What changed in this filing

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Item 9A. Controls and Procedures

2024-03-04 compared with 2023-03-30 · 306 added, 384 removed, 369 unchanged (65% of the section changed)

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Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022 (as such term is defined in Rule 13a-15(e) under the Exchange Act).

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023 (as such term is defined in Rule 13a-15(e) under the Exchange Act).

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and CFO, as appropriate to allow timely decisions regarding required disclosure.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based upon this evaluation, our management concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective due to the material weakness described below.

Management ’ s Report on Internal Control over Financial Reporting

Based upon this evaluation as of December 31, 2023, our disclosure controls and procedures were not effective due to the material weakness described below.

Management ’ s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, utilizing the criteria in the Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control-Integrated Framework (2013).

Based on its assessment, our management determined that, as of December 31, 2022, the Company’s internal control over financial reporting was not effective due to the material weakness described below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

In management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2022, management determined that there were control deficiencies concerning the accounting procedures that support the financial reporting process related to recording accounts payable invoices that were received and approved for payment, and such control deficiencies aggregated to a material weakness.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, utilizing the criteria in the Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control-Integrated Framework (2013).

Based on its assessment as of December 31, 2023, our management determined that the Company’s internal control over financial reporting was not effective due to the material weakness described below.

Management determined that there was a material weakness related to the design of our information technology general controls (ITGC) over logical access to key information systems used in the financial reporting process, resulting in certain segregation of duties conflicts.

Additionally, certain business process controls that are dependent on information from these systems were also not effective.

Remediation Plan

The Company’s management, with the oversight of the Audit Committee, has evaluated the material weakness described above and designed a remediation plan to address this material weakness.

The Company intends to remediate the material weakness by (i) implementing multiple reviews of the accounting mailbox where accounts payable invoices are received from vendors, which the multiple reviews of the accounting mailbox was first established in 2022 before the identification of the control deficiency (ii) multiple reviews of the weekly accounts payable schedules and activity reports from the Company’s accounting system, and (iii) contacting vendors on a quarterly basis regarding outstanding invoices.

The Company’s management, under the oversight of the Audit Committee, has undertaken measures to remediate these deficiencies.

This includes enhancing the design of logical access controls to ensure appropriate segregation of duties through improved internal documentation and monitoring activities.

Management began to implement these remedial steps during the fourth quarter of fiscal 2023 by removing privileged access.

The material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.

Notwithstanding the material weakness described above, there have been no restatements of prior period financial statements, and no changes in previously released financial results were required as a result of the material weakness.

Remediation of Previously Reported Material Weakness

As previously reported, we did not maintain effective controls over the review of accounts payable.

During 2023, we implemented remediation plans to address this material weakness by designing and implementing processes and controls over the timely identification, recording, and review of accounts payable.

Management has concluded, through testing, that these controls are designed and operating effectively as of December 31, 2023, and the material weakness has been effectively remediated.

Changes in Internal Control Over Financial Reporting

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OTHER INFORMATION

During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Directors and Executive Officers of the Registrant

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by Item 10 of Part III will be included in our Proxy Statement relating to the 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

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Information required by Item 11 of Part III will be included in our Proxy Statement relating to the 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholders

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by Item 12 of Part III will be included in our Proxy Statement relating to the 2024 Annual Meeting of Stockholders and is incorporated herein by reference.

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Notes to Consolidated Financial Statements

Report of BDO USA, LLP dated March 30, 2023 on the Company’s financial statements filed as a part hereof for the fiscal years ended December 31, 2022 and 2021.

Report of BDO USA, P.C.

dated March 4, 2024 on the Company’s financial statements filed as a part hereof for the fiscal years ended December 31, 2023 and 2022.

The independent registered public accounting firm’s consent with respect to this report appears in Exhibit 23 of this Annual Report on Form 10-K.

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1 to the At-the-Market Equity Offering Sales Agreement, dated May 28, 2019, by and between Lightbridge Corporation and Stifel, Nicolaus & Company, Incorporated (incorporated by reference to Exhibit 1.1 to the Form 8-K filed by the Company on April 9, 2021).

Articles of Incorporation of the Company, as amended through October 27, 2022.

Articles of Incorporation of the Company, as amended through October 27, 2022 (incorporated by reference to Exhibit 3.1 to the Form 10-K filed by the Company on March 30, 2023).

Amended and Restated Bylaws of the Company as amended through November 4, 2021 (incorporated by reference to Exhibit 3.1 to the Form 10-Q filed by the Company on November 8, 2021).

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333-218796, filed on June 16, 2017)

Amended Lightbridge Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix B to the definitive proxy statement filed on August 31, 2022).

Amended Lightbridge Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement filed on April 3, 2023).

Form of Non-Statutory Stock Option Agreement for Employees under the 2020 Omnibus Incentive Plan.

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(incorporated by reference to Exhibit 10.14 to the Form 10-K filed by the Company on March 25, 2021).

Form of Restricted Stock Award Agreement under the 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.14 to the Form 10-K filed by the Company on March 31, 2022).

Employment Agreement, dated August 8, 2018, between the Company and Seth Grae (incorporated by reference to Exhibit 10.2 to the Form 10-Q filed by the Company on August 9, 2018).

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Form of Indemnification Agreement (August 2018) (incorporated by reference to Exhibit 10.5 to the Form 10-Q filed by the Company on August 9, 2018).

Form of Restricted Stock Award Agreement under the 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.14 to the Form 10-K filed by the Company on March 31, 2022).

Strategic Partnership Project Agreement, dated September 27, 2022, between the Company and Battelle Energy Alliance, LLC.

Project Task Statement under the Strategic Partnership Project Agreement, dated December 9, 2022, between the Company and Battelle Energy Alliance, LLC.

Cooperative Research and Development Agreement, dated September 27, 2022, between the Company and Battelle Energy Alliance, LLC.

Project Task Statement under the Cooperative Research and Development Agreement, dated December 9, 2022, between the Company and Battelle Energy Alliance, LLC.

Strategic Partnership Project Agreement, dated September 27, 2022, between the Company and Battelle Energy Alliance, LLC(incorporated by reference to Exhibit 10.15 to the Form 10-K filed by the Company on March 30, 2023).

Project Task Statement under the Strategic Partnership Project Agreement, dated December 9, 2022, between the Company and Battelle Energy Alliance, LLC(incorporated by reference to Exhibit 10.16 to the Form 10-K filed by the Company on March 30, 2023).

Cooperative Research and Development Agreement, dated September 27, 2022, between the Company and Battelle Energy Alliance, LLC(incorporated by reference to Exhibit 10.17 to the Form 10-K filed by the Company on March 30, 2023).

