Q1 2022 Lightbridge Corp Earnings Call
Good day, ladies and gentlemen, thank you for standing by.
Welcome.
Corporation business update and first quarter 2022 conference call. Please note that today's call is being recorded.
My pleasure to introduce Matthew <unk> Nancy.
Relations with life.
Nation.
Thank you Olivia and thanks to all of you for joining us today.
The company's earnings press release was distributed after the market closed yesterday and can be viewed on the investor Relations page of the <unk> website at Www Dot L. T Bridge Dotcom Joy.
Joining us on the call today is Seth Gray Chief Executive Officer.
Along with Larry Goldman Chief Financial Officer, Sherry Hollaway controller, Andre Boucher cough executive Vice President for nuclear operations and <unk>.
Tim Foran, 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 expects anticipate believe and intend will be used in our discussion of goals or events in the future presentations.
Presentation is based on current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from such estimates.
Other risks are set forth in more detail and library <unk> 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 would like to turn the call over to our first speaker, Seth Gray Chief Executive Officer of late Bridge Hello, Sir.
Hello, Matt and thank you all for joining us to discuss library, just first quarter of 2022 results since it's only been a bit over a month since our last conference call. We'll keep the opening remarks brief to get to your questions.
We are continuing to make steady progress on our fuel development sector.
The ongoing efforts that Pacific Northwest National Laboratory, our P and L performing under our second funding voucher from the U S Department of energy Gateway for accelerated innovation and nuclear or gain program.
As a brief reminder, our work at P&L advances a critical stage in the manufacturing process of life reach fueled by demonstrating a casting process using depleted uranium zirconium material.
Receiving the second gain voucher has served as an important validation for light bridge by the U S Department of energy.
White bridge is well aligned with the support of U S. Government is providing to develop advanced nuclear technologies that can help the existing large reactors new small modular reactors, we anticipate future fuel development milestone will include agreement to manufacture our nuke.
Earlier fuel material samples for capsule irradiation test reactor, while continuing to develop and optimize our nuclear fuel manufacturing processes, using depleted or natural uranium and culminating with the design and manufacturing of a multimode fuel rod with enriched uranium from loop irradiation.
In experiments and a test reactor.
These irradiation testing experiment in the test reactor will generate data necessary.
Support regulatory licensing approval of our metallic fuel rods for demonstration and an operating commercial power reactor.
We're actively working with the U S government and the private sector to reach these key milestones.
I want to congratulate you scale power for their successful listing on the New York Stock Exchange last week, New scale is a leading innovator in small modular reactor designs and I was very happy to see the investment community come together in support of this important technology.
This further validates our added focus on fueling S. M March that are in development and licensing.
S M ours being developed by several companies have the potential collectively generate massive amounts of power with the versatility to contribute significantly to the world meeting climate goals, we believe that light bridge fuel can provide us.
All of the benefits that our technology would bring to large reactor and with anticipated additional economic benefits and safety enhancements.
Russia's invasion of Ukraine.
Led to growing concerns about energy security.
And we are light bridge participate some of these discussions.
Country need to wean off reliance on fossil fuel from nations right in their national security.
The world's growing emphasis on ESG is also becoming increasingly important incur.
Increasing concerns for energy security and yesterday, he brought nuclear power into focus.
Indispensable part of our diversified energy base.
Existing large reactors remain a focus for life bridge.
While we don't expect many larger.
That's likely in the near term we were pleased to see the biting administration allocate $6 billion to help prevent nuclear power plants from closing.
Nuclear power currently provides about 20% of the nation's power and over 50% of carbon free electricity as a result, the buys and the administration has identified the current U S fleet of 93 large reactors as a vital resource to achieve net zero emissions by 2050.
Keep up the current nuclear power plants is of utmost importance today.
While reaching efforts to the next generation of reactors I'll turn the call over now to Andre moves Chicago Executive VP for nuclear operations, who will review, our near term research and development opportunities Andre.
Thank you Sir.
It's.
As Seth mentioned, we continue to make progress in our fuel development program.
As previously reported we completed work on the first U S departmental scanner juice gain voucher award in collaboration with Idaho National Laboratory.
I'll work consisted of designing an experiment.
The origination of language metallic fuel material samples and the advanced test reactor outside of some national Laboratory.
The other established the best plan for the measurement of key terminus physical properties of language fuel material, both before and after irradiation of the in the ATR.
