What changed in this filing

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Item 1. Financial Statements

2023-05-11 compared with 2022-10-31 · 99 added, 310 removed, 235 unchanged (64% of the section changed)

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets

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Total Current Assets

Prepaid project costs

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Stockholders’ Equity

Preferred stock, $ 0.001 par value, 10,000,000 authorized shares, 0 shares issued and outstanding at September 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 13,500,000 shares authorized, 11,539,932 shares and 9,759,223 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Preferred stock, $ 0.001 par value, 10,000,000 authorized shares, 0 shares issued and outstanding at March 31, 2023 and December 31, 2022

Common stock, $ 0.001 par value, 25,000,000 authorized, 12,126,030 shares and 11,900,217 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

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Three Months Ended

Nine Months Ended

September 30,

Operating Expenses

3 unchanged sentences

Other Operating Income

Distribution from joint venture

Contributed services - research and development

Total Other Operating Income

Operating Loss

( 2,125,473 )

( 1,913,806 )

Total Operating Loss

$ ( 2,282,945 )

1 unchanged sentence

Interest income

Foreign currency transaction gain

Total Other Income

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$ ( 2,049,529 )

$ ( 2,037,530 )

$ ( 1,912,255 )

$ ( 5,589,701 )

$ ( 5,534,340 )

Accumulated preferred stock dividend

Deemed additional dividend on preferred stock dividend due to the beneficial conversion feature

Net Loss Attributable to Common Stockholders

$ ( 2,037,530 )

$ ( 2,106,660 )

$ ( 5,589,701 )

$ ( 6,109,389 )

Net Loss Per Common Share, Basic and Diluted

Net Loss Per Common Share

Basic and diluted

Weighted Average Number of Common Shares Outstanding

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Month Ended

Operating Activities

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Adjustments to reconcile net loss from operations to net cash used in operating activities:

Common stock issued for services

Stock-based compensation

Changes in operating working capital items

Other receivables

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and accrued liabilities

Accrued legal settlement costs

( 4,200,000 )

Net Cash Used in Operating Activities

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Financing Activities

Net proceeds from issuances of common stock and exercise of stock options

Net proceeds from the issuances of common stock

Net Cash Provided by Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

( 5,398,013 )

Net (Decrease) Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Period

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Non-Cash Financing Activities:

Accumulated preferred stock dividend

Conversion of Series A convertible preferred stock to common stock and payment of paid-in-kind dividends to Series A preferred stockholder

Payment of accrued liabilities with common stock

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Balance - January 1, 2023

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$ ( 146,515,710 )

Shares issued - registered offerings - net of offering costs

Shares issued to consultant for services

Stock-based compensation

Net loss for the three months ended June 30, 2022

( 1,502,642 )

Balance - June 30, 2022

$ 169,834,944

$ ( 140,543,444 )

Shares issued - registered offerings - net of offering costs

Shares issued to consultant for services

Stock-based compensation

Net loss for the three months ended September 30, 2022

( 2,037,530 )

Balance - September 30, 2022

$ 173,077,225

$ ( 142,580,974 )

LIGHTBRIDGE CORPORAT ION

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Preferred Stock

Balance - January 1, 2022

1 unchanged sentence

$ ( 136,991,273 )

Shares issued - registered offerings - net of offering costs

Shares issued to consultant & directors for services

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$ ( 139,040,802 )

Conversion of 16,026 preferred shares to 1,846 shares of common shares

Shares issued to consultant for services

Stock-based compensation

Net loss for the three months ended June 30, 2021

( 1,610,097 )

Balance - June 30, 2021

$ 146,684,313

$ ( 132,777,693 )

Conversion of 20,085 preferred shares to 2,382 shares of common shares

Shares issued - registered offerings - net of offering costs

Shares issued to consultant for services

Stock-based compensation

Net loss for the three months ended September 30, 2021

( 1,912,255 )

Balance - September 30, 2021

$ 150,163,990

$ ( 134,689,948 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, including a summary of the Company’s significant accounting policies, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive condensed consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2022, included in our Annual Report on Form 10-K for the year ended December 31, 2022.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month period have been made.

Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

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The Company was formed on October 6, 2006, when Thorium Power, Ltd., which was incorporated in the state of Nevada on February 2, 1999, merged with Thorium Power, Inc.

(TPI), which was incorporated in the state of Delaware on January 8, 1992.

(TPI), which was incorporated in the state of Delaware on January 8, 1992 (subsequently and collectively referred to as “we” or the “Company”).

On September 29, 2009, the Company changed its name from Thorium Power, Ltd.

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The Company is a nuclear fuel technology company developing its next generation nuclear fuel technology.

Going Concern, Liquidity and Management’s Plan

The Company’s available working capital at September 30, 2022 and as of the date of this filing, exceeds its currently anticipated expenditures through the third quarter of 2023.

However, there are inherent uncertainties in forecasting future expenditures, especially forecasting for uncertainties such as future research and development (R&D) costs and other cash outflows, as well as how the COVID-19 outbreak, including the emergence and spread of variant strains of the virus, may affect future costs and operations.

Also, the cash requirements of the Company’s future planned operations to commercialize its nuclear fuel, including any additional expenditures that may result from unexpected developments, will require it to raise significant additional capital, including receiving government support.