Project Task Statement under the Cooperative Research and Development Agreement, dated December 9, 2022, between the Company and Battelle Energy Alliance, LLC(incorporated by reference to Exhibit 10.18 to the Form 10-K filed by the Company on March 30, 2023).

Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Form 10-K filed by the Company on March 15, 2016).

Consent of BDO USA, LLP.

Consent of BDO USA, P.C.

Power of Attorney (Included on the signature page hereto).

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Section 1350 Certifications.

Incentive Compensation Recovery Policy .

The following materials from Lightbridge Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline eXtensible Business Reporting Language (XBRL):

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DECEMBER 31, 2023 and 2022

Report of Independent Registered Public Accounting Firm ( BDO USA, LLP ;

Report of Independent Registered Public Accounting Firm ( BDO USA, P.C .;

Philadelphia, PA :

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Consolidated Statements of Operations

Consolidated Statements of Cash Flows

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Stockholders and Board of Directors

Lightbridge Corporation

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Classification of Research and Development Expenses

As described in Note 1 to the consolidated financial statements, the Company records research and development expenses as incurred, which consists of wages and related payroll benefits, non-cash stock-based compensation, materials, testing, consulting and other outside research and development services, related to the development of the Company’s nuclear fuel technology.

During the year ended December 31, 2022, the Company incurred approximately $0.7 million of research and development expenses.

We identified the classification of research and development expenses as a critical audit matter.

The principal consideration for our determination is the Company’s methodology for classifying various operating expenses as research and development expenses.

Auditing this classification was especially challenging given the significant audit effort and the extent of audit evidence required.

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Research and Development Expenses

As described in Note 1 to the consolidated financial statements, the Company records research and development expenses as incurred, which consist primarily of wages and related payroll benefits, non-cash stock-based compensation, materials, testing, consulting and other outside research and development services, related to the development of the Company’s nuclear fuel technology.

During the year ended December 31, 2023, the Company recorded approximately $1.9 million of research and development expenses.

We identified the evaluation of research and development expenses as a critical audit matter due to the management judgment involved in:

(i) determining whether expenses incurred are related to the research and development activities, and (ii) the methodology used to allocate certain expenses incurred related to wages, payroll benefits, and non-cash stock-based compensation to research and development expenses.

Auditing these elements was especially challenging due to the nature and extent of audit effort and evidence required to address the matter.

The primary procedures we performed to address this critical audit matter included:

Testing a sample of research and development expenses.

Performing inquiries of the project manager to determine the nature of expenses.

Testing management’s allocation of wages, payroll benefits, and non-cash stock-based compensation by (i) recalculating the percentage of wages, payroll benefits and non-cash stock-based compensation allocated to research and development expenses, (ii) testing the completeness and accuracy of data used in determining the allocation.

/s/ BDO USA, LLP

Testing a sample of research and development expenses by:

(i) obtaining and inspecting underlying supporting documents, and (ii) inquiring of project manager to determine whether expenses incurred are related to the research and development activities.

Testing management’s allocation of wages, payroll benefits, and non-cash stock-based compensation by:

(i) recalculating the percentage of wages, payroll benefits and non-cash stock-based compensation allocated to research and development expenses, and (ii) testing the completeness and accuracy of data used in determining the allocation.

/s/ BDO USA, P.C.

We have served as the Company's auditor since 2015.

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Total Current Assets

Prepaid project costs

Prepaid project costs and other long-term assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Other Operating Income

Distribution from joint venture

Contributed services - research and development

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Interest income

Foreign currency transaction gain

Total Other Income

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$ ( 7,497,857 )

Accumulated Preferred Stock Dividend

Additional deemed dividend on preferred stock due to the beneficial conversion feature

Deemed dividend upon induced conversions of Series A and Series B Preferred Stock to common stock

( 3,509,328 )

Net Loss Attributable to Common Shareholders

$ ( 7,497,857 )

$ ( 12,036,704 )

Net Loss Per Common Share

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LIGHTBRIDGE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

Balance - January 1, 2022

$ 161,772,641

$ ( 136,991,273 )

Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock awards

Shares issued - registered offerings - net of offering costs

Shares issued to consultant & directors for services

Stock-based compensation

( 7,497,857 )

Balance - December 31, 2022

$ 173,595,385

$ ( 144,489,130 )

Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock awards

Shares issued - registered offerings - net of offering costs

Shares issued to consultant & directors for services

Stock-based compensation

( 7,908,646 )

Balance - December 31, 2023

$ 181,295,125

$ ( 152,397,776 )

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

LIGHTBRIDGE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

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$ ( 7,497,857 )

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

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

Common stock issued for services

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Prepaid expenses and other current assets

Prepaid project costs

Prepaid project costs and other long-term assets

Accounts payable and accrued liabilities

Accrued legal settlement costs

( 4,200,000 )

Net Cash Used in Operating Activities

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Net proceeds from the issuances of common stock

Net proceeds from the exercise of stock options

Payments for taxes related to net share settlement of equity awards

Net Cash Provided by Financing Activities

Net Increase in Cash and Cash Equivalents

Net (Decrease) Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

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Non-Cash Financing Activities:

Accumulated preferred stock dividend

Exchanges of preferred stock Series A and B to common stock

Payment of accrued liabilities with common stock

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LIGHTBRIDGE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Balance - January 1, 2022

$ 161,772,641

$ ( 136,991,273 )

Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock awards

Shares issued - registered offerings - net of offering costs

Shares issued to consultant & directors for services

Stock-based compensation

( 7,497,857 )

Balance - December 31, 2022

$ 173,595,385

$ ( 144,489,130 )

Preferred Stock

Balance - January1, 2021

$ 146,353,232

$ ( 129,155,608 )

Exchanges of Series A & B Preferred Stock to Common Stock

( 2,666,667 )

Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock units

Common stock issued pursuant to restricted stock awards

Common stock issued - registered ATM offerings - net of offering costs

Common stock issued through the exercise of options

Common stock issued to directors and consultants for services

Stock-based compensation

( 7,835,665 )

Balance - December 31, 2021

$ 161,772,641

$ ( 136,991,273 )

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

LIGHTBRIDGE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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 (subsequently and collectively referred to as “we” or the “Company”).

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

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.

Basis of presentation

Basis of Consolidation

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These wholly-owned subsidiaries are inactive.

All significant intercompany transactions and balances have been eliminated in consolidation.

All intercompany transactions and balances have been eliminated in consolidation.

Segment Reporting

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting.

The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance.

We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources considering our core data, which is managed centrally on a company-wide basis and evaluates our financial results.

Because we have a single reportable segment, all required financial segment information can be found directly in the Consolidated Financial Statements.

We evaluate the performance of our reporting segment based on operating expenses and will evaluate additional segment disclosure requirements if and when the Company expands its operation.

