The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1. Basis of Presentation, Summary of Significant Accounting Policies, and Nature of Operations
Basis of presentation
The accompanying unaudited condensed consolidated financial statements of Lightbridge Corporation and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, including a summary of the Company’s significant accounting policies, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2018, included in our Annual Report on Form 10-K for the year ended December 31, 2018.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month period have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms “Lightbridge”, “Company,” “we,” “us” or “our” mean Lightbridge Corporation and all entities included in our condensed consolidated financial statements.
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. We are a nuclear fuel technology Company developing and commercializing next generation nuclear fuel technology.
Liquidity
The Company has adopted Accounting Standards Codification, (“ASC”), 205-40,
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
. This guidance amended the existing requirements for disclosing information about an entity’s ability to continue as a going concern and explicitly requires management to assess an entity’s ability to continue as a going concern and to provide related disclosure in certain circumstances. This guidance was effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. The following information reflects the results of management’s assessment, plans, and conclusion of the Company’s ability to continue as a going concern.
At March 31, 2019, the Company had $23.5 million in cash and had a working capital surplus of approximately $23.4 million. The Company believes that its current financial resources, as of the date of the issuance of these financial statements, are sufficient to fund its current 12 month operating budget, alleviating the substantial doubt raised by our historical operating results and satisfying our estimated liquidity needs 12 months from the issuance of these financial statements.
The Company had expended substantial funds on its research and development activities to date and expects to increase this spending through its equity contributions to its joint venture company Enfission, LLC. The Company’s net cash used in operating activities during the three months ended March 31, 2019 was approximately $1.5 million, and current projections indicate that the Company will have continued negative cash flows for the foreseeable future. Net losses incurred for the three months ended March 31, 2019 and 2018 amounted to approximately $3.1 million and $4.7 million, respectively. As of March 31, 2019, the Company has an accumulated deficit of approximately $106.6 million, representative of recurring losses since inception. The Company has incurred recurring losses since inception because it is a development stage nuclear fuel development company. The Company expects to continue to incur losses due to the costs and expenses related to the Company’s research and development expenses and corporate general and administrative expenses.
The amount of cash and cash equivalents on the balance sheet as of the date of this filing is approximately $23 million. The Company also may consider other plans to fund operations including: (1) raising additional capital through equity issuances, debt financings or from other sources; (2) additional funding through new relationships to help fund future research and development costs (e.g., potential Department of Energy funding); and (3) other capital raises. The Company may issue securities, including common stock, preferred stock, and stock purchase contracts through private placement transactions or registered public offerings, pursuant to its registration statement on Form S-3 filed with the SEC on March 15, 2018 and declared effective on March 23, 2018. There can be no assurance as to the availability or terms upon which financing and capital might be available. The Company’s future liquidity needs, and ability to address those needs, will largely be determined by the success of the development of its nuclear fuel and key nuclear development and regulatory events and its business decisions in the future.
Equity Method Investment – Enfission, LLC - Joint Venture with Framatome Inc.
In January 2018, Lightbridge and Framatome Inc., a subsidiary of Framatome SAS (formerly part of AREVA SAS), finalized and launched Enfission, LLC (“Enfission”), a 50-50 joint venture company, to develop, license, and sell nuclear fuel assemblies based on Lightbridge-designed metallic fuel technology and other advanced nuclear fuel intellectual property. Framatome SAS and Framatome Inc. (collectively “Framatome”) is a global leader in designing, building, servicing, and fueling reactor fleet and advancing nuclear energy and is majority owned by Électricité de France, the world’s largest owner and operator of nuclear power plants. Lightbridge and Framatome began joint fuel development and regulatory licensing work under previously signed agreements initiated in March 2016. The joint venture Enfission is a Delaware-based limited liability company that was formed on January 24, 2018.
Management has determined that its investment in Enfission should be accounted for under the equity method of accounting. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and consolidated statements of operations; however, the Company’s share of the losses of the investee company is reported in the “Equity in loss from joint venture” line item in the consolidated statements of operations, and the Company’s carrying value in an equity method investee company is reported in the “Investment in joint venture” or “Investee losses in excess of investment” line item in the consolidated balance sheets.
