Q3 2021 Lightbridge Corp Earnings Call
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Thank you for standing by and welcome to the light Rich Corporation business update and third quarter tiny tiny one conference call.
Please note that today's call is being recorded.
It is now my pleasure to introduce Matthew <unk>, Nancy Director of Investor Relations for <unk> Corporation.
Thank you Kathleen and thanks to all of you for joining US today. The company's earnings press release was distributed before the market opened today and can be viewed on the Investor Relations page of the light bridge website at Www Dot LT bridge Dot com.
Joining us on the call today is Seth Gray Chief Executive Officer, along with Larry Goldman Chief Financial Officer, Sherry Hollaway controller.
Drain Lucia comp executive Vice President for nuclear operations and Jim for enough 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 companys competitive position and product and service offerings. During today's call words, such as expect anticipate believe and intend.
<unk> will be used in our discussion of goals or events in the future.
<unk> 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 and light bridges filings 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 will like to turn the call over to our first speaker, Seth Gray Chief Executive Officer of like Bridge Hello, Sir.
Hello, Matt and thank you all for joining us to discuss the light bridges third quarter 2021 results.
Hope you and your families are well and safe.
As noted in our press release issued earlier today, we continue to make strong progress in developing our fuel.
Difficultly improve the economics and safety of existing and new nuclear power plants, including large reactors and small modular reactors.
We recently achieved a major milestone completing our work at Idaho National Laboratory for our first U S Department of energy gain Voucher Award.
This work supports irradiation testing of our fuel and makes the safety and design case for light bridge fuel samples to be tested in the advanced test reactor at Idaho National Lab.
We also began work on our second gain voucher at Pacific Northwest National Laboratory, which is focused on the manufacturing process of language fuel.
Turning to our strong patent portfolio during the third quarter, United States, Canada, Japan, and Australia awarded additional patents delight bridge in support of our efforts to commercialize like bridge fuel.
At the corporate level, we expanded our board of directors to seven members five of whom are independent directors as that term is defined under NASDAQ listing standards.
Also formed a new board committee dedicated to environmental social and governance oversight and government guidance.
The ESG Committee reflects light bridges dedication to environmental and social responsibility, which is an integral part of our long term performance strategy.
Nuclear energy represents a significant portion of clean energy globally.
We believe the industry will continue to attract greater interest from socially conscious investors as the metrics of ESG practices are standardized around the world.
I will turn the call over to Andrey <unk> <unk> executive VP for nuclear operations to review our fuel development activity Andrei.
Thank you Seth as Seth mentioned, we have successfully completed work under the U S Department of energy is gain voucher program in collaboration with Idaho National Laboratory.
I'll work consisted of designing them experiment for the irradiation of <unk> metallic fuel material samples and the advanced test reactor.
In our laboratory.
Together, we established the best plan for the measurement of key earmarked physical appropriate to supply fuel material, both before and after radiation.
The advance test reactor.
From there Idaho National Laboratory to form the detailed design and established the safety case, neither for insertion of the experiment and the advance test reactor.
This included the controller parameters, such as sample arrangement thermal hydraulic capacity.
<unk> sample temperature.
Confluence and the physical location of test capsules within the ACO.
Sure.
Next steps in the basin program, and we'll get the contract for the high assay low enriched uranium material and fabrication of the sample coupons.
And the advanced test reactor.
Our goal is to have the experiments available for insertion in the ACR when its core internal change out maintenance outages completed.
Diamond or the insertion of the tragic for the final duration of the maintenance outage as well as the availability of face some positions in the ACR and Idaho National Laboratory prior commitments with pace.
<unk> has achieved in the ADR authorization or elimination of a little bit before.
We began work on our second gain voucher was the Pacific Northwest National Laboratory in the third quarter.
The scope of this project is a demonstration of our fuel cost the process using the political uranium.
50% by weight alloy was their cornea.
This is a key step in the publication process for all fuel and it also feeds into our needs for fabrication of radiation fuel samples for the advanced test reactor at Idaho National Laboratory.
Yes currently completed the breakeven of depleted uranium zirconium materials that are sub tier suppliers, which is a component of widely just mentioned contribution for the project.
Total value of the projects is approximately $663000 for three quarters of this amount funded by the U S Department of energy.
The scope performed by Pacific Northwest National Laboratory.
Back to you Seth.
Thank you Andrei.
And I wanted to thank the teams at light bridge and Idaho National Lab for their collaborative efforts under what were unprecedented conditions during the global pandemic to complete this important work I also want to thank the U S Department of energy and the gain program for their continued support of advanced nuclear technology R&D light.
