Thank you for standing by, and welcome to the Lightbridge Corporation Business Update and Second Quarter 2021 Conference Call. Please note that today's call is being recorded. And it's now my pleasure to introduce Matthew Abenante, Director of Investor Relations for Lightbridge Corporation..

Thank you, Brian, and thanks to all of you for joining us today. The company's earnings press release was distributed before the market opened earlier today and can be viewed on the Investor Relations page of the Lightbridge website at www.ltbridge.com.

Joining us on the call today is Seth Grae, Chief Executive Officer; along with Larry Goldman, Chief Financial Officer; Andrey Mushakov, Executive Vice President for Nuclear Operations; and Jim Fornof, Vice President for Nuclear Program Management.

I would like to remind our listeners that any statements on this call that are not historical facts are forward-looking statements. Today's presentation includes forward-looking statements about the company's competitive position and product and service offerings.

During today's call, words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. This presentation is based on current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from such estimates.

These and other risks are set forth in more detail in Lightbridge's filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements whether as a result of new developments or otherwise.

And with that, I would like to turn the call over to our first speaker, Seth Grae, Chief Executive Officer of Lightbridge. Hello, Seth..

Well, hello, thank you, Matt. And thank you all for joining us to discuss Lightbridge's second quarter 2021 results. I hope you and your families are well and safe.

Earlier today, United Nations' Intergovernmental Panel on Climate Change, the IPCC, stated in a report that the window is rapidly closing to avoid catastrophic climate change that would transform life as we know it.

For those new to Lightbridge's story, and as a reminder to those who've been following Lightbridge, I'd like to start with our mission, which is to pioneer advanced nuclear fuel technologies to impact the world's climate and energy problems soon enough to make a difference.

Lightbridge Fuel, our groundbreaking next-generation nuclear fuel technology, will make both existing and new reactors safer, more proliferation resistant and more economically viable. Our focus has been on developing new metallic fuel rods, something that hasn't been attempted in the nuclear power industry for the existing reactor technology.

Lightbridge Fuel will be even safer, and produce more energy than current nuclear fuels. Both existing reactors and the future small modular reactors, or SMRs, can benefit by using Lightbridge Fuel enabling a plant to produce added incremental electricity at a lower cost than any other means of generating baseload electric power.

We are designing Lightbridge Fuel to enable these SMRs to more efficiently load follow, ramping up and down in power as renewables are available, replacing fossil fuel plants.

In addition, we expect this technology to reduce the cost of generating electricity from an SMR, which strengthens the business case for deploying large numbers of SMRs to deliver reliable power and meet the IPCC's climate goals.

Our development steps and anticipated safety and economic benefits are also applicable to the existing large light water reactors. Our innovative fuel design is backed by a global patent portfolio. The U.S. Department of Energy and its national laboratories have validated Lightbridge Fuel with 2 funding awards.

DOE considers awards larger than $500,000 in cases with "a clear need and involving a truly exceptional technology." Our gain voucher for work at Idaho National Laboratory meets that criteria with an award in excess of $500,000 in DOE funding contributions. Turning to our current fuel development efforts.

Last month, we executed a cooperative research and development agreement, or CRADA, with the Battelle Memorial Institute, the operating contractor of the Pacific Northwest National Laboratory, PNNL, in collaboration with the DOE.

This agreement kicks off our work at PNNL, which advances a critical stage in the manufacturing process of Lightbridge Fuel by demonstrating a casting process using depleted uranium zirconium material. The total project value of CRADA is approximately $663,000 and with 3/4 of this amount funded by DOE for the scope performed by PNNL.

Earlier in the second quarter, we announced the successful demonstration of our proprietary manufacturing process for 3-lobe, 6-foot rods using surrogate materials. These surrogate rods were manufactured through our co-extrusion process at a length designed for small modular reactors.

