Q2 2021 Lightbridge Corp Earnings Call
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Thank you for standing by and welcome to the <unk> Corporation business update.
Second quarter 2021 conference call.
Please note that today's call is being recorded its now my pleasure to introduce Matthew I've been on sales.
Victor asking Investor Relations for Lionbridge Corporation.
Thank you, Brian and thanks to all of you for joining US today. The company's earnings press release was distributed before the market opened earlier today and can be viewed on the Investor Relations page of the light gauge website at Www Dot L. T breach dot com joined.
Joining us on the call today is Seth Gray Chief Executive Officer, along with Larry Goldman Chief Financial Officer, Andre Boucher Cough 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 offerings.
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 on life or just filings with the Securities and Exchange Commission.
<unk> does not assume any obligation to update or revise any such forward looking statements, whether average 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, Blake Bridge Hello, Seth.
Well Hello, and thank you, Matt and thank you all for joining us to discuss light bridges second quarter 2021 results I.
I Hope you and your families are well and safe.
Earlier today.
Nations Intergovernmental panel on climate change the IPCC.
Stated in our report.
The window is rapidly closing to avoid catastrophic climate change that would transform life as we know it.
For those new to life Regis story, and as a reminder to those who've been following lionbridge I'd like to start with our mission.
As to pioneer advanced nuclear fuel technologies to impact the world's climate and energy problems soon enough to make a difference.
Light bridge fuel our groundbreaking next generation nuclear fuel technology.
We'll make both existing and new reactors safer more proliferation resistant and more economically viable.
Our focus has been on developing new metallic fuel rods, something that hasnt been attempted in the nuclear power industry for the existing reactor technology.
Life, <unk> fuel will be even safer and produce more energy than current nuclear fuels.
Both existing reactors and the future small modular reactors or S. M ours can benefit by using light bridge fuel, enabling a plant to produce added incremental electricity at a lower cost than any other means of generating baseload electric power.
We are designing light bridge fuel to enable these S M hours to more efficiently load follow 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 strengthens the business case for deploying large numbers of S. M ours to deliver reliable power and meet the Ipcc's climate goals.
Our development steps and anticipated safety and economic benefits are also applicable to the existing large light water reactors.
Our innovative fuel design is backed by a global patent portfolio.
The U S Department of energy and its National Laboratories have validated light bridge fuel was 2 funding Awards D.
Oh considers awards larger than $500000 in cases with quote a clear need and involving a truly exceptional technology unquote or gain voucher for work at Idaho National Laboratory meets that criteria within award in excess of $500000 in D O funding Contra.
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Turning to our current fuel development efforts last month, we executed a cooperative research and development agreement or creator with the Battelle Memorial Institute, the operating contractor of the Pacific Northwest National Laboratory P&L in.
In collaboration with the Doa.
This agreement kicks off our work at P&L, which advances a critical stage in the manufacturing process of life rich fuel.
Demonstrating a casting process using depleted uranium zirconium material.
The total project value of our Credo is approximately $663000 with 3 quarters of this amount funded by D. O for the scope performed by P&L.
Earlier in the second quarter.
We announced the successful demonstration of our proprietary manufacturing process for 3 lobe 6 foot rods using surrogate materials.
The surrogate rods were manufactured through our co extrusion process at a lens designed for small modular reactors. These activities are part of our ongoing efforts to qualify our manufacturing process and develop specifications for our metallic fuel rod design that will ultimately be used for <unk>.
Zine and manufacturing fuel rods for loop irradiation testing as well as commercial lengths rods for operation in a commercial reactor.
We are pleased with our ongoing efforts at Idaho National Laboratory or <unk> performing under our funding voucher from the department of Energy's gain program. 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.
We will be completed later this year.
Last week, we announced the appointment of Jesse Funches as an independent director to our board of directors, who will serve as chair of the audit Committee Jesse brings a unique skill set combining years of successful financial management with a comprehensive knowledge of nuclear regulatory path.
<unk> improvement processes.
He also has extensive experience in working with Congress and the office of management and budget and the office of the Secretary and in the office of the Secretary of Defense.
Jesse his wealth of knowledge and strong leadership will be instrumental in guiding our fuel development initiatives and ensure we meet or exceed regulatory and governmental requirements.
Since our last call there has been a flurry of activity within the company as well as the industry, which has led to a greater awareness and attention for like bridge.
In June life, which was added to the Russell Microcap Index. We are proud to be 1 of the few publicly traded nuclear companies and to be included in the index, which will help us continue to broaden our investor base.
Investors are increasingly learning that advanced nuclear technology is necessary for U S companies to compete globally and to meet IPCC climate goals.
In July I presented at clean equity Monaco. This time virtually clean equity is an annual invitation only event co hosted by Prince Alberts Foundation, and innovator capital of London, featuring some of the world's most innovative sustainable technology companies the audience <unk>.