Use of Estimates and Assumptions

The preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

We evaluate the performance of our reporting segment based on our operating expenses.

Basis of Presentation and Use of Estimates and Assumptions

The preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Significant Estimates

These accompanying consolidated financial statements include some amounts that are based on management’s best estimates and assumptions.

The most significant estimates relate to its valuation of stock options, the valuation allowance on deferred tax assets and contingent liabilities.

It is reasonably possible that these above-mentioned estimates and others may be adjusted as more current information becomes available, and any adjustment could be significant in future reporting periods.

The compensation expense related to stock options may have been a materially different amount had other reasonable assumptions been used that differed from the reasonable assumptions made by management.

There were no significant estimates at December 31, 2023 and 2022.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants.

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.

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.

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

This method uses valuation techniques to convert future amounts to a single present amount.

The measurement is based on the value indicated by current market expectations with respect to the future amounts.

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 unaffiliated market participants at the measurement date.

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 financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities.

The carrying amounts of cash and cash equivalents, accounts payable and accrued liabilities are considered to be representative to their respective fair values because of the short-term nature of those instruments.

Cash equivalents which consists of U.S.

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

treasury bills at December 31, 2022), accounts payable and accrued liabilities are considered to be a Level 1 measurement, 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.

The following tables summarize the valuation of the Company’s cash equivalents that fall within the fair value hierarchy (in millions) at December 31, 2022.

There were no cash equivalents at December 31, 2023.

Treasury Bills

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 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 will need additional funding and /or in-kind support via 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 and commercialization of its fuel products.

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 research and development 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, risks related to the research and development of our nuclear fuel, regulatory approval of the Company’s fuel, 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 the Company’s 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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treasury bills to maturity.

treasury bills totaled approximately $ 19.9 million and $ 9 .0 million at December 31, 2022 and 2021, respectively.

The remaining $ 9.0 million and $ 15.7 million at December 31, 2022 and 2021, respectively, are on deposit with two notable financial institutions.

treasury bills totaled zero and $ 19.9 million as of December 31, 2023 and 2022, respectively.

The remaining $ 9.0 million at December 31, 2022, were on deposit with two prominent financial institutions.

Contributed services - Research and Development

The Company was awarded a grant in 2019 and a second grant in 2021 from the United States Department of Energy (DOE) which represented contributed services to further the Company’s R&D activities.

The Company concluded that its government grants were not within the scope of the revenue recognition standard ASC Topic 606 as they did not meet the definition of a contract with a customer.

The Company was awarded a grant in 2021 from the United States Department of Energy (DOE), which represented contributed services to further the Company’s R&D activities.

The Company concluded that its government grants were not within the scope of ASC Topic 606, Revenue Recognition , as they did not meet the definition of a contract with a customer.

Additionally, the Company concluded that the grants met the definition of a contribution, as the grants were a non-reciprocal transaction.

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.

As such, the Company determined that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition (Subtopic 958-605), 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).

Subtopic 958-605 requires nonfinancial assets, which includes services, such as the R&D services provided under the Gateway for Accelerated Innovation in Nuclear (GAIN) vouchers described in Note 6.

Research and Development Expenses, 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 R&D expense, rather than depicting contributed services - research and development as a reduction of R&D expense.

The fair value of contributed services was determined by the cost of professional time and materials, which were charged by the subcontractor who fulfilled the services contributed under the grant award.

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 approximately $ 0.4 million for the year ended December 31, 2022 and approximately $ 0.5 million for the year ended December 31, 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 2022 and 2021 and no impairment of the trademarks was identified.

The Company performs an impairment test in the fourth quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred.

For the fourth quarter 2023 test, the Company applied the FASB's accounting guidance which allows the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may be required to test trademarks for impairment.

Based on the qualitative assessments performed, the company concluded that it was more likely than not that the fair value of the Trademarks substantially exceeded its carrying value and therefore, further quantitative analysis was not required.

As a result, no impairment was recorded.

As of December 31, 2023 and December 31, 2022, the carrying value of trademarks was approximately $ 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.

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.

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

The Company has only one lease for office rent and the lease is for a term of 12 months without renewal options (See Note 5.

Commitments and Contingencies).

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

Income taxes are accounted for using the asset and liability method.

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The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In accordance with FASB ASC 740, Accounting for Income Taxes, the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained by a taxing authority.

In accordance with Financial Accounting Standards Board (FASB) ASC 740, Accounting for Income Taxes , the Company reflects in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered ‘more-likely-than-not’ that the position taken will be sustained on its technical merits by a taxing authority upon examination.

As of December 31, 2023 and 2022, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items.

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As of December 31, 2023 and 2022, the Company had no such accruals.

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.

Research and Development Expenses

Research and development expenses are expensed when incurred.

Research and development expenses consist primarily of wages and related payroll benefits, non-cash stock-based compensation, materials, testing, consulting, and other third-party research and development services, related to the development of the Company’s nuclear fuel.

Advance payments for goods or services for future research and development activities are deferred and expensed as the goods are delivered or the related services are performed.

Stock-Based Compensation

The stock-based compensation expense incurred by Lightbridge for employees and directors in connection with its equity incentive plan is based on the employee model of ASC 718, and the fair value of any stock options granted is measured at the grant date.

In accordance with ASU 2018-07, Compensation - Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting, options granted to our consultants are accounted for in the same manner as options issued to employees.

The stock-based compensation expense incurred by the Company for employees and directors in connection with its equity incentive plan is based on the employee model of ASC 718, and the fair value of any stock options granted is measured at the grant date.

Options or common stock granted to consultants for services performed are accounted for in the same manner as options and stock issued to employees for services.

Awards with service-based vesting conditions only:

Expense is recognized on a straight-line basis over the requisite service period of the award.

Awards with performance-based vesting conditions:

Expense is not recognized until it is determined that it is probable the performance-based conditions will be met.

When achievement of a performance-based condition is probable, a catch-up of expense is recorded as if the award had been vesting on a straight-line basis from the award date.

The award will continue to be expensed on a straight-line basis over the requisite service period until a higher performance-based condition is met, if applicable.

Awards with market-based vesting conditions:

Expense is recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present.

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.

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.

The Company uses a Black-Scholes pricing model to determine the fair value of stock options on the measurement date of the grant for service-based vesting conditions.

The Company estimates forfeitures at the time of grant and revises the estimate, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

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 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 (“RSU”) or Restricted Stock Awards (“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.

Shares that are issued to employees upon exercise of the stock options or vesting of Restricted Stock Units (RSUs) or Restricted Stock Awards (RSAs) grants may be issued net of the number of shares with a fair value equal to the amount required to satisfy applicable tax withholding requirements.

The Company grants RSAs, which is an award of common shares that have full voting rights and dividend rights (with dividends paid upon vesting of the RSA) but are restricted regarding the sale or transfer before vesting.