These uncertainties include the Company’s projected fuel development timeline of up to 15 - 20 years to fuel commercialization, the operational costs required to keep the fuel development project on schedule and the various risks of developing and commercializing the Company’s nuclear fuel.

These uncertainties, when combined, raise substantial doubt about the Company’s ability to continue as a going concern for the 12 months following the date of this filing.

The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business.

No adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

To the extent any uncertainties reduce the Company’s liquidity for the next 12 months, the Company will consider, if available, additional debt or equity raises and delaying certain expenditures, including R&D expenses, until sufficient capital becomes available.

At September 30, 2022, the Company had $ 31.3 million in cash and had a working capital surplus of $ 30.4 million.

The Company’s net cash used in operating activities for the nine months ended September 30, 2022 was $ 4.1 million, and current projections indicate that the Company will have continued negative cash flows from operations for the foreseeable future.

Net loss incurred for the nine months ended September 30, 2022 amounted to $ 5.6 million.

As of September 30, 2022, the Company had an accumulated deficit of $ 142.6 million, representative of recurring losses since inception.

The Company will continue to incur losses because it is in the early research and development stage of developing its nuclear fuel.

The Company’s plans to fund future operations include:

(1) raising additional capital through future equity issuances or debt financings;

(2) additional funding through new relationships to help fund future R&D costs;

and (3) seeking other sources of capital, including grants from the federal government.

The Company may issue securities, including common stock, preferred stock, and stock purchase contracts through private placement transactions or registered public offerings, pursuant to current and future registration statements.

The Company’s current shelf registration statement on Form S-3 was filed with the SEC on March 25, 2021, registering the sale of up to $ 75 million of the Company’s securities and was declared effective on April 5, 2021.

Due to the offering limitations applicable under General Instruction I.B.6.

of Form S-3 and the market valuation of our future public float, the Company may be limited on the amount of funding available under this Form S-3 shelf registration statement in the future.

There can be no assurance as to the future availability of equity capital or the acceptability of the terms upon which financing and capital might become available.

The Company’s future liquidity needs to develop its nuclear fuel are long-term, and the ability to address those needs and to raise capital will largely be determined by the success of the development of its nuclear fuel, key nuclear development and government regulatory events, and its business decisions in the future.

Basis of Consolidation

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Fair Value of Financial Instruments

The Company’s consolidated financial instruments consist principally of cash and cash equivalents, and accounts payable.

In accordance with the provisions of ASC 820, “Fair Value Measurements,” the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable.

The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company generally applies the income approach to determine fair value.

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ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value.

Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable.

The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The Company classifies fair value balances based on the observability of those inputs.

The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The three levels of the fair value hierarchy are as follows:

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The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

Quoted market prices were applied to determine the fair value of U.S.

Treasury Bill investments;

therefore they were categorized as Level 1 on the fair value hierarchy.

The Company buys and holds short-term U.S.

Treasury Bills to maturity.

Certain Risks, Uncertainties and Concentrations

The Company will need additional funding by way of a combination of strategic alliances, government grants, further offerings of equity securities, or an offering of debt securities or other debt financing in order to support its future R&D activities required to further enhance and complete the development of its fuel products to a proof-of-concept stage and a commercial stage thereafter.

The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities.

The carrying amounts of cash and cash equivalents (which includes U.S.

treasury bills), accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.

treasury bills are classified as Level 1 on the fair value hierarchy as there are quoted prices in active markets for identical assets.

Certain Risks and Uncertainties

The Company will need additional funding by way of a combination of strategic alliances, government grants, further offerings of equity securities, or an offering of debt securities in order to support its future research and development (R&D) activities required to further enhance and complete the development of its fuel products to a proof-of-concept stage and a commercial stage thereafter.

There can be no assurance that the Company will be able to successfully continue to conduct its operations if there is a lack of financial resources available in the future to continue its fuel development activities, and a failure to do so would have a material adverse effect on the Company’s future R&D activities, financial position, results of operations, and cash flows.

Also, the success of the Company’s operations will be subject to other numerous contingencies, some of which are beyond management’s control.

These contingencies include general and regional economic conditions, contingent liabilities, potential competition with other nuclear fuel developers, including those entities developing accident tolerant fuels, changes in government regulations, support for nuclear power, changes in accounting and taxation standards, inability to achieve overall short-term and long-term R&D milestones toward commercialization, future impairment charges to its assets, and global or regional catastrophic events.

These contingencies include general and regional economic conditions, contingent liabilities, potential competition with other nuclear fuel developers, including those entities developing accident tolerant fuels, changes in government regulations, support for nuclear power, changes in accounting and taxation standards, inability to achieve overall short-term and long-term research and development milestones toward commercialization, future impairment charges to its assets, and global or regional catastrophic events.

The Company may also be subject to various additional political, economic, and other uncertainties.

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The Company holds cash balances in excess of the federally insured limits of $ 250,000 .

The Company deems this credit risk not to be significant as its cash is and was held by two prominent financial institutions in 2022 and 2021.

It deems this credit risk not to be significant as cash is held by two prominent financial institutions in 2023 and 2022.

The Company buys and holds short-term U.S.

treasury bills to maturity.