These activities are part of our ongoing efforts to qualify our manufacturing process and develop specifications for our metallic fuel rod design that will ultimately be used for design and manufacturing fuel rods for lube irradiation testing as well as commercial length rods for operation in a commercial reactor.

We are pleased with our ongoing efforts at Idaho National Laboratory, or INL, performing under our funding voucher from the Department of Energy's GAIN program. We are designing an experiment for testing our fuel samples in the Advanced Test Reactor at INL. We anticipate our work under this voucher will be completed later this year.

Last week, we announced the appointment of Jesse Funches as an Independent Director to our Board of Directors, who will serve as Chair of the Audit Committee. Jesse brings a unique skill set combining years of successful financial management with a comprehensive knowledge of nuclear regulatory policies and processes.

He also has extensive experience in working with Congress and the Office of Management and Budget, in the Office of the Secretary - and in the Office of the Secretary of Defense.

Jesse's wealth of knowledge and strong leadership will be instrumental in guiding our fuel development initiatives and ensure we meet or exceed regulatory and governmental requirements.

Since our last call, there has been a flurry of activity within the company as well as the industry, which has led to a greater awareness and attention for Lightbridge. In June, Lightbridge was added to the Russell Microcap Index.

We are proud to be one of the few publicly traded nuclear companies and to be included in the index, which will help us continue to broaden our investor base. Investors are increasingly learning that advanced nuclear technology is necessary for U.S. companies to compete globally and to meet IPCC climate goals.

In July, I presented at CleanEquity Monaco, this time virtually. CleanEquity is an annual invitation-only event co-hosted by Prince Albert's Foundation and Innovator Capital of London, featuring some of the world's most innovative, sustainable technology companies.

The audience included selected sovereign, corporate, family and professional investors, policymakers and end users. Video of my presentation is available on Lightbridge's Investor Relations page. I also look forward to presenting at the upcoming SNN Network Summer virtual event on August 19.

Tomorrow, Andrey Mushakov will speak at the American Nuclear Society's Utility Working Conference, speaking on a panel discussion on accident tolerant fuels focused on the economic performance benefits associated with these fuels and will discuss the improved safety and economic benefits of Lightbridge Fuel.

And with that, I'll turn the call over to Andrey, Executive VP for Nuclear Operations, who will review our near-term research and development opportunities.

Andrey?.

Thank you, Seth. As Seth mentioned, we have executed contracts with Pacific Northwest National Laboratory related to our second GAIN Voucher for demonstration of our fuel casting process using depleted uranium and a 50% -- in a [58%] (ph) alloy with zirconium.

This is a key step in the fabrication process for our fuel, and it also feeds into our needs for fabrication of irradiation fuel samples for the Advanced Test Reactor at Idaho National Laboratory.

We have also begun the procurement and quality assurance process with our sub-tier vendors for the supply of depleted uranium and zirconium materials, which is a component of Lightbridge's mentioned contributions to the project. The total value of the project is approximately $663,000 with 3/4 of this amount funded by the U.S.

Department of Energy for the scope performed by PNNL. Also relating to our manufacturing process, we have successfully demonstrated our patented coextrusion process using surrogate materials in place of uranium. The surrogate rods are manufactured using our coextrusion process at the 6-foot nominal lengths designed for small modular reactors.

This successful demonstration of our high-temperature coextrusion illustrates the primary forming process for Lightbridge Fuel, including the helical twist of the fuel rods and the metallurgical bond between the central displacer, surrogate fuel alloy and the cladding.

Rods produced during this demonstration will be used for further development activities, including validation of computer models of the extrusion process and corrosion tension of as-fabricated palladium alloys. In parallel, we continue to make progress on our Advanced Test Reactor experiment design with Idaho National Laboratory.

We have completed the conceptual design and -- design phase, including the initial design review, in which our Idaho National Lab colleagues have been optimizing a combination of design elements in order to achieve burn-up of the fuel samples within a defined window of time in the reactor.