These restrictions lapse as the award vests.

The shares are forfeited and returned to the Company if they do not vest.

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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.

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.

Research and Development Costs

Research and development expenses are expensed when incurred.

Research and development expenses consist primarily of wages and related payroll benefits, non-cash stock-based compensation, materials, testing, consulting and other outside research and development services, related to the development of the Company’s nuclear fuel.

Advance payments for goods or services for future research and development activities are deferred and expensed as the goods are delivered or the related services are performed.

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 Company adopted this guidance on January 1, 2022 and it did not have a material impact on our consolidated financial statements.

The number of RSAs to be granted are determined by the closing stock price on the date of the RSAs grant.

Comprehensive Loss

Comprehensive loss is defined as a change in equity of a business enterprise during a period resulting from transactions from nonowner sources.

There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company's comprehensive loss was the same as its reported net loss.

Recently Adopted Accounting Pronouncement

The FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326).

This standard requires a financial asset to be presented at the net amount expected to be collected.

The financial assets of the Company in scope of ASU 2016-13 will primarily be accounts receivable.

The Company will estimate an allowance for expected credit losses on accounts receivable that result from the inability of customers to make the required payments.

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

The Company adopted this guidance on January 1, 2023, and it did not have a material impact on its results of operations, financial position, and disclosures because the Company had no outstanding accounts receivable on which to apply this new standard.

Recent Accounting Pronouncements Not Yet Adopted

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.

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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;

(2) revises the scope exception from derivative accounting in Subtopic 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.

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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.

The FASB issued ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326).

This standard requires a financial asset to be presented at the net amount expected to be collected.

The financial assets of the Company in scope of ASU 2016-13 will primarily be accounts receivable.

The Company will estimate an allowance for expected credit losses on accounts receivable that result from the inability of customers to make required payments.

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.

Immaterial Revision

An immaterial revision was made during the course of preparing the Company’s consolidated financial statements as of and for the year ended December 31, 2022, after the Company completed a preliminary Internal Revenue Code Section 382 analysis of its historical net operating loss carryforward amounts.

As a result, a portion of the prior years’ net operating loss carryforwards were limited and incorrectly presented in the deferred tax table within Note 7.

Income Taxes.

The Company will adopt this guidance January 1, 2024 and does not expect the adoption to have a material impact on its results of operations, financial position, and disclosures because the Company does not have any transactions or instruments to which this standard applies.

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07).

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

The ASU is effective for us January 1, 2024 and will be applied retrospectively.

Early adoption is permitted.

This ASU will likely result in additional required disclosure when adopted.

The Company is currently evaluating the provisions of this ASU and the impact on its consolidated financial statements and related disclosures.

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.

Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, warrants and convertible preferred shares (see Note 8.

Stockholders’ Equity and Stock-Based Compensation).

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 share data):

Net loss attributable to common stockholders

Weighted-average common shares outstanding

Basic net loss per share

Net loss attributable to common stockholders, basic

Effect of dilutive securities

Net loss, diluted

Weighted average common shares outstanding - basic

Potential common share issuances:

Incremental dilutive shares from equity instruments (treasury stock method)

Weighted-average common shares outstanding

Diluted net loss per share

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.

For the years ended December 31, 2023 and 2022, there is no difference in the number of shares used to calculate basic and diluted shares outstanding as the inclusion of the potentially dilutive securities would be antidilutive.

The following outstanding securities have been excluded from the computation of diluted weighted shares outstanding for the years noted below, as they would have been anti-dilutive due to the Company’s losses at December 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.

Warrants outstanding

Stock options outstanding

RSAs outstanding

Restricted stock awards outstanding

Prepaid Project Costs

In 2022, the Company entered into agreements with Idaho National Laboratory (INL), in collaboration with the U.S.

Department of Energy (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”) as of December 31, 2022.

Prepaid Project Costs – Short-Term

On October 16, 2023, the Company engaged RATEN ICN in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in Canada Deuterium Uranium (CANDU) reactors.

The total price of approximately $ 0.2 million shall be payable in three installments, including an advance payment of $ 0.1 million, and total of a milestone payment and a final payment of approximately $0.1 million.

The Company advanced payment for future project work totaling approximately $ 56,000 and approximately 50 % of this amount was expensed at December 31, 2023 and the remaining amount was recorded under Prepaid expenses and other current assets.

On December 5, 2023, the Company entered into an agreement with Centrus Energy to conduct a front-end engineering and design (FEED) study to add a dedicated Lightbridge Pilot Fuel Fabrication Facility (LPFFF) at the American Centrifuge Plant in Piketon, Ohio.

The work is expected to be completed in 2024.

The Company advanced payment for future project work totaling approximately $ 0.1 million and approximately 23 % of this amount was expensed at December 31, 2023 and the remaining amount was recorded under Prepaid expenses and other current assets.

Prepaid Project Costs – Long-Term

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

At the time of signing, 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.

In May 2023, the Company and INL modified the agreements to extend the contract term to May 2029, aligning it with the duration of the irradiation testing and increasing the advanced payments by $ 0.1 million.

The prepaid project costs were $ 0.5 million as of December 31, 2023 and $ 0.3 million as of December 31, 2022 under Other Assets - Prepaid project costs and other long-term assets.

Accounts Payable and Accrued Liabilities

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Trade payables

Accrued directors’ fee and consulting expenses

Accrued director fees, legal and consulting expenses

Commitments and Contingencies

The Company had total contractual commitments of approximately $ 3.6 million for research and development work as of December 31, 2023 for the following three R&D projects.

Project Task Statements - INL

The Company had approximately $ 2.9 million in outstanding project task statement (PTS) commitments to BEA relating to the R&D work being conducted under the Strategic Partnership Project Agreement (SPP) and Cooperative Research and Development Agreement (CRADA) at INL.

Performance of work under these agreements may be terminated at any time by either party, without any liability, after the effective date of termination, upon giving a thirty-day written notice under the SPP and a sixty-day written notice under the CRADA, to the other party.

In the event of termination, the Company shall be responsible for 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.

Engineering Study of Lightbridge Fuel™ for use in CANDU reactors

On October 16, 2023, the Company engaged RATEN ICN in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in CANDU reactors.

As of December 31, 2023, the Company has approximately $ 0.2 million in remaining outstanding project commitments to RATEN ICN.

FEED Study with Centrus Energy for a Lightbridge Pilot Fuel Fabrication Facility

On December 5, 2023, the Company entered into an agreement with Centrus Energy to conduct a FEED study to add a dedicated LPFFF at the American Centrifuge Plant in Piketon, Ohio.

The work is expected to be completed in 2024.