Rich.
I find it encouraging to see nuclear energy being recognized.
As a necessary way to effectively meet our 24 hour energy needs and displace carbon emitting sources, we're hearing more thoughtful conversations emerging with knowledgeable experts and government Ngos company's institutional investors and others being given a voice in their attempt to.
Increased both formal and informal public discussion about nuclear years role in addressing climate challenges.
In recent interview at the UN climate change Conference Cop 26 U S Secretary of energy, Jennifer Granholm stated that the bite and administration is quote very bullish on these advanced nuclear reactors. We have in fact invested a lot of money in the research and development of those on.
She also stated that wind and solar are not yet capable of generating baseload capacity and that half of the United States clean power now is through nuclear quote if you look at the overall power.
About 20% globally, 29% of the clean power is nuclear the Holy Grail is to identify clean Baseload power nuclear is dispatched gibble clean baseload power. So we want to be able to bring more on these advanced nuclear reactors.
And the existing fleet are safe, we have bulk standard of regulation in the United States Unquote.
Historically governments.
Public policy would take the lead in nuclear his role in addressing climate change, but now the private sector is also taking leading roles. According to the United Nations Framework Convention on climate change there are more than 1600 companies throughout the world with combined revenues of over <unk>.
11, four trillion dollars that have made net zero commitments and will therefore play a critical role in shaping what energy policy will look like.
In fact in the most recent iteration of the reconciliation bill being drafted in the U S. Congress nuclear power would receive a tax credit of <unk> <unk> per kilowatt hour or $30 per megawatt hour.
That would significantly help to keep the existing reactor fleet in operation. Additionally, Exelon recently announced that it will spend $300 million to upgrade its Byron dredged and Braidwood nuclear power stations in Illinois in response to a bill signed in September just shifts the state to one <unk>.
<unk> percent clean energy by 2050.
Three plants had been scheduled to close but subsidies included in the bill allowed exelon to keep them running.
The International Energy Agency stated that along with an increase in renewables a significant expansion in global nuclear capacity is the only pathway to net zero emissions.
And an improved outlook for the planet.
According to the World Nuclear Association nuclear power capacity worldwide is increasing steadily with about 50 reactors under construction, mostly in Asia, producing a capacity of 55 gigawatt hours.
However, this simply isn't enough capacity to meet global energy demand by the end of the decade. Nevertheless, Nevertheless by 2050, which is the seminal year for climate change. According to the Intergovernmental panel on climate change.
We are not surprised to see the recent activity in the uranium market either.
Perhaps only in terms of its velocity are we surprised.
The World is and will continue to need carbon free nuclear power and would that need comes an increase in the demand for uranium uranium supply has become less certain due to years of persistently low prices and we expect demand to only grow as nuclear power becomes more abundant.
As advanced technology, such as small modular reactors or licensed and built.
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 third 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.
Company's working capital position at September 32021 was $15 4 million compared to $17 1 million.
At December 31, 2020.
Total assets were $16 6 million and total liabilities were $1 1 million at September 32021.
Total cash used in operating activities was $8 8 million for the nine months ended September 32021.
An increase of approximately $3 2 million compared to $5 6 million for the nine months ended September 32020.
This increase was due primarily to the dissolution of the envision joint venture and the payment of approximately $4 $2 million to Framatome outstanding invoices for the work performed and other expenses incurred.
Total cash provided by financing activities was $3 4 million for the nine months ended September 32021.
<unk> of $1 8 million compared to the nine months ended September 32020.
This is primarily due to the decrease in our net proceeds from the issuance of common stock in 2021.
Which was $3 4 million for the nine months ended September 32021.
As compared to $5 2 million for the nine months ended September 32020.
On September on October 29, 2021.
We entered into a share exchange agreement.
Leading to our Nonvoting series, a convertible preferred stock.
We exchanged all of the outstanding 663767 shares of series a convertible preferred stock.
262910 shares of our common stock.
At a conversion price of $10 per common share.
Which I note was above the market price on the date of conversion.
In support of our long term business and future financing requirements with respect to our fuel development. We expect to continue to seek additional funding and equity funding in the future along with new strategic alliances that may contain cost sharing contributions and additional funding from others.
In order to help fund our future R&D milestones, leading to the commercialization of <unk> fuel.
I will now turn the call over to Sherri Holloway, our controller, who will go over our P&L financial information for the <unk>.
Third quarter of 2021, sorry.
Thank you Barry.
Net loss.
Quarter, 2021, with $1 9 million compared to $3 1 million for the third quarter of 2020.
Total R&D expenses increase.
Separately <unk>.