Now that the conceptual phase is complete, Idaho National Lab will begin the detailed design and safety case for the experiment. We expect the experiment design to be completed later this calendar year.

Completion of the ATR experiment design will allow us to finalize the scope support of Idaho National Lab for high-assay low-enriched uranium supply, coupon sample fabrication, reactor radiation and ultimately post-radiation examination of the samples. And with that, back to you, Seth..

Thank you, Andrey. Now I will turn the call over to Larry Goldman, Chief Financial Officer, to summarize the company's financial results.

Larry?.

Thank you, Seth, and good afternoon, everyone. For further information regarding our second quarter 2021 financial results and disclosures, please refer to our earnings release that we filed this morning, and our Form 10-Q that we will file with the SEC later today.

The company's working capital position at June 30, 2021, was $13.8 million compared to $17.1 million at December 31, 2020. Total assets were $15.1 million and total liabilities were $1.2 million at June 30, 2021.

Total cash used in operating activities was $7.7 million for the 6 months ended June 30, 2021, an increase of approximately $4.2 million compared to the $3.5 million for the 6 months ended June 30, 2020.

This increase was due primarily to the dissolution of the Enfission joint venture and the payment of approximately $4.2 million to Framatome for outstanding invoices for work performed and other expenses incurred. There was no cash provided by financing activities for the 6 months ended June 30, 2021.

Net loss for the second quarter of 2021 was $1.6 million compared to $2.1 million for the second quarter of 2020. Total R&D expenses increased by approximately $0.2 million for the 3 months ended June 30, 2021 to $0.3 million as compared to $0.1 million for the 3 months ended June 30, 2020.

It was an increase of approximately $0.1 million and outside R&D work with the DOE National Laboratories related to our first GAIN Voucher and an increase of approximately $0.1 million and various other R&D expenses.

R&D expenses consist primarily of employee compensation and related fringe benefits and other allocable overhead costs related to the R&D of our fuel. Total G&A expenses decreased by approximately $0.5 million for the 3 months ended June 30, 2021 to $1.5 million as compared to $2 million for the 3 months ended June 30, 2020.

There was a decrease in professional fees of approximately $0.3 million, a decrease in patent expense of approximately $0.1 million and a decrease in employee comp and benefits of approximately $0.3 million.

These decreases were offset by an increase of approximately $0.1 million in insurance expense and an increase of approximately $0.1 million in consulting fees.

Net other operating income was $0.2 million for the 3 months ended June 30, 2021, due to an anticipated final distribution of approximately $0.1 million from the dissolution and wind down of the affairs of the Enfission joint venture. And grant income of approximately $0.1 million from our first GAIN Voucher.

There was no grant income for the 3 months ended June 30, 2020.

In support of our long-term business and future financing requirements with respect to our fuel development, we expect to continue to seek additional DOE funding and equity funding in the future, along with some strategic alliances that may contain cost bearing contributions and additional funding from others in order to help fund our future R&D milestones leading to the commercialization of Lightbridge Fuel.

Now over to you, Seth..

Thank you, Larry. And with that, we will go to the question-and-answer session. Thank you, everyone, who has submitted questions. Matt, please go ahead to the questions..

Okay. Your first question. In your shareholder letter in June, you mentioned the incident at the nuclear power plant at Taishan in China.

Is it safe to say that had Lightbridge fuel rods being deployed that the current situation wouldn't have occurred?.

We don't know the specifics of the situation in Taishan, so it is difficult to say how Lightbridge's metallic fuel would have responded. It does seem likely that some of the conventional fuel rods have experienced a cladding failure and released radioactive fission product into the reactor coolant.

Lightbridge's metallic fuel is designed to retain fission products within the fuel matrix, even in the event of a cladding breach. On our website, you could see our investor presentation, which has some quotes from the U.S. Nuclear Regulatory Commission with a link to that NRC web page.

And on the NRC's website, it says about Lightbridge Fuel "complete retention of fission products means no burst release of these products upon cladding failure." So yes, I think it is safe to say that had Lightbridge fuel rods been deployed, the situation would not have occurred..

