Lightbridge Corporation — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Lightbridge is a pre-commercial nuclear-fuel technology company developing metallic fuel for existing and advanced reactors, including small modular reactors (SMRs). The filing is unaudited.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating expenses | $1.61m | $1.79m | $3.78m | $3.94m |
| Operating loss | $1.52m | $1.61m | $3.57m | $3.66m |
| Net loss | $1.50m | $1.61m | $3.55m | $3.62m |
| Basic and diluted loss per share | $0.14 | $0.27 | $0.34 | $0.61 |
- No revenue was reported; margins are therefore not meaningful. R&D expenses were $0.17m in Q2 and $0.43m for the six months. G&A was $1.44m and $3.35m, respectively.
- Cash and cash equivalents were $29.3m at June 30, 2022, including $14.0m in U.S. Treasury bills. Working capital was reported as $29.2m at quarter-end; elsewhere the filing gives approximately $29.4m as of the filing date.
- Six-month operating cash use was $3.1m, versus $7.7m in 2021. Financing provided $7.6m, principally from ATM stock sales; cash increased $4.5m to $29.3m.
- No debt or credit lines were reported. Current liabilities were $0.48m. Accumulated deficit was $140.5m.
Changes versus prior period
- Q2 net loss narrowed by about $0.1m; six-month net loss was also modestly lower year over year. Six-month operating expenses fell $0.16m, as lower R&D was partly offset by higher G&A.
- Six-month G&A increased about $0.1m, including higher stock compensation, employee costs, directors’ fees and promotion spending; lower arbitration-related professional fees (the matter settled in 2021) partly offset those increases.
- R&D declined about $0.2m for the six-month period, primarily due to lower consulting, outside R&D, patent and employee costs. The 2021 joint-venture distribution did not recur.
- ATM sales generated $7.6m net proceeds from approximately 1.2m shares in the first half. Common shares outstanding rose from 9.76m at December 31, 2021 to 11.01m at June 30, 2022.
Outlook, risks and notable items
- Management says available working capital exceeds currently anticipated spending through Q2 2023, but states that substantial doubt exists about the company’s ability to continue as a going concern for the 12 months following the filing. It expects ongoing operating losses and negative cash flow.
- Management estimates operating cash needs of $1.0m–$1.2m per month and total expenditures of $12m–$18m over the next 12–15 months; actual spending could exceed available working capital as pending R&D agreements are finalized. The company may reduce or delay spending, including R&D, which could extend development timelines.
- Longer term, the filing estimates average outside R&D expenditures of about $10m annually over 10–15 years and describes a fuel commercialization timeline of up to 15–20 years. Management expects to seek equity or convertible financing, strategic partners and government grants; financing availability and terms are not assured, and equity issuance would dilute shareholders. The existing Form S-3 and ATM may be subject to offering limits.
- Development work includes DOE-supported projects with national laboratories. A PNNL fuel-casting project, valued at approximately $0.7m with roughly three-quarters expected to be DOE-funded, was expected to finish by year-end 2022. Lightbridge Fuel was also selected for an MIT-led SMR fuel study with approximately $0.8m in DOE funding to MIT. Management describes potential first SMRs using the fuel as operating as early as 2028; this is a projection, not a company revenue forecast.
- Key risks include technical testing and commercialization, access to test reactors and national laboratories, cost and schedule uncertainty, dependence on grants and partners, competition, regulation, COVID-19-related disruption, and the need to retain specialized personnel. The company disclosed that a senior nuclear engineer planned to resign later in 2022.
- Subsequent to quarter-end, approximately 70,000 ATM shares were sold through July 28 for about $0.3m net. A director-affiliated organization received $7,200 in membership dues and $85,000 in conference-related fees during the first half. The company reported no legal proceeding believed to be materially adverse.
Important facts for investors to verify
- Whether the company can secure sufficient financing and government support, given the going-concern warning and long development horizon.
- Progress, cost, schedule and funding status of DOE/national-laboratory R&D agreements and fuel testing milestones.
- Actual cash burn versus management’s estimates, and remaining ATM capacity or other financing limits.
- Share-count growth, future dilution and the impact of stock-based compensation and potential awards.
- Execution and governance details of the related-party consulting and conference arrangements.