LIGHTBRIDGE Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures 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 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. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. 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. 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, 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. 35 Table of Contents 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 Except as noted above, there was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. 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. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 36 Table of Contents PART III ITEM 10. 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. ITEM 11. EXECUTIVE COMPENSATION 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. ITEM 12. 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. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information required by Item 13 of Part III will be included in our Proxy Statement relating to the 2024 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information required by Item 14 of Part III will be included in our Proxy Statement relating to the 2024 Annual Meeting of Stockholders and is incorporated herein by reference. 37 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Documents filed as part of this report. (1) The following financial statements of Lightbridge Corporation, supplemental information and report of independent registered public accounting firm are included in this Form 10-K: · Consolidated Balance Sheets at December 31, 2023 and 2022 · Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 · Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 · Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2023 and 2022 · Notes to Consolidated Financial Statements · 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. (2) All schedules have been omitted because they are not required, not applicable or the information is otherwise included. (3) Exhibits. Exhibit Number Description 1.1 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 May 28, 2019). 1.2 Amendment No. 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). 3.1 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). 3.2 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). 4.2 Description of Securities (incorporated by reference to Exhibit 4.2 to the Form 10-K filed by the Company on March 31, 2022). 4.3 Specimen Certificate for Company’s Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s registration statement on Form S-3 filed on April 1, 2013, File No. 333-187659). 10.1** Lightbridge Corporation 2006 Stock Plan (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company on February 21, 2006). 10.2** Lightbridge Corporation 2015 Equity Incentive Plan, as amended (incorporated by reference to Appendix A to the definitive proxy statement filed on March 29, 2018, File No. 001-34487). 38 Table of Contents 10.3** Form of Incentive Stock Option Agreement for Employees under the 2015 Equity Incentive Plan (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form S-8, File No. 333-218796, filed on June 16, 2017). 10.4** Form of Non-Qualified Stock Option Agreement for Employees under the 2015 Equity Incentive Plan (incorporated by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8, File No. 333-218796, filed on June 16, 2017). 10.5** Form of Non-Qualified Stock Option Agreement for Non-Employee Directors under the 2015 Equity Incentive Plan (incorporated by reference to Exhibit 99.4 to the Company’s Registration Statement on Form S-8, File No. 333-218796, filed on June 16, 2017) 10.6** Amended Lightbridge Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement filed on April 3, 2023). 10.7** Form of Non-Statutory Stock Option Agreement for Employees under the 2020 Omnibus Incentive Plan. (incorporated by reference to Exhibit 10.12 to the Form 10-K filed by the Company on March 25, 2021). 10.8** Form of Restricted Stock Unit Award Agreement for Employees under the 2020 Omnibus Incentive Plan. (incorporated by reference to Exhibit 10.13 to the Form 10-K filed by the Company on March 25, 2021). 10.9** Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the 2020 Omnibus Incentive Plan. (incorporated by reference to Exhibit 10.14 to the Form 10-K filed by the Company on March 25, 2021). 10.10** 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). 10.10** 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). 10.12** Employment Agreement, dated August 8, 2018, between the Company and Andrey Mushakov (incorporated by reference to Exhibit 10.3 to the Form 10-Q filed by the Company on August 9, 2018). 10.13** Employment Agreement, dated August 8, 2018, between the Company and Larry Goldman (incorporated by reference to Exhibit 10.4 to the Form 10-Q filed by the Company on August 9, 2018). 10.14** 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). 10.15 ▲ 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). 10.16 ▲ 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). 10.17 ▲ 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). 10.18 ▲ 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). 21.1 Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Form 10-K filed by the Company on March 15, 2016). 23.1* Consent of BDO USA, P.C. 39 Table of Contents 24.1* Power of Attorney (Included on the signature page hereto). 31.1* Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer. 31.2* Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Officer and Principal Accounting Officer. 32* Section 1350 Certifications. 97.1* Incentive Compensation Recovery Policy . 