The Company had approximately $ 0.5 million in remaining outstanding project commitments to Centrus Energy for the FEED study at December 31, 2023.

Operating Leases

The Company leased office space for a 12 -month term from January 1, 2024 through December 31, 2024 with a monthly payment of approximately $ 8,000 .

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

The future minimum lease payments required under the non-cancellable operating leases for 2024 total approximately $ 0.1 million.

Total rent expense for the year ended December 31, 2023 and 2022 was approximately $ 0.1 million.

Project Task Statements (Purchase Orders)

For the year ended December 31, 2022, the Company had approximately $ 3.4 million in outstanding project task statement obligations 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).

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, the 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.

It is anticipated that the initial phase of work under the two agreements will culminate in irradiation testing in the Advanced Test Reactor (ATR) of fuel samples using enriched uranium supplied by the DOE.

Research and Development Expenses

In 2022, Lightbridge entered into agreements with BEA, to support the development of Lightbridge Fuel™.

These framework agreements use an innovative structure that consists of an “umbrella” Strategic Partnership Project Agreement and an “umbrella” Cooperative Research and Development Agreement, 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 PTSs.

The initial phase of work under the two agreements will culminate in irradiation testing in the Advanced Test Reactor (ATR) of fuel samples using enriched uranium supplied by the DOE.

The initial phase of work aims to generate irradiation performance data for Lightbridge’s delta-phase uranium-zirconium alloy relating to various thermophysical properties.

The data will support fuel performance modeling and regulatory licensing efforts for the commercial deployment of Lightbridge Fuel.

It is anticipated that subsequent phases of work under the two umbrella agreements will include post-irradiation examination of the irradiated fuel samples, loop radiation testing in the ATR, and post-irradiation examination of one or more uranium-zirconium fuel rodlets, as well as transient experiments in the Transient Reactor Test Facility at INL.

The data, which will be obtained during post-irradiation examination work, will support fuel performance modeling and regulatory licensing efforts for the commercial deployment of Lightbridge Fuel™.

For the year ended December 31, 2023, the Company recorded $ 0.8 million in research and development expenses associated with INL.

Romania Feasibility Study

On October 16, 2023, the Company engaged RATEN ICN in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in CANDU reactors.

The total price of approximately $ 0.2 million is payable in three installments, including an advance payment of $ 0.1 million and an interim milestone payment and final payment totaling approximately $0.1 million.

For the year ended December 31, 2023, the Company recorded $ 27,000 in research and development expenses associated with RATEN ICN.

Centrus Feed Study

On December 5, 2023, the Company entered into an agreement with Centrus Energy to conduct a FEED study to add a dedicated Lightbridge pilot fuel fabrication facility (LPFFF) at the American Centrifuge Plant in Piketon, Ohio.

The work began in 2023 and is expected to be completed in 2024 at a cost of approximately $ 0.5 million.

For the year ended December 31, 2023, the Company recorded $ 23,400 in research and development expenses associated with this FEED study.

DOE GAIN Voucher

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 was 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 (Battelle), Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE.

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

PNNL has completed a contract extension with the Company for one month to complete the final report related to this PNNL GAIN voucher in December 2022.

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

For the years ended December 31, 2022 and 2021, the Company recorded $ 0.4 million and $ 0.1 million of contributed services - research and development, respectively.

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

On December 19, 2019, the Company was awarded its first voucher from the DOE’s GAIN program to support development of Lightbridge Fuel™ in collaboration with INL.

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

On April 22, 2020, the Company entered into a CRADA with BAE, the operating contractor of INL, in collaboration with the DOE.

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

The voucher award could 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 formed 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 BAE, related to the work done under the GAIN voucher.

For the year ended December 31, 2021, the Company recorded approximately $ 0.4 million of contributed services - research and development for work that was completed that caused the DOE to incur payment obligations related to the GAIN voucher.

The Company had no payment obligations related to the GAIN voucher.

This amount was recorded as contributed services - research and development in the Other Operating Income section of the consolidated statement of operations and the corresponding amount was recorded as research and development expenses.

For the years ended December 31, 2023 and 2022, the Company recorded $ 31,000 and $ 0.4 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 R&D expenses for the work that was completed by the DOE contractor.

The R&D services provided under the GAIN vouchers were 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 BEA and 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.

Revision of Previously Issued Financial Statements

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

Total R&D expenses, including internal costs and other outside R&D costs, for the years ended December 31, 2023 and 2022 were $ 1.9 million and $ 0.7 million, respectively.

The Company’s ability to utilize its net operating loss (NOL) carryforwards may be substantially limited due to ownership changes that have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions.

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As a result of these identified ownership changes, the portion of NOL carryforwards attributable to the pre-ownership change periods are subject to a substantial annual limitation under Section 382 of the Code.

A conclusive Section 382 study had not been performed due to the Company’s current projections of the lack of taxable income for the foreseeable future.

The Company has adjusted its previously reported NOL carryforwards to address the impact of these 382 ownership changes.

This resulted in a reduction of available total federal and state NOL carryforwards of $ 109 million, as originally reported at December 31, 2021, to $ 47 million (post-2017 NOLs) at December 31, 2022.

The write-down of $ 62 million (pre-2018 NOLs) reduced the net operating losses line as of December 31, 2021 within gross deferred tax assets, as previously disclosed, by $ 15.9 million, with a corresponding decrease in the valuation allowance.

A conclusive Section 382 study had not been performed for December 31, 2023 due to the Company’s current projections of the lack of taxable income for the foreseeable future.

NOLs created in years beginning after 2017 now only offset 80% of taxable income but no longer have a 20-year expiration.

Since the limitation affected the prior period, the Company has determined that its December 31, 2021 tax footnote presentation overstated the gross deferred tax asset and corresponding valuation allowance by $ 15.9 million.

However, there was no net impact to the net deferred tax asset and tax expense as the decrease in the net operating loss was offset completely by a corresponding adjustment to the Company’s overall valuation allowance.

For comparative purposes, the Company’s prior year tax footnote has been revised to reflect the adjustment to the net operating losses and valuation allowance.

The revision had no effect on the previously reported balance sheets, statements of operations, cash flows and stockholders’ equity.

The Company’s revised deferred tax asset disclosures are below:

Deferred tax assets consisted of the following (rounded in millions):

December 31, 2021

As Previously Reported

December 31, 2021

Stock-based compensation

Patent impairment provision

Net operating loss carry-forwards

Research and development tax credits

valuation allowance

The 2023 and 2022 annual effective tax rate is estimated to be 25 % for the combined U.S.

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As of December 31, 2023 and 2022, there were no tax contingencies or unrecognized tax positions recorded.

On August 16, 2022, President Biden signed the Inflation Reduction Act (the “IRA”).

The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as an excise tax on stock repurchases.