The Company allocates income (loss) utilizing the hypothetical liquidation book value (“HLBV”) method, in which the Company allocates income or loss based on the change in each JV member’s claim on the net assets of the JV’s operating agreement at period end after adjusting for any distributions or contributions made during such period. The Company uses this method because of the difference between the distribution rights and priorities set forth in the Enfission operating agreement and what is reflected by the underlying percentage ownership interests of the Joint Venture.
We evaluate on a quarterly basis, whether our investment accounted for under the equity method of accounting, has an other than temporary impairment (“OTTI”). An OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined not likely to be recoverable. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the security until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors.
Basis of Consolidation
These condensed consolidated financial statements include the accounts of Lightbridge, a Nevada corporation, and our wholly-owned subsidiaries, TPI, a Delaware corporation and Lightbridge International Holding LLC, a Delaware limited liability company. All significant intercompany transactions and balances have been eliminated in consolidation. Translation gains and losses for the three months ended March 31, 2019 and 2018 were not significant.
As of January 24, 2018, the Company owns a 50% interest in Enfission – accounted for using the equity method of accounting (see Note 3. Investment in Joint Venture / Investee Losses in Excess of Investment). Enfission is deemed to be a variable interest entity (“VIE”) under the VIE model of consolidation because it currently does not have sufficient funds to finance its operations and will require significant additional equity or subordinated debt financing. The Company has determined that it is not the primary beneficiary of the VIE since it does not have the power to direct the activities that most significantly impact the VIE’s performance.
In determining whether the Company is the primary beneficiary and whether it has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all its economic interests in the entity, regardless of form. This evaluation considers all relevant factors of the entity’s structure including the entity’s capital structure, contractual rights to earnings (losses) as well as other contractual arrangements that have potential to be economically significant. Although the Company has the obligation to absorb the losses as of this reporting period, it has concluded that it is not the primary beneficiary since the major decision making for all significant economic activities require the approval of both the Company and Framatome. The significant economic activities identified were financing activities; research and development activities; licensing activities; manufacturing of fuel assembly product activities; and marketing and sales activities. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests and control is a matter that requires the exercise of professional judgment.
Certain Risks, Uncertainties and Concentrations
The Company is an early stage company and will likely need additional funding by way of strategic alliances, government grants, further offerings of equity securities, an offering of debt securities, or a financing through a bank in order to support the remaining research and development activities required to further enhance and complete the development of our fuel products to a commercial stage.
The Company participates in a government-regulated industry. Our operating results are affected by a wide variety of factors including decreases in the use or public favor of nuclear power, the need for additional research and development of our metallic fuel, and our ability to protect our intellectual property. Due to these factors, we may experience substantial period-to-period fluctuations in our future operating results. Potentially, a loss of a key officer, key management, and other personnel could impair our ability to successfully execute our business strategy, particularly when these individuals have acquired specialized knowledge and skills with respect to nuclear power and our operations.
Our future operations and earnings may depend on the results of the Company’s operations outside the United States, including some of its research and development activities. There can be no assurance that the Company will be able to successfully continue to conduct such operations, and a failure to do so would have a material adverse effect on the Company’s research and development 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, competition, changes in government regulations and support for nuclear power, changes in accounting and taxation standards, inability to achieve overall long-term goals, future impairment charges, and global or regional catastrophic events. The Company may be subject to various additional political, economic, and other uncertainties.
Cash and Cash Equivalents
The Company may at times invest its excess cash in savings accounts and US Treasury Bills. It classifies all highly liquid investments with 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 three prominent financial institutions in 2019 and 2018. The Company buys and holds short-term US Treasury Bills from Treasury Direct to maturity. US Treasury Bills totaled approximately $10.0 million and $10.0 million at March 31, 2019 and December 31, 2018, respectively. The remaining $13.5 million and $14.6 million at March 31, 2019 and December 31, 2018, respectively, are on deposit with three notable financial institutions with substantially all of the $13.5 million with one financial institution. Total cash and cash equivalents held, as reported on the accompanying condensed consolidated balance sheets, totaled approximately $23.5 million and $24.6 million at March 31, 2019 and December 31, 2018, respectively.