101 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): (i) the Consolidated Balance Sheets; (ii) Consolidated Statement of Operations; (iii) Consolidated Statement of Cash Flows; (iv) Consolidated Statement of Changes in Stockholders’ Equity; and (v) Notes to Consolidated Financial Statements 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). ________________ * Filed or furnished herewith ** Indicates management contract or compensatory plan or arrangement. ▲ Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of this Exhibit to the SEC upon request. ITEM 16. FORM 10-K SUMMARY None. 40 Table of Contents LIGHTBRIDGE CORPORATION DECEMBER 31, 2023 and 2022 TABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm ( BDO USA, P.C .; Philadelphia, PA : PCAOB ID# 243 ) 42 Consolidated Balance Sheets 44 Consolidated Statements of Operations 45 Consolidated Statements of Changes in Stockholders’ Equity 46 Consolidated Statements of Cash Flows 47 Notes to Consolidated Financial Statements 48 41 Table of Contents Report of Independent Registered Public Accounting Firm Stockholders and Board of Directors Lightbridge Corporation Reston, Virginia Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Lightbridge Corporation (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended , in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. 42 Table of Contents Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (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 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 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. Philadelphia, Pennsylvania March 4, 2024 43 Table of Contents LIGHTBRIDGE CORPORATION CONSOLIDATED BALANCE SHEETS December 31, December 31, 2023 2022 ASSETS Current Assets Cash and cash equivalents $ 28,598,445 $ 28,899,997 Prepaid expenses and other current assets 207,063 115,264 Total Current Assets 28,805,508 29,015,261 Other Assets Prepaid project costs and other long-term assets 483,000 345,000 Trademarks 108,865 108,225 Total Assets $ 29,397,373 $ 29,468,486 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable and accrued liabilities $ 486,326 $ 350,331 Total Current Liabilities 486,326 350,331 Commitments and contingencies - Note 5 Stockholders’ Equity Preferred stock, $ 0.001 par value, 10,000,000 authorized shares, 0 shares issued and outstanding at December 31, 2023 and 2022 — — Common stock, $ 0.001 par value, 25,000,000 authorized, 13,698,274 shares and 11,900,217 shares issued and outstanding at December 31, 2023 and 2022, respectively 13,698 11,900 Additional paid-in capital 181,295,125 173,595,385 Accumulated deficit ( 152,397,776 ) ( 144,489,130 ) Total Stockholders’ Equity 28,911,047 29,118,155 Total Liabilities and Stockholders’ Equity $ 29,397,373 $ 29,468,486 The accompanying notes are an integral part of these consolidated financial statements. 44 Table of Contents LIGHTBRIDGE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, 2023 2022 Revenue $ — $ — Operating Expenses General and administrative 7,149,773 7,490,086 Research and development 1,922,865 669,818 Total Operating Expenses 9,072,638 8,159,904 Other Operating Income Contributed services - research and development 31,028 372,612 Total Other Operating Income 31,028 372,612 Total Operating Loss ( 9,041,610 ) ( 7,787,292 ) Other Income Interest income 1,132,964 289,435 Total Other Income 1,132,964 289,435 Net Loss Before Income Taxes ( 7,908,646 ) ( 7,497,857 ) Income taxes — — Net Loss $ ( 7,908,646 ) $ ( 7,497,857 ) Net Loss Per Common Share Basic and diluted $ ( 0.65 ) $ ( 0.69 ) Weighted Average Number of Common Shares Outstanding 12,099,574 10,834,574 The accompanying notes are an integral part of these consolidated financial statements. 45 Table of Contents LIGHTBRIDGE CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 Additional Common Stock Paid-in Accumulated Total Shares Amount Capital Deficit Equity Balance - January 1, 2022 9,759,223 $ 9,759 $ 161,772,641 $ ( 136,991,273 ) $ 24,791,127 Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock awards 268,796 269 ( 104,873 ) — ( 104,604 ) Shares issued - registered offerings - net of offering costs 1,855,085 1,855 11,024,930 — 11,026,785 Shares issued to consultant & directors for services 17,113 17 59,983 — 60,000 Stock-based compensation — — 842,704 — 842,704 Net loss — — — ( 7,497,857 ) ( 7,497,857 ) Balance - December 31, 2022 11,900,217 $ 11,900 $ 173,595,385 $ ( 144,489,130 ) $ 29,118,155 Shares issued, net of share settlement for withholding taxes paid upon vesting of restricted stock awards 240,499 240 ( 221,850 ) — ( 221,610 ) Shares issued - registered offerings - net of offering costs 1,492,148 1,493 6,403,938 — 6,405,431 Shares issued to consultant & directors for services 65,410 65 259,935 — 260,000 Stock-based compensation — — 1,257,717 — 1,257,717 Net loss — — — ( 7,908,646 ) ( 7,908,646 ) Balance - December 31, 2023 13,698,274 $ 13,698 $ 181,295,125 $ ( 152,397,776 ) $ 28,911,047 The accompanying notes are an integral part of these consolidated financial statements. 46 Table of Contents LIGHTBRIDGE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 Operating Activities Net Loss $ ( 7,908,646 ) $ ( 7,497,857 ) Adjustments to reconcile net loss to net cash used in operating activities: Common stock issued for services 45,000 45,000 Stock-based compensation 1,257,717 842,704 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 91,799 ) ( 1,812 ) Prepaid project costs and other long-term assets ( 138,000 ) ( 345,000 ) Accounts payable and accrued liabilities 350,995 193,810 Net Cash Used in Operating Activities ( 6,484,733 ) ( 6,763,155 ) Investing Activities Trademarks ( 640 ) ( 6,642 ) Net Cash Used in Investing Activities ( 640 ) ( 6,642 ) Financing Activities Net proceeds from the issuances of common stock 6,405,431 11,026,785 Payments for taxes related to net share settlement of equity awards ( 221,610 ) ( 104,604 ) Net Cash Provided by Financing Activities 6,183,821 10,922,181 Net (Decrease) Increase in Cash and Cash Equivalents ( 301,552 ) 4,152,384 Cash and Cash Equivalents, Beginning of Year 28,899,997 24,747,613 Cash and Cash Equivalents, End of Year $ 28,598,445 $ 28,899,997 Supplemental Disclosure of Cash Flow Information Cash paid during the year: Interest paid $ — $ — Income taxes paid $ — $ — Non-Cash Financing Activities: Payment of accrued liabilities with common stock $ 215,000 $ 15,000 The accompanying notes are an integral part of these consolidated financial statements. 47 Table of Contents LIGHTBRIDGE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Basis of Presentation, Summary of Significant Accounting Policies, and Nature of Operations 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. On September 29, 2009, the Company changed its name from Thorium Power, Ltd. to Lightbridge Corporation and began its focus on developing and commercializing metallic nuclear fuels. The Company is a nuclear fuel technology company developing its next generation nuclear fuel technology. Basis of Consolidation These consolidated financial statements include the accounts of Lightbridge, a Nevada corporation, and the Company’s wholly-owned subsidiaries, TPI, a Delaware corporation, and Lightbridge International Holding LLC, a Delaware limited liability company. These wholly-owned subsidiaries are inactive. All intercompany transactions and balances have been eliminated in consolidation. Segment Reporting 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 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. There were no significant estimates at December 31, 2023 and 2022. Fair Value of Financial Instruments 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 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: Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable for the asset or liability; and Level 3 - Unobservable inputs that reflect management’s assumptions. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. 48 Table of Contents The Company’s financial instruments consist principally of cash and cash equivalents, accounts payable and accrued liabilities. The carrying amounts of cash and cash equivalents (which includes U.S. treasury bills 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. U.S. 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. Assets Level I Level II Level III Treasury Bills $ 19.90 $ — $ — Certain Risks and Uncertainties 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, 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. Cash and Cash Equivalents The Company may at times invest its excess cash in interest bearing accounts and U.S. treasury bills. It classifies all highly liquid investments with original stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities. The Company holds cash balances in excess of the federally insured limits of $ 250,000 . It deems this credit risk not to be significant as cash is held by two prominent financial institutions in 2023 and 2022. The Company buys and holds short-term U.S. treasury bills to maturity. U.S. 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 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 (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. 49 Table of Contents Trademarks 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 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. Leases The Company recognizes operating lease right of use assets and liabilities at commencement date based on the present value of the future minimum lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet in accordance with the short-term lease recognition exemption. The Company applies the practical expedient to non-separate and non-lease components for all leases that qualify. Lease expense is recognized on a straight-line basis over the lease term. The Company has only one lease for office rent and the lease is for a term of 12 months without renewal options. Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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 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. The Company’s policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, the Company had no such accruals. 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 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. 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 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. 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 RSU or RSA grants. 50 Table of Contents 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. The RSAs are included in common stock issued and outstanding and are considered contingently issuable in the calculation of weighted-average shares outstanding for purposes of calculating earnings per share. The consolidated statement of changes in stockholders’ equity shows the initial grant of RSAs as a reclassification from additional paid-in capital to common stock, with any compensation expense related to the RSAs included in stock-based compensation. The 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. GAAP for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options , that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in 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. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption is either through a modified retrospective method or a full retrospective method of transition. The Company 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. Note 2. 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. 51 Table of Contents 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. Years Ended December 31, 2023 2022 Stock options outstanding 510,787 525,903 Restricted stock awards outstanding 557,688 416,316 Total 1,068,475 942,219 Note 3. Prepaid Project Costs 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. Note 4. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following (rounded in millions): December 31, December 31, 2023 2022 Trade payables $ 0.1 $ 0.2 Accrued director fees, legal and consulting expenses 0.4 0.2 Total $ 0.5 $ 0.4 Note 5. Commitments and Contingencies Commitments 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. 52 Table of Contents 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 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. Note 6. Research and Development Expenses INL Project 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, 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. 53 Table of Contents 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™. 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. The PNNL GAIN voucher project was completed on January 31, 2023. 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 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. Note 7. Income Taxes 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. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups. During the course of preparing the Company’s consolidated financial statements, as of and for the year ended December 31, 2022, the Company completed a preliminary assessment of the available NOL carryforwards under Section 382 of the Code. The Company determined that it likely had undergone multiple ownership changes from 2009 to 2022 as defined under Section 382. 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 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. The 2023 and 2022 annual effective tax rate is estimated to be 25 % for the combined U.S. federal and state statutory tax rates. The Company reviews tax uncertainties in light of changing facts and circumstances and adjusts them accordingly. As of December 31, 2023 and 2022, there were no tax contingencies or unrecognized tax positions recorded. 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 % 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: December 31, 2023 December 31, 2022 Book income at federal statutory rate, 21% 21.00 % 21.00 % State taxes, net of federal benefit 4.25 % 4.82 % Change in valuation allowance ( 25.40 )% ( 31.97 )% Permanent difference ( 0.15 )% ( 0.16 )% True-Ups, Stock-based compensation and Other 0.30 % 6.31 % — % — % 54 Table of Contents Deferred tax assets consisted of the following (rounded in millions): December 31, 2023 December 31, 2022 Stock-based compensation $ 3.7 $ 3.5 Patent impairment provision 0.3 0.4 Net operating loss carry-forwards 15.0 13.6 Research and development expenses – capitalized for tax purposes 0.5 0.1 Research and development tax credits 0.3 0.3 Total deferred tax asset 19.8 17.9 Less: valuation allowance ( 19.8 ) ( 17.9 ) 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. Any unused annual limitation may be carried over to later years, and the amount of the limitation may under certain circumstances be increased by the built-in gains in assets held by us at the time of the change that are recognized in the five-year period after the change. The reconciliation between income taxes (benefit) at the U.S. 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, 2023 December 31, 2022 Tax benefit at U.S. federal statutory rates $ ( 1.7 ) $ ( 1.6 ) Tax benefit at state statutory rates ( 0.3 ) ( 0.4 ) Other — ( 0.4 ) Increase in valuation allowance 2.0 2.4 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. Tax Law Prior to 2022, Internal Revenue Code Section 174 allowed taxpayers to deduct R&D expenditures in the year in which they were incurred. The 2017 Tax 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 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. 55 Table of Contents Note 8. Stockholders’ Equity and Stock-Based Compensation 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. Common Stock Equity Offerings 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. The offering of common stock pursuant to this agreement can be terminated with 10 days written notice by either party. 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 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 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. 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. 56 Table of Contents 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 Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding, December 31, 2022 525,903 $ 18.74 4.52 $ 4,982 Granted 35,482 4.58 Exercised — — Forfeited — — Expired ( 50,598 ) 17.47 Outstanding, December 31, 2023 510,787 $ 17.88 3.84 $ — Vested and expected to vest, December 31, 2023 510,787 $ 17.88 3.84 $ — Options exercisable, December 31, 2023 498,177 $ 18.21 3.71 $ — During the year ended December 31, 2023, the Company issued 35,482 stock options to two consultants. 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. 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. Common Stock 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. 57 Table of Contents Restricted Stock Awards The following summarizes the Company’s restricted stock award activity and the RSA outstanding: Number of Shares Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding, December 31, 2022 416,316 $ 6.52 $ 1,619,469 Awards granted 301,099 $ 3.91 Awards vested ( 159,727 ) $ 7.06 Awards forfeited — $ — Outstanding, December 31, 2023 557,688 $ 4.95 $ 1,790,178 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. 58 Table of Contents 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: 2023 2022 Expected volatility 68.13 % to 95.7 % 97.58 % to 115.37 % Risk free interest rate 4.21 % to 5.12 % 1.02 % to 3.28 % Dividend yield rate — — Expected term 1 – 6 years 2 – 6 years Closing price per share – common stock $ 4.31 to $ 4.35 $ 5.93 to $ 6.27 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): Year Ended December 31, 2023 2022 Research and development expenses $ 0.2 $ — General and administrative expenses 1.1 0.8 Total stock-based compensation expense $ 1.3 $ 0.8 Note 9. 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. Note 10. 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 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. Dr. 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. Note 11. Subsequent Events ATM Sales 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. 59 Table of Contents SIGNATURES 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. LIGHTBRIDGE CORPORATION Date: March 4, 2024 By: /s/ Seth Grae Seth Grae Chief Executive Officer, President and Director 60 Table of Contents POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Seth Grae and Larry Goldman, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the dates indicated. Signature Title Date /s/ Seth Grae Chief Executive Officer, President, and Director March 4, 2024 Seth Grae (Principal Executive Officer) /s/ Larry Goldman Chief Financial Officer, and Treasurer March 4, 2024 Larry Goldman (Principal Financial and Accounting Officer) /s/ Thomas Graham, Jr. Director March 4, 2024 Thomas Graham, Jr. /s/ Sweta Chakraborty Director March 4, 2024 Sweta Chakraborty /s/ Jesse Funches Director March 4, 2024 Jesse Funches /s/ Sherri Goodman Director March 4, 2024 Sherri Goodman /s/ Daniel Magraw Director March 4, 2024 Daniel B. Magraw /s/ Mark Tobin Director March 4, 2024 Mark Tobin 61