From there Idaho National Laboratory performed a detailed design and establish the safety case, neither for insertion of the experiments and the advanced test reactor.
This included the control parameters such as sample enrichment.
Thermal hydraulic capacity maximum sample temperature.
Neutral influence and the physical location of past capsules within the advance test reactor.
Next steps in that system program.
Contract for fabrication of enriched uranium coupons samples for insertion in the advanced test reactor.
The assignment of the insertion of subject to the final duration or the maintenance outage.
They will ability of facing positions and the advanced test reactor.
Idaho National Laboratory prior commitments what taste them.
As well as fabrication and delivery of the coupons samples.
Once the required burn that you've achieved in the advance test reactor or reducing elimination of a little bit before.
We began the work of my own second gain voucher was the Pacific Northwest National Laboratory or P&L.
The third quarter of point to point to one.
The scope of this project is a demonstration of our fuel cashed in process.
When depleted uranium.
50 of weight percent alloy was their cornea.
This is a key step in the fabrication process, a while fuel and its also informs our approach the publication of irradiation fuel samples for the advanced test reactor at the habit for National Laboratory.
We have completed the procurements and deliver it to the P&L of depleted uranium zirconium materials.
Some fear renders which is a component of languages cost share contribution to the project.
Total value of the project is a fractional for 606.
$3000 with three quarters of this amount funded by the U S Department of energy for the scope performed by C. N M L.
As previously announced.
Also had a successful demonstration of our patented works through some process using surrogate materials in place of uranium.
The circuits rods are manufactured using a of course was in process at the six foot normal length designed for small modular reactors.
Accessible demonstration of all high temperature for extrusion process.
Illustrates the primary form of the process for Lionbridge fuel ingredients, the helical twist of the fuel rods and the metallurgical born.
In the central Displacer, surrogates fuel alloy and the cladding.
Rods produced during this demonstration will be used for further development activities.
Including validation of computer models over the course sort of in process and corrosion faced an Av as fabricated claiming alloys.
The design language fueled to enable small modular reactors to more efficiently load follow ramping up and down in power and renewables are available, which replaces some fossil fuel plants.
In addition, we.
This technology to reduce the cost Virginia Eaton electricity from small modular reactor.
We've strengthened the business case for deploying a large numbers of small modular reactors to deliver reliable power and meet climate goals.
So.
Thank you Andre now ill turn the call over to Larry Goldman Chief Financial Officer to summarize the company's financial results.
Thank you Seth and good afternoon, everyone.
For further information regarding our first quarter 2020 'twenty two.
Actual results and disclosure 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, 2022, we had working capital of $28 $3 million as compared to $24.7 million at December 31, 2021 with no debt financing.
Our cash and cash equivalents were $28 2 million as compared to $24 7 million at December 31, 2021.
Total assets were $28 9 million and total liabilities were <unk> 5 million at March 31 2022.
Total cash used in operating activities were $1 9 million for the quarter, a decrease of $4 4 million.
From the $6 3 million of cash used in operating activities for the first quarter of 2021.
This 4.4 million dollar decrease was due primarily to the dissolution of our former joint venture in the first quarter of 2021, and the payment of approximately $4 $2 million for outstanding invoices for work performed in other expenses incurred.
Cash provided by financing activities was $5 4 million in the first quarter of 2022 compared to zero in the first quarter of 2021.
This increase was due to an increase in the net proceeds from the issuance of common stock by our at the market ATM facility.
We remain very strategic and focused on shareholder value creation.
In 2021, our ATM program was mainly used in the second half of the year, when we raised $14 $2 million of net proceeds taking.
Taking advantage of the strong equity markets, where are we as well as most of our peer companies experienced overall increases in stock prices at the time, which allowed us to strengthen our balance sheet.
Many NASDAQ companies have an ATM program today.
Today, we have ample working capital and flexibility to support our near term fuel development expenditures and other strategic initiatives.
This is very important to like bridge and our stockholders as well as our external stakeholders such as the federal government to ensure we have sufficient working capital as well as the ability to access capital in the future.
At the same time like breaches always looking for opportunities to secure funding from other sources to minimize dilution to our stockholders.
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 in the future along with new strategic alliances that may contain cost sharing contribution and additional funding from others in order to help fund our few.
R&D milestones leading to the commercialization of <unk> fuel.
Like bridge is working with the U S National laboratories on research and development activity and is currently negotiating new contracts for additional future stopes.
R&D work in 2022 and beyond.