The three months ended September 32020 124.
Yes.
Compared to $2 million.
That ended September 32.
2020.
There was an increase of approximately $2 million and outside research and development.
With the national.
National laboratories related to warrant gain voucher.
All other R&D expenses for the three months ended September 30.
2021.
Three months ended September 32020, with consistent period over period.
Total G&A expenses decreased by approximately $1 1 million for the three months ended September 30 of 2021 to $1 7 million.
As compared to $2 8 million.
For the three months ended September 32020.
There was a decrease in professional fees of approximately $1 4 million.
Primarily due to a decrease in legal and professional fee.
Relating to the Slam Witten arbitration, which was earlier in the year.
These decreases were offset by increase of approximately <unk> 3 million in employee compensation, primarily due to increased bonus accrual for 2021.
Net other operating income was <unk> 3 million for the three months ended September 32021.
Shifting of grant income from the first game.
Now over to you Sir.
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 the questions.
Thank you Seth.
With the market recovery in uranium accelerating as quickly as it had.
Is there a particular reason behind this dramatic price increase.
Here's what we think are the reasons for the surge in uranium prices occur.
According to U S C natural uranium spot prices surged from $30 per pound in August $50 per pound in September of this year.
And currently settled around $43 a pound.
There are some fundamental factors driving spot prices, including one significantly lower global uranium production due to COVID-19 to producer and intermediary record buying in 2020.
As these two groups accounted for 80% of spot volume.
Three signing a year ago, an amendment to the Russian suspension agreement, which reduces Russian export limits to U S utilities over time.
With the enriched uranium limit decreasing significantly beyond 2021.
And for Kazak production targets for 2021, and 'twenty two we're expected to remain 20% below planned levels authorized under what is called the subsoil use subsoil use contracts for individual projects.
And other overarching fact are emerging around the globe is the realisation among policymakers the media and many others that nuclear power must play an essential role in reducing cotwo emissions.
Global climate change goals can only be met with a significant increase in nuclear power as part.
Of the energy generating mix.
As I mentioned earlier in the most recent iteration of the reconciliation Bill U S. Congress is considering nuclear power would receive a tax credit of <unk> <unk> per kilowatt hour 30.
Dollars per megawatt hour.
That would be significant and would help including help to keep existing reactors in operation and hence meeting more uranium.
Thank you.
Has there been any progress or updates regarding the possible additional test loops at the advanced test reactor at Idaho National Laboratory.
Yes, part of the U S government, increasing support for nuclear power has been to make the advanced test reactor in to a user facility that industry, including light bridge can access.
Core internal change outage is currently underway that Andrew talked about at the advanced test reactor.
We expect that outage will run until about mid 2022.
We understand that the new top closure plate will include penetrations that would allow for adding new flow loops that is very good we understand the Doe is exploring providing funding to add at least one flow loop to the ATR, we support adding to flow loops.
People in.
And in Congress, who are aware of these issues and the benefits of the U S nuclear power industry, and we look forward to more progress.
How does light bridge fuels potential applications compare to other approaches such as the <unk> approach.
Andrei.
Yes.
This feels unique material composition, youll geometry, and construction enable operational flexibility for water cooled reactors that other fuels cannot offer.
Virtually every operator in the reactor in the world, It's what's our coke.
<unk>.
I appeal, so for safety benefits for planned advanced reactors that implementation on water cooled reactors environments is limited by the fuel geometry.
<unk> cylindrical compact authorizes the particles.
The fuel is particularly well suited.
So highest temperature korlym conditions.
And plan helium called advanced reactor designs.
It is led by feel is applicable to both existing reactor fleet as well as several proposed advanced small modular reactor designs.
Thank you Andre and for our last question are you confident that small modular reactors will use <unk> fuel or the SME companies aware of the progress you've made.
We expect that light bridge fuel will bring significant benefit to <unk>, including reducing the cost per unit of electricity generated by SMS.
The company is proposing SLR designs are aware of like bridge fuel.
The potential advantages it can offer to their designs.
At this time most of the SME vendors are focused on completing the design and licensing process for their reactors.
We apprise SMO, our vendors of our progress and our R&D efforts with National Labs, and otherwise we feel that as we continue to make progress in our designers and their customers who operate the SMS will implement light bridge fuel because of its inherent safety and economic advantages in water cooled reactors.
<unk>.
And that was our last question.
Thanks, Matt and thanks, everybody for participating on today's call. We look forward to providing additional updates in the future in the meantime, we can be reached as always at IR at <unk> Dot com stay safe stay well goodbye.
This concludes today's conference call you may now disconnect. Thank you for participating.
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