Q2 2022 Lightbridge Corp Earnings Call
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Thank you for standing by and welcome to the Light Bridge Corporation business update and second quarter 2022 Conference call. Please note that today's call is being recorded it is now my pleasure to introduce Matthew <unk> director of Investor Relations for <unk> Corporation.
Thank you Justin 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 <unk> website at Www Dot L. T Bridge Dot com.
Joining us on the call today is Seth Great Chief Executive Officer, along with Larry Goldman Chief Financial Officer, Andre Boucher, <unk> Executive Vice President for nuclear operations, Sherri Hollaway controller, and Jim <unk>, Vice President for 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 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 <unk> filings with the Securities and Exchange Commission language 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'd like to turn the call over to our first speaker Seth Gray Chief Exec.
Active officer of like bridge Hello, Sir.
Thank you, Matt and thank you all for joining us to discuss <unk> second quarter 2022 results.
One purchase progress and momentum during the first half of 2022 has been encouraging.
And our outlook for continued momentum in the second half of the year is just as promising.
Also thus far in 2022, we have further strengthened our intellectual property protection of Lionbridge fuel technology by securing patents from Canada, and Eurasia and sharing that our intellectual property will enjoy broad protections in support of our efforts to commercialize flybridge fuel.
Last week, we announced that <unk> signed a memorandum of understanding with Curio a company that is developing technology called true fuel to produce transuranic materials from recycling used nuclear fuel under this Mou, we will explore government funding opportunities with curio.
Relating to carry out its true fuel technology and potential use of transuranic material as feedstock and light bridge designed metallic fuel rods to power existing large reactors and coming small modular reactors.
We're impressed with curio as recent progress, including their Mou with northwest energy, which started with energy northwest as an industry partner and potential offtake or of products produced through curios nuclear waste recycling process.
Last month, we announced that M. I T was awarded an $800000 grant from the U S Department of Energy's Nuclear Energy University program R&D Awards to study the deployment of accident tolerant fuels and small modular reactors.
Within this study M. I T will simulate the usage and safety performance of light bridge fuel inside a new scale small modular reactor.
This research dovetails with our strategic focus on fueling <unk> and over the future and the potential additional benefits light bridge fuel rods will bring to us.
This is another example of the exciting collaborative efforts between Lionbridge and D O. This.
This project similar to our two gain vouchers represent important work on the path to commercial commercialization that is being supported by D. A week.
We are seeing growing support for nuclear power.
Particularly in government and providing energy security for ourselves and our allies and also for climate reasons. Importantly, we are seeing stepped up support for nuclear power from government, which <unk> expects to benefit from.
<unk> nuclear fuel technology can help the U S government meet its strategic goals.
As I've spoken about in prior calls and interviews light bridges in negotiations for a strategic partnership project under which light bridge fuel will help American meet its clean energy and energy security goals. This series of agreements will allow for cooperative work at Idaho National Laboratory Lee.
Adding up to irradiation testing of fuel samples in the advanced test reactor.
This is a key critical path step necessary to support fuel performance modeling and regulatory licensing efforts for commercial deployment of <unk> fuels.
As you have seen in the news many European countries will start rationing natural gas and we'll hope for mild winter, Germany will soon decide which companies have to shut factories to ration power.
The great need in the marketplace is for more power.
It's not a coincidence that earlier this month the European Union voted to include nuclear power and its green energy taxonomy.
Which will help bring more power more money into projects at the EU considers to be sustainable and will slash greenhouse gas emissions.
New reactors are under construction on order or planned across the UK and throughout Europe .
It's also encouraging to see that Belgium has scaled back plans to phase out nuclear reactors and similarly over in Asia, South Korea has scaled back plans to phase out of nuclear reactors.
The technology surrounding reactors of the future is compelling for.
For their reduced size and greater efficiency.
However at life range, we believe that fuel is the secret of nuclear energy in our fuel will help shape the future of nuclear energy.
Current fuel rods have only had incremental changes in design over the approximately 65 years of the nuclear power industry.
<unk> has re imagined the nuclear fuel rods, using advanced technology to make nuclear fuel, even safer and more economical in today's fuel rods without compromising on safety and quality.
Each of the discussions among industry the administration and Congress is about energy security.
And ensuring that there is enough power being supplied.
One of the many benefits of <unk> fuel will be 30% more power than what standard nuclear fuel rods for new reactors designed to take that added power.
The 30% is based on our preliminary assessment, we performed for our power uprate for an EPR reactor.
We believe similar power up rates will be feasible in other large reactors as well as <unk>.
Our confidence continues to grow about the improving competitiveness of nuclear energy for Baseload power generation and transitioning our power grid to clean energy sources by 2050 <unk>.
This month, the breakthrough Institute published a report that evaluates what our clean energy transition in the U S. What look like incorporating advanced nuclear energy, stating that bold investments in advanced nuclear technology in the United States.
<unk> advanced technological innovation secure leadership and international nuclear markets and support National Energy security and electricity grid resilience, all while improving the environment and health and accelerating U S climate action.
A report published by the International Energy Agency last month concluded that quote the policy landscape is changing opening up opportunities for our nuclear comeback unquote cut.
<unk> seem to be waking up to the realization that they can't meet their national security energy our climate goals.
Without nuclear energy.
And now we're seeing this is really starting to happen just yesterday, we were pleasantly surprised with the news of a deal between Senators, Joe Manchin and Chuck Schumer on a reconciliation bill that will invest $370 billion in clean energy and climate change programs.
Which offer support for hydrogen renewables and nuclear energy.
We are happy to see that the bill includes a production tax credit for existing nuclear plants to help keep them operating.
Plants to keep operating will be able to use our fuel, which also will provide economic benefits to the plants. In addition, the bill includes funding for National Labs, which is important for testing new technologies, such as ours and most importantly for US the Bill includes 700 million.
To support the availability of Halo high assay low enriched uranium for research development and demonstration Halo is used in our fuel technology. This bill is a major and necessary step forward to secure domestic cailloux supply, which is long overdue and.
We'll have a strong positive impact on our ability to produce <unk> fuel rods.
I will turn the call over to Andre Michel <unk> Executive VP for nuclear operations, who will give us a quick review of our near term research and development activities Andre.
Thank you Seth as.
As Seth mentioned, we continued to make progress in our fuel development program.
Kristina ongoing work on the second gain voucher was specific northwest National laboratory or P&L.
The scope of this project is a demonstration of our fuel cost and process using depleted uranium and they're 50 of weight percent alloys zirconium.
This is a key step in the fabrication process for our fuel and its also informs our approach the fabrication of fuel samples.
Aviation and the advanced test reactor at the habit for National Laboratory.
Total value of the project is approximately $660000 for three quarters of this amount funded by the U S Department of energy.
The sculptor formed by P&L.
We will provide further updates as we make additional progress on this project in the coming months.
The design language fuel to enable small modular reactors to more efficiently load follow.
Both of his current nuclear fuel.
<unk> been up and down and power as renewables are available.
So margins language fuel kind of combined with renewables to power a zero carbon electric grid.
In addition, we expect Leverages technology to reduce the cost of January to electricity from <unk>, which strengthens the business case for deploying large numbers of western Morris for delivering reliable power and energy security and climate goals.
Sir.
Well. Thank you Andre now I will 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 second quarter 2022 financial results and disclosures. Please refer to our earnings release that we filed yesterday and our Form 10-Q that we will file with the SEC later today.
The company's working capital position at June 30 of 2022 was $29 2 million compared to $24 7 million at December 31, 2021, an increase of $4 5 million.
Total assets were $29 8 million and total liabilities were <unk> 5 million at June 32022.
Today, we have ample working capital and financial flexibility to support our near term fuel development expenditures.
This is very important to like bridge and our stockholders as well as our external stakeholders such as the federal government to ensure that we have sufficient working capital as well as the ability to access capital in the future.
To conduct our R&D activities.
Total cash used in operating activities were $3 1 million for the six months ended June 32022.
A decrease of approximately $4 6 million compared to $7 7 million for the first half of 2021.
This decrease was due primarily to the dissolution of our former joint venture last year and the payment of approximately $4 2 million for outstanding outstanding Invoices for work performed and other expenses incurred.
Total cash provided by financing activities for the six months ended June 32022 was seven 6 million due to an increase in the net proceeds from the issuance of common stock by our at the market facility ATM.
In support of our long term business and future financing requirements with respect to our fuel development, we expect to seek to continue.
Additional doe 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.
<unk> is working with the U S National laboratories on R&D activities, which is Nicole we end as negotiating new contact tracks for additional future scopes of work in 2022 and beyond.
Net loss for the second quarter of 2022 was $1 5 million compared to $1 6 million for the second quarter of 2021.
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 half of 2022.
Thank you Larry.
Total R&D expenses decreased by approximately $1 million for the three months ended June 32022, as compared to the three months ended June 32021.
This decrease was primarily due to a decrease in consulting and outside R&D expenses of approximately $1 million.
All other R&D expenses for the three months ended June 32022, and June 30 of 2021.
Fairly consistent period to period.
Total general and administrative expenses decreased by approximately $1 million for the three months ended June 32022, as compared to the second quarter of 2021.
This decrease was primarily due to a decrease in consulting fees of approximately $1 million and a decrease in professional fees of approximately $1 million.
Relating to fees incurred.
Connection with an arbitration matter that was settled in 2021 that was not repeated during the three months ended June 32022.
These decreases were offset by increases in director's fees and stock based compensation expenses of approximately $1 million.
It was a net other operating gain of <unk> 1 million for the three months ended June 32022, compared to $8 $2 million net operating gain for the three months ended June 32021.
This $1 million decrease was due to the financial cash distributions from the dissolved envision joint venture that occurred in 2021.
It was contributed services research and development from the gain program of approximately $1 million for the three months ended June 32022 and June 32021.
With a charged to R&D expenses and a corresponding amount recorded two contributed services.
Search and development.
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 have submitted questions. Matt. Please go to the questions.
Okay.
Our first question.
And day rate I have a question about advanced nuclear energy for enriched life or Aneel.
I would like to know how aneel potentially affects use of your technology, whether for good or bad or not at all.
Andre can take that one.
Sure.
Lionbridge has several patented.
<unk> fuel designs for light water reactors.
Back to the pursuing at the moment, but.
Primarily due to the current unfavorable market conditions for thorium fuels.
We believe that based on discussions with our utility partners that the benefits of <unk> metallic fuel outweigh the benefits of thorium in terms of improving nuclear power plant economics and safety for water cooled reactors.
However, we will continue to monitor market conditions, particularly the price of natural uranium to see if a thorium fuel cycle becomes economically feasible in the future.
Thank you.
Our next question.
Back in April Duke Energy, and Purdue University announced a joint feasibility study to explore using SMS ours on produce campus with light <unk> be in the running on collaborate collaborating on studies such as these or approach universities about such research opportunities.
Great and Jim leads a lot of our work with universities to you why don't you take that question.
Sure Seth.
As we understand it the announcement by Purdue and Duke Energy is initially focused on the feasibility of using an <unk>.
As a component of produce green energy roadmap.
Wow Purdue currently has a small 10 kilowatt research reactor called the <unk> one on campus.
Concept of a power reactor would be the first at a university in the U S.
Of course, Duke energy is already very experienced in nuclear power operations with 11 reactor units already operating in North and South Carolina.
Excuse me.
Since there has been no announced results from the feasibility study to date.
The choice of reactor type is still apparently opened.
And if a water cooled ASUR more such as new scale, a whole tack or GE Hitachi has chosen like bridge could potentially be able to provide fuel for that unit other designs or other potential designs using molten salt try so or so or with sodium court would rule south.
<unk>.
Regarding the collaboration with universities on research opportunities lie fridges.
Open to working with universities that can help us advance our R&D and commercialization goals are good example of this assess mentioned earlier is our recently announced collaboration with <unk>.
And new scale power to study the deployment of accident tolerant fuel <unk>.
The award to MRI.
As part of the Doe nuclear energy universe.
University program.
And is expected to begin in the second half of this year among several objectives. The project will stimulate the fuel and safety performance of <unk> fuel.
In a new scale SME.
Thank you.
The next question can you provide more color about the curio Mou and what our future project with them would entail.
Flight bridge fuel is being designed to use uranium as the fissile material. We also have design variance that could use plutonium to eliminate existing plutonium stockpiles, while generating carbon free power.
Curie hours working on reprocessing technology that could remove plutonium from used nuclear fuel.
With that plutonium mixed with other fish sell material so that it could not be used for weapons purposes. We believe it could be feasible to use that reprocessed material in light bridge fuel.
We look forward to exploring along with curio possibilities of government funding for studies in this area and we will certainly.
Our report more as we make progress.
Will the Hay Lew needed for late bridge fuel samples be sourced from <unk> down blended highly enriched uranium or another source.
Yeah.
Sure.
The initial halo for our fuel samples that will be irradiated in the advance test reactor will be supplied by the U S government.
I believe from existing stockpiles.
Where the government gets it from is up to the government how it got in their stockpiles, which site.
Understand I think was from enriching uranium several years ago.
Not from down blending, but will be provided to us from those stockpiles.
Larger scale commercial supplies of Halo for commercial <unk>.
Supply of our fuel would come from new enrichment of uranium by an enrichment company.
The U S government stockpiles can't meet large scale.
Commercial production of Halo, but they can meet what we'll need for for our testing purposes advance test reactor with the samples.
And our last question is actually a two parter.
Centrists would appear to be the first available source for commercial Halo for light <unk> fuel would curio be the eventual optimal choice when and if available for <unk> fuel in other words are there two halo options for light bridge.
Curio will not produce halo.
Curio.
Looking to reprocess used reactor fuel to extract plutonium mixed with other substances substances and they get very non proliferative and that that material is something that we will explore using in a very end of light bridge fuel instead of Halo, we have there.
<unk> that have zirconium metal with Halo metal and we could have variance with zirconium metal with plutonium or variance of this.
Zirconium metal with plutonium mixed with some other substances like what here I was looking to to produce.
Centrists is demonstrating its ability to produce halo and other companies are also exploring use of their approaches to produce halo in the U S as well as in Europe .
And I'll add that with the new $700 million in the Bill that Senator Joe mention is supporting.
We're very very much more confidence that the U S. We'll have sufficient commercial production of Halo here in the United States.
Sure.
Coming back to you well, thank you, Matt and I'll just mention.
We're invited to be interviewed live tomorrow at $3 45 PM USA Eastern time at the NASDAQ market site in times square in New York on TD Ameritrade network.
If any of you.
Our watching TD Ameritrade Tomorrow afternoon, we will we'll be answering some questions there and I want to thank everybody for participating on today's call. It's an exciting time in nuclear and for Lionbridge, We look forward to providing additional updates in the near future in the meantime, we can be reached at IR at <unk>.
<unk> dot com stay safe and well goodbye.
This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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