Q3 2022 Lightbridge Corp Earnings Call
Thank you for standing by and welcome to the like breach Corporation business update and third quarter 2022 conference call.
Note that today's call is being recorded it is now my pleasure to introduce Matthew upping, the Ante director of Investor Relations for language Corporation.
Thank you Carmen and thanks to all of you for joining us today.
The company's earnings press release was distributed last Thursday, and can be viewed on the Investor Relations page of <unk> website at Www Dot LTE bridge Dot com.
Joining us on the call today is Jeff Great FIFA Executive Officer, along with Larry Goldman Chief Financial Officer, Andre <unk> Executive Vice President for nuclear operations, Jerry Holway 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 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 in languages 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.
With that I will turn the call over to our first Speaker death, Gray Chief Executive Officer of late Bridge Hello, Seth.
Hello, Matt and thank you all for joining us to discuss today's third quarter 2022 results.
Last week, we held our 2022 annual meeting of stockholders. Thank you to light British shareholders, who cast your votes, resulting and approval of all the proposals.
We appreciate your vote of confidence as we gear up towards the next phase of our fuel development activities.
I also thank Dr. Victor Alessi for service to life Ridge as an independent director Vic departed the board after last week's meeting and we wish him the very best in his retirement.
Lionbridge has continued to make progress on our fuel development program, including our work at Pacific Northwest National Laboratories from our second gain Voucher award, which is focused on the manufacturing process of like bridge fuel.
The ongoing activities are in their final stage, and we expect them to culminate by the end of the year and our process suitable for producing fuel samples for our upcoming irradiation tests.
We are in advanced stages of negotiation for a strategic partnership.
Project. This will be our first formal step toward helping America meet its clean energy and energy security goals. This series of agreements will allow for cooperative work at Idaho National Laboratory, IL, leading up to the irradiation testing of our fuel material samples in the advance test reactor.
Which is America's largest research reactor Andrew that IL.
This is a key critical path step necessary to support fuel performance modeling and regulatory licensing efforts for the commercial deployment of light bridge fuel.
Yeah.
I look forward to this work at a research reactor as an important step in gaining entry to commercial power reactors.
Including existing and future Lightwater reactors large light water reactors can do type reactors and future small modular reactors.
This step entails fabrication of the fuel material samples and they were radiation testing in the advance test reactor.
That data will be relevant for eventual deployment of our fuel in the above mentioned types of commercial power reactors now over to Andrey <unk> <unk> executive VP for nuclear operations to review, our ongoing fuel development activities Andre.
Thank you Seth last.
Last year the U S Department of energy awarded Thats, the second voucher from the gateway for accelerated innovation nuclear.
Or gain program to support the development of <unk> fuel in collaboration with Pacific Northwest National Laboratory P&L now.
The scope of the project is to demonstrate likely to just nuclear fuel cost and process using the depleted uranium.
It just happened to crack jokes lionbridge fuel.
On July 14th 2021, Lionbridge answer them to create agreement Cooperative research and development agreement with the Battelle Memorial Institute Pacific Northwest Division, the operation contractor over the Pacific Northwest National Laboratory in cooperation with the U S Department of impairment.
The project commenced in the third quarter of 2021 and is expected to be completed by the end of this year.
The total project values zero point $7 million with three quarters. So this amount provided by the U S Department of energy for the scope performed by Pacific North.
National Laboratory.
Under the gain voucher, we have been working through its P&L would develop a reliable and repeatable casting process utilizing <unk> existing equipment.
Base several castings have been performed and the cast ingots analyzed.
You sort of this process, we cast a methodology is multi required based on the characterization of the results as we approach an optimized process to achieve the desired outcome.
This work is expected to culminate in a process suitable to produce fuel samples for our current litigation paths.
Back to you Sir.
Thank you Andre.
Last week I was part of the industry component of the U S delegation at the international Atomic Energy Agency's nuclear energy ministerial conference, which was held in Washington DC.
As the official statements at the conference showed there has been a shift in the conversation and in addition to climate emphasizing energy security as a theme of great importance. The conference reflected a global competition among countries, which has been heightened by Russia's invasion of Ukraine, Russia is using.
Energy is a weapon and is attacking civilian infrastructure, including nuclear power plants.
Through to gain vouchers are work at U S National Labs, and the new collaborative project getting way underway at <unk> with new scale.
Light bridge is.
Very much becoming a part of this important effort.
Regarding energy security. It is important to remember that fossil fuels require trains our pipelines to reach downstream markets. The lengths of the track or the pipeline is always vulnerable to a physical attack and possibly by cyber attack.
Any adversary from anywhere in the World can turn your energy off because you can't protect the entire length of the train track or our pipeline too.
Two natural gas pipelines in Europe have recently been attacked.
Much of the infrastructure for fossil fuel relies on constant deliveries of new fuels.
