What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-03 compared with 2024-03-04 · 156 added, 114 removed, 129 unchanged (68% of the section changed)

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This MD&A consists of the following sections:

Overview of Our Business and Development of Lightbridge Fuel™ - a general overview of our business and updates;

Critical Accounting Estimates - a discussion of critical judgments and estimates;

Overview of Our Business and Recent Developments of Lightbridge Fuel™ - a general overview of our business and updates;

Operations Review - an analysis of our consolidated results of operations for the periods presented in our consolidated financial statements;

Liquidity, Capital Resources, and Financial Position - an analysis of our cash flows and an overview of our financial position.

Critical Accounting Estimates - a discussion of critical judgments and estimates;

As discussed in more detail under “Forward-Looking Statements” preceding this MD&A, the following discussion contains forward-looking statements that are based on our management’s current expectations, estimates, and projections, which are subject to a number of risks and uncertainties.

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Risk Factors .

Overview of Our Business and Recent Developments

Our Company’s goal is to impact in a meaningful way the world’s climate and energy problems.

We are developing and plan to commercialize innovative, proprietary nuclear fuel designs, which we expect will significantly enhance the nuclear power industry’s economics due to higher power output and longer fuel cycles, and we also expect the fuel will provide improved safety margins.

We are an early-stage technology company in the product development phase and are pre-revenue.

Our ongoing operations are currently being financed primarily by raising new equity capital.

Recent Developments

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

On December 5, 2023 we entered into an agreement with Centrus Energy Corp.

(Centrus Energy) to conduct a front-end engineering and design (FEED) study to construct a Lightbridge Pilot Fuel Fabrication Facility (LPFFF) to manufacture Lightbridge Fuel™ using high-assay low-enriched uranium (HALEU) at the American Centrifuge Plant in Piketon, Ohio, the only HALEU production plant in the world outside of Russia.

The FEED study will identify infrastructure and licensing requirements as well as the estimated cost and construction schedule for the LPFFF.

Centrus Energy’s wholly-owned subsidiary, American Centrifuge Operating, LLC, will lead the study.

The work is expected to be completed in 2024 at a fixed price of approximately $0.5 million.

Engineering Study of Lightbridge Fuel™ for use in Canada Deuterium Uranium (CANDU) reactors

On October 16, 2023, we engaged Institutul de Cercetări Nucleare Pitești, a subsidiary of Regia Autonoma Tehnologii pentru Energia Nucleara in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in CANDU reactors.

This assessment will cover key areas including mechanical design, neutronics analysis, and thermal and thermal-hydraulic evaluations.

The findings from this engineering study will play an important role in guiding future economic evaluations and navigating potential regulatory licensing-related issues for potential use of Lightbridge Fuel™ in CANDU reactors.

The work is expected to be completed in 2024 at a fixed price of approximately $0.2 million.

HALEU Consortium Membership

To support establishment of domestic HALEU infrastructure, the DOE announced on December 7, 2022 the creation of a HALEU Consortium.

According to the DOE, the purposes of the HALEU Consortium include:

(i) providing the Secretary of Energy HALEU demand estimates for domestic commercial use, (ii) purchasing HALEU made available to members for commercial use under the program, (iii) carrying out demonstration projects using HALEU under the program, and (iv) identifying actionable opportunities to improve the reliability of the HALEU supply chain.

On December 15, 2022, the Company submitted a formal request to the DOE to join the HALEU Consortium to mitigate HALEU supply risk.

On January 12, 2023, the Company received written confirmation from the DOE of Lightbridge’s membership in the HALEU Consortium.

HALEU is a key component necessary for the fabrication and operation of Lightbridge Fuel™ in light water reactors.

Overview of Our Business and Recent Developments of Lightbridge Fuel™

When used in this Annual Report on Form 10-K, the terms “Lightbridge”, the “Company”, “we”, “our”, and “us” refer to Lightbridge Corporation together with its wholly-owned subsidiaries Lightbridge International Holding LLC and Thorium Power Inc.

Lightbridge’s principal executive offices are located at 11710 Plaza America Drive, Suite 2000, Reston, Virginia, 20190, USA.

At Lightbridge, we are developing next generation nuclear fuel for water-cooled reactors that could significantly improve the economics and safety of existing and new nuclear power plants, large and small, and enhance proliferation resistance of spent nuclear fuel while supplying clean energy to the electric grid or to “behind the meter” customers for electric power, including data centers.

We believe that the world’s energy and climate needs can only be met if nuclear power’s share of the energy-generating mix grows substantially in the coming decades.

We believe Lightbridge can benefit from a growing nuclear power industry, and that our nuclear fuel can help enable that growth to happen.

We believe our metallic fuel will offer significant economic and safety benefits over traditional nuclear fuel, primarily because of the superior heat transfer properties and the resulting lower operating temperature of all-metal fuel.

Technology industry companies believe that nuclear energy can offer a strategic, sustainable, and reliable solution for powering data centers.

Advances in reactor technology, combined with growing corporate and governmental support for clean energy, can position nuclear power as a cornerstone of future energy strategies for data-intensive industries.

We believe that by integrating nuclear power, the data center sector can achieve operational efficiency, energy security, and sustainability.

We believe uses of our fuel could include providing additional power via power uprates of existing reactors, which may be willing to pay a premium for reliable, clean, and sustainable baseload electricity.

Oil and gas producing companies are investing in low-emission energy technologies to reduce fossil fuel emissions from oil and gas production.

Advances in nuclear reactor and fuel technology can position nuclear power as a key energy source for this purpose.

Emerging nuclear technologies include small modular reactors (SMRs), which are now in the development and licensing phases.

We expect that Lightbridge Fuel™ can provide water-cooled SMRs with the same benefits our technology brings to large reactors, with such benefits being even more meaningful to the economic case for deployment of SMRs, including potential load following capability when included on a virtually zero-carbon electric grid with renewable energy sources.

We expect Lightbridge Fuel™ to enable power uprates in SMRs.

We have built a significant portfolio of patents, and we anticipate testing our nuclear fuel through third-party vendors and others, including the United States Department of Energy’s (DOE) national laboratories.

Currently, we are performing the majority of our R&D activities within and in collaboration with the DOE’s national laboratories.

Recent Developments of Lightbridge Fuel™

Idaho National Laboratory Agreements

In December 2022, Lightbridge entered into agreements with Battelle Energy Alliance, LLC (BEA), the DOE’s operating contractor for Idaho National Laboratory (INL), to support the development of Lightbridge Fuel™.

The framework agreements use an innovative structure that consists of an “umbrella” Strategic Partnership Project Agreement (SPP) and an “umbrella” Cooperative Research and Development Agreement (CRADA), each with BEA, with an initial duration of seven years.

The framework agreements use an innovative structure that consists of an “umbrella” Strategic Partnership Project Agreement (SPPA) and an “umbrella” Cooperative Research and Development Agreement (CRADA), each with BEA, with an initial duration of seven years.

We anticipate that the initial phase of work under the two agreements that has been released will culminate in casting and extrusion of unclad fuel material samples using enriched uranium supplied by the DOE that will subsequently be inserted for irradiation testing in the Advanced Test Reactor (ATR) at INL.

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 to be released under a future Project Task Statement, will support fuel performance modeling and regulatory licensing efforts for commercial deployment of Lightbridge Fuel™.

We plan to negotiate subsequent phases of work under the two umbrella agreements that have not yet been released that may include post-irradiation examination of the irradiated fuel material coupons, loop irradiation 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.

In 2023, we worked with INL to complete and issue a Quality Implementation Plan (QIP) for our collaborative project at INL which was an essential first step to ensure all future work performed at INL on the project would meet the U.S.

nuclear industry quality assurance requirements.

Additionally, we worked with INL to demonstrate casting of delta-phase uranium-zirconium ingots with depleted uranium using existing INL equipment.

As part of that effort, we cast several laboratory-scale ingots using depleted uranium and zirconium alloy materials.

Our next step is to cast additional ingots using depleted uranium and zirconium alloy materials and conduct initial extrusions from those ingots in the next several months at INL.

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

We use a rolling wave planning approach for project management purposes on the released scopes of work.

It is an iterative planning technique in which the work to be accomplished in the near term is planned in detail, while work further in the future is planned at a higher level.

As such, periodic revisions to the scope and/or cost estimates are anticipated.

The Company anticipates entering into additional modifications to the Project Task Statements (PTS) under the SPPA and/or CRADA with INL to expand the scope of work, including performing additional extrusions, updating the experiment design for irradiation testing of coupon samples in the ATR, as well as other potential activities.

We are discussing these additional scopes and timing of work with INL to be performed under the two “umbrella” agreements with BEA;

which we anticipate will increase our R&D expenses for the SPPA and/or CRADA.

In late 2024, we worked with INL to re-baseline the project scope, schedule, and cost estimate at completion.

As a result, the expected cost estimate at completion was increased by approximately $2.0 million.

The successful execution of this project is subject to risks, including potential delays, cost overruns, regulatory challenges, and changes in funding availability, and if the project scope does increase, then the project will be successfully executed or completed.

Regardless of whether further project modifications occur, INL has indicated to the Company that due to resource and manufacturing equipment constraints, INL may not be able to meet the Company’s preferred project timeline, and that the total project cost will exceed the current budget.

We anticipate that subsequent phases of work under the two umbrella agreements that have not yet been released may include post-irradiation examination of the irradiated fuel material coupons, loop irradiation 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.

On March 26, 2024, the Company and BEA entered into Modification No.

2 PTS under the SPPA, dated December 9, 2022, as amended on May 23, 2023, by and between the Company and BEA.

Pursuant to the terms of Modification No.

2, the potential amounts payable by the Company to reimburse BEA for its expenses and employee time were increased by approximately $0.6 million, bringing the total estimated cost for the work to be performed under the “umbrella” SPPA to $1.7 million.

On October 24, 2024, the Company and BEA entered into Modification No.

3 PTS under the SPPA, dated December 9, 2022, as amended on May 23, 2023 and March 26, 2024, by and between the Company and BEA.

Pursuant to the terms of Modification No.

3, the potential amounts payable by the Company to reimburse BEA for its expenses and employee time were increased by approximately $0.3 million, bringing the total estimated cost for the work to be performed under the “umbrella” SPPA to approximately $2.0 million.

On January 16, 2025 the Company and BEA entered into Modification No.

3 PTS under the CRADA, dated September 27, 2022, as amended on May 22, 2023, May30, 2023, by and between the Company and BEA.

Pursuant to the terms of Modification No.

3, the potential amounts payable by the Company to reimburse BEA for its expenses and employee time were increased from $2.6 million by approximately $1.6 million, bringing the total estimated cost for the work to be performed under the “umbrella” CRADA to $4.2 million.

This modification also required that a $0.6 million advance payment be made, which was paid on January 16, 2025.

After Modification No.

3, to the PTS under the CRADA and the anticipated Modification No.

4 to the PTS under the SPPA, total cash payments from the Company to BEA under both Agreements are estimated at approximately $6.5 million (excluding project contingencies) on a cost reimbursable basis over the performance periods under the initial releases.

Romania Feasibility Study of Lightbridge Fuel™ for use in CANDU reactors

On October 16, 2023, we engaged Institutul de Cercetări Nucleare Pitești, a subsidiary of Regia Autonoma Tehnologii pentru Energia Nucleara (RATEN ICN) in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in CANDU reactors.

This assessment covers key areas including mechanical design, neutronics analysis, and thermal and thermal-hydraulic evaluations.

On July 2, 2024, we issued a change order adding a new task to the remaining scope of this engineering study.

Following the change order, the Company paid a total fee of approximately $0.2 million for this engineering study, which was completed in 2024.

We anticipate performing additional studies with RATEN ICN.

Nuclear Energy University Program Awards

We are working with Texas A&M University (TAMU), NuScale Power, and Structural Integrity Associates on a 3-year study led by TAMU.

Texas A&M University (TAMU), NuScale Power, and Structural Integrity Associates are working on a 3-year study of our nuclear fuel, led by TAMU.

The TAMU study is expected to be completed in 2026.

In mid-2023, TAMU was awarded $1.0 million by the DOE’s Nuclear Energy University Program (NEUP) R&D Awards to conduct this study.

The project entails a characterization of the performance of the Lightbridge Fuel™ Helical Cruciform advanced fuel design, which will generate sets of experimental data on friction factor, flow, and heat transfer behavior under NuScale’s small modular reactors (SMRs) simulated normal and off-normal conditions.

We previously announced our ongoing NEUP project with the Massachusetts Institute of Technology (MIT).

The study led by MIT and funded by DOE relates to evaluation of accident tolerant fuels in various SMRs.

We previously announced the ongoing NEUP project with the Massachusetts Institute of Technology (MIT).

The study led by MIT and funded by DOE relates to evaluation of accident tolerant fuels (ATFs) in various SMRs.

The project aims to simulate the fuel and safety performance of Lightbridge Fuel™ for the NuScale SMR and provide scoping analysis to improve the safety and economics of water-cooled SMRs.

We do not have any performance obligations with the collaboration teams working on the above-mentioned projects and will not receive any revenue or record any benefits from these awards.

In October 2024, MIT presented a technical paper with preliminary safety evaluation results at the TopFuel 2024 Conference in Grenoble, France.

According to MIT, the results have shown promising safety and performance benefits for Lightbridge Fuel™.

Compared to conventional fuel, Lightbridge Fuel™ demonstrated improved thermal-hydraulic margins, lower operating temperatures, and greater potential for power uprates, which contributes to enhancing reactor economics.

We do not have any performance obligations with the collaboration teams working on the above-mentioned projects and will not receive any revenue or record any economic benefits from these awards.

Future Steps Toward Our Fuel Development and Timeline For The Commercialization of Our Nuclear Fuel Assemblies

We anticipate fuel development milestones for Lightbridge Fuel™ over the next 2-3 years will consist of the following:

To produce samples, coupons, and rodlets necessary for testing to be performed under our INL agreements.

We will continue to execute the SPPA/CRADA work at INL leading to casting and extrusion of fuel material samples using enriched uranium and their subsequent insertion for irradiation testing in the ATR.

Continue development and/or validation (benchmarking) of Lightbridge-specific methods and modifications to existing modeling codes to accurately predict Lightbridge Fuel™ performance over the full domain of operating conditions for which Lightbridge Fuel™ will be licensed.

Fuel Qualification Plan:

Develop a Fuel Qualification Plan that describes our approach to characterizing and validating the performance our fuel rods, assemblies, and assembly components in relevant operation scenarios, and validation of the modeling tools that accurately describe the performance of Lightbridge Fuel™ in the relevant conditions.

NRC Engagement Plan :

Prepare and submit the NRC Engagement Plan that outlines how and when Lightbridge will engage the NRC regarding submission of relevant information and supporting documentation for license applications.

Continue manufacturing efforts relating to establishing a manufacturing process for the co-extrusion of cladded rodlets for loop irradiation testing and other fuel testing.

In addition, we plan to complete site selection and begin deployment of a LPFFF with capacity to produce fuel samples, fuel coupons, fuel rodlets, and full-length fuel rods for lead test rods and lead test assemblies for demonstration of our fuel in commercial reactors.

Thermal-Hydraulic Analysis and Experiments:

Perform thermal-hydraulic modeling of Lightbridge Fuel™ to prepare for a series of thermal-hydraulic experiments to confirm pressure drop, critical heat flux performance, and other thermal-hydraulic parameters of Lightbridge Fuel™ under various operating conditions in different types of reactors.

The long-term milestones towards development and commercialization of nuclear fuel assemblies include, among other things, irradiating nuclear material samples and prototype fuel rods with enriched uranium in test reactors, conducting post-irradiation examination of irradiated material samples and/or prototype fuel rods, performing thermal-hydraulic experiments, performing seismic and other out-of-reactor experiments, performing advanced computer modeling and simulations to support fuel qualification, designing a lead test assembly (LTA), entering into a lead test rod/assembly agreement(s) with a host reactor(s), demonstrating the production process of lead test rods and/or lead test assemblies at a pilot-scale fuel fabrication facility and demonstrating the operation of lead test rods and/or lead test assemblies in commercial reactors.

The above future steps describe our current proposed approach to deploying Lightbridge Fuel™ in CANDU and/or U.S.

PWR reactors.

There are inherent uncertainties in the cost and outcomes of the many steps needed for successful deployment of our fuel in commercial nuclear reactors, which makes it difficult to accurately predict the timing of the commercialization of our nuclear fuel technology.

However, based on our best estimate and assuming adequate R&D funding levels, we expect to begin demonstration of lead test rods and/or possibly LTAs with our metallic fuel in commercial reactors in the 2030s and begin receiving purchase orders for initial fuel reload batches from utilities 15-20 years from now, with deployment of our nuclear fuel in the first reload batch in a commercial reactor taking place approximately two years thereafter.

We are exploring ways of shortening this timeframe that may include securing access to expanded irradiation test loop capacity in existing or new research reactor facilities.

Lightbridge aims to engage early with relevant nuclear regulators to inform our future R&D activities.

Fuel Development Strategy

We believe our metallic fuel can be used in different types of water-cooled commercial power reactors, such as pressurized water reactors (PWRs), boiling-water reactors (BWRs), Russian-designed water-cooled, water-moderated energetic reactors (VVERs), CANDUs, water-cooled SMRs, and water-cooled research reactors.

We have obtained patent validation in key countries (in our judgement) and will continue to seek patent validation in countries that either currently operate or are expected to build and operate a large number of nuclear power reactors compatible with our fuel technology.

We have obtained patent validation in key countries that we believe would have a commercial market for our fuel and will continue to seek patent validation in countries that either currently operate or are expected to build and operate a large number of nuclear power reactors compatible with our fuel technology.

Below is a brief description of each key fuel development step leading up to a lead test assembly (LTA) operation in a commercial reactor.

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Fabrication of LTAs will require a dedicated pilot-scale fuel fabrication facility.

We estimate the major scopes of work to establish a manufacturing capability for LTAs would take 5-8 years to complete.

In December 2023, to help us identify infrastructure and regulatory licensing requirements as well as better define cost and schedule estimates for a LPFFF, we entered into a contract with Centrus Energy to conduct a FEED Study for the LPFFF.

Expanding that pilot-scale fuel fabrication facility from LTA capability to batch reload quantities would require a substantial additional capital investment in the manufacturing facility and equipment.

These estimates assume sufficient funding availability and that the project receives prioritization by the DOE and US Nuclear Regulatory Commission (NRC) to facilitate access to the required quantities of the HALEU material and timely regulatory licensing of such a facility.

We estimate the major scopes of work to establish a manufacturing capability for LTR/LTA could take several years to complete and require tens of millions of dollars in capital expenditures.

Expanding that pilot-scale fuel fabrication facility to batch reload quantities would require a substantial additional capital investment in the manufacturing facility and equipment (in the order of hundreds of millions of dollars).

These estimates assume sufficient funding availability and that the project receives prioritization by the DOE and U.S.

Nuclear Regulatory Commission (NRC) to facilitate access to the required quantities of the HALEU material and timely regulatory licensing of such a facility.

Nuclear Material/Coupon Sample Irradiation Test

Lightbridge’s irradiation testing program includes coupon irradiation of material samples of its uranium-zirconium fuel alloy which will allow characterization of the underlying thermophysical behavior of the fuel alloy.

This project is currently underway, and we expect insertion of fuel material coupons in the ATR in 2025 and completion of irradiation testing to full burnup and post-irradiation examination of the fuel material coupons in approximately four years thereafter.

This project is currently underway with INL, and we expect insertion of fuel material coupons in the ATR in 2026 and completion of irradiation testing to full burnup and post-irradiation examination of the fuel material coupons in approximately several years thereafter.

The data obtained from this program will be a fundamental component of Lightbridge’s accelerated fuel qualification approach described below as it will be used to inform and develop the physics-based models and simulations of the fuel rod behaviors.

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The purpose of the loop irradiation testing of Lightbridge’s metallic fuel rods is to demonstrate the performance and behavior of the fuel rods under prototypic commercial reactor operating conditions typical of PWRs at a power level and burnup accumulation higher than the fuel would experience in normal operation in a commercial power plant.

This will provide a physical demonstration of the capabilities of the fuel rods in order to ensure reactor safety.

This will provide a physical demonstration of the capabilities of the fuel rods to ensure reactor safety.

Such testing is expected to provide information of sufficient detail to validate the performance of individual fuel rods such that their behavior in normal operating conditions of a NRC-regulated nuclear power plant would be sufficiently well understood to request a license amendment from the NRC for operation of a LTA.

We expect execution of such a loop irradiation test to be performed in the ATR at INL.

We plan on such a loop irradiation test to be performed in the ATR at INL.

The ATR currently has limited irradiation loop test facilities;

however, installation of the new so-called “I-loops” will increase the loop irradiation capacity of ATR for performing tests on Lightbridge Fuel™ in the desired test conditions.

however, the planned installation of the new so-called “I-loops” in the coming years will increase the loop irradiation capacity of ATR for performing tests on Lightbridge Fuel™ in the desired test conditions.

We expect the performance of the irradiation test to take three years of in-reactor time plus an additional one year for post-irradiation examination, wherein analysis of the fuel rod performance and behavior is performed, from the time when the additional test loop becomes available.

Preparation for Lead Test Assembly Operation

Insertion of an LTA with Lightbridge’s fuel rods in a nuclear power plant requires the power plant owner to obtain approval from the NRC based on a safety evaluation and justification that the LTA will not be detrimental to the plant’s licensed operations.

Insertion of a LTA with Lightbridge’s fuel rods in a nuclear power plant requires the power plant owner to obtain approval from the NRC based on a safety evaluation and justification that the LTA will not be detrimental to the plant’s licensed operations.

This justification must address numerous technical areas (e.g., neutronics design, mechanical design, thermal hydraulic design, materials science, reactor operations, etc.) and include considerations of the performance of the LTA itself as well as its interaction with other fuel assemblies in the reactor core which may be impacted by the presence of the LTA.

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Along with leveraging the AFQ approach, uranium-zirconium fuel technology has the benefits of being previously demonstrated in operating icebreaker reactors and several aspects of the performance of the fuel have been demonstrated.

This enables Lightbridge to begin designing an LTA and developing the necessary computer models of the fuel behavior, prior to obtaining the results of the loop irradiation testing of the fuel rod.

This enables Lightbridge to begin designing a LTA and developing the necessary computer models of the fuel behavior, prior to obtaining the results of the loop irradiation testing of the fuel rod.

Along with the irradiation testing and computer simulations, some physical testing of the fuel assembly design will be required.

Lightbridge anticipates that such ‘out-of-pile’ testing to justify the LTA performance will take approximately four years.

We expect that the LTA design effort, development of computer modeling and simulation capabilities, and performance of the LTA safety justification will take eight years.

Lightbridge anticipates that such ‘out-of-pile’ testing to justify the LTA performance may take four years.

We expect that the LTA design effort, development of computer modeling and simulation capabilities, and performance of the LTA safety justification may take eight years.

The NRC’s review and approval of the license amendment for LTA insertion is expected to require two years after the license amendment is submitted.

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Consolidated Results of Operations

The following table presents our operating results for the years indicated (rounded to millions):

The following table presents our operating results and the change in amounts for the years indicated (rounded to millions):

Operating Expenses

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Total Operating Expenses

Other Operating Income

Contributed services - research and development

Total Other Operating Income

Total Operating Loss

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Professional services are principally comprised of legal, audit, strategic advisory services, and outsourcing services.

Total general and administrative expenses decreased by $0.4 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The decrease of $0.4 million was primarily due to a decrease in employee compensation and employee benefits of $0.4 million, due to the increase in the time allocation percentage of G&A labor costs to research and development expenses, a decrease in consulting expenses of $0.1 million, a decrease in insurance expense of $0.1 million, a decrease in dues and subscriptions of $0.1 million, and a decrease in promotion expenses of $0.1 million, offset by an increase in stock-based compensation of $0.4 million, which was due to the partial vesting of restricted stock awards granted in 2022.

Total stock-based compensation included in general and administrative expenses was $1.1 million for the years ended December 31, 2023 and 2022.

General and administrative expenses increased by $1.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

The increase of $1.4 million was primarily due to an increase in employee compensation and employee benefits of $0.3 million, an increase in consulting fees and professional fees of $0.3 million, an increase in stock-based compensation of $0.6 million, an increase in IT expenses of $0.1 million, an increase in travel and recruitment expenses of $0.1 million, and an increase in patent expense of $0.1 million, partially offset by a decrease in insurance expense of $0.1 million.

Total stock-based compensation included in general and administrative expenses was $1.7 million and $1.1 million for the years ended December 31, 2024 and 2023, respectively.

Research and Development (R&D)

R&D expenses consist primarily of costs associated with our CRADA and SPP agreements with INL for the research and development of our fuel, employee compensation and related fringe benefits including stock-based compensation and related allocable overhead costs for the research and development of our fuel and contributed services - research and development for the work performed under the Gateway for Accelerated Innovation in Nuclear (GAIN) vouchers.

Total R&D expenses increased by $1.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022 due to the increase in R&D activities related to the development of our fuel.

This increase primarily consisted an increase in INL project labor costs of $0.8 million, an increase in allocated employee compensation and employee benefits of $0.4 million, an increase in consulting expenses of $0.1 million, an increase in travel expenses of $0.1 million and an increase in stock-based compensation expenses of $0.1 million.

This increase was offset by a decrease of $0.3 million primarily related to the GAIN voucher work recorded as research and development expenses in 2022 that was completed in the first quarter of 2023.

We currently anticipate investing approximately $6 million to $8 million in the R&D of our nuclear fuel over the next 12 to 15 months.

Due to the nature of our R&D expenditures, cost and schedule estimates are inherently uncertain and can vary significantly as new information and the outcome of these R&D activities become available.

R&D expenses consist primarily of costs associated with our CRADA and SPPA agreements with INL, employee compensation and related fringe benefits including stock-based compensation and other research and development costs for the development of our Lightbridge Fuel™.

The following table presents the total R&D expenses for the year ended December 31, 2024 and 2023 (rounded to millions):

Romania Feasibility Study

Centrus Energy FEED Study

Allocated employee compensation and stock-based compensation

Other outside R&D expenses

R&D expenses increased by $2.7 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023 due to the increase in R&D activities related to the development of Lightbridge Fuel™.

This increase primarily consisted of an increase in INL project labor costs of $0.9 million, an increase of outside R&D costs of $0.4 million, an increase in R&D employees and allocated employee compensation and employee benefits of $1.0 million, an increase in quality assurance expenses of $0.1 million, an increase in R&D modeling computer hardware and software and travel expenses of $0.2 million and an increase in stock-based compensation expenses of $0.1 million.

Total stock-based compensation included in research and development expenses was $0.3 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively.

We currently anticipate investing approximately $17.0 million in the R&D of our nuclear fuel for 2025.

Meeting this future budgeted R&D spending for the next 12 months is uncertain and actual spending may differ.

Due to the nature of our R&D expenditures, future costs and schedule estimates are inherently uncertain and can vary significantly as new information and the outcome of these R&D activities become available.

Our future business operations are dependent on budgetary constraints due primarily to market conditions and the uncertainty of future liquidity and capital resources available to us to conduct our future R&D activities.

Other Operating Income

There was a decrease in other operating income of $0.4 million related to a decrease in contributed services - research and development for the year ended December 31, 2023 due to the GAIN voucher project that was completed in the first quarter of 2023.

There are no outstanding GAIN vouchers.

Contributed services - research and development are recorded with a charge to R&D expenses and a corresponding amount recorded to contributed services - research and development.

There was an increase in other income of $0.8 million due to rising treasury bill interest rates over the past year which resulted in an increase in interest income earned from the purchase of treasury bills and from our bank savings account for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

There was an increase in other income of $0.2 million due to higher cash balances over the past year, which resulted in an increase in interest income earned from the purchase of treasury bills and from our bank savings account for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Provision for Income Taxes

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We believe that based on our current level of operating expenses and currently available cash resources, we will have sufficient funds available to cover our business activities and operating cash needs for the next 12 months.

Our long-term cash requirements are currently estimated to be an average of $10.0 million of outside or third-party R&D expenditures per year over the next 10-15 years.

In order to meet these long-term cash requirements for future planned operations to develop and commercialize our nuclear fuel, including any additional expenditures that may result from unexpected developments, it will be necessary for our project to receive direct or indirect funding and/or in-kind support from government and/or strategic partners and/or other third-party sources.

At December 31, 2023, we had cash and cash equivalents of $28.6 million, as compared to $28.9 million at December 31, 2022, a decrease of $0.3 million.

At December 31, 2024, we had cash and cash equivalents of $40.0 million, as compared to $28.6 million at December 31, 2023, an increase of $11.4 million.

We raised net proceeds of $21.4 million from the sale of approximately 4.5 million shares of common stock during the year ended December 31, 2024.

Our net cash used in operating activities for the year ended December 31, 2024, was $9.5 million and our cash flow projections indicate that we will have continued negative cash flows for the foreseeable future.

We currently do not anticipate any incoming cash flows, other than the sale of common stock through our ATM offering.

Therefore, we are not profitable, and we cannot provide any assurance that we will become profitable in the future.

We will continue to incur losses because we are in the early development stage of commercializing our nuclear fuel.

We have approximately $28.2 million of working capital as of the date of this filing.

We currently project a negative cash flow from our operations for both our general and administrative and R&D expenses, resulting in total expected expenditures of approximately $13.8 million for the next 12 months.

Our R&D expenses are expected to increase over the next 12-15 months.

Our cash balance at December 31, 2023 and as of the date of this filing exceeds our anticipated cash requirements for the next 12 months.

There are inherent uncertainties in forecasting the future required R&D or other expenditures in the future.

Once other anticipated agreements are finalized or other future R&D agreements are entered into and the future R&D expenses are known, we expect to incur a significantly higher level of future required R&D expenses and higher negative monthly cash flows from operations in the future.

If sufficient funding becomes available to us, our R&D activities may significantly increase in the future.

This funding is needed to continue our nuclear fuel development project and to achieve our future R&D milestones.

The actual amount of cash we will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of the R&D work at the DOE’s national laboratories for our fuel along with the cost to commercialize our nuclear fuel.

Accordingly, there is high potential for budget variances in the current cost projections and fuel development timelines of our current planned operations over the fuel development period.

We will continue to utilize our ATM to finance our future R&D and corporate activities.

We will need to receive substantial funding and in-kind support from government and/or strategic partners and/or other third-party sources throughout our nuclear fuel R&D development period in order to fund our ongoing R&D efforts in the future.

We currently do not anticipate any incoming cash flows, other than the sale of common stock through our at-the-market (ATM) offering.

We are not profitable, and we cannot provide any assurance that we will become profitable in the future.

We will continue to incur losses because we are in the early R&D development stage of our nuclear fuel.

To complete the development and commercial deployment of Lightbridge Fuel™ we currently estimate a total R&D, including Capital Expenditures (CAPEX) investment in the range of $200 million to $300 million or approximately $20.0 million per year over the next 10-15 years.

We plan to raise this capital through a combination of strategic and financial investors, as well as potentially receiving grants from the DOE and/or other government sources.

Sufficient funding is needed to continue our nuclear fuel development project and to achieve our future R&D milestones leading to the commercialization of our nuclear fuel.

The actual amount of cash we will need to reach the commercialization of our nuclear fuel is subject to many factors, including, but not limited to, the timing, design and conduct of the R&D work at the DOE’s national laboratories for our fuel along with other costs to commercialize our nuclear fuel.

Accordingly, there is high potential for budget variances in the current above cost projections and fuel development timelines of our current planned operations over the above cited fuel development period.

Currently, we plan to continue to utilize our ATM to finance our future R&D and general and administrative activities.

We will also need to receive substantial funding and in-kind support from government, strategic partners and/or other third-party sources throughout our nuclear fuel R&D development period in order to fund our ongoing R&D efforts in the future.

If we are unable to obtain such funding and/or in-kind support that meets our future R&D cash requirements, we will need to seek other funding, which may include the issuance of additional shares of the Company’s common stock, if available.

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There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all.

Our current source of cash available to us for the next 12 months, in addition to cash and cash equivalents on hand, is the potential funding from equity issuances pursuant to the ATM equity offering sales agreement, as amended, with Stifel, Nicolaus & Company, Incorporated.

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

We filed a prospectus supplement, dated April 4, 2023, with the SEC pursuant to which we may offer and sell shares of common stock having an aggregate offering price of up to $17.9 million from time to time, through the ATM.

We will file another prospectus supplement with the SEC after we have either sold $17.9 million of our common stock under this prospectus supplement or are required to file a new prospectus supplement when our current S-3 shelf registration expires in April 2024.

Under current SEC regulations set forth under General Instruction I.B.6.

of Form S-3, if at any time our public float is less than $75.0 million, and for so long as our public float remains less than $75.0 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to an aggregate of one-third of our public float, which is referred to as the baby shelf rules.

As of the date of this filing, we are subject to the baby shelf rules for any offerings conducted on our current shelf registration statement, and therefore may be limited on the amount of funding available under this Form S-3 shelf registration statement in the future.

Although we expect this ATM facility to continue to be a source of working capital for the Company in 2024, there is no assurance that an ATM financing arrangement will be available to us in the future.

Stockholders’ Equity and Stock-Based Compensation of the Notes to the Consolidated Financial Statements included in Part II.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K for information regarding our ATM financing.

We have approximately $48.4 million of working capital as of the date of this filing.

We currently project a negative cash flow from our operations from both our general and administrative and R&D expenses, resulting in total expected expenditures of approximately $25.0 million for 2025.

Our R&D expenses are expected to increase over the next 12 months based on our fuel development activities.

Our cash balance at December 31, 2024, and as of the date of this filing exceeds our anticipated cash requirements for the next 12 months.

There are inherent uncertainties in forecasting the R&D and other expenditures that will be required in the future.

We may also be unsuccessful in raising the capital necessary in the future to continue the R&D development of our fuel.

Once other anticipated agreements are finalized or other future R&D agreements are entered into and the future R&D expenses are known, we expect to incur a significantly higher level of future required R&D expenses to further develop our fuel, resulting in higher negative monthly cash flows from operations in future periods.

Our current source of cash available to us for the next 12 months, in addition to cash and cash equivalents on hand, is the potential funding from equity issuances pursuant to the at-the-market equity offering sales agreement, as amended, , with Stifel, Nicolaus & Company, Incorporated.

We filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) on March 29, 2024, registering the sale of up to $75.0 million of the Company’s securities that was declared effective on April 19, 2024.

On May 10, 2024, we filed a prospectus supplement, which was further supplemented on July 19, 2024 and August 9, 2024 pursuant to which we may offer and sell shares of common stock having an aggregate offering price of up to $12.6 million from time to time, through the ATM.

On November 22, 2024, we filed a prospectus supplement pursuant to which we may offer and sell shares of common stock having an aggregate offering price of up to $45.0 million from time to time through the ATM.

Although we expect this ATM facility to continue to be our primary source of working capital for the Company in 2025, there is no assurance that an ATM financing arrangement will be available to us in the future.

Stockholders’ Equity and Stock-Based Compensation of the Notes to our Consolidated Financial Statements included in Part II.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K for information regarding our prior equity financings.

We have no debt or lines of credit, and we have financed our operations to date through the sale of our preferred stock and common stock.

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Short-Term and Long-Term Liquidity Sources

Our current source of liquidity is cash raised from our ATM facility.

Currently, our primary source of liquidity is cash raised from our ATM facility.

As discussed above, we will seek new financing in order to bring us additional sources of capital, depending on the capital market conditions of our common stock.

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We may be unable to form such strategic alliances on terms acceptable to us or at all.

The following table provides detailed information about our net cash flows for the years ended December 31, 2023 and 2022 (rounded in millions):

Stockholders’ Equity and Stock-Based Compensation of the Notes to our Consolidated Financial Statements included in Part II.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K for information regarding our prior equity financings.

The following table provides detailed information about our net cash flows for the years ended December 31, 2024 and 2023 (amounts reflected in millions):

Net Cash Used in Operating Activities

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Net Cash Provided by Financing Activities

Net Cash (Outflow) Inflow

Net Cash Inflow (Outflow)

Operating Activities

Cash used in operating activities decreased by $0.2 million in 2023 as compared to 2022.

The decrease was primarily due to changes in net operating assets and liabilities, which were driven by an increase in prepaid assets of $0.2 million, offset by an increase in accounts payable and accrued liabilities of $0.4 million.

Cash used in operating activities increased by $3.0 million in 2024 as compared to 2023.

This increase was primarily due to increased spending on R&D, general and administrative expenses and changes in working capital, which included an increase in prepaid assets of $0.1 million, and was partially offset by an increase in accounts payable and accrued liabilities of $0.2 million.

Investing Activities

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Financing Activities

Cash provided by financing activities decreased by $4.7 million.

This decrease was due to a decrease in the net proceeds received from the issuance of common stock under our at-the-market (ATM) facility in fiscal year 2023 of $4.6 million and an increase in net share settlement of equity awards for the payment of withholding taxes of $0.1 million.

Cash provided by financing activities increased by $14.7 million.

This increase was due to an increase in the net proceeds received from the issuance of common stock under our at-the-market (ATM) facility in the year ended December 31, 2024 of $15.0 million, partially offset by an increase in net share settlement of equity awards for the payment of withholding taxes of $0.3 million.

Cash provided by our ATM facility was $21.4 million (sale of approximately 4.5 million common shares) and $6.4 million (sale of approximately 1.5 million common shares) for the years 2024 and 2023, respectively.

Cash used during the years 2024 and 2023 related to the payment of withholding taxes on the net share settlement of equity awards was $0.5 million and $0.2 million, respectively.

Contractual Obligations and Commitments

On December 9, 2022, we entered into an initial project task statements with BEA, the operating contractor of INL, in collaboration with the DOE, which statements set forth the initial scopes of work and funding commitments under the umbrella agreements, each dated September 27, 2022, between the Company and BEA.

At December 31, 2023, we had approximately $2.9 million in outstanding project task statement obligations to BEA relating to the research and development being conducted under the SPP and 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.

Subsequent Events to our Consolidated Financial Statements included in Part II.

Financial Statements and Supplementary Data of this Annual Report on Form 10-K for information regarding cash provided by our ATM facility after December 31, 2024.

Project Task Statements - INL

On December 9, 2022, we entered into initial project task statements with BEA, the operating contractor of INL, in collaboration with the DOE, which statements set forth the initial scopes of work and funding commitments under the umbrella agreements, each dated September 27, 2022, between the Company and BEA.

At December 31, 2024, we had approximately $1.7 million in project task statements to BEA relating to the research and development being conducted under the SPPA and 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 SPPA 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 had approximately $0.2 million in outstanding project commitments to RATEN ICN.

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

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

The work is expected to be completed in 2024 at a cost and with a remaining contractual obligation of approximately $0.5 million at December 31, 2023.

Operating Leases

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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 7. Management’s Discussion and Analysis