I will now turn the call over to Sherri haul away, our controller, who will go over select P&L financial information for the first quarter of 2020 to Sheri.
Thank you Larry.
Total R&D expenses were.
$3 million in the first quarter of 2022.
Pair 2.4 million in the first quarter of 2021.
There was a decrease in employee compensation and employee benefits of approximately <unk> 1 million.
Total G&A expenses increased by approximately <unk> 1 million for the first quarter of 2022 as compared to the first quarter 2021.
This increase was primarily due to an increase in employee compensation and employee benefits of approximately <unk> 1 million.
An increase in director fees of approximately <unk> 1 million due to the addition of new board members.
An increase in promotion expenses.
<unk> 1 million.
And an increase in stock based compensation of approximately <unk> 2 million due to the issuance of restricted stock awards in 2021.
These increases were offset by decrease in professional fees of approximately 4 million relate.
Relating to fees incurred in connection with the arbitration matter in.
2021 that were not repeated.
First quarter 2022.
Total net other operating income when they had to contribute it services research and development.
Well, it's quite 1 million for the first quarter 2022 and 2021.
With a charged to R&D expenses and a corresponding amount recorded two contributing services research and development.
Net loss for the first quarter 2022.
With $2 million.
Which was unchanged compared to first quarter of 2021.
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 Sir.
Okay. Our first question.
Are there still three performance uprate variants, those are 10%, 17% or 30%.
<unk> planned for late bridge fuel.
Can you explain the physical differences between the three variants.
And we'll nuclear power plants require some upgrades to achieve performance operates and what do you think the rough estimated costs would be.
Well, yes, we are still considering having those three variants for commercial deployment of our metallic fuel technology in large light water reactors. Some of these variance may also be applicable to the small modular reactors the SMA ours. However.
A more detailed assessment the power uprate opportunities in SM ours would be required for each particular Aston Martin.
The main physical differences among the three variance would come in the form of different uranium enrichment level that composition and concentration of what is called vulnerable absorbers inside the fuel rods, depending on the operating cycle length of each fuel variance.
According to an economic study performed by what pace Global a Siemens business, which is available in the library website.
One time costs of reactor upgrade.
For accommodating a 10% cap rate with a 24 month operating cycle extended from 18 months in an existing 1100 megawatt electric pressurized water reactor.
We've estimated that $85 million per reactor, which we believe utilities could balance sheet finance and the work could be done within the timeframe.
Normal refueling outage.
Next question Matt.
Are any of languages numerous patents reaching expiration.
Well, none at the moment during the next several years.
We have some information here that as of December 31, 2021, we held five U S patents and more than 140 foreign patents. The expiration dates of these patents are generally 20 years from their application dates.
Some of our U S patents covering our old seed and blanket fuel assembly designs will begin to expire in 2027 all of their U S patents covering our all metal fuel Assembly design will expire in the 2031 to 2035 timeframe.
In addition to our extensive patent portfolio, we maintain a large body of trade secrets, particularly relating to our proprietary co extrusion manufacturing process for our metallic fuel rods east trade secrets provide further protection of our intellectual property well beyond 2035, and we plan.
To continue to file new patent application.
Next question.
Is the three well or four lobe design for light bridge fuel design being planned.
And is there an advantage with either design.
Well Andre.
Sure Yeah with the relative multiple radiance affirmed its solid fuel rod technology to include him three law as well as for law variance for specific reactor designs.
The specific fuel Rod design used for a particular reactor your friends on the reactors existent fuel Assembly design and.
The fuel library from Anvil low required to provide the power plant and the desire of the fuel cycle.
Next question.
Thanks This is actually.
I'm sorry, Yes go ahead, Matt.
This is our last question.
Could you explain the design reasons, you think casting and powder metallurgical routes.
Jim you want to take that one.
Yes, sure Seth Thanks.
Yes, where we're developing our fuel manufacturing processes.
To ensure that they meet the high level of nuclear safety and quality.
While at the same time controlling their costs and maximize material utilization, including reduction of waste streams.
We continue to work well with a variety of suppliers to evaluate and optimize these processes.
This includes the work that Andre described that we're currently performing P&L under our second gain voucher.
The specifics of these process steps in their optimization or trade secrets as you mentioned.
Our process selection decisions are made to balance the requirements of safety quality reliability and of course cost control.
Okay. Thanks, Jim.
And thank you everybody 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 stay well goodbye.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
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