Beneficial Conversion Feature of Convertible Preferred Stock
The Company accounts for the beneficial conversion feature on its convertible preferred stock in accordance with ASC 470-20,
Debt with Conversion and Other Options
. The Beneficial Conversion Feature (“BCF”) of convertible preferred stock is normally characterized as the convertible portion or feature that provides a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of convertible preferred stock when issued. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.
To determine the effective conversion price, the Company first allocates the proceeds received to the convertible preferred stock and then uses those allocated proceeds to determine the effective conversion price. If the convertible instrument is issued in a basket transaction (i.e. issued along with other freestanding financial instruments), the proceeds should first be allocated to the various instruments in the basket. The intrinsic value of the conversion option should be measured using the effective conversion price for the convertible preferred stock on the proceeds allocated to that instrument. The effective conversion price represents proceeds allocable to the convertible preferred stock divided by the number of shares into which it is convertible. The effective conversion price is then compared to the per share fair value of the underlying common shares on the commitment date. The accounting for a BCF requires that the BCF be recognized by allocating the intrinsic value of the conversion option to additional paid-in capital, resulting in a discount on the convertible preferred stock. This discount should be accreted from the date on which the BCF is first recognized through the earliest conversion date for instruments that do not have a stated redemption date. The intrinsic value of the BCF is recognized as a deemed dividend on convertible preferred stock over a period specified in the guidance. In the case of both the Series A and Series B preferred shares, the holders of the shares had the right to convert beginning at the date of issuance with the result that the accretion of the related BCF was recognized immediately at issuance.
When the Company’s preferred stock has dividends that are paid-in-kind (“PIK”) (i.e. the holder is paid in additional shares or liquidation/dividend rights), and either (1) neither the Company nor the holder has the option for the dividend to be paid in cash, or (2) the PIK amounts do not accrue to the holder if the instrument is converted prior to the PIK amount otherwise being accrued or due, additional BCF is recognized as dividends accrue to the extent that the per share fair value of the underlying common shares at the commitment date exceeds the conversion price.
Recently Adopted Accounting Pronouncements
Compensation
–
Stock Compensation
— In June 2018, the FASB issued ASU 2018-07,
Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.
ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods. The Company elected the early adoption of this ASU on July 1, 2018. The adoption of ASU 2018-07 did not have a material impact on the Company’s financial position, results of operations or cash flows.
Leases
— In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842).
ASU 2016-02 amends existing lease accounting guidance and requires recognition of most lease arrangements on the balance sheet. The adoption of this standard resulted in the Company recognizing a right-of-use asset representing its rights to use the underlying asset for the lease term with an offsetting lease liability. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or cash flows.
ASU 2018-09, Codification Improvements
— This ASU represents changes in various Subtopics to clarify, correct errors, or make minor improvements. The amendments are not expected to have a significant effect on current accounting practice. Subtopics impacted by this ASU that are relevant to the Company include
Subtopic 220-10 Income Statement — Reporting Comprehensive Income-Overall, Subtopic 718-740 Compensation — Stock Compensation-Income Taxes, Subtopic 805-740 Business Combinations — Income Taxes
, and
Subtopic 820-10 Fair Value Measurement-Overall
. Many of the amendments within this ASU do not require transition and are effective upon issuance. However, some are not effective until fiscal years beginning after December 15, 2018. The amendments within this ASU did not have a material impact on the Company’s condensed consolidated financial statements or the related footnote disclosures.
Recent Accounting Pronouncements – To Be Adopted
Intangibles, Goodwill and Other
— In January 2017, the FASB issued ASU 2017-04,
Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment
. To simplify the subsequent measurement of goodwill, ASU 2017-04 eliminates Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, ASU 2017-04 requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2017-04 commencing in the first quarter of fiscal 2020. The Company does not believe this standard will have a material impact on its condensed consolidated financial statements or the related footnote disclosures.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework
—
Changes to the Disclosure Requirements for Fair Value Measurement —
This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the disclosure changes are to be applied on a prospective basis. Although this ASU has a significant impact to the Company’s fair value disclosures, no additional impact is expected to the Company’s condensed consolidated financial statements.
