Lightbridge(LTBR) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and related disclosures for Lightbridge Corporation Item 1. Condensed Consolidated Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements for Lightbridge Corporation, including the balance sheets, statements of operations, changes in stockholders' equity, and cash flows for the periods ended March 31, 2024, and December 31, 2023 (or March 31, 2023 for income and cash flow statements), along with detailed notes explaining the company's operations, accounting policies, financial instrument fair values, R&D commitments, and equity activities Unaudited Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity as of March 31, 2024, and December 31, 2023 Unaudited Condensed Consolidated Balance Sheets Summary | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $27,942,421 | $28,598,445 | | Total Current Assets | $28,344,280 | $28,805,508 | | Total Assets | $28,932,770 | $29,397,373 | | Accounts payable and accrued liabilities | $907,421 | $486,326 | | Total Current Liabilities | $907,421 | $486,326 | | Total Stockholders' Equity | $28,025,349 | $28,911,047 | | Total Liabilities and Stockholders' Equity | $28,932,770 | $29,397,373 | - Cash and cash equivalents decreased by $656,024 from December 31, 2023, to March 31, 2024[9] - Total Stockholders' Equity decreased by $885,698 from December 31, 2023, to March 31, 2024[12] Unaudited Condensed Consolidated Statements of Operations This section details the company's revenues, expenses, and net loss for the three months ended March 31, 2024, and March 31, 2023 Unaudited Condensed Consolidated Statements of Operations Summary | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenue | $0 | $0 | $0 | 0% | | General and administrative | $2,157,745 | $1,865,929 | $291,816 | 15.6% | | Research and development | $1,023,823 | $448,044 | $575,779 | 128.5% | | Total Operating Expenses | $3,181,568 | $2,313,973 | $867,595 | 37.5% | | Operating Loss | $(3,181,568) | $(2,282,945) | $(898,623) | 39.4% | | Interest income | $361,984 | $256,365 | $105,619 | 41.2% | | Net Loss | $(2,819,584) | $(2,026,580) | $(792,994) | 39.1% | | Net Loss Per Common Share (Basic and diluted) | $(0.21) | $(0.17) | $(0.04) | 23.5% | | Weighted Average Number of Common Shares Outstanding | 13,491,954 | 11,673,736 | 1,818,218 | 15.6% | - The company reported no revenue for both periods[13] - Research and development expenses significantly increased by 128.5% year-over-year, reflecting increased R&D activities[13] Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines the changes in common stock, additional paid-in capital, accumulated deficit, and total stockholders' equity for the three months ended March 31, 2024 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity Details | Metric | Balance - January 1, 2024 | Shares issued - registered offerings - net of offering costs | Shares issued to consultant & directors for services | Stock-based compensation | Net loss for the three months ended March 31, 2024 | Balance - March 31, 2024 | | :-------------------------------- | :------------------------ | :------------------------------------------------- | :------------------------------------------------- | :----------------------- | :------------------------------------------------- | :----------------------- | | Common Stock (Shares) | 13,698,274 | 427,300 | 64,206 | — | — | 14,189,780 | | Common Stock (Amount) | $13,698 | $428 | $64 | — | — | $14,190 | | Additional Paid-in Capital | $181,295,125 | $1,221,554 | $254,936 | $456,904 | — | $183,228,519 | | Accumulated Deficit | $(152,397,776) | — | — | — | $(2,819,584) | $(155,217,360) | | Total Stockholders' Equity | $28,911,047 | $1,221,982 | $255,000 | $456,904 | $(2,819,584) | $28,025,349 | - Total stockholders' equity decreased from $28.9 million at January 1, 2024, to $28.0 million at March 31, 2024, primarily due to the net loss, partially offset by proceeds from common stock issuances and stock-based compensation[16] Unaudited Condensed Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2024, and March 31, 2023 Unaudited Condensed Consolidated Statements of Cash Flows Summary | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Net Loss | $(2,819,584) | $(2,026,580) | $(792,994) | 39.1% | | Stock-based compensation | $456,904 | $284,360 | $172,544 | 60.7% | | Net Cash Used in Operating Activities | $(1,878,006) | $(1,579,746) | $(298,260) | 18.9% | | Net Cash Used in Investing Activities | $0 | $0 | $0 | 0% | | Net Cash Provided by Financing Activities | $1,221,982 | $731,052 | $490,930 | 67.2% | | Net Decrease in Cash and Cash Equivalents | $(656,024) | $(848,694) | $192,670 | -22.7% | | Cash and Cash Equivalents, End of Period | $27,942,421 | $28,051,303 | $(108,882) | -0.4% | - Net cash used in operating activities increased by $0.3 million, primarily due to increased R&D and G&A expenses[17][129] - Net cash provided by financing activities increased by $0.5 million, driven by higher net proceeds from common stock issuances under the ATM facility[17][130][131] Note 1. Nature of Operations, Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements This note describes Lightbridge Corporation's business, the basis of financial statement presentation, significant accounting policies, and the expected impact of recent accounting pronouncements Fair Value of Financial Instruments | Assets | Level I | Level II | Level III | | :------- | :------ | :------- | :-------- | | Treasury Bills | $2.5M | $17.5M | $- | - Lightbridge Corporation is a nuclear fuel technology company focused on developing and commercializing next-generation metallic nuclear fuels for water-cooled reactors[20] - The company's financial statements are prepared in accordance with SEC rules for Form 10-Q and Regulation S-X, and should be read in conjunction with the 2023 Annual Report on Form 10-K[21] - The company faces risks including the need for additional funding, competition, regulatory changes, and the ability to achieve R&D milestones[28][29] - Recent accounting pronouncements (ASU 2023-07, ASU 2023-09, ASU 2020-06) are not expected to have a material impact on the company's financial statements upon adoption[30][31][32] Note 2. Net Loss Per Share This note details the calculation of basic and diluted net loss per share and identifies anti-dilutive securities for the periods presented Anti-Dilutive Securities Outstanding | Security Type | March 31, 2024 | March 31, 2023 | | :-------------- | :------------- | :------------- | | Stock options outstanding | 555,582 | 525,903 | | Restricted stock awards outstanding | 557,688 | 416,316 | | Total Anti-Dilutive Securities | 1,113,270 | 942,219 | - Basic and diluted net loss per share are computed using weighted-average common shares outstanding. Stock options and restricted stock awards were excluded from diluted EPS calculations as they were anti-dilutive due to company losses[35][36] Note 3. Prepaid Project Costs and Other Long-term Assets This note provides information on advanced payments made for future project work, specifically with Idaho National Laboratory (INL) - The company made advanced payments of $0.5 million for future project work with Idaho National Laboratory (INL) as of March 31, 2024, and December 31, 2023, for the development of Lightbridge Fuel™[38] Note 4. Accounts Payable and Accrued Liabilities This note details the composition and changes in accounts payable and accrued liabilities for the periods presented Accounts Payable and Accrued Liabilities Details | Category | March 31, 2024 (millions) | December 31, 2023 (millions) | | :-------------------------- | :------------------------ | :--------------------------- | | Trade payables | $0.2 | $0.1 | | Accrued legal and consulting expenses | $0.5 | $0.4 | | Accrued bonus | $0.2 | $0.0 | | Total | $0.9 | $0.5 | - Total accounts payable and accrued liabilities increased from $0.5 million at December 31, 2023, to $0.9 million at March 31, 2024, driven by increases in trade payables, accrued legal/consulting expenses, and accrued bonus[39] Note 5. Commitments and Contingencies This note outlines the company's research and development commitments and other contractual obligations Research and Development Commitments | Project | March 31, 2024 (millions) | December 31, 2023 (millions) | | :-------------------------- | :------------------------ | :--------------------------- | | INL Project | $3.1 | $2.9 | | Romania Feasibility Study | $0.1 | $0.2 | | Centrus Energy FEED Study | $0.3 | $0.5 | | Total R&D Commitments | $3.5 | $3.6 | - The INL project commitment increased by $0.6 million due to Modification No. 2 to the SPPA, bringing the total estimated cost for work under the 'umbrella' SPPA to $1.7 million[42] - The company has approximately $0.1 million in future minimum lease payments for office space in 2024[49] Note 6. Research and Development Costs This note provides a breakdown of research and development expenses by project and category for the periods presented Research and Development Expenses by Category | R&D Category | March 31, 2024 (millions) | March 31, 2023 (millions) | | :---------------------------------------- | :------------------------ | :------------------------ | | INL Project | $0.4 | $0.2 | | Romania Feasibility Study | $0.1 | $0.0 | | Centrus Energy FEED Study | $0.2 | $0.0 | | Allocated employee compensation and stock-based compensation expenses | $0.2 | $0.1 | | Other outside R&D expenses | $0.1 | $0.1 | | Total R&D Expenses | $1.0 | $0.4 | - R&D expenses for the INL Project were $0.4 million for Q1 2024, up from $0.2 million in Q1 2023, supporting irradiation testing and regulatory licensing of Lightbridge Fuel™[50][51] - The Romania Feasibility Study incurred $0.1 million in R&D expenses for Q1 2024 to assess Lightbridge Fuel™ compatibility with CANDU reactors[52] - The Centrus Energy FEED Study for a pilot fuel fabrication facility incurred $0.2 million in R&D expenses for Q1 2024[53] Note 7. Stockholders' Equity and Stock-Based Compensation This note details changes in stockholders' equity, common shares outstanding, stock options, and stock-based compensation expenses Common Stock and Equivalents Outstanding | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Common shares outstanding | 14,189,780 | 13,698,274 | | Stock options outstanding | 555,582 | 510,787 | | Total common stock and equivalents | 14,745,362 | 14,209,061 | - The company sold 427,300 shares under its At-the-Market (ATM) offering for net proceeds of $1.2 million during Q1 2024, compared to 169,978 shares for $0.7 million in Q1 2023[60] - Total stock-based compensation expense was $0.5 million for Q1 2024, up from $0.3 million in Q1 2023, with $0.4 million allocated to G&A and $0.1 million to R&D in Q1 2024[69] - As of March 31, 2024, total unrecognized compensation cost