<unk> selected sovereign corporate family and professional investors policymakers and end users video of my presentation is available on <unk> Investor Relations page.
I also look forward to presenting at the upcoming S. N N network summer virtual event on August 19th.
Tomorrow, Android Musha call will speak at the American nuclear societies utility working conference speaking on a panel discussion on an accident tolerant fuels focused on the economic performance benefits associated with these fuels and will discuss the improved safety and economic benefits.
Fits of like bridge fuel and with that I'll turn the call over to Andre Executive VP for nuclear operations, who will review, our near term research and development opportunities Andre.
Thank you Seth as Seth mentioned, we have executed contracts from <unk>.
Vic Northwest National Laboratory related to our second gain voucher.
But a demonstration of our fuel casting process using depleted uranium and at 50%.
And the 50 weight percent alloys zirconium. This is a key step in the fabrication process for all fuel and it also feeds into our needs for fabrication of irradiation fuel samples for the advanced test reactor at standard promotional leverage.
We have also begun to procurement and quality assurance processes on sample to your vendors from the supplier depleted uranium zirconium materials.
As a component of why you just mentioned contributions to the project.
The thoughtful value of the project was approximately $663000 with 3 quarters from this amount funded by the U S Department for LNG from the scope of corn price.
P&L.
Also relate to income on the fracturing process, we have successfully demonstrated our patented extrusion process using surrogate materials in place. So if you rank.
The surrogates, Rob assortment of fractured using my own quirks wisdom process at the 6 foot normal language designed for small modular reactors.
This successful demonstration of our highest temperature growth Georgia.
The primary form and crosses for language fuel, including the helical twist of the fuel rods and day metallurgical bonds with him.
On the central displace their share of good fuel alloy and the cladding.
Ross produced during this demonstration will be used to further develop activity this including validation of computer models.
Moving on process and corrosion pages as fabricated alloys.
In parallel we continue to make progress on all the advanced test reactor experiment design, because the Idaho National Laboratory.
We have completed the conceptual design.
And.
Design phase, including the initial design review and.
Reach out Idaho National lab colleagues have been optimizing the combination of design elements and other to achieve burnup fuel samples within a defined window time on the reactor.
Now the conceptual phase is complete item promotional level begin the detailed design on safety case, where they experiment.
We expect the experiments designed to be completed later this calendar year.
Completion on the ACR experiment design will allow us to finalize the scopes of work with weighted from National Lab.
As the low enriched uranium supply.
Coupons simple fabrication reactor irradiation and ultimately fostering interesting examination of the samples.
And with that back to you Sir.
Thank you Andrei <unk>.
Now I 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.
Further information regarding our second quarter 2021 financial results and disclosures. Please refer to our earnings release that we filed this morning, and our form 10-Q that we will file with the SEC later today.
The company's working capital position at June 32021 was $13.8 million compared to $17.1 million at December 31.2020.
Total assets were $15.1 million and total liabilities were $1.2 million at June 32021.
Total cash used in operating activities was $7.7 million for the 6 months ended June 32021, an increase of approximately $4.2 million.
Per to the $3.5 million for the 6 months ended June 32020.
This increase was due primarily to the dissolution of the infusion joint venture and the payment of approximately $4.2 million to Framatome per outstanding invoices from work performed and other expenses incurred.
There was no cash provided by financing activities for the 6 months ended June 32021.
Net loss for the second quarter of 2021 was $1.6 million compared to $2.1 million for the second quarter of 2020.
Total R&D expenses increased by approximately <unk> 2 million for the 3 months ended June 32021.
<unk> 3 million as compared to <unk> 1 million for the 3 months ended June 32020.
There was an increase of approximately <unk> 1 million and outside R&D work with the National laboratories related to our first gain voucher and an increase of approximately $2.1 million and <unk>.
Are there R&D expense.
R&D expenses consist primarily of employee compensation and related fringe benefits and other allocable overhead costs related to the R&D of our fuel.
Hold on G&A expenses decreased by approximately <unk> 5 million for the 3 months ended June 32021 to $1.5 million as compared to 2 million for the 3 months ended June 32020.
A decrease in professional fees of approximately <unk> 3 million.
Kris and patent expense of approximately <unk> 1 million and a decrease in employee comp and benefits of approximately $3 million.
These decreases were offset by an increase of approximately <unk> 1 million in insurance expense and an increase of approximately <unk> $1 million in consulting fees.
Net other operating income was <unk> 2 million for the 3 months ended June 32021 day.
To an anticipated final distribution of <unk>.
Approximately $1 million from the dissolution and wind down of the affairs of the inpatient joint venture.
And grant income of approximately <unk> 1 million from our first gain voucher.
Grant income from the 3 months ended June 32020.
In support of our long term business and future financing requirements or respect to our fuel development.