The Company does not believe that other standards, which have been issued but are not yet effective, will have a significant impact on its financial statements.
Note 2. Net Loss Per Share
Basic net loss per share is computed using the weighted-average number of common shares outstanding during the period except that it does not include unvested common shares subject to repurchase or cancellation. Diluted net income 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, warrants, restricted shares, and unvested common shares subject to repurchase or cancellation. The dilutive effect of outstanding stock options, restricted shares, restricted stock units, and warrants is not reflected in diluted earnings per share because we incurred net losses for the three months ended March 31, 2019 and 2018, and the effect of including these potential common shares in the net loss per share calculations would be anti-dilutive and are therefore not included in the calculations.
Note 3. Investment in Joint Venture (Investee Losses in Excess of Investment)
Pursuant to the Enfission operating agreement, both partners agreed that Enfission will serve as an exclusive vehicle to develop, license, and sell nuclear fuel assemblies based on Company-designed metallic fuel technology and other advanced nuclear fuel intellectual property licensed to Enfission by the Company and Framatome or their affiliates. The joint venture builds on the joint fuel development and regulatory licensing work under previously signed agreements initiated in March 2016.
The Enfission operating agreement provided that the Company and Framatome each hold 50% of the total issued Class A voting membership units of the joint venture.
The Company’s equity in losses in excess of its investment are accounted for under the equity method consisted of the following as of March 31, 2019 (rounded in millions):
Investment Name
|
|
Ownership
Interest
|
|
|
Carrying
Amount
|
|
Enfission, LLC
|
|
|
50%
|
|
|
|
|
Total contributions
|
|
|
|
|
|
$
|
7.0
|
|
Less: Share of the loss in investment in Enfission
|
|
|
|
|
|
|
(7.1
|
)
|
Equity losses in excess of investment
|
|
|
|
|
|
$
|
(0.1
|
)
|
The Company invested approximately $7.0 million in Enfission and Framatome invested approximately $2.5 million for the period from January 24, 2018 (Date of Inception of Enfission) to March 31, 2019. The cash balance in Enfission at March 31, 2019 was approximately $3.1 million. During the three months ended March 31, 2019, Enfission incurred a loss of approximately $2.0 million, and accordingly, the Company recorded its share of the loss in investment in Enfission, in accordance with the provisions in the joint venture operating agreement, of approximately $1.3 million in the accompanying condensed consolidated statement of operations. The Company’s share of the joint venture losses for the three months ended March 31, 2019 have exceeded its capital contributions by approximately $73,000 and as a result, in accordance with equity method accounting, its share of the equity losses in excess of the equity contributions made in 2019 have been recorded as investee loss in excess of investment, under the current liability section of the accompanying balance sheets.
The Company was committed to fund Enfission for its share of Enfission’s liabilities at March 31, 2019. The Company expects to continue providing additional equity contributions in 2019 and for the foreseeable future.
