Lightbridge Corporation (Nasdaq: LTBR) — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Financial statements are unaudited. Lightbridge is a pre-revenue nuclear fuel technology company developing metallic fuel for water-cooled reactors.
Financial results and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating expenses | $2.16m | $2.20m | $6.44m | $5.98m |
| Operating loss | $2.16m | $2.13m | $6.41m | $5.70m |
| Interest income | $0.32m | $0.09m | $0.87m | $0.11m |
| Net loss | $1.84m | $2.04m | $5.54m | $5.59m |
| Loss per share, basic and diluted | $0.15 | $0.18 | $0.47 | $0.53 |
At September 30, cash and cash equivalents were $29.24m, total assets $30.08m, current liabilities $0.88m, and stockholders’ equity $29.21m. Working capital was approximately $28.6m based on the balance sheet; management separately cited approximately $28.3m. The company reported no debt or credit lines.
For the first nine months, operating cash use was $4.14m versus $4.10m in 2022; financing provided $4.48m, primarily from common stock issuance, versus $10.65m in 2022. Cash increased by $0.34m during the period. No revenue-based margins are meaningful because the company reported no revenue.
Material changes and financing
- Year-to-date R&D expense increased 127% to $1.37m, principally reflecting higher national laboratory project labor and employee costs. G&A decreased about 6% to $5.07m.
- Operating loss widened year over year, but higher interest income helped reduce the nine-month net loss slightly compared with 2022.
- The company issued approximately 0.9m shares through its at-the-market (ATM) program during the first nine months, raising $4.5m net, compared with $10.6m net in the prior-year period. Approximately $13.8m remained available under the ATM as of the filing date. After quarter-end, about 25,000 shares were sold for approximately $111,000 net through October 31.
- Common shares outstanding were 12.93m at September 30 and 12.96m as of October 30, 2023. Further equity financing may dilute existing shareholders.
Outlook, development and risks
- Management said existing cash was expected to fund business activities and operating needs for the next 12 months. It projected approximately $14m of total expenditures over that period and anticipated R&D expense growth over the next 12–15 months. Cash flows are expected to remain negative.
- Long-term development is expected to require substantial government support; management estimated average outside R&D spending of $10m per year over the next 10–15 years. Further funding may require grants, partnerships, equity or debt; access to financing is not assured.
- INL work is intended to progress toward casting and extrusion of fuel samples for irradiation testing. Initial depleted-uranium alloy ingots had been cast and were undergoing characterization. The company reported approximately $3.1m of outstanding INL project task statement commitments; work can be terminated subject to notice and costs incurred through termination.
- Management’s expected milestones over the next 2–3 years include INL work toward irradiation testing, a CANDU fuel feasibility study, and a front-end engineering and design study for a pilot-scale fabrication facility. These are plans, not guaranteed outcomes.
- After quarter-end, Lightbridge engaged a Romanian nuclear research institute for a CANDU compatibility study priced at $186,300, expected to be completed by the end of 2024.
- Principal risks include funding and going-concern pressures if resources are unavailable, technical and regulatory development risk, dependence on government laboratories and strategic partners, fuel commercialization and customer adoption, competition, uranium supply, and possible schedule and cost changes. Management said the company had no known legal proceedings expected to have a material adverse effect and no material changes to its previously disclosed risk factors.
- Disclosure controls were assessed as not effective at September 30 due to an unremediated material weakness involving accounts-payable invoice controls. Remediation steps were in progress; management said the weakness would not be considered remediated until controls operated effectively for a sufficient period and were tested.
Key facts for investors to verify
- Whether available cash, ATM capacity, government support and other financing can sustain planned R&D spending, especially as costs rise.
- Progress, timing, technical results and cost of INL casting, extrusion and irradiation-testing work, as well as the stated project commitments.
- Whether planned CANDU and pilot-facility studies advance development, licensing and commercialization prospects.
- Future share issuance and dilution, including ATM usage and the company’s remaining financing capacity.
- Remediation and testing of the accounts-payable control weakness; also reconcile management’s $28.3m working-capital statement with the balance-sheet calculation of approximately $28.6m.