Treasury Bills held by the Company totaled $ 20.0 million and $ 9.0 million at September 30, 2022 and December 31, 2021, respectively.

The remaining cash balances of $11.3 million and $ 15.7 million at September 30, 2022 and December 31, 2021, respectively, are on deposit with two prominent financial institutions.

treasury bills totaled $ 20.0 million and $ 19.9 million at March 31, 2023 and December 31, 2022, respectively.

The remaining $ 8.1 million and $ 9.0 million at March 31, 2023 and December 31, 2022, respectively, are on deposit with two notable financial institutions.

Contributed services - Research and Development

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As such, the Company determined that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition applies for these contributed services, even though the Company is a business entity, as guidance in the contributions received subsections of Subtopic 958-605 applies to all entities (not-for-profits and business entities).

The Company early adopted Accounting Standards Update 2020-07 in the fourth quarter of 2021, which amends Subtopic 958-605 and further clarifies the presentation and disclosure about contributions.

Subtopic 958-605 requires that nonfinancial assets, which includes services, such as the research and development services provided under the Gateway for Accelerated Innovation in Nuclear (GAIN) vouchers described in Note 6, should be shown on a gross method at the fair value of the services contributed, with contributed services - research and development shown as other operating income and the related costs as a charge to research and development expense, rather than depicting contributed services - research and development as a reduction of research and development expense.

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The principal market used to arrive at fair value is the market in which the Company operates.

The Company recognized contributed services - research and development of $ 0.1 million and $ 0.3 million for the three months and nine months ended September 30, 2022 and $ 0.3 million and $ 0.5 million for the three months and nine months ended September 30, 2021.

Costs for filing and legal fees for trademark applications are capitalized.

Trademarks are considered intangible assets with an indefinite useful life and therefore are not amortized.

The Company performed an impairment test in the fourth quarter of 2021 and no impairment of the trademarks was identified.

As of September 30, 2022 and December 31, 2021, the carrying value of trademarks was $ 0.1 million.

In accordance with ASU 2016-02, Leases (Topic 842) , which requires recognition of most lease arrangements on the balance sheet, the Company recognizes operating lease right of use assets and liabilities at commencement date based on the present value of the future minimum lease payments over the lease term.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet in accordance with the short-term lease recognition exemption.

The Company applies the practical expedient to not separate lease and non-lease components for all leases that qualify.

Lease expense is recognized on a straight-line basis over the lease term.

The Company has only one lease for office space and the lease is for a term of 12 months without renewal options.

See Note 4 for additional information.

Common Stock Warrants

The Company accounts for common stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement.

Common stock warrants are accounted for as a derivative in accordance with ASC 815, Derivatives and Hedging, if the stock warrants contain terms that could potentially require “net cash settlement” and therefore, do not meet the scope exception for treatment as a derivative.

Warrant instruments that could potentially require “net cash settlement” in the absence of explicit language precluding such settlement are initially classified as derivative liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash.

All outstanding warrants expired on May 16, 2022.

Stock-Based Compensation

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However, if the market condition is satisfied prior to the end of the requisite service period, the Company accelerates all remaining expense to be recognized.

Awards with both performance-based and market-based vesting conditions - If an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period.

Awards with both service-based or performance-based and market-based vesting conditions:

If an award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period.

The Company elected to use the Black-Scholes pricing model to determine the fair value of stock options on the measurement date of the grant for service-based vesting conditions and the Monte-Carlo valuation method for performance-based or market-based vesting conditions for stock options.

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The forfeiture rate estimate used for all equity awards was zero, based on the experience of the Company having an insignificant historical forfeiture rate.

Shares that are issued to employees upon exercise of the stock options may be issued net of a number of shares with a fair value equal to the required tax withholding requirements to be paid by the Company regarding its tax withholding obligations.

As a result, the actual number of shares issued are fewer than the actual number of shares exercised under the stock option or on the dates of vesting of Restricted Stock Unit (RSU) grants.

The Company grants two types of Restricted Stock Awards (“RSAs”).

Shares that are issued to employees upon exercise of the stock options or vesting of Restricted Stock Units or Restricted Stock Awards (RSAs) grants may be issued net of a number of shares with a fair value equal to the required tax withholding requirements to be paid by the Company regarding its tax withholding obligations.

As a result, the actual number of shares issued with tax withholding obligations are fewer than the actual number of shares exercised under the stock option or on the dates of vesting of restricted stock unit or RSAs grants.

The Company grants two types of RSAs.

The first type is an award of our shares that have full voting rights and dividend rights (with dividends paid upon vesting of the RSA) but are restricted with regard to sale or transfer before vesting.

As such, they are shown as shares issued and outstanding.

These restrictions lapse over the vesting period.

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The RSAs are included in common stock issued and outstanding and are considered contingently issuable in the calculation of weighted-average shares outstanding for purposes of calculating earnings per share.

The consolidated statement of changes in stockholders’ equity shows the initial grant of RSAs as a reclassification from additional paid-in capital to common stock, with any compensation expense related to the RSAs included in stock-based compensation.

The second type of RSAs granted by the Company have only performance conditions.

The condensed consolidated statement of changes in stockholders’ equity shows the initial grant of RSAs as a reclassification from additional paid-in capital to common stock, with any compensation expense related to the RSAs included in stock-based compensation.

