Q3 2023 Lightbridge Corp Earnings Call

Thank you for standing by and welcome to the like Bridge Corporation business update and third quarter 2023 Conference call. Please note that today's call is being recorded it is now my pleasure to introduce Matthew.

90, <unk> director of Investor Relations for like Bridge Corporation.

Thank you Carmen and thanks to all of you for joining us today.

The company's earnings press release was distributed yesterday and can be viewed on the Investor Relations page of <unk> website at Www Dot L cheap rates dot com joining.

Joining us on the call today is Seth Great Chief Executive Officer, along with Andre Boucher Cox Executive Vice President for nuclear operations, Larry Goldman Chief Financial Officer, and Sherry Hollaway controller.

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 presentations.

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.

<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, Blake Bridge Hello, Seth.

Well Hello, Matt and thank you and thank you all for joining us to discuss light bridges third quarter results.

I want to start by thanking our team for for performing exceptionally well and it's highly dynamic environment as we continue to make meaningful progress on our fuel development, expanding our R&D footprint and bringing light bridge fuel closer to reaching its commercial potential.

We are developing advanced nuclear fuel for existing reactors as well as new water cooled small modular reactors that we believe will bring significantly improved safety economics and nonproliferation benefits.

Earlier this month, we announced an important engineering study with the potential D. Nuclear Research Institute, which is a subsidiary of rattan.

The study will determine the compatibility of light bridge fuel for use in can do reactors.

10 is a Romanian government research Institute and specializes in orange the activities in the field of nuclear energy.

Exploring the suitability of light bridge fuel for use in can do reactors has many potential benefits for light bridge conventional can do fuel doesn't require enriched uranium and steady uses natural uranium we expect white breach fuel to require uranium enriched to under 5% and can do reactors.

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We expect that this engineering study will confirm the enrichment level that is needed for lionbridge fuel.

Additionally, can do rods are much shorter in length and fuel for large light water reactors only about two feet long and typical bundle of our odds weighs roughly 20 to 25 kilograms, so they're easier to handle.

Candy reactors can also be refueled without shutting down the reactor. This is a major advantage because of the utility can replace the spent fuel bundles, while keeping the reactor running which mitigates many technical and operational risks associated with testing new fuel designs and it can do reactor for utility.

We anticipate this engineering study will be completed by the end of 2024.

In July we announced the Texas A&M University had been awarded approximately $1 million from the U S Department of Energy's Nuclear Energy University program R&D Awards. The funding is being used to evaluate thermal hydraulic performance of light bridge fuel and a new scale.

Small modular reactor.

The study planned to be conducted over a span of three years is designed to develop a comprehensive understanding of how light bridge fuel performs inside an assay bar designed by new scale power.

Partnering with US on this project as structural integrity associates, which will perform the thermal evaluation of light bridge fuel in the U S. M. R. Using its Pegasus simulation software the software represents a generation.

Next generation fuel evaluation and design optimization tool, which will provide us with detailed insights into the performance of our fuel under various conditions.

This is one of two current D. O E funded University studies of light bridges participating and together with our ongoing study led by M. I T.

M. I T is evaluating accident tolerant fuels and various types of small modular reactors. The study with M. I T aims to simulate the fuel and safety performance.

The fuel and safety performance of like bridge fuel for a new scale small modular reactor and provides scope and analysis to improve the safety and economics of Lightwater small modular reactors.

In December we announced our umbrella strategic partner partnership project and create agreements with Bechtel Energy Alliance the D O S operating.

Contractor for Idaho National Laboratory.

These agreements will enable us to conduct irradiation testing of fuel material samples in the advance test reactor, which is America's largest research reactor, we will collect material performance data on the uranium zirconium alloy used inlay bridge fuel we are actively examining the tech.

Nickel and operational aspects of life Richfield and a variety of reactor types that are operating around the world. The data we collect from our initiatives in the United States, and Romania will apply to regulatory licensing and confirmation of our value proposition, including safety fuel performance and he can.

<unk> benefits of our fuel for use by utilities and other stakeholders I'll turn the call over to Andrey <unk> <unk> executive VP for nuclear operations to review, our ongoing fuel development activities Andrei.

Thank you Seth as Seth mentioned, we engaged the Dashti Nuclear Research Institute a subsidiary of return to perform an engineering study to assess the compatibility and suitability of fly a bridge fuel for use on the Canada reactors. This.

This assessment tower's key areas, including mechanical design, <unk> analysis, and Germline thermal hydraulic revelations.