related to restricted stock units was $2.2 million, to be recognized over a weighted-average vesting period of 1.9 years[67] Note 8. Subsequent Events This note discloses significant events that occurred after the balance sheet date, including amendments to the ATM offering and the equity incentive plan - On May 8, 2024, the ATM equity offering sales agreement was amended to update the shelf registration statement and reduce the commission rate to Stifel from 4.0% to 3.0%[71] - From April 1, 2024, to May 10, 2024, approximately 0.2 million shares were sold under the ATM, generating $0.7 million in net proceeds[72] - The 2020 Equity Incentive Plan was amended on February 27, 2024, to increase authorized shares by 700,000 to 2,500,000, approved by stockholders on April 19, 2024[73] Forward-Looking Statements This section outlines the forward-looking statements contained in the report, identifying key areas such as market growth, financial projections, operational plans, and the commercialization timeline for Lightbridge Fuel™, while also cautioning readers about inherent risks and uncertainties that could cause actual results to differ materially from these statements, emphasizing that such statements are not guarantees of future performance - Forward-looking statements cover market growth, demand for nuclear fuel technology, sales, earnings, revenue, management plans, future economic conditions, and financing/liquidity[74][76] - Key risks include the ability to commercialize nuclear fuel technology, dependence on strategic partners, funding future operations, market demand, competition, regulatory changes, and intellectual property development[75][76] - The company assumes no obligation to update these forward-looking statements after the filing date, except as required by law[75] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Lightbridge Corporation's financial condition and results of operations for the three months ended March 31, 2024, compared to the prior year, detailing the company's business overview, recent R&D developments, operational performance, and liquidity outlook, highlighting increased R&D expenses and ongoing reliance on equity financing for future development Overview of Our Business and Development of Lightbridge Fuel™ This section provides an overview of Lightbridge's core business, focusing on the development and commercialization of its next-generation metallic nuclear fuel technology - Lightbridge is developing next-generation metallic nuclear fuel for water-cooled reactors, aiming to improve economics, safety, and proliferation resistance, and enable growth in the nuclear power industry[80][82] - Recent developments include a FEED study with Centrus Energy for a Lightbridge Pilot Fuel Fabrication Facility, a feasibility study in Romania for CANDU reactors, and ongoing R&D agreements with Idaho National Laboratory (INL)[85][88][89] - The company successfully demonstrated extrusion of a depleted uranium-zirconium alloy rod at INL, a key step before producing enriched uranium fuel samples for irradiation testing[94] - Lightbridge anticipates demonstrating lead test rods/assemblies in commercial reactors in the 2030s, with initial fuel reload batches expected 15-20 years from now[101] Critical Accounting Estimates This section discusses the company's critical accounting policies and estimates, noting any significant changes during the reporting period - There have been no significant changes in the company's critical accounting policies and estimates during the three months ended March 31, 2024[103] Operations Review This section analyzes the company's operational performance, including a detailed review of general and administrative, research and development expenses, and other income Operations Review Summary | Metric | March 31, 2024 (millions) | March 31, 2023 (millions) | Change ($M) | Change (%) | | :-------------------------- | :------------------------ | :------------------------ | :---------- | :--------- | | General and administrative | $2.2 | $1.9 | $0.3 | 16% | | Research and development | $1.0 | $0.4 | $0.6 | 150% | | Total Operating Expenses | $3.2 | $2.3 | $0.9 | 39% | | Operating Loss | $(3.2) | $(2.3) | $(0.9) | 39% | | Other Income | $0.4 | $0.3 | $0.1 | 33% | | Net loss before Income Taxes | $(2.8) | $(2.0) | $(0.8) | 40% | | Net Loss | $(2.8) | $(2.0) | $(0.8) | 40% | - General and administrative expenses increased by $0.3 million, primarily due to higher employee compensation, benefits, directors' fees, postage, recruitment, and stock-based compensation[109] - Research and development expenses increased by $0.6 million, driven by increased R&D activities related to the INL project, Romania Feasibility Study, Centrus Energy FEED Study, and allocated employee compensation[111][112] - The company projects investing approximately $8 million to $9 million in R&D over the next 12 to 15 months[113] - Other income increased by $0.1 million due to rising interest rates, resulting in higher interest income from treasury bills and bank savings[115] Liquidity, Capital Resources, and Financial Position This section discusses Lightbridge Corporation's cash position, capital resources, and ability to fund future operations and research and development activities - As of March 31, 2024, the company had $27.9 million in cash and cash equivalents, a decrease of $0.7 million from December 31, 2023[117] - The company expects