The second type of RSAs that can be granted by the Company can have only performance conditions.

These RSAs do not have voting and dividend rights until they vest as ordinary common shares and are not included in common stock issued and outstanding.

Recent Accounting Pronouncements

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance .

This ASU requires disclosures that are expected to increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model by analogy, including (1) the nature of the transactions and the form in which assistance has been received, (2) the accounting policy applied, and (3) the balance sheet and income statement line items that are affected by the transactions, and the amounts applicable to each financial statement line item.

This ASU is effective for annual periods beginning after December 15, 2021, with early adoption permitted.

The adoption of this standard did not materially impact the Company’s condensed consolidated financial statements in 2022.

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the complexity associated with applying U.S.

GAAP for certain financial instruments with characteristics of liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options , that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock;

(2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification;

and (3) revises the guidance in ASC 260, Earnings Per Share , to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Adoption is either through a modified retrospective method or a full retrospective method of transition.

The Company does not currently have any transaction or instruments to which this standard applies.

If, in the future, the Company issues new convertible debt, new warrants or certain other instruments, the standard may have a material effect, but this cannot be determined at this time.

Recently Adopted Accounting Pronouncement

The FASB issued ASU No.

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In estimating the allowance for expected credit losses, consideration will be given to the current aging of receivables, historical experience, and a review for potential bad debts.

The Company will adopt this guidance in the first quarter of fiscal 2023 and does not expect the adoption to have a material impact on its results of operations, financial position, and disclosures.

The Company does not expect to have revenue or substantial receivables for the foreseeable future.

The Company adopted this guidance in the first quarter of fiscal 2023 and it did not have a material impact since the Company had no outstanding accounts receivable on which to apply this new standard.

Net Loss Per Share

Basic net loss per share is computed using the weighted-average number of common shares outstanding during the year except that it does not include unvested common shares subject to repurchase or cancellation.

Diluted net income per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period.

Basic net loss per share is computed using the weighted-average number of common shares outstanding during the reporting period except that it does not include unvested common shares subject to repurchase or cancellation.

Diluted net loss per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, warrants and convertible preferred shares (see Note 7.

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The common stock equivalents of performance-based milestone compensation arrangements are included as potentially dilutive shares only if the performance condition has been met as of the end of the reporting period.

The treasury stock method is used in calculating diluted EPS for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive.

The following table sets forth the computation of the basic and diluted loss per share (dollars in millions, except per share data):

The treasury stock method is used in calculating diluted net loss per share for potentially dilutive stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and share purchase warrants would be used to purchase common shares at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive.

The following table sets forth the computation of the basic and diluted loss per share (dollars in millions, except share data):

Three Months Ended

Nine Months Ended

September 30,

Net loss attributable to common stockholders

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Incremental dilutive shares from equity instruments (treasury stock method)

Weighted-average common shares outstanding- diluted

Weighted-average common shares outstanding

Diluted net loss per share

The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company’s losses for the three and nine months ended September 30, 2022 and 2021 and because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock:

September 30,

The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company’s losses for the three months ended March 31, 2023 and 2022 and also because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock.

Three Months Ended

Warrants outstanding

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RSAs outstanding

RSUs outstanding

Series A convertible preferred stock to common shares

Series B convertible preferred stock to common shares

Prepaid Project Costs

In 2022, the Company entered into agreements with Idaho National Laboratory (INL), in collaboration with the DOE, to support the development of Lightbridge Fuel™.

The Company made advanced payments for future project work totaling $ 0.4 million to Battelle Energy Alliance, LLC (“BEA”), DOE’s operating contractor for INL, as of March 31, 2023 and December 31, 2022.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following (dollars in millions):

September 30,

Accounts payable and accrued liabilities consisted of the following (rounded in millions):

Trade payables

Accrued legal and consulting expenses

Accrued bonuses

Accrued bonus

Commitments and Contingencies

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The Company leased office space for a 12 -month term from January 1, 2023 through December 31, 2023 with a monthly payment of approximately $ 8,000 .

The future minimum lease payments required under the non-cancellable operating leases for 2022 total approximately $ 23,000 .

Total rent expense for the three and nine months ended September 30, 2022 was approximately $ 23,000 and $ 70,000 , respectively.

Total rent expense for the three and nine months ended September 30, 2021 was approximately $ 30,000 and $ 91,000 , respectively.

The future minimum lease payments required under the non-cancellable operating leases for 2023 total $ 0.1 million.

Total rent expense for the three months ended March 31, 2023 and 2022 was approximately $ 24,000 for both periods.

Project Task Statements (Purchase Orders)

The Company has approximately $ 3.2 million in outstanding project task statement obligations (PTS) to BEA relating to the research and development being conducted under the Strategic Partnership Project Agreement and Cooperative Research and Development Agreement at INL (see Note 6.

Research and Development Costs).

On December 19, 2019, the Company was awarded a voucher from the DOE’s GAIN program to support development of Lightbridge Fuel™ in collaboration with Idaho National Laboratory (INL).

The scope of the project included experiment design for irradiation of Lightbridge metallic fuel material samples in the Advanced Test Reactor at INL.