Both provisions are effective for tax years beginning after December 31, 2022.

The Company is in the process of evaluating the IRA but does not expect it to have a material impact on the Company’s consolidated financial statements.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting, and the amounts recognized for income tax purposes.

The significant components of deferred tax assets (at an approximate 25 % effective tax rate) as of December 31, 2022 and 2021, respectively, are as follows.

The significant components of deferred tax assets (at an approximate 25 % total effective tax rate, consisting of a 21 % effective tax rate for Federal and a 4 % effective tax rate for the state) as of December 31, 2023 and 2022, respectively, are as follows.

The reconciliation of federal statutory income tax rate to the effective income tax rate was as follows:

Book income at federal statutory rate, 21%

State taxes, net of federal benefit

Change in valuation allowance

Permanent difference

True-Ups, Stock-based compensation and Other

Deferred tax assets consisted of the following (rounded in millions):

December 31, 2022

December 31, 2021

Stock-based compensation

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Research and development tax credits

Total deferred tax asset

valuation allowance

The Company has NOL carryforwards for federal and state tax purposes of approximately $ 54 million at December 31, 2022, that is potentially available to offset future taxable income.

For financial reporting purposes, no deferred tax asset was recognized because as of December 31, 2022 and 2021, management currently estimates that it is more likely than not that substantially all of the deferred tax assets, the majority of which are NOLs, will be unused.

Net deferred tax asset

The Company has NOL carryforwards for federal and state tax purposes of approximately $ 60 million at December 31, 2023 and $ 54.4 million at December 31, 2022, that is potentially available to offset future taxable income.

There were no deferred tax liabilities at December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the Company had federal research and development credit carry-forwards of approximately $ 0.3 million.

The federal research and development credit carry-forwards have a 20-year carry-forward period and expire from 2036 to 2040 .

The Company’s NOL carryforwards included the NOL from 2018 (post-2017) to current reporting year and all have an unlimited carryforward period.

For financial reporting purposes, no deferred tax asset was recognized because as of December 31, 2023 and 2022, management currently estimates that it is more likely than not that substantially all the deferred tax assets, the majority of which are NOLs, will be unused.

The increase in the total valuation allowance for the years ended December 31, 2023 and 2022 was approximately $ 1.9 million and $ 2.5 million, respectively.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences are deductible.

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and State statutory combined tax rates of approximately 25 % and the amount recorded in the accompanying consolidated financial statements is as follows (rounded in millions):

December 31, 2022

December 31, 2021

Tax benefit at U.S.

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Tax benefit at state statutory rates

Tax benefit from federal and state R&D tax credits

Increase in valuation allowance

Total provision for income tax benefit

Uncertain Tax Positions

We file income tax returns in the U.S.

federal jurisdiction and Virginia.

The tax years 2018 through 2022 remain subject to examination by the appropriate governmental agencies.

At December 31, 2023 and 2022, the Company had no unrecognized tax benefits.

As of December 31, 2022 and 2023, we did not accrue interest and penalties.

Recent Change in U.S.

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The 2017 Tax 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 research and development 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 research and development expenses are significant and the Company expects to continue to generate losses for tax purposes.

Capitalized R&D expenses 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 the 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 taxes as a result of this tax law change as the remaining operating expenses, after excluding research and development expenses are significant and the Company expects to continue to generate losses for tax purposes.

Stockholders’ Equity and Stock-Based Compensation

On October 27, 2022, at the Company’s annual shareholder meeting, the shareholders’ approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of common stock from 13,500,000 shares to 25,000,000 shares and an amendment to the Lightbridge Corporation 2020 Omnibus Incentive Plan to increase the number of shares of common stock available for issuance under this Incentive Plan from 650,000 shares to 1,100,000 shares.

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

At December 31, 2023, the Company had 13,698,274 common shares outstanding (including outstanding RSAs totaling 557,688 shares).

Also outstanding were stock options relating to 510,787 shares of common stock, all totaling 14,209,061 shares of common stock and all common stock equivalents, potentially outstanding at December 31, 2023.

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

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

At December 31, 2021, the Company had 9,759,223 common shares outstanding (including outstanding restricted stock awards 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.

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.

At-the-Market (ATM) Offerings

On May 28, 2019, the Company entered into an at-the-market 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.

Under this agreement, the Company pays Stifel a commission equal to 4.0% of the aggregate gross proceeds of any sales of common stock under the agreement.

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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 Securities and Exchange Commission 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.

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

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

On March 25, 2021, the Company filed a shelf registration statement on Form S-3, registering the sale of up to $75.0 million of the Company’s securities, which registration statement was declared effective on April 5, 2021 and expires on April 5, 2024.

On April 4, 2023, the Company filed a prospectus supplement with the amount of the Company securities available for issuance totaling $17.9 million with $11.9 million available for future share issuances as of December 31, 2023 .

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

The Company sold approximately 1.9 million shares, under the ATM for the year ended December 31, 2022 resulting in net proceeds of approximately $ 11.0 million.

The Company sold approximately 2.0 million shares under the ATM for the year ended December 31, 2021 resulting in net proceeds of approximately $ 14.8 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 December 31, 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.

Stock-based Compensation

The Company sold 1,492,148 shares under the ATM for the year ended December 31, 2023 resulting in net proceeds of $ 6.4 million (stock issuance costs were $ 0.4 million).

The Company sold 1,855,085 shares under the ATM for the year ended December 31, 2022 resulting in net proceeds of $ 11.0 million (stock issuance costs were $ 0.5 million).

Stock Option Plan

2020 Equity Incentive Plan

On March 9, 2020, the Board of Directors adopted the Company’s 2020 Omnibus Incentive Plan (the 2020 Plan).

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.

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.

The total number of shares of common stock available for issuance under the 2020 Plan is 1,800,000 shares with 803,467 shares available for future issuance at December 31, 2023.

Stock Options

Stock options issued to the Company’s employees, directors and consultants are summarized as follows for the year ended December 31, 2023:

Number of Options

Weighted Average Exercise Price

Outstanding, December 31, 2022

Outstanding, December 31, 2023

Vested and expected to vest, December 31, 2023

Options exercisable, December 31, 2023

During the year ended December 31, 2023, the Company issued 35,482 stock options to two consultants.

These options were assigned a weighted average fair value of $ 3.98 per share (total fair value of $ 75,000 ).

During the year ended December 31, 2021, the Company issued 58,164 stock options to consultants.

The 2021 options issued to the consultants of the Company were assigned a weighted average fair value of $ 2.58 per share (total fair value of $ 150,000 ).

These options were assigned a fair value of $ 1.77 per share.

For the year ended December 31, 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 were used in the Black-Scholes pricing model:

For expected volatility, we have concluded that our historical volatility over the option’s expected holding term provides the most reasonable basis for this estimate.

For the risk-free interest rate, we use U.S.

Treasury Note rates which mature at approximately the same time as the option’s expected holding term or option life determined by using the simplified method.

We recognize forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur.

The estimated future forfeiture rates, based on the historical forfeiture rates, which were not significant, were zero.

The intrinsic value is calculated as the difference between the fair value of the Company's common stock and the exercise price of the stock options.

The fair value of the Company's common stock is $ 3.21 and $ 3.89 per share at December 31, 2023 and 2022, respectively.

As of December 31, 2023, total unrecognized compensation cost related to option awards was $ 41,600 , which is expected to be recognized over a remaining weighted-average vesting period of 2.0 years.

Consultants’ Stock Issuances

For the years ended December 31, 2023 and 2022, the Company issued 13,325 shares (with stock prices ranging from $ 4.00 to $ 5.82 per share) and 10,565 shares of common stock (with stock prices ranging from $ 4.56 to $ 8.35 per share), respectively, to its investor relations firm for services provided during the years, recorded to general and administrative expenses.

The total stock-based compensation expense recorded for these share issuances was $ 60,000 for each year with a weighted average grant date fair value of $ 4.50 per share.

Directors’ Stock Issuances

On November 20, 2023, the Board of Directors approved an equity grant valued at $ 240,000 (included in accrued liabilities and general and administrative expenses) in total to its six directors, which resulted in granting a total of 60,456 shares of common stock, valued on the grant date at $ 3.97 per share, which vested on January 2, 2024.

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

Restricted Stock Awards

The following summarizes the Company’s restricted stock award activity and the RSA outstanding:

Grant Date Fair Value

Outstanding, December 31, 2022

Awards granted

Awards vested

Awards forfeited

Outstanding, December 31, 2023

The intrinsic value is calculated as the fair value of the Company's common stock.

The fair value of the Company's common stock is $ 3.21 and $ 3.89 per share at December 31, 2023 and 2022, respectively.

The fair value of the RSAs vested in 2023 was $ 0.6 million.

As of December 31, 2023, all the outstanding restricted stock units are unvested.

As of December 31, 2023, total unrecognized compensation cost related to restricted stock units was $ 2.6 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.1 years.

2023 Transactions

On May 3, 2023, the Board of Directors approved a RSA equity grant valued at $ 120,000 to one new officer of the Company, which resulted in the issuance of a total of 35,088 shares of common stock to the new officer, valued on the grant date at $ 3.42 per share and issued on May 3, 2023.

These RSAs vest annually in equal installments over three years.

These 35,088 shares were included in the total outstanding common shares at December 31, 2023 and compensation expense will be recognized straight line over the three-year vesting period .

On November 20, 2023, the Board of Directors approved a RSA equity grant of approximately $ 1.1 million, which equated to 266,011 RSAs granted to all of its employees and two consultants, valued at the stock price on the grant date of $ 3.97 per share.

These RSAs awards vest annually in three equal installments on the grant date anniversary.

On November 18, 2023, 62,864 of the total 188,588 RSAs that were granted on November 18, 2021 vested.

These RSAs vest annually with a three-year straight line vesting period .

The Company withheld 21,854 common shares to make payments for withholding taxes of $0.1 million on these vested shares.

The Company issued a total of 41,010 shares of common stock, net of this share settlement for the taxes due and paid upon the vesting of these RSAs to its employees.

The common shares withheld became available for reissuance under the 2020 Plan.

On December 15, 2023, 96,863 of the total 290,590 RSAs that were granted on December 15, 2022 vested.

These RSAs vest annually with a three-year straight line vesting period .

The Company withheld 38,746 common shares to make payments for withholding taxes of $0.1 million on these vested shares.

The Company issued a total of 58,117 shares of common stock, net of this share settlement for the taxes due and paid upon the vesting of these RSAs, to its employees.

The common shares withheld became available for reissuance under the 2020 Plan.

2022 RSA Transactions

On December 15, 2022, the Board of Directors approved an equity grant of approximately $ 1.4 million, which equaled a total of 290,590 RSAs to all its employees and two consultants, valued at the stock price on the grant date of $ 4.71 per share.

These RSAs awards vest annually in three equal installments on the grant date anniversary.

RSA Summary – 2023 and 2022

As of December 31, 2023 and 2022, there were 557,688 and 416,316 RSAs included in the total issued and outstanding common stock, respectively.

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

A total of $ 1.2 million and $ 0.7 million of compensation expense was recorded for the year ended December 31, 2023 and 2022, respectively, for the RSAs.

Stock-Based Compensation Expense

Stock Options

The following assumptions were used in the Black-Scholes pricing model to determine the fair value of stock options granted:

Expected volatility

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Dividend yield rate

Weighted average years

Expected term

Closing price per share – common stock

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$ 5.93 to $ 6.27

Stock options issued to the Company’s employees, directors and consultants are summarized as follows for the year ended December 31, 2022:

Weighted Average Exercise Price

Weighted Average Grant Date

Beginning of the year - January 1, 2022

End of the period - December 31, 2022

Options exercisable

Stock option transactions to the employees, directors and consultants are summarized as follows for the year ended December 31, 2021:

Weighted Average Exercise Price

Weighted Average Grant Date

Beginning of the year - January 1, 2021

End of the year - December 31, 2021

Options exercisable

During the year ended December 31, 2021, the Company received approximately $ 0.3 million of net proceeds from the exercise of 30,282 stock options.

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

Weighted Average Exercise Price

Weighted Average Fair Value

Non-vested - December 31, 2020

Non-vested - December 31, 2021

Non-vested - December 31, 2022

The above tables include stock options issued and outstanding as of December 31, 2022 as follows:

A total of 325,571 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 Chief Executive Officer, who is also a director, with remaining contractual lives of 2.27 years to 6.92 years .

All other options issued to directors, officers, and employees have a remaining contractual life ranging from 2.27 years to 6.92 years.

A total of 200,332 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 0.36 years to 9.67 years.

As of December 31, 2022, there was approximately $ 42,000 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 approximately 2.06 years.

For stock options outstanding at December 31, 2022 and 2021, the intrinsic value was approximately $ 5,000 and $ 238,000 , respectively.

For those vested stock options at December 31, 2022 and 2021, the intrinsic value was approximately $ 5,000 and $ 225,000 , respectively.

The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at December 31, 2022:

Stock Options Outstanding

Stock Options Vested

3.82 -$ 9 .00

12.49 -$ 24 .00

24.01-$ 72 .00

72.01 -$ 75.60

Common Share Issuances

For the year ended December 31, 2022, the Company issued 10,565 common shares, respectively, to its investor relations firm for services provided during the year ended December 31, 2022.