We expect to continue to seek additional funding and equity funding in the future along with some strategic alliances that may contain cost bearing contributions and additional funding from others in order to help fund our future R&D milestones leading to the commercialization of <unk>.
Fuel.
Now over to you Sir.
Thank you Larry and with that we will go to the question and answer session. Thank you everyone who has submitted questions. Matt. Please go ahead to the questions.
Okay. Your first question.
In your shareholder letter in June you mentioned the incident at nuclear power plant at Tai Shan in China.
Is it safe to say that had light bridge fuel rods being deployed that the current situation wouldn't have occurred.
Okay.
We don't know the specifics of the situation and Tai Shan. So it is difficult to say how light bridges metallic fuel would have responded it does seem likely that some of the conventional fuel rods have experienced a cladding failure and released radioactive decision product into the reactor coolant.
Light bridges metallic fuel is designed to retain fission products within the fuel matrix, even in the event of cladding breach.
On our website you can see our investor presentation, which has some quotes from the U S nuclear regulatory commission with a link to that NRC web webpage.
On the NRC website. It says about light bridge fuel quote complete retention of fission products means no burst released from these product upon planning failure unquote.
So yes, I think it is safe to say the headlight bridge fuel rods been deployed the situation would not have occurred.
Thank you. The next question has there been any progress or updates regarding the possible additional tests to look at the advanced test reactor at Idaho National Laboratory.
No update yet Congress is going through the authorization and appropriations process, we expect to learn additional developments. After Congress is back in session. After the labor day holidays.
Thank you.
Are there additional game vouchers in the works and if so what areas of focus would you propose.
Jim If you would take that.
Certainly sir.
Yes under the rules of the D O regain program a company can have only 2 active gain vouchers at the same time.
Might bridge has 2 active gain voucher award so.
We're.
Precluded from from a third at Tomorrow.
We do find that the gain vouchers to be our useful program.
In order to tap into the unique capabilities.
U S National Labs, so flybridge will consider new gain voucher applications as we.
Identify additional scope suitable for them.
E program.
Yeah.
Thank you Tim.
Can you clarify the timing of when language has to provide us ample materials for the ATR as things stand today as well as additional loops are added to the Ato.
And also for you Jim.
Yes sure Seth.
Yes, we've identified a potential target ATR slot in the late 2022 or early 2023 timeframe for insertion on core.
Fuel material samples because and this is following the core internal change on outage, which is currently underway.
This timing will be dependent upon the final completion.
The ato or outage as well as design or other commitments for reactor irradiation, but assuming that on I know completes the outage. According to the current schedule and the cash capsules position in the HR.
We remain available to us and as expected the outage should not affect our long term efforts.
Regarding the additional tests loops.
But we can't speculate on when or if there'll be added to the pure as you mentioned, it's function of current funding or when they might be made available to us, but we have made public statements about our support for adding these additional loops in order to support American innovation.
In advanced nuclear fuels.
Back to you Seth.
Yeah.
Okay. Another question.
Thank you.
With the progress that's been made so far across 2 game vouchers and your co extrusion process demonstration.
What are some mile stones investors can look forward to for the rest of the year.
Okay I can take this 1 andre.
Absolutely.
So in terms of upcoming milestones under the gain voucher either promotional laboratory, we expect the seniors best work later this year that.
That will culminate with a complete experiment design, where radiation based on the coupon on fuel sample material material samples and the advance test reactor.
From there right.
Page finalizing our discussions with Idaho National laboratory relating to contract for prevention of par coupon fuel material samples using high assay low enriched uranium or <unk>.
Also related to him on a fraction process was successfully demonstrated the bathroom per square stored on processed using surrogate materials someplace of uranium.
Branch reduced during those downstream from that will be used for further development activities, including the realization of computer models of the extrusion processes and corrosion tasting as fabricated equation analogs.
Finally, we have recently begun work on the Satcom gain voucher Pacific Northwest National Laboratory, but demonstrated the cash some element of revenue for the question on the fracturing process used and deployed with uranium. So we'll continue to make some progress on that particular scope of work as well.
Back to you.
Thank you.
Is likely just a direction for fuel manufacturing with recent gained vouchers considering both coextrusion on tasking.
Why don't you take that 1 Andre.
Sure Seth.
Extraordinarily on cash Tim 2 critical steps.
On a fraction of cost us.
Bill It is prepared using the cash generative.
The bill at its core it's sort of into a pool lengths fuel rod.
Our recently completed circuits, rather extrusion demonstrated quite stores on the elements from a fraction process.
And on the most recent gain about insurance specific northwest National laboratories focused on demonstration of the cash development.
From a fracturing process.
Yeah.
Yeah.
Okay, Matt any other questions.
That's it from me.
Okay very good well. 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 and well goodbye.
This concludes today's conference call you may now disconnect.
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Yes.
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