Summarized balance sheet information for the Company’s equity method investee Enfission as of March 31, 2019 and December 31, 2018 is presented in the following table (rounded in millions):
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
Assets
|
|
|
|
|
|
|
Cash
|
|
$
|
3.1
|
|
|
$
|
0.7
|
|
Other current assets
|
|
|
0.4
|
|
|
|
0.7
|
|
Total assets
|
|
$
|
3.5
|
|
|
$
|
1.4
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
$
|
3.7
|
|
|
$
|
1.9
|
|
Equity
|
|
|
(0.2
|
)
|
|
|
(0.5
|
)
|
Total liabilities and equity
|
|
$
|
3.5
|
|
|
$
|
1.4
|
|
Summarized income statement information for the Company’s equity method investee Enfission is presented in the following table for the three months ended March 31, 2019 and for the period from January 24, 2018 (Date of Inception) to March 31, 2018 (rounded in millions):
|
|
For the three Months ended March 31,
2019
|
|
|
For the period from January 24, 2018 (Date of Inception) to March 31, 2018
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Net sales and revenue
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
Research and development costs
|
|
|
1.7
|
|
|
|
0.9
|
|
Administrative expenses
|
|
|
0.3
|
|
|
|
0.1
|
|
Total Operating Loss
|
|
$
|
2.0
|
|
|
$
|
1.0
|
|
Loss from operations
|
|
$
|
2.0
|
|
|
$
|
1.0
|
|
Net loss
|
|
$
|
2.0
|
|
|
$
|
1.0
|
|
As of March 31, 2019 and December 31, 2018, the total receivable due from Enfission was approximately $0.4 million and $0.1 million, respectively, which represents all consulting fees Lightbridge charged to Enfission and reimbursable expenses paid by Lightbridge on Enfission’s behalf (see Note 8. Related Party Transactions). Based on an evaluation of this equity method investment, we determined that no OTTI has occurred as of March 31, 2019.
Note 4. Accounts Payable and Accrued Liabilities
Accounts payable and accrued expenses consisted of the following (rounded in millions):
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Trade payables
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Accrued expenses and other
|
|
|
0.3
|
|
|
|
0.2
|
|
Accrued bonuses
|
|
|
0.2
|
|
|
|
0.0
|
|
Total
|
|
$
|
0.6
|
|
|
$
|
0.3
|
|
Note 5. Commitments and Contingencies
Commitments
Operating Leases
The Company leases office space for a 12-month term with a monthly rent payment of approximately $15,000 per month for office rent. The term of the lease extends through December 31, 2019.
The future minimum lease payments required under the non-cancellable operating leases are as follows (rounded in millions):
Year ending December 31,
|
|
Amount
|
|
2019
|
|
$
|
0.1
|
|
Total minimum payments required
|
|
$
|
0.1
|
|
Contingency
Litigation
A former Chief Financial Officer of the Company filed a complaint against the Company with the US Occupational Safety and Health Administration on March 9, 2015. This complaint was closed and dismissed by OSHA in January 2018 without any findings against the Company. On March 14, 2018 an appeal was filed and the Company will vigorously defend this appeal and believes that this appeal hearing will not result in any findings against the Company. As of March 31, 2019 and December 31, 2018, legal fees of approximately $11,000 and $4,000 were owed, respectively, and are expected to be paid in full by the Company’s insurance carriers.
Note 6. Research and Development Costs
Lightbridge’s total corporate research and development costs, included in the caption research and development expenses in the accompanying condensed consolidated statement of operations amounted to approximately $0.9 million for each of the three months ended March 31, 2019 and 2018. See Note 8 – Related Party Transactions regarding consulting fees charged to Enfission for research and development expenses incurred by Lightbridge on behalf of Enfission.
Note 7. Stockholders’ Equity and Stock-Based Compensation
At March 31, 2019, there were 36,149,325 common shares outstanding, and there were also outstanding warrants relating to 844,337 shares of common stock, stock options relating to 5,342,192 shares of common stock, 813,624 shares of Series A convertible preferred stock convertible into 813,624 shares of common stock (plus accrued dividends of $453,597 relating to an additional 165,239 common shares), and 2,666,667 shares of Series B convertible preferred stock convertible into 2,666,667 shares of common stock (plus accrued dividends of $337,456, relating to an additional 224,970 common shares), all totaling 46,206,354 shares of common stock and all common stock equivalents, including accrued preferred stock dividends, outstanding at March 31, 2019.
At December 31, 2018, there were 32,862,090 common shares outstanding, and there were also outstanding warrants relating to 844,337 shares of common stock, stock options relating to 5,604,154 shares of common stock, 813,624 shares of Series A convertible preferred stock convertible into 813,624 shares of common stock (plus accrued dividends of $407,382 relating to an additional 148,403 common shares), and 2,666,667 shares of Series B convertible preferred stock convertible into 2,666,667 shares of common stock (plus accrued dividends of $262,856, relating to an additional 175,237 common shares), all totaling 43,114,512 shares of common stock and all common stock equivalents, including accrued preferred stock dividends, outstanding at December 31, 2018.