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

As of December 31, 2022, the Company accrued these directors’ fees of $ 200,000 under accrued directors’ fees.

For the year ended December 31, 2021, the Company issued 10,462 common shares to its investor relations firm for services provided during the year ended December 31, 2021.

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

There were 13,096 common shares issued to four directors that vested immediately upon issuance and the remaining 6,548 shares of common shares were issued to the two remaining directors that vested on January 1, 2022 .

Restricted Stock Units Issued and Net Share Settlements for Payments of Withholding Taxes

On October 28, 2020, the Compensation Committee of the Board granted from the 2020 Plan time-based restricted stock units (‘RSUs”) to certain of the Company’s executive officers, employees, and consultants.

Each RSU represents a contingent right to receive, upon vesting, one share of the Company’s common stock.

The number of RSUs granted to executive officers, employees and consultants totaled 243,800 shares.

These RSUs awards vest in three equal installments on each of the first three annual anniversaries of the grant date, on October 28, 2021, October 28, 2022 and October 28, 2023.

On October 28, 2021, the first tranche of 78,617 of total outstanding RSUs vested.

Regarding these 78,617 RSUs that vested, the Company withheld 35,304 common shares of the employees at the stock price on the vesting date of $ 9.93 per share, in order to make payments of withholding taxes of $0.3 million on these vested shares.

The Company issued a total of 43,313 shares of common stock, net of the share settlement for the taxes paid upon the vesting of these RSUs, to its employees and one consultant.

On November 4, 2021, the Compensation Committee of the Board of Directors approved the accelerated vesting of the remaining 157,233 RSUs outstanding, and all these remaining 157,233 RSUs vested on December 15, 2021.

Regarding these 157,233 RSUs vested on December 15, 2021, the Company withheld 70,265 common shares to be issued to the employees, at the stock price on the vesting date 6.74 per share in order to make the payments for withholding taxes of $ 0.5 million on these vested shares.

The Company issued a total of 86,968 shares of common stock, net of share settlement for the taxes paid upon vesting of RSUs, to its employees and one consultant.

Total payments for withholding taxes on the net share settlements of vested RSU equity awards for the year ended December 31, 2021 was $ 0.8 million.

Restricted Stock Units Outstanding

The following summarizes the Company’s RSUs activity:

Total RSUs outstanding at January 1, 2021

Total RSUs granted

Total RSUs vested (including accelerated vesting)

Total RSUs forfeited

Total unvested RSUs outstanding at December 31, 2021

Restricted Stock Awards Issued and Net Share Settlements for Payments of Withholding Taxes

On November 18, 2021, the Board of Directors approved an equity grant of approximately $ 2 million, which equaled to a total of 188,588 RSAs, to all of its employees and two consultants, valued at the stock price on the grant date of $ 10.69 per share.

These RSAs awards contained 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.

The Company did not meet the performance-based vesting provision.

Therefore, these RSAs awards vest in three equal installments on each of the first three annual anniversaries of the grant date, on November 18, 2022, November 18, 2023 and November 18, 2024.

There was an additional performance-based RSA grant on November 18, 2021 of approximately $ 2 million, which equaled to a total 188,588 shares, with vesting only upon the Company completing a business acquisition in 2022, with the target’s historical financials meeting certain financial performance metrics.

The Company did not meet this milestone and these 188,588 RSAs expired at December 31, 2022 and were returned back to the stock plan.

On November 18, 2022, the first tranche, or 62,862 .

of the total outstanding RSAs vested.

Regarding these 62,862 RSAs that vested, the Company withheld 21,794 common shares of the employees at the stock price on the vesting date of $ 4.80 per share, in order to make payments of withholding taxes of $ 0.1 million on these vested shares.

The Company issued a total of 41,068 shares of common stock, net of the share settlement for the taxes paid upon the vesting of these RSAs, to its employees and consultants.

On December 15, 2022, the Board of Directors approved an equity grant of approximately $ 1.4 million, which equaled to a total of 290,590 RSAs, to all of its employees and two consultants, valued at the stock price on the grant date of $ 4.71 per share.

These RSAs awards vest in three equal installments on each of the first three annual anniversaries of the grant date, on December 15, 2023, December 15, 2024 and December 15, 2025.

As of December 31, 2022 and 2021, there were 416,316 RSAs and 188,588 RSAs included in the total outstanding common shares, respectively and compensation expense recognized straight line over the three-year vesting period.

A total of $ 0.7 million and $ 0.1 million of compensation expense were recorded for the year ended December 31, 2022 and 2021, respectively.

The following summarizes the Company’s RSAs activity:

Total RSAs outstanding at January 1, 2022

Total RSAs granted

Total RSAs vested

Total performance-based RSAs expired

Total unvested RSAs outstanding at December 31, 2022

Scheduled vesting for outstanding RSAs with service conditions at December 31, 2022 is as follows:

Year Ending December 31,

Scheduled vesting

As of December 31, 2022, there was approximately $ 2.6 million of total unrecognized compensation cost related to these unvested RSAs compensation arrangements.

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 2.43 years.

The components of total stock-based compensation expense included in the Company’s consolidated statements of operations for the years ended December 31, 2022 and 2021 are as follows (rounded in millions):

Total non-cash stock-based compensation expense recorded related to options granted and restricted stock awards included in the Company’s consolidated statements of operations for the years ended December 31, 2023 and 2022 are as follows (rounded in millions):

Research and development expenses

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Total stock-based compensation expense

Defined Contribution 401K Retirement Plan

The Company has an established 401k retirement plan for its employees.

The Company matches employee contributions to the plan 100 %, with immediate vesting.

The Company contributed approximately $ 0.2 million and $ 0.1 million to the 401k plan for the years ended December 31, 2023 and 2022, respectively.

Related Party Transactions

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.

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

For the year ended December 31, 2022, the Company incurred $ 14,400 , respectively, in dues paid to WDHT.

In addition, for the year ended December 31, 2022, the Company incurred $ 105,000 in fees to WDHT to attend conferences in which the Company participated with WDHT to promote the Company’s nuclear fuel.

(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 years ended December 31, 2023 and 2022, the Company incurred $ 14,400 , respectively, in dues paid to WDHT.

This agreement was terminated on January 1, 2024.

Subsequent Events

Sales under the ATM that were made from January 1, 2023 to the date of the filing of these financial statements were approximately 0.2 million common shares that totaled net proceeds of approximately $ 0.7 million.

Sales of common stock under the Company’s ATM from January 1, 2024 to March 4, 2024 amounted to approximately 179,000 shares, which resulted in total net proceeds of approximately $ 0.6 million.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Jesse Funches

/s/ Sherri Goodman

March 4, 2024

Sherri Goodman

/s/ Daniel Magraw

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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-K

Item 9A. Controls and Procedures