Coal plants get tons of coal delivered every single day by training, while natural gas is a constant replenishment of gas to the plant through the pipeline.
If you don't get the fuel the plant has to shut down after running through their onsite storage inventory same.
Same for an oil burning plant, but with nuclear fuel are generally lasts about a year and a half in between refueling outages and some plants keep up to several years of fuel on site, reducing adversaries ability to cut off energy supplies and <unk> fuel can even lengthening the fuel cycle.
Additionally.
Countries seem to be waking up to the realization that they can't meet their national security energy or climate goals without a significant increase in nuclear power.
And now we're seeing that this is starting to happen.
Since our last conference call, Canada, the United Kingdom, Japan, Belgium, South Korea have announced plans to extend the operations of existing nuclear plants and.
And explore the feasibility of building new reactors.
And by the successful issuance of Green bonds.
Canada is Bruce power to refurbish six units at its nuclear power station in Ontario.
That issuance is the first for a nuclear project and will open doors for future Green bond support for nuclear power.
In the U S. The state of California reversed its decision to immediately shut down the Diablo Canyon plant and intends to operate until 2030.
Similarly in Georgia, the hatch nuclear power plant has announced its intention to apply for a license extension, Michigan is investigating options to restart the palisades plant and light bridges home state of Virginia Governor Glenn Younkin released a comprehensive energy plan that endorsed expansion of nuclear.
<unk> energy and the goal of installing a small modular reactor and southwest Virginia within 10 years.
Virginia, North Anna nuclear plants have pending license extension to operate until at least 2058 state level development such as these in the private and public sectors are occurring with bipartisan political support underscoring nuclear energies advantages in terms of energy security and zero.
Carbon emissions.
Overall sentiment and public acceptance for nuclear power is increasing.
It was positive developments coming from government academia municipalities electric utilities, and innovative technology companies such as like bridge.
Look forward to the progress we will make through the rest of this year and for the momentum to continue.
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 third quarter 2022 financial results and disclosures. Please refer to our earnings release that we filed last Thursday, and our Form 10-Q that we will file with the SEC later today.
The company's working capital position at September 32022, with $34 million compared to $24 $7 million at December 31, 2021.
Total assets were $31 7 million and total liabilities were $1 2 million at September 32022.
Total cash used in operating activities decreased by $4 7 million for the nine months ended September 32022, compared to the nine months ended September 32021 from eight.
$8 8 million to $4 1 million.
This decrease was primarily due to <unk>.
The $4 $2 million arbitration settlement payment in 2021 related to the dissolution of the joint venture and changes in certain working capital accounts.
Total cash provided by financing activities was 10 6 million for the nine months ended September 32022, an increase of $7 2 million compared to the same period in 2021.
This was due to an increase in the net proceeds from the issuance of common stock in 2022.
In support of our long term business and future financing requirements with respect to our fuel development, we expect to see government 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 future R&D.
Milestones, leading to the commercialization of light bridge fuel.
I will now turn the call over to Sherri Holloway, our controller, who will go over our P&L financial information for the third quarter of 2022.
Thank you Larry.
Net loss for the third quarter of 2022 with $2 million compared to $1 9 million for the third quarter of 2021.
Total R&D expenses decreased by $2 million for the three months ended September 32022.
As compared to three months ended September 32021.
This decrease was primarily due to a decrease in consulting and outside of R&D expenses.
Total G&A expenses increased by approximately <unk> 2 million for the.
The three months ended September 32022, as compared to the three months ended September 32021.
There was an increase in stock based compensation expenses.
$1 million and an increase in director fees employee compensation and employee benefits of $1 million.
Net other operating income was <unk> 1 million for the three months ended September 32022, and <unk> 3 million for the three months ended September 32021.
<unk> generated from the gain program and recorded as contributed services research and development.
With a corresponding charged to R&D expenses.
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 and Matt. Please go ahead with questions.
The first question is a technical question.
Great Bridge fuel the definition of a high assay low enriched uranium fuel product.
Yes, it does.
The department of energy in the United States defines high assay low enriched uranium is halo as being enriched above 5% in the element you $2 35 uranium 235 to just below 20% enrichment and that is the range in which our fuel will be enriched.
<unk> four light water reactors. So the answer to that one is yes.
What happened to your seed and blanket thorium core is thorium is still considered a viable alternative to uranium by light <unk> and its investors.
Yeah, I'll start and then I'll go over to Andre I.
Let's just say a lot of interest in thorium and the world had been driven by India's interest in using thorium, but when under the George W. Bush Administration. A deal was made that opened India up to import uranium and current reactor technologies a lot of the driving interest in thorium moved away.
And Andrea over to you.
Yes, so based on our previous analysis.
Discussions with nuclear utilities, we concluded that the thorium fuel cycle was not economically viable at the current price of natural uranium.
It might provide some fuel cost savings of the price of natural uranium girth to exceed $200 per pound, which is quite a bit higher compared to where the price from they'd show uranium is today.