Common Stock Equity Offerings
ATM Offering
On March 30, 2018, the Company entered into an at-the-market issuance sales agreement (“2018 ATM”) with B. Riley FBR, Inc. (the “Distribution Agent”), pursuant to which the Company could issue and sell shares of its common stock from time to time through the Distribution Agent as the Company’s sales agent. Sales of the Company’s common stock through the Distribution Agent were 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, as amended, pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-223674), the base prospectus filed as part of such registration statement and the prospectus supplement dated March 30, 2018, which registered the offer and sale of up to $50 million of common stock under this 2018 ATM. Effective March 29, 2019, the Company and the Distribution Agent terminated this 2018 ATM agreement.
Sales under this 2018 ATM that were made during the quarter ended March 31, 2019 were 3.3 million shares that totaled gross proceeds of approximately $2.0 million. The Company records its ATM sales on a settlement date basis. A total of 0.3 million shares sold on March 28, 2019 and March 29, 2019, for total gross proceeds of $0.2 million, were recorded with settlement dates in the first week in April 2019.
On January 24, 2018, January 26, 2018, February 7, 2018, and March 2, 2018, the Company filed prospectus supplements registering an aggregate amount of approximately $22.6 million under the prior at-the-market (“ATM”) agreement with B. Riley FBR, Inc. The Company received approximately $20.7 million of net proceeds from its ATM during the three months ended March 31, 2018 under these above-mentioned prospectus supplements.
Preferred Stock Equity Offerings
Series B Preferred Stock - Securities Purchase Agreement
On January 30, 2018, the Company issued 2,666,667 shares of newly created Non-Voting Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and associated warrants to purchase up to 666,664 shares of the Company’s common stock to the several purchasers for approximately $4.0 million or approximately $1.50 per share of Series B Preferred Stock and associated 0.25 of a warrant. Dividends accrue on the Series B Preferred Stock at the rate of 7% per year and will be paid in-kind through an increase in the liquidation preference per share. The liquidation preference, initially $1.50 per share of Series B Preferred Stock, is the base that is also used to determine the number of common shares into which the Series B Preferred Stock will convert as well as the calculation of the 7% dividend. Each share of Series B Preferred Stock is convertible at the option of the holder into such number of shares of the Company’s common stock equal to the liquidation preference divided by the conversion price of $1.50 per share subject to adjustments in the case of stock splits and stock dividends.
Holders of the Series B Preferred Stock are also entitled to participating dividends whenever dividends in cash securities (other than shares of the Company’s common stock paid on shares of common stock) or property are paid on common shares or shares of Series A Preferred Stock. The amount of the dividends will equal the amount to which the holder would be entitled if all shares of Series B Preferred Stock had been converted to common stock immediately prior to the record date.
The warrants had a per share of common stock exercise price of $1.875. The warrants were exercisable upon issuance and expired six months after issuance on July 30, 2018. Warrants were also issued to the investment bank who introduced these investors, which were subsequently transferred to the principal of the investment bank, entitling the holder to purchase 133,432 common shares in the Company at an exercise price of $1.50 per share, up to and including January 30, 2021. On February 6, 2017 the Company entered into an agreement with this investment bank. The agreement calls for monthly retainer payments of $15,000, which are credited against any transaction introductory fee earned by the investment bank. This agreement calls for a 7% transaction introductory fee and warrants equal to 5% of the total transaction amount, at a strike price equal to the offering price for a three-year term.
The holders of the Series B Preferred Stock have no voting rights. In addition, as long as the shares of Series A Preferred Stock are outstanding, the Company may not take certain actions without first having obtained the affirmative vote or waiver of the holders of a majority of the outstanding shares of Series B Preferred Stock. The Company has the option at any time after August 2, 2019 to redeem some or all of the outstanding Series B Preferred Stock for an amount in cash equal to the liquidation preference plus the amount of any accrued but unpaid dividends of the Series B Preferred Stock being redeemed. The holders of the Series B Preferred