Thank you. The next question.

Has there been any progress or updates regarding the possible additional test loops at the Advanced Test Reactor at Idaho National Laboratory?.

No update yet. Congress is going through the authorization and appropriations process. We expect to learn additional developments after Congress is back in session after the Labor Day holidays..

Thank you.

Are there additional GAIN Vouchers in the works? And if so, what areas of focus would you propose?.

Yes.

Jim, if you would take that?.

Certainly, Seth. Yes, under the rules of the DOE GAIN program, a company can have only 2 active GAIN Vouchers at the same time. Lightbridge has 2 active GAIN Voucher awards. So we're precluded from a third at the moment. We do find that the GAIN Vouchers to be -- are a useful program in order to tap into the unique capabilities of the U.S. National Labs.

So Lightbridge will consider new GAIN Voucher applications as we identify additional scopes suitable for this DOE program..

Thank you, Jim.

Can you clarify the timing of when Lightbridge has to provide fuel sample materials for the ATR as things stand today as well as if additional loops are added to the ATR?.

Okay. Also for you, Jim..

Yes. Sure, Seth. Yes, we've identified a potential target ATR slot in the late 2022 or early 2023 time frame for insertion of our fuel material test samples. And this is following the core internal change-out outage, which is currently underway.

This timing will be dependent upon the final completion of the ATR outage as well as INL’s other commitments for reactor irradiation. But assuming that INL completes the outage according to the current schedule and the capsules position in the ATR remain available to us, as expected, the outage should not affect our long-term efforts.

Regarding the additional test loops, we can't speculate on when or if they'll be added to the ATR. As you mentioned, it's a function of current funding. Or when they might be made available to us. But we have made public statements about our support for adding these additional loops in order to support American innovation and advanced nuclear fuels.

Back to you, Seth..

Another question, Matt?.

Thank you.

With the progress that's been made so far across 2 GAIN vouchers and your coextrusion process demonstration, what are some milestones investors can look forward to for the rest of the year?.

Okay.

Can you take this one, Andrey?.

Absolutely. So in terms of upcoming milestones, under the first GAIN voucher at Idaho National Laboratory, we expect to finish that work later this year that would culminate with a complete experiment design validation testing of coupon fuel sample -- material samples in the Advanced Test Reactor.

From there, we anticipate finalizing our discussions with Idaho National Laboratory relating to contract for production of our coupon fuel material samples using high-assay low-enriched uranium, or HALEU.

Also relating to our manufacturing process, we successfully demonstrated our patented coextrusion process using surrogate materials in place of uranium.

Rods produced during this demonstration will be used for further development activities, including validation of computer models of the extrusion process and corrosion [testing] (ph) of as-fabricated palladium alloys.

And then finally, we have recently begun work under the second GAIN voucher with Pacific Northwest National Laboratory to demonstrate the casting element of our patented advanced manufacturing process using depleted uranium. So we'll continue to make some progress on that particular scope of work as well. Back to you, Matt..

Thank you.

Is Lightbridge's direction for fuel manufacturing with recent GAIN Vouchers considering both coextrusion and casting?.

Why don't you take that one, Andrey?.

Sure, Seth. Coextrusion and casting are 2 critical steps of our manufacturing process. First, the billet is prepared using the casting rod, then the billet is coextruded into full-length fuel rod. Our recently completed surrogate rod extrusion demonstrated the coextrusion element of our manufacturing process.

And then the most recent GAIN voucher with Pacific Northwest National Laboratory is focused on demonstration of the casting element of our manufacturing process..

Okay.

Matt, any other questions?.

That's it for me..

Okay. Very good. Well, thank you, everybody, for participating on today’s call. We look forward to providing additional updates in the near future. In the meantime, we can be reached at ir@ltbridge.com. Stay safe and well. Goodbye..

This concludes today's conference call. You may now disconnect..