<unk> has been under past.
While we are currently.
Not pursuing.
Thorium base sedan blanket fuel assembly designs.
We still own patents to that technology.
So if the price of natural uranium surges above $200 per pound.
Sustainable fashion in the future we will take another look at a thorium fuel cycle at that time.
Back to you Matt.
Thank you.
Countries around the world are refurbishing old plants and building new plants.
I can't help but wonder why it is taking so long to get your rods out. There are you just staying under the radar. So they don't steal your invention before you get more patents.
Okay. Good question Andre you want to start with that one.
Yeah, sure so ongoing projects and wall in the refurbishment of old plants or build a new one so largely based on existing technology.
Or incremental evolutionary improvements because of existing technology and.
And that technology has been previously commercially deployed are extensively demonstrated nitrates and reactors over the past several decades.
<unk> is developing the next generation metallic fuel technology for existing and future water cooled reactors.
As part of our ongoing fuel development program, our fuel technology must undergo extensive in the reactor and got out of reactor tests and experiments the January fueled performance as well as other relevant data required for regulatory licensing approval by nuclear regulators around the world.
Nuclear experience shows.
And the nuclear power industry that bringing new nuclear technology the markets typically it takes 20 years or longer.
For example, there are a number of advanced reactor designs that have been in development for quite some time mainly.
Many of these advanced reactors are expected to be deployed commercially in the <unk> areas.
<unk> advanced system computational analysis, coupled with our plants in the reactor taste and can shorten these timelines.
Back to you Matt.
And Matt I'll, just quickly add that.
Following Fukushima and political issues research reactors, either closed in Norway, and Canada, where we lost access to them in Russia.
And.
This has added to timelines with many U S and other companies, including light bridge and we're very grateful for the U S government stepping up now and making the advance test reactor available and giving us the support they need that didn't used to be available. So as we've lost capability in other countries where gay.
<unk> capability now in the United States, which helps us tremendously in next question.
I would like to know when your fuel rods will start testing at the National Laboratory, it's been a year since your design for testing was approved and you were just waiting for an opening in the scheduled to start the re testing can you update us on the current status.
Okay, Jim take that one.
Sure Seth.
Since the completion of our gain voucher program.
For the experiment design and the advanced test reactor.
<unk> been working with Boeing and also identify the source of uranium material.
And define the fabrication processes necessary to develop and produce the coupon samples for this experiment.
We believe that we have had general technical agreement with INO on these items and.
Contractual documentation for this work because it is undergoing final review and approval with <unk> and with the Doe.
The current schedule for coupon fabrication is approximately two years.
So we expect that a radiation in the ATR could be begin in early 2025.
Back to you.
Oh, okay.
How does the current low availability of Halo effect, the timing for creating light bridge fuel samples.
Hey, Jim.
Yes again.
While it's true that the supply of commercial quantities Halo is currently quite limited.
We believe that there is enough in the inventory I don't know for the production of our coupon samples for the ATR irradiation.
We've seen no effect on timing.
Coupon fabrication due to the availability of <unk>.
However, as White bridge and other advanced fuel in the reactor suppliers ramp up to commercial scale deliveries.
The availability of Halo could become an increasingly important constraint.
The U S Congress and the department of energy recognize this limitation.
Gone forward looking halo procurement initiatives.
These programs once fully implemented are intended to make available up to 25 metric tons per year and this would be in the form of.
Uranium hexafluoride uranium oxide and metallic uranium.
And its status on that initial supply supplier expressions of interest for the program are expected.
By the Doe in the next few months.
And for our last question.
<unk>.
I would now have ATR tests loops available in the near term for light bridge fuel testing and what might be the approximate ATR Kuwait.
And take that one too Jim.
Sure.
We've discussed in the past the radiation in the ACR and as Jeff has mentioned.
It's a scarce asset.
Quite in demand.
From its principal use or the United States Navy as well as users in variety of industry and.
University program.
This is particularly true for the limited number of flux trap flow loop position given the HCR <unk>.
As such I know.
It really provide us with a guarantee of slots at <unk>.
However, in the case of our near term testing plans library, he doesn't need a clue per our current experiment.
Instead, we will be using what's known as a drop in capsule location and we've been working with the iron ore to targeted availability to be consistent with our coupon fabrication schedule.
The ACR has.
Quite a few more positions available for drop in capsule experiments.
As we go forward and continue to move through our fuel qualification program will ultimately need access to the flow and capabilities of <unk>.
And in that regard I know was investigating opportunities to increase the number and availability of flow loops and the AQR in the future.
And we will continue to work with them closely to coordinate access to the ATR as we develop.
As they support the development of our fuel program.
Back to you guys.
Okay, well, thanks for that Jim.
And 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 stay well goodbye.
And with that ladies and gentlemen concludes today's conference call. Thank you for participating and you may now disconnect. Good day.
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