On April 22, 2020, the Company entered into a Cooperative Research and Development Agreement (CRADA) with Battelle Energy Alliance, LLC (Battelle), the operating contractor of INL, in collaboration with DOE.

Signing the CRADA was the last step in the contracting process to formalize a voucher award from the GAIN program.

The voucher award can only be used to conduct the experiment defined in the CRADA.

All work was completed on this GAIN voucher in the third quarter of 2021.

This experiment design forms the basis of the Company’s current and future efforts with the INL.

The Company had no cash payment obligations related to the GAIN voucher, but did provide in-kind services consisting of project management, quality assurance, and technical oversight under the CRADA.

The DOE incurred payment obligations to Battelle, related to the work done under the GAIN voucher.

As of December 31, 2021, the total final project amount recorded as contributed services - research and development was $ 0.5 million.

During the three and nine months ended September 30, 2021, the Company recorded $ 0.3 million and $ 0.4 million of contributed services - research and development for the work that was completed by Battelle.

Performance of work under these agreements may be terminated at any time by either party, without liability, upon giving a thirty-day written notice under the Strategic Partnership Project Agreement and a sixty-day written notice under the Cooperative Research and Development Agreement, to the other party.

In the event of termination, the Company shall be responsible for the BEA’s costs (including the closeout costs), through the effective date of termination, but in no event shall the Company’s cost responsibility exceed the total estimated cost stated in each PTS and any subsequent modification to the PTS.

Research and Development Costs

In 2022, Lightbridge entered into agreements with INL, in collaboration with the DOE, to support the development of Lightbridge Fuel™.

These framework agreements use an innovative structure and consist of an “umbrella” Strategic Partnership Project Agreement and an “umbrella” Cooperative Research and Development Agreement (CRADA), each with BEA, DOE’s operating contractor for INL, with an initial duration of seven years.

Throughout the duration of these umbrella agreements, all R&D work contracted with BEA is through the issuance of project task statements.

On March 25, 2021, the Company was awarded a second voucher from the DOE’s GAIN program to support development of Lightbridge Fuel™ in collaboration with the Pacific Northwest National Laboratory (PNNL).

The scope of this project is to demonstrate Lightbridge’s nuclear fuel casting process using depleted uranium, a key step in the manufacture of Lightbridge Fuel™.

On July 14, 2021, the Company executed a CRADA with the Battelle Memorial Institute, Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE.

The total project value is $ 0.7 million, with three-quarters of this amount expected to be paid by DOE for the scope of work performed by Battelle and the remaining amount provided by Lightbridge, by providing in-kind services to the project.

The project commenced in the third quarter of 2021 and is expected to be completed by the end of 2022.

During the three and nine months ended September 30, 2022, the Company recorded $ 0.1 million and $ 0.3 million of contributed services - research and development, respectively, and during the three and nine months ended September 30, 2021, the Company recorded $ 21,000 for the work that was completed by Battelle.

The contributed services - research and development for both GAIN vouchers were recorded in the Other Operating Income section of the condensed consolidated statement of operations and the corresponding amount was recorded as research and development expenses.

The scope of this project was to demonstrate Lightbridge’s nuclear fuel casting process using depleted uranium, a key step in the manufacture of Lightbridge Fuel™.

The total project value was $ 0.7 million, with three-quarters of this amount expected to be paid by DOE for the scope of work performed by PNNL and the remaining amount provided by Lightbridge, by providing in-kind services to the project.

The PNNL GAIN voucher project was completed on January 31, 2023.

During the three months ended March 31, 2023 and 2022, the Company recorded $ 31,000 and $ 0.1 million of contributed services - research and development, respectively, for work that was completed that caused the DOE to incur payment obligations to its contractor related to the GAIN voucher.

The Company recorded the corresponding amount as research and development expenses for the work that was completed by the DOE contractor.

The R&D services provided under the GAIN vouchers are utilized by the Company in its ongoing development of its next generation nuclear fuel technology.

The Company believes that the amounts paid by the DOE to Battelle for the service provided does not differ materially from what the Company would have paid had it directly contracted for these services for its R&D activity.

Recent Change in U.S.

Prior to 2022, Internal Revenue Code Section 174 allowed taxpayers to deduct R&D expenditures in the year in which they were incurred.

The 2017 tax reform act amended Section 174, effective for amounts paid or incurred in tax years beginning after December 31, 2021, to require taxpayers to charge their R&D expenditures to a capital account.

Capitalized costs are required to be amortized over five years (15 years for expenditures attributable to foreign research).

Due to the Company’s future significant R&D expenses, the impact of this tax law change will mean that a significant portion of our total operating expenses will be taken as a deduction over a 5-year period rather than being currently deductible.

The Company does not expect to pay cash taxes as a result of this change as our remaining operating expenses after excluding R&D expenses are significant and the Company expects to continue to generate losses for tax purposes.

The Company believes that the amounts paid by the DOE to its contractor for the services provided does not differ materially from what the Company would have paid had it directly contracted for these services for its R&D activity.

Stockholders’ Equity and Stock-Based Compensation

At September 30, 2022, the Company had 11,539,932 common shares outstanding (including outstanding RSAs totaling 188,588 shares).

Also outstanding were stock options relating to 525,903 shares of common stock and performance-based RSA awards of 188,588 shares, all totaling 12,254,423 shares of common stock and all common stock equivalents, outstanding at September 30, 2022.

