fuel and patented manufacturing process.
Fitting in strategically with the goals of the federal government, we are seeing an increasing understanding and the bite his administration that the nuclear nuclear energy must increase to meet the administrations zero emission goals. In fact, you may have seen news reports the tax subsidies for.
Listing nuclear facilities might be included in the upcoming infrastructure Bill.
It's becoming clear that there is a paradigm shift in the way governments around the world are looking at nuclear power.
In the last year the U S government through the nuclear fuel working group outlined a bold plan that commits to federal funding of R&D for advanced nuclear energy as well as lifting of the ban on investment by the U S International Development Finance Corporation into advanced nuclear energy projects for X.
Laurie.
From there the nuclear Energy leadership Act was included as an amendment to the National Defense Authorization Act that passed last fall.
<unk> D O efforts on demonstration of advanced reactor concepts, including nuclear fuel technology.
And this month the European Commission announced that it will include nuclear energy in the European Union taxonomy regulation, which steers investment into low carbon projects. All of these developments matter in setting the stage for attracting greater investment in nuclear energy technology.
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Investors in nuclear tend to follow government actions when leveraging their investments. So we expect these changes will lead to more meaningful investment in the nuclear power industry.
Light bridge presents a unique opportunity in the nuclear industry.
Our fuel design March the only truly new fuel design since the dawn of light water reactors in the nuclear industry.
These are significant changes that will bring significant safety and economic benefits for both existing and new reactors in many ways light bridge fuel can helps the nuclear power industry to reduce the cost of generating electricity and operating nuclear plants over.
Over the long run we expect to transition from most nuclear energy being generated in large reactors to much more generation from larger numbers of small modular reactors powered by light bridge fuels offering superior ramp rates for load following with renewables, while providing a meaningful increase in power.
Output.
And with that I will turn the call over to Andrey <unk> <unk> executive VP for nuclear operations, who will update us on some recent news and review our near term research and development opportunities Andrei.
Thank you Seth yesterday, we announced the successful demonstration of our patented corks tourism process isn't surrogate materials in place of uranium price.
Surrogates rods were manufactured using a corked Jordan process at the six foot lateral lengths designed for small modular reactors or have some ours.
The successful demonstration of our high temperature Kirk's throws him illustrates the primary performing process for lionbridge fuel and crude and the helical twist of the fuel rods and be metallurgical bonds between the central Displacer circuit fuel alloy and declared.
Broad spread during this demonstration will be used for further development bacteria, this and crude and validation of computer models like sorting process and corrosion fast simple as fabricated Collegium alloys.
In parallel we continue to make progress from our advanced best reactor experiments designed was either from National Laboratory.
Nearing the completion of the conceptual design craze and reach out I am out colleagues have been optimizing the combination of design elements in order to true burned up all of the fuel samples for them you find when both farm and the perhaps reactor.
Once the conceptual phase is complete private from National Laboratory will immediately begin the detailed design and safety case from the experiment.
We expect the experiment design to be completed later this calendar year.
Completion of the ACR experiment design, but will also allow us to finalize the scopes of work with Atlanta from National Laboratory.
High assay low enriched uranium supply.
Coupons simple fabrication.
Reactor ideation, and Belgium post to reduce things dimension of the samples.
We are also progress from on the contract and a quality control aspects. So far our second gain voucher was the Pacific Northwest National Laboratory for demonstration of our fuel cash some process using depleted uranium and they're 50% weight percent alloy was their cornea.
This is a key staff from the publication process for all fuel and it also feeds into our needs for fabrication of irradiation fuel samples for the advanced test reactor at Diavik promotional laboratory.
The game contracts with P&L, almost complete and we expect to be able to execute these contracts with the national lab shortly.
We have also begun the corridor of quotation on quality assurance process resolves sub numbers for the supply of depleted uranium zirconium materials each of the components of widebody just mentioned contribution from the project.
Total value of the project is approximately 600 of them six to $4000 for three quarters of the some unfunded by deal are you from the scope performed by Pacific Northwest National Laboratory.
To yourself.
Thank you Andrei.
Now I'll will turn the call over to Larry Goldman Chief Financial Officer to summarize the company's financial results Larry.
Thank you Seth and good afternoon, everyone for further information regarding our first quarter 2021 financial results and disclosures. Please refer to our earnings release that we filed at the close of market yesterday, and our form 10-Q that we will file with the SEC later today.
The company maintained a strong working capital position at March 31, 2021, with $15 2 million of cash and cash equivalents compared to 21 5 million at December 31 2020.
We had working capital of $15 2 million at March 31, 2021, as compared to $17 1 million at December 31, 2020 with no debt financing.
Total assets were $15 9 million and total liabilities were $4 6 million at March 31 2021.
Total cash used in operating activities was $6 3 million an increase of approximately $4 3 million for the three months ended March 31, 2021 compared to the three months ended March 31 2020.
This increase was due primarily to the dissolution of the efficient joint venture and the payment of approximately $4 2 million to Framatome per outstanding invoices for work performed in other expenses incurred by Framatome.
Cash provided by financing activities decreased by approximately <unk> 4 million for the first quarter of 2021 as compared to the first quarter of 2020.
This decrease was due to the decrease in cash proceeds from the issuance of our common stock as we did not raise any equity capital for the three months ended March 31 2021.
In support of our long term business and future financing.
With respect to our fuel development, we expect to continue to seek additional funding in the future along with new strategic alliances that may contain cost sharing.
Patients on other additional funding from others in order to help fund our future R&D milestones.
Adding to the commercialization of our life rich fuel.
I will now turn the call over to Sherri haul away our accounting manager.
Go over select P&L financial information for the first quarter of 2021 Sherri.
Thank you Barry.
Net loss for the first quarter of 'twenty, 'twenty, one with $2 million compared to $2 3 million for the first quarter of 'twenty 'twenty.
Primarily due to these factors.
Total R&D expenses were <unk> 4 million in the first quarter of 2021 compared to <unk> 4 million in the first quarter of 2020.
Expenses were consistent period over period, as we transition to a new field development strategy with the D O E National laboratories.
It was a decrease in employee compensation and employee benefits.
Approximately 2 million offset by increase of approximately $1 million in outside research and development work and an increase of approximately <unk> one.
$1 million in patent expenses.
R&D expenses consist primarily of employee compensation and related fringe benefit.
Other allocable overhead costs related to the research and development.
Yeah.
G&A expenses for the three months ended March 31st 2021, well one $8 million.
The G&A expenses will decrease by approximately <unk> 2 million from the three months ended March 31, 2021 as compared to the three months ended March 31st 2020.
Due to a decrease in legal and professional fees of approximately $21 million related to the Framatome arbitration.
And a decrease in employee compensation and employee benefits of approximately <unk> 1 million.
Net other operating income was $1 million for the three months ended March 31st 2021 due to the recognition of grant income from the first gain voucher.
There was no grant income from the three months ended March 31st 2020.
Now over to you Seth.
Thank you Sherry and with that we will go to the question and answer session. Thank you to everyone who has submitted questions. Matt. Please go ahead with questions.
Thank you Seth the first question how does the recent co extrusion announcement differ from your previous work.
Hey, Andre you take that one.
Sure Seth.
The work we announced this week is different.
<unk> patented high temperature co extrusion process.
Oh, three law Lionbridge fuel design variance and incorporate them.
Sensor line displace their and viewers and nuclear grade cladding alloy materials.
These extraordinary salsa includes some specimens was intentional internal defects.
From certain backward from non destructive examination, thanks, Tim on those particular.
Surrogates for watts.
The components produced from this work will enable led breach the begin technically validate them out finite element computer models of the fuel fabrication process before.
Form the corrosion asics sort of clearing material needed for future license them.
And begin the development of non destructive examination techniques for all fuel.
These activities are part of our ongoing efforts to qualify them and the sanction process and develop as probably kitted specifications for them. It's all like fuel Rod design that Phil.
Ultimately be used to design and little fraction reached uranium fuel rods.
Irrigation.
First reactor and commercial lengths fuel rods for operations in a commercial reactor.
Thank you Andre our next question can you provide an update on where things stand today. One year later in terms of the work to be done at I N L.
Yes, Jim spent in charge of that work, Jim you want to take that one.
Yes sure Seth.
As we previously mentioned the <unk> experiment design at the Idaho National Lab is moving forward with an expected completion date at the end of the third quarter of this year.
We are nearing the completion of the conceptual phase of the experiment.
What this means isn't debt we will have a.
A detailed specification for the fuel sample geometry.
True.
The enrichment levels of the coupons the position of each sample capsules within the Ato or core and most importantly, the resident time of each capsule in the reactor.
These factors are being optimized by I know.
Using an iterative neutron X in thermal hydraulics modeling approach with the goal of achieving the desired range of fuel burn offs within a minimum amount of reactor time.
Once completed this conceptual phase will allow <unk> to proceed with the development of the engineering and fabrication drawings and specifications for the capsules themselves and the fuel coupon samples.
Well, whereas to complete the safety case for sample insertion into the ATR.
We have identified a potential target date in late 2022 early 2023 for insertion.
Following the ATR core internal change on outage.
And the state of course.
Target date of course depends upon the final schedule for the Ato or outage as well as volume goes on their commitments for a reactor irradiation.
In addition to completing the experiment design will allow light per inch to move forward with contracting for sample material and test coupon fabrication.
And ultimately this will allow us to perform post radiation.
Elimination of measurement of the samples in collaboration with high now.
Well back to back to you Matt.
Thank you Jim.
Next question can you discuss which S. M R or advanced reactors types might be use might use <unk> fuel.
And what reactor types may not be feasible.
And do these designs have any application in the current power reactor fleet.
Hey, Jim take that one.
Yes.
Yes, yes, thanks again.
<unk> has the potential application in most water cooled reactor types, including pressurized water boiling water and heavy water designs.
The current answer more advanced reactor designs. The most obvious application for fuel would be new skill power module.
The GE Hitachi BW <unk> 300.
And in the whole tech consumer 60.
Other advanced designs, such as the Terrapower sodium fast reactor or the ex energy ex D 100, which isn't a choice of fuel helium cooled reactor wood.
It would not have a direct application for the current might bridge fuel designs.
However, these companies do share some synergies with block light bridge in the areas of H E. L F.
<unk> supply.
And metallic fuel fabrication.
But we have not completely explored the other advanced reactors, such as molten salt or low power density.
<unk> moderated designs, but these are less likely.
To have application for our current.
Sure.
And finally regarding the debt.
Power reactor fleet most of the R&D efforts accomplished first water cooled after more designs will have some some if not a direct application to the existing reactors.
These include the current fleet of PW or BWXT can do players.
So as such we could still see a great potential to deploy the whiteboard fuel into the current fleet.
See you again, thank you thank.
Thank you Jim.
For my understanding language field uses uranium zirconium do you have designs to use other materials.
Yes.
We have done work on a version of our fuel utilizing plutonium in zirconium and that technology is included in some of our patents that we've issued debt that had been issued.
This version of our fuel could be used to dispose of plutonium from dismantled nuclear weapons utilizing in reactor fuel to dispose. It flips Newtonian and this technology could also be used to produce power by disposing of reprocess plutonium from used reactor fuel.
In the past, we designed a thorium uranium fuel that we also patented we are no longer working on thorium fuel. The reason we are focusing on our metallic zirconium uranium fuel is this design best addresses the needs of the market.
At best provides the power uprate and longer fuel cycles that reduce the cost of electricity generated by reactors and that's what utilities are looking for in this field design also adds tremendous additional safety and non proliferation benefits.
Next question Matt.
With the recent talk from the bite and administration supporting existing large reactors in the upcoming infrastructure Bill how can this be viewed as a benefit for lionbridge.
What I'd say is that energy production is crucial for infrastructure.
And there is talk as I mentioned earlier in the call.
Apparently including top value the secretary of energy Jennifer Granholm.
Production tax credits for nuclear power plants.
And that type of support plus the economic benefits of like bridge fuel.
<unk> significantly improve the economics of owning and operating nuclear power plants large and small keeping existing plants open that could use our fuel and lead to the construction of new reactors that could use our fuel, including we believe large numbers of <unk>.
Next question.
Okay.
This is our last question nuclear plants like at Indian point or being shut down throughout the country. When do you think that the perception of nuclear will change to the better in this country.
Let's start today.
If we are really going to meet IPCC climate goals large growth in nuclear power has to be part of the answer.
And if the U S is really going to compete in energy markets globally, with China, and Russia advanced nuclear technology that the customers per far has to be a part of the answer.
Light <unk> technology can help make nuclear power and more acceptable.
And with that being our last question I'll say, thank you everybody for participating on today's call. We look forward to providing additional updates in the near future in the meantime, we can be reached at IR at <unk> Dot com stay safe say, what stay well goodbye.
That concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
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