to have sufficient funds for the next 12 months based on current operating expenses and cash resources, but projects continued negative cash flows from operations[116][117][118] - Long-term R&D cash requirements are estimated at an average of $10.0 million per year over the next 10-15 years, necessitating direct or indirect funding from government, strategic partners, or other third-party sources[116][120] - The company utilizes its ATM facility for financing, having raised $1.2 million in Q1 2024, and has a new shelf registration statement for up to $6.6 million available through the ATM[119][121] - The company is subject to 'baby shelf rules' due to its public float being less than $75.0 million, limiting the amount it can raise through primary public offerings to one-third of its public float in any twelve-month period[122] - The company has no off-balance sheet arrangements or material impact from inflation[132][133] Item 3. Quantitative and Qualitative Disclosures About Market Risk Lightbridge Corporation, as a 'smaller reporting company,' is exempt from providing the detailed quantitative and qualitative disclosures about market risk typically required by this Item - The company is not required to provide information on market risk disclosures as it qualifies as a 'smaller reporting company' under Rule 12b-2 of the Exchange Act[134] Item 4. Controls and Procedures This section addresses the effectiveness of Lightbridge Corporation's disclosure controls and procedures and internal control over financial reporting, where management concluded that disclosure controls were not effective as of March 31, 2024, due to a previously identified material weakness related to information technology general controls (ITGC) over logical access and segregation of duties, with remediation efforts ongoing - Disclosure controls and procedures were deemed not effective as of March 31, 2024[136] - A material weakness exists in internal control over financial reporting related to the design of information technology general controls (ITGC) over logical access to key financial reporting systems, leading to segregation of duties conflicts[137] - Remediation efforts, including enhancing logical access controls and improving internal documentation and monitoring, began in Q4 2023 and are ongoing[139] - No restatements of prior period financial statements or changes in previously released financial results were required due to the material weakness[137] PART II - OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and other disclosures Item 1. Legal Proceedings Lightbridge Corporation is not currently aware of any legal proceedings or claims that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently involved in any legal proceedings or claims that are believed to have a material adverse effect on its business[141] Item 1A. Risk Factors This section highlights new or updated risk factors, specifically focusing on the risks associated with acquisition activities, including challenges in integration, failure to realize anticipated benefits, retention of key personnel, and potential financial strain or dilution to stockholders - No other material changes to risk factors were reported, apart from those related to acquisition activity[142] - Acquisition activity presents risks such as integration challenges, failure to achieve anticipated benefits, difficulties in reconciling business practices, retention of key personnel, and potential unidentified liabilities[143][144] - Acquisitions may lead to expenditure of cash, amortization of expenses, and potential dilution to existing stockholders if significant financing through equity issuance is required[145][146] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Lightbridge Corporation reported no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report[147] Item 3. Defaults Upon Senior Securities This item is not applicable to Lightbridge Corporation for the reporting period - This item is not applicable[147] Item 4. Mine Safety Disclosures This item is not applicable to Lightbridge Corporation for the reporting period - This item is not applicable[147] Item 5. Other Information This section discloses that no director or officer adopted or terminated Rule 10b5-1 trading arrangements during the quarter, and details an amendment to the At-the-Market Equity Offering Sales Agreement, updating the shelf registration statement and reducing the sales agent's commission rate - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[147] - The At-the-Market Equity Offering Sales Agreement was amended on May 8, 2024, to reference a new effective shelf registration statement and reduce the commission rate to Stifel from 4.0% to 3.0%[148] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including amendments to agreements, legal opinions, consents, certifications, and interactive data files - The exhibit index includes Amendment No. 2 to the At-the-Market Equity Offering Sales Agreement, legal opinions, certifications, and interactive data files[153][158] SIGNATURES The report is duly signed on behalf of Lightbridge Corporation by its President, Chief Executive Officer, and Director (Principal Executive Officer), Seth Grae, and its Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Larry Goldman, as of May 10, 2024 - The report was signed by Seth Grae, President, CEO, and Director, and Larry Goldman, CFO, on May 10, 2024[158]