The performance-based RSA awards of 188,588 shares are not included as common stock outstanding due to managements’ probability assessment of not meeting the performance-based milestone at September 30, 2022.

At December 31, 2021, the Company had 9,759,223 common shares outstanding (including outstanding RSAs totaling 188,588 shares).

Also outstanding were warrants relating to 45,577 shares of common stock, stock options relating to 538,713 shares of common stock and performance-based RSA awards of 188,588 shares, all totaling 10,532,101 shares of common stock and all common stock equivalents, outstanding at December 31, 2021.

The performance-based RSA awards of 188,588 shares were not included as common stock outstanding due to managements’ probability assessment of not meeting the performance-based milestone at December 31, 2021.

At March 31, 2023, the Company had 12,126,030 common shares outstanding (including outstanding restricted stock awards totaling 416,316 shares).

Also outstanding were stock options relating to 525,903 shares of common stock ( 514,513 stock options were vested), all totaling 12,651,933 shares of common stock and all common stock equivalents, outstanding at March 31, 2023.

At December 31, 2022, the Company had 11,900,217 common shares outstanding (including outstanding restricted stock awards totaling 416,316 shares).

Also outstanding were stock options relating to 525,903 shares of common stock ( 514,513 stock options were vested), all totaling 12,426,120 shares of common stock and all common stock equivalents, outstanding at December 31, 2022.

Common Stock Equity Offerings

ATM Offerings

On May 28, 2019, the Company entered into an at-the-market (ATM) equity offering sales agreement with Stifel, Nicolaus & Company, Incorporated (Stifel), which was amended on April 9, 2021, pursuant to which the Company may issue and sell shares of its common stock from time to time through Stifel as the Company’s sales agent.

Sales of the Company’s common stock through Stifel, if any, will be made by any method that is deemed to be an “at-the-market” equity offering as defined in Rule 415 promulgated under the Securities Act of 1933.

On March 25, 2021, the Company filed a new shelf registration statement on Form S-3, registering the sale of up to $ 75 million of the Company’s securities, which registration statement was declared effective on April 5, 2021.

The Company filed a prospectus supplement, dated April 9, 2021, with the SEC pursuant to which the Company offered and sold shares of common stock having an aggregate offering price of up to $ 9.0 million through its ATM.

After this offering was completed, the Company filed a second prospectus supplement, dated November 19, 2021, with the SEC pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $ 20.0 million from time to time through its ATM.

On November 9, 2022, the Company filed a prospectus supplement with the SEC pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $ 20.0 million from time to time through its ATM.

On April 4, 2023, the Company filed an additional prospectus supplement revising the amount available to $ 17.9 million.

The Company records its ATM sales on a settlement date basis.

The Company sold approximately 0.5 million and 1.8 million shares, respectively, under the ATM for the three and nine months ended September 30, 2022 resulting in net proceeds of approximately $ 3.0 million and $ 10.6 million, respectively, under the November 19, 2021 prospectus supplement.

For the three and nine months ended September 30, 2021, the Company sold 0.6 million shares, resulting in net proceeds of $ 3.4 million.

Preferred Stock Equity Offerings

Exchange of Outstanding Series A and Series B Convertible Preferred Stock for Common Shares

On October 29, 2021, the Company entered into an agreement with the holder of all of the outstanding Series A Preferred Stock, to exchange all of the outstanding Series A Preferred Stock and the payment-in-kind (PIK) dividends for 262,910 shares of the Company’s common stock ($ 10 per share induced conversion price), without any cash payments by either party.

On December 3, 2021, the Company entered into a series of agreements with all of the holders of the Company’s Series B convertible preferred stock to exchange all outstanding Series B Preferred Stock for shares of the Company’s common stock at an exchange rate equal to the sum of the liquidation preference of the Series B Preferred Stock and the accrued and unpaid dividends thereon, divided by $ 10.00 per share.

Upon the closing of the exchange, the Company issued an aggregate of 522,244 shares of common stock to the holders in exchange for all 2,666,667 issued and outstanding Series B Preferred Stock.

The exchange for both Series A and Series B preferred stock was effected without registration under the Securities Act of 1933, as amended, pursuant to the exemption from registration set forth in Section 3(a)(9) of the Securities Act.

In accordance with ASC 470-20, the Company accounted for both exchanges as an induced conversion based on the short period of time the exchange offer was open and that all equity securities pursuant to the original terms were exchanged.

Pursuant to this accounting guidance, the Company evaluated the fair value of the incremental 183,098 common shares issued to the Series A Preferred stockholders.

Based on the $ 9.57 closing stock price on October 29, 2021, the Company recorded to additional paid-in capital a deemed dividend of $ 1.8 million at the date of the exchange.

Also, the Company evaluated the fair value of the incremental 232,111 common shares issued to the Series B Preferred stockholders.

Based on the $ 7.57 closing stock price on December 3, 2021, the Company recorded to additional paid-in capital a deemed dividend of $ 1.8 million at the date of the exchange.

The Company did not have any outstanding warrants as of September 30, 2022 and had 45,577 outstanding warrants as of December 31, 2021.