I just returned from a trip to Romania, where our team looks at a project kickoff meeting for the Canada Engineering <unk> technical experts.

Pleased to be working with this world class team of engineers and be able to benefit from their in depth knowledge of Gander reactors and <unk> fuel technology.

The outcome of this engineering study will play an important role in guidance future economic elevations and navigate and potential regulatory license and the related issues.

Turning now project to.

Idaho National Lab, we have recently been able to cast three and you're showing gets using depleted uranium zirconium alloy materials.

Currently undergoing characterization. Our next step is the scale of the ingot size to make it suitable for extrusion and then come back the initial exclusions from the scaled up and gets using depleted uranium.

We expect to start the collaborations with Texas, A&M University, Myerscough power and structural integrity of associates. Soon on the 1 million study funded by the US Department of free outages nuclear energy in your City program R&D Awards.

This project and tell the comprehensive characterization of the performance of the language Shield design, which will generate unique sets of experimental data friction factor flow and heat transfer behavior on the new scales Lightwater small module reactor simulated normal and Gulf normal conditions there.

Project is expected to accelerate the deployment of advanced fuels for light to what Theyre small modular reactor applications.

Unknown Executive: Thank you for standing by and welcome to the Lightbridge Corporation Business Update and third quarter 2023 Conference Call. Please note that today's call is being recorded.

Leveraging the use of existing tests and infrastructures.

And measuring basic thermal hydraulic brokerages.

Matthew Abenante: It is now my pleasure to introduce Matthew Abenante, Director of Investor Relations for Lightbridge Corporation. Thank you, Carmen, and thanks to all of you for joining us today. The company's earnings press release was distributed yesterday and could be viewed on the Investor Relations page of the Lightbridge website at www.ltbridge.com.

All other ongoing <unk> funded University study led by Mike as it relates to emulation of accident tolerant fuels and various small modular reactors the project.

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<unk> the simulated the fuel unsafe to performance of Lionbridge fuel for a new scale FMR and provide scope and analysis to improve the safety and economics of light water reactor small modular reactors.

Matthew Abenante: Joining us on the call today is Seth Grae, Chief Executive Officer, along with Andrey Mushakov, Executive Vice President for Nuclear Operations, Larry Goldman, Chief Financial Officer, and Sherrie Holloway Controller. 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.

With that I'll turn the call over back to Seth.

Thank you Andre.

Support for nuclear energy is one of the few strongly bipartisan issues in Congress.

Earlier this month Congressman Bob laptop and Jim Cliburn reintroduced the nuclear fuel Security act to establish and expand critical United States' nuclear fuel programs to boost domestic uranium mining conversion and enrichment capacity.

This pivotal legislation underscores the importance of bolstering our nation's domestic nuclear fuel capabilities. It is in the strong national security interest of the United States to reduce reliance on Russian conversion enrichment of uranium by.

Matthew Abenante: This presentation is based on current expectations and involves 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 Lightbridge's filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements, whether as a result of new developments or otherwise.

By focusing on expanding domestic capacity, we enhance energy security.

This also can lead to sustainable clean nuclear energy growth and job creation, we believe white bridge fuel could become part of helping the United States and our allies achieve energy independence and resilience.

Seth Grae: And with that, I'd like to turn the call over to our first speaker, Seth Grae, Chief Executive Officer of Lightbridge. Hello, Seth. Well, hello, Matt, and thank you. And thank you all for joining us to discuss Lightbridge's third quarter results. I want to start by thanking our team for performing exceptionally well in this highly dynamic environment as we continue to make meaningful progress on our fuel development, expanding our R&D footprint and bringing Lightbridge fuel closer to reaching its commercial potential.

Last week, the International Energy Agency released its world energy outlook for 2023.

The report presents a bright future for nuclear energy, especially within the reports scenario for net zero emissions.

The IAEA foresees, a doubling of today's global nuclear power capacity to limit emissions sufficiently by 2015. The report acknowledges that nuclear power is gaining traction in key markets. Currently operating reactors are receiving operating license extensions.

Seth Grae: We are developing advanced nuclear fuel for existing reactors as well as new water-cooled small-modular reactors that we believe will bring significantly improved safety, economics, and nonproliferation benefits. Earlier this month, we announced an important engineering study with the Potesty Nuclear Research Institute, which is a subsidiary of R&D. The study will determine the compatibility of Lightbridge fuel for using can-do reactors. R&D is a Romanian Government Research Institute and specializes in R&D activities in the field of nuclear energy.

There is growing support for new projects, including the rising interest in small modular reactors, which further amplifies nuclear power's potential. Many countries are announcing plans to boost investments in nuclear power, including countries that currently do not have reactors.

Light bridge fuel represents a unique opportunity for our growing nuclear sector, we invented <unk> fuel to bring major safety economic and nonproliferation benefits for both existing large plans and future water cooled small modular reactors now I will turn the call over to Larry Goldman Chief.

Seth Grae: Exploring the suitability of Lightbridge fuel for using can-do reactors has many potential benefits for Lightbridge. Conventional can-do fuel doesn't require enriched uranium. Instead, it uses natural uranium. We expect Lightbridge fuel to require uranium in rich to under 5% and can-do reacts. Reactors. We expect that this engineering study will confirm the enrichment level that is needed for lightbridge fuel. Additionally, candy rods are much shorter in length and fuel for large lightwater reactors, only about two feet long and a typical bundle of rods weighs roughly 20 to 25 kilograms, so they are easier to handle.

Financial officer to summarize the company's financial results Larry.

Thank you Seth and good afternoon, everyone.

For further information regarding our third quarter 2023 financial results and disclosures. Please refer to our earnings release that we filed yesterday and our Form 10-Q that will be filed later today.

The company's working capital position was $28 $6 million at September 32023 versus $28 $7 million at December 31, 2022.

Total assets were $30 1 million and total liabilities were <unk> 9 million at September 32023.

Seth Grae: Candy reactors can also be refueled without shutting down the reactor. This is a major advantage because the utility can replace the spent fuel bundles while keeping the reactor running, which mitigates many technical and operational risks associated with testing new fuel designs and a can-do reactor for utility. We anticipate this engineering study will be completed by the end of 2024. In July, we announced that Texas A&M University had been awarded approximately $1 million from the U.S. Department of Energy's Nuclear Energy University Program R&D Awards.

Today, we have ample working capital and financial flexibility to support our near term fuel development expenditures.

This is very important to light bridge, and our stockholders as well as our external stakeholders such as the federal government.

Ensure that we have sufficient working capital as well as the ability to access capital in the future in order to conduct our R&D activities.

Total cash and cash equivalent so it's $29 2 million as compared to $28 9 million at December 31, 2022, an increase of <unk> 3 million in cash and cash equivalents for the nine months ended September 32023.

Seth Grae: The funding is being used to evaluate thermal hydraulic performance of lightbridge fuel in a new scale small modular reactor. The study planned to be conducted over a span of three years is designed to develop a comprehensive understanding of how lightbridge fuel performs inside an SMR designed by new scale power. Partnering with us on this project is structural integrity associates, which will perform the thermal evaluation of lightbridge fuel in the SMR using its Pegasus simulation software.

Total cash used in operating activities for the nine months ended September 30 of 2023 with $4 $1 million, which was the same amount as compared to the same period in 2022.

Total cash provided by financing activities for the nine months ended September 30 of 2023 was $4 5 million a decrease of $6 1 million as compared to the $10 6 million rates for the same period in 2022.

Seth Grae: This software represents a generation, a next generation fuel evaluation and design optimization tool, which will provide us with detailed insights into the performance of our fuel under various conditions. This is one of two current DOE-funded university studies that lightbridge is participating in together with our ongoing study led by MIT. MIT is evaluating accident tolerant fuels in various types of small modular reactors. The study with MIT aims to simulate the fuel and safety performance of lightbridge fuel for a new scale small modular reactor and provides scope and analysis to improve the safety and economic of lightwater small modular reactors.

This was due to a decrease in the net proceeds from the issuance of our common stock by our at the market or ATM facility.

In support of our long term business and future financing.

<unk> with respect to our fuel development, we expect to see government funding in the future as long as well as 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 our light bridge fuel.

I will now turn the call over to Sherri Holloway, our controller, who will go over our P&L financial results for the third quarter of 2023 Sherri.

Seth Grae: In December, we announced our umbrella strategic partnership project and CRETA agreements with Patel Energy Alliance, the DOE's operating contractor for Idaho National Laboratory. These agreements will enable us to conduct a radiation testing of fuel material samples in the advanced test reactor, which is America's largest research reactor. We will collect material performance data on the Uranium Zirconium alloy used in lightbridge fuel. We are actively examining the technical and operational aspects of lightbridge fuel in a variety of reactor types that are operating around the world.

Thank you Larry.

Net loss was $1 8 million for the third quarter ended September 32023 <unk>.

Compared to $2 million for the third quarter of 2022.

Total R&D expenses amounted to <unk> 5 million for the three months ended September 32023, compared to <unk> 2 million for the three months ended September 32022.

An increase of <unk> $3 million.

This increase was primarily due to an increase in project labor cost.

Seth Grae: The data we collect from our initiatives in the United States and Romania will apply to regulatory licensing and confirmation of our value proposition, including safety, fuel performance, and economic benefits of our fuel for use by utilities and other stakeholders.

<unk> from the U S National laboratories, a point $2 million and an increase in employee compensation and employee benefits and stock based compensation of <unk> 2 million.

Offset by a decrease in other outside research and development costs.

Andrey Mushakov: I'll turn the call over to Andrey Mushikov, Executive VP for Nuclear Operations, to review our ongoing fuel development activities. Andrey. Thank you, Seth. Seth mentioned we engaged the Tashty Nuclear Research Institute, a subsidiary of Rotten, to perform an engineering study, to assess the compatibility and suitability of Lightbridge fuel for using the Canada reactors. This assessment covers key areas, including mechanical design, electronic analysis, and thermal and thermal hydraulic evaluations. I've just returned from a trip to Romania, where our team had a project, Geek of Meeting, for the Canada Engineering Study with Rotten ICN's technical experts.

$1 million.

Total G&A expenses were one 6 million for the third quarter ended September 32023, compared to $2 million for the third quarter 2022.

The decrease of <unk> 4 million was primarily due to a decrease in employee compensation and employee benefits.

<unk> 5 million and a decrease in insurance expense.

1 million.

I've set by increase in stock based compensation appoint $1 million and an increase in professional fees $1 million.

Andrey Mushakov: We're pleased to be working with this world-class team of nuclear engineers, and be able to benefit from their in-depth knowledge of candle reactors and the candle fuel technology. The outcome of this engineering study will play an important role in guiding future economic evaluations, and navigating potential regulatory license in related issues.

Total other operating income was zero.

Third quarter ended September 32023.

Compared to <unk> 1 million for the third quarter 2022.

At this point $1 million decrease was due to the gain voucher project that was completed in the first quarter of 2023.

Andrey Mushakov: During our project to the design of the national lab, we have recently been able to cast three initial ingots using depleted uranium and zirconium aluminum materials that are currently undergoing characterization. Our next step is to scale up the ingot size, to make it suitable for extrusion, and then conduct initial extrusions from the scale that ingots using depleted uranium. We expect to start our collaboration with Texas NM University, new scale power, and structural integrity associates soon.

Total other income was <unk> 3 million for the third quarter ended September 32023.

<unk> 2.1 million for the third quarter 2022.

An increase of <unk> $2 million.

This increase in other income was due to an increase in interest income earned from our treasury bills and our savings account.

Back to you Seth.

Thank you Sherry.

Andrey Mushakov: On a 1 million study funded by the use department of energies, nuclear energy university program R&D awards. This project entails a comprehensive characterization of the performance of the light-rich fuel design, which will generate unique sets of experimental data of friction factor, flow, and heat transfer behavior on the new scales, light-water, small module reactor simulated normal, and off-normal conditions. The project is expected to accelerate the deployment of advanced fuels for light-water, small module reactor applications by leveraging the use of existing testing infrastructures and measuring basic thermohydraulic properties.

And thank you everybody for participating on today's call.

We have not received any questions for this conference call. We look forward to providing additional updates in the meantime, we can be reached at IR at <unk> Dot com stay safe and well goodbye.

Thank you and this concludes today's conference you may now disconnect.

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Andrey Mushakov: Our other ongoing DOE-funded university study, led by MIT, a related population of oxygen, tolerant fuels, and various small module reactors. The project, we are involved in with MIT, aims to simulate the fuel and safety performance of light-rich fuel for a new scale SMR and provides scope and analysis to improve the safety and economics of light with the reactive small module reactors.

Seth Grae: That I'll turn the call over back to set. Thank you, Andre. Support for nuclear energy is one of the few strongly bipartisan issues in Congress. Earlier this month, Congressman Bob Latte and Jim Clyburn reintroduced the Nuclear Fuel Security Act to establish and expand critical United States nuclear fuel programs to boost domestic uranium mining, conversion, and enrichment capacity. This pivotal legislation underscores the importance of bolstering our nation's domestic nuclear fuel capabilities. It is in the strong national security interest of the United States to reduce reliance on Russian conversion and enrichment of uranium.

Seth Grae: By focusing on expanding domestic capacity, we enhance energy security. This also can lead to sustainable clean nuclear energy growth and job creation. We believe lightbridge fuel could become part of helping the United States and our allies achieve energy independence and resilience. Last week, the International Energy Agency released its World Energy Outlook for 2023. The report presents a bright future for nuclear energy, especially within the report's scenario for net zero emissions. The IAEA foresee a doubling of today's global nuclear power capacity to limit emissions sufficiently by 2050.

Seth Grae: The report acknowledges that nuclear power is gaining traction in key markets. Currently operating reactors are receiving operating license extensions. There's growing support for new projects, including the rising interest in small modular reactors, which further amplifies nuclear power's potential. Many countries are announcing plans to boost investments in nuclear power, including countries that currently do not have reactors. Lightbridge fuel represents a unique opportunity for our growing nuclear sector.

Seth Grae: We invented lightbridge fuel to bring major safety, economic, and nonproliferation benefits for both existing large plans and future water-cooled small modular reactors.

Lawrence Goldman: Now, I will turn the call over Larry Goldman, chief financial officer, to summarize the company's financial results. Larry? Thank you, Seth, and good afternoon, everyone.

Lawrence Goldman: For further information regarding our third quarter, 2023 financial results and disclosures, please refer to our earnings release that we filed yesterday and our form can cue that will be filed later today. The company's working capital position was $28.6 million at September 30, 2023 versus $28.7 million at December 31, 2022. Total assets with $30.1 million and total liabilities were $0.9 million at September 30, 2023. Today, we have ample working capital and financial flexibility to support our near-term fuel development expenditures.

Lawrence Goldman: This is very important to lightbridge 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 in order to conduct our R&D activities. Total cash and cash equivalent was $29.2 million as compared to $28.9 million at December 31, 2022. An increase of .3 million in cash and cash equivalent for the nine months ended September 30, 2023.

Lawrence Goldman: Total cash used in operating activities for the nine months ended September 30, 2023 was $4.1 million, which was the same amount as compared to the same period in 2022. Total cash provided by financing activities for the nine months ended September 30th, 2023 was 4.5 million, a decrease of 6.1 million as compared to the 10.6 million raised for the same period in 2022. This was due to a decrease in the net proceeds from the issuance of our common stock by our at the market or ATM facility.

Lawrence Goldman: 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 as well as 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 our lightbridge fuel.

Sherrie Holloway: I will now turn the call over to Sherrie Holloway, our controller, who will go over our P&L financial results for the third quarter of 2023 Sherrie. Thank you Larry. Net loss was 1.8 million for the third quarter ended September 30th, 2023, compared to 2 million for the third quarter of 2022. Total R&D expenses amounted to 0.5 million for the three months ended September 30th, 2023, compared to 0.2 million for the three months ended September 30th, 2022, an increase of 0.3 million dollars.

Sherrie Holloway: This increase was primarily due to an increase in project labor costs incurred from the U.S, national laboratories of 0.2 million dollars and an increase in employee compensation and employee benefits and stock based compensation of 0.2 million, offset by decrease in other outside research and development costs of 0.1 million dollars. Total G&A expenses were 1.6 million for the third quarter ended September 30th, 2023, compared to 2 million for the third quarter, 2022.

Sherrie Holloway: The decrease of 0.4 million was primarily due to a decrease in employee compensation and employee benefits of 0.5 million and a decrease in insurance expense of 0.1 million, offset by increase in stock based compensation of 0.1 million dollars and an increase in professional fees of 0.1 million dollars. Total other operating income was 0 for the third quarter ended September 30th, 2023, compared to 0.1 million for the third quarter, 2022. This 0.1 million dollar decrease was due to the G&A voucher project that was completed in the first quarter of 2023.

Sherrie Holloway: Total other income was 0.3 million dollars for the third quarter ended September 30, 2023, compared to 0.1 million for the third quarter, 2022, and increased a point to a million dollars. This increase in other income was due to an increase in interest income earn from our treasury bills and our bank savings account. Back to you, Seth.

Seth Grae: Thank you, Sherrie. And thank you, everybody, for participating on today's call. We have not received any questions for this conference call. We look forward to providing additional updates in the meantime. We can be reached at IR at ltbridge.com. Stay safe and well. Goodbye. Thank you, and this concludes today's conference. You may now disconnect.