The 45,577 warrants that were issued to investors on November 17, 2014, entitling the holders to purchase 45,577 common shares in the Company at an exercise price of $ 138.60 per common share, expired on May 16, 2022.

The Company sold approximately 0.2 million shares under the ATM for the three months ended March 31, 2023 resulting in net proceeds of $ 0.7 million.

The Company sold approximately 0.8 million shares under the ATM for the three months ended March 31, 2022 resulting in net proceeds of $ 5.4 million.

Stock-based Compensation

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On September 3, 2020, the shareholders approved the 2020 Plan to authorize grants of the following types of awards (a) Options, (b) Stock Appreciation Rights, (c) Restricted Stock and Restricted Stock Units, and (d) Other Stock-Based and Cash-Based Awards.

Stock Options

During the nine months ended September 30, 2022, the Company issued 18,852 stock options to two consultants.

These options were assigned a weighted average fair value of $ 3.98 per share.

The value was determined using the Black-Scholes pricing model.

The following assumptions for these option grants were used in the Black-Scholes pricing model:

Expected volatility

97.58 %- 115.37

Risk free interest rate

1.02 %- 3.275

Dividend yield rate

Weighted average years

Closing price per share - common stock

$ 5.93 - $ 6.27

Stock options issued to the Company’s employees, directors and consultants are summarized as follows for the nine months ended September 30, 2022:

Weighted Average Exercise Price

Weighted Average Grant Date

Beginning of the year - January 1, 2022

End of the period - September 30, 2022

Options exercisable

A summary of the Company’s non-vested options as of September 30, 2022 and December 31, 2021, and changes during the nine months ended September 30, 2022, is presented below:

Weighted Average Exercise Price

Weighted Average Fair Value

Non-vested - December 31, 2021

Non-vested- September 30, 2022

The above tables include stock options issued and outstanding as of September 30, 2022 as follows:

A total of 339,855 incentive stock options and non-qualified 10 -year options have been issued, and are outstanding, to the directors, officers, and employees at exercise prices of $ 3.82 to $ 75.60 per share.

From this total, 127,299 options are held by the Company’s Chief Executive Officer, who is also a director.

All options issued to directors, officers, and employees, including those issued to the Company’s Chief Executive Officer, have a remaining contractual life ranging from 2.52 years to 7.17 years.

A total of 186,048 non-qualified 2 to 10 -year options have been issued, and are outstanding, to consultants at exercise prices of $ 3.82 to $ 75.60 per share and have a remaining contractual life ranging from 0.61 years to 9.92 years.

As of September 30, 2022, there was approximately $ 48,000 of total unrecognized compensation cost related to non-vested stock options granted under the plans.

That cost is expected to be recognized over a weighted-average period of 2.26 years.

For stock options outstanding at September 30, 2022, the intrinsic value was $ 54,000 .

The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at September 30, 2022:

Stock Options Outstanding

Stock Options Vested

Exercise Prices

9.01 -$ 12.48

12.49 -$ 24.00

24.01 -$ 72.00

72.01 -$ 75.60

The number of shares of common stock available for issuance under this Incentive Plan is 1,100,000 shares.

Common Share Issuances

For the nine months ended September 30, 2022 and 2021, the Company issued 7,276 and 7,382 common shares, respectively, to its investor relations firm for services provided during the period.

Restricted Stock Awards

On November 18, 2021, the Board of Directors approved an equity grant of 188,588 RSAs, with a grant date fair value of $ 2.0 million, to all of the Company’s employees and two consultants, valued at the stock price on the grant date of $ 10.69 per share.

These RSAs contain a performance-based accelerated vesting provision and a service-based vesting provision, with the service-based vesting provision being one-third vesting on each of the first three anniversaries of the date of grant.

As of September 30, 2022 and December 31, 2021, the Company had deemed it not probable that the performance-based vesting provision would be met.

These 188,588 shares were included in the total outstanding common shares at September 30, 2022 and December 31, 2021 and compensation expense will be recognized straight line over the three-year vesting period.

A total of $0.5 million of compensation expense was recorded for the nine months ended September 30, 2022 .

Also on November 18, 2021, there was an additional performance-based equity grant of 188,588 RSAs, with a grant date fair value of $ 2 million, with immediate vesting upon the Company completing a business acquisition in 2022, subject to certain target financial performance metrics.

The RSAs were valued at the stock price on the grant date of $ 10.69 per share.

This RSA grant, based on managements’ probability assessment of meeting this milestone at September 30, 2022 and December 31, 2021, was not probable of being met and no stock-based compensation expense was recorded for the nine months ended September 30, 2022 and for the year ended December 31, 2021.

These 188,588 RSAs were not included in the total outstanding common shares, on the accompanying balance sheets and changes in statements of stockholders’ equity at September 30, 2022 and December 31, 2021.

The Company has been assessing the probability of achieving this performance condition at each reporting period in 2022 and will record the $2 million as an expense as well as include these performance-based RSAs in the total outstanding common shares, if there is a change to management’s assessment that it is probable that this performance-condition will be met .

The following summarizes the Company’s RSAs activity:

Total RSAs outstanding at January 1, 2022

Total RSAs granted

Total RSAs vested

Total RSAs forfeited

Total unvested RSAs outstanding at September 30, 2022

Scheduled vesting for outstanding RSAs with service conditions at September 30, 2022 is as follows:

Year Ending December 31,

Scheduled vesting

As of September 30, 2022, there was $ 1.4 million of total unrecognized compensation cost related to these unvested RSAs compensation arrangements The compensation expense is recognized on a straight-line basis over the three-year vesting period and the total unrecognized compensation is expected to be recognized over a weighted-average period of 2.13 years.

The components of total stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 are as follows (dollars in millions):

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the three months ended March 31, 2023 and 2022, the Company issued 3,750 shares and 2,262 shares of common stock, respectively, to its investor relations firm for services provided during the period.

On December 15, 2022, the Board of Directors approved an equity grant value at $ 200,000 in total to its five directors, which resulted in the issuance of a total of 52,085 shares of common stock to the five directors, valued on the grant date at $ 3.84 per share and issued on January 3, 2023.

On November 18, 2021, the Board of Directors approved an equity grant value at $ 210,000 in total to its six directors, which resulted in the issuance of a total of 19,644 shares of common stock to the six directors, valued on the grant date at $ 10.69 per share.

There were 13,096 common shares issued to four directors on November 18, 2021 and the remaining 6,548 shares of common shares were issued to the two remaining directors on January 1, 2022 .

Restricted Stock Awards Issued

As of March 31, 2023 and December 31, 2022, there were 416,316 RSAs included in the total issued and outstanding common stock.

Compensation expense is recognized straight line over the three-year vesting period.

A total of $ 0.3 million and $ 0.3 million of compensation expense was recorded for the three months ended March 31, 2023 and March 31, 2022, respectively, for the RSAs.

As of March 31, 2023, there was $ 2.3 million of total unrecognized compensation cost related to these unvested RSAs.

The compensation expense will be recognized on a straight-line basis over the three-year vesting period and the total unrecognized compensation is expected to be recognized over a weighted-average period of 2.20 years.

The components of total stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022 are as follows (rounded in millions):

Three Months Ended

Research and development expenses

General and administrative expenses

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On February 9, 2022, the Company entered into an agreement with We Don’t Have Time Inc.

(“WDHT”), an organization with a social media network platform dealing with the climate crisis, pursuant to which WDHT will provide a variety of climate-change related consulting services to the Company and the Company agreed to pay a monthly membership fee of $ 1,200 to WDHT through and including December 2022.

Sweta Chakraborty, a member of the Company’s Board of Directors, is also the President and Executive Board Member of WDHT.

For the three months and nine-months ended September 30, 2022, the Company incurred $ 3,600 and $ 10,800 , respectively, in dues paid to WDHT.

In addition, for the three months and nine-months ended September 30, 2022, the Company incurred $ 35,000 and $ 85,000 , respectively, in fees to WDHT to attend two conferences in which the Company participated with WDHT to promote the Company’s nuclear fuel.

Subsequent Events

Equity Transactions

Sales under the 2021 ATM that were made from October 1, 2022 to the date of filing were approximately 41,000 shares common stock that totaled net proceeds of approximately $ 0.2 million.

Increase in Authorized Common Shares

On October 27, 2022, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada, increasing the number of shares of common stock the Company is authorized to issue from 13,500,000 shares to 25,000,000 shares, with a par value of $ 0.001 per share.

(“WDHT”), an organization with a social media network platform dealing with the climate crisis, pursuant to which WDHT provides a variety of climate-change related consulting services to the Company and the Company pays a monthly membership fee of $ 1,200 to WDHT.

Chakraborty, a member of the Company’s Board of Directors, is also the CEO of WDHT’s US division.

For the three months ended March 31, 2023 and 2022, the Company incurred $ 3,600 in dues to WDHT.

In addition, for the three months ended March 31, 2022, the Company incurred $ 50,000 in fees to WDHT to attend conferences in which the Company participated with WDHT to promote the Company’s nuclear fuel.

FORWARD-LOOKING STATEMENTS

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dependence on strategic partners;

any adverse changes to our agreements or relationship with the U.S.

government and its national laboratories;

our ability to fund our future operations, including general corporate overhead and outside research and development costs, and continue as a going concern;

the demand for fuel for nuclear reactors, including small modular reactors, and our ability to attract new customers;

the demand for our fuel for nuclear reactors and our ability to attract customers;

our ability to manage the business effectively in a rapidly evolving market;

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the increased costs associated with metallization of our nuclear fuel;

uncertainties related to conducting business in foreign countries, including with respect to the Company’s intellectual property;

risks associated with the further spread and uncertainty of COVID-19, including the ultimate impact of COVID-19 on people, economies, our ability to access capital markets, the Company’s financial position, results of operations or liquidity;

uncertainties related to conducting business in foreign countries;

public perception of nuclear energy generally;

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changes in the political environment;

development and utilization of, and challenges to, our intellectual property;

the other risks identified in Item 1A.

Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Reports for the quarters ended March 31, 2022 and June 30, 2022.

development and utilization of, and challenges to, our intellectual property domestically and abroad;

the trading price of our securities is likely to be volatile, and purchasers of our securities could incur substantial losses and;

the other risks and uncertainties identified in Item 1A.

Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Most of these factors are beyond our ability to predict or control and you should not put undue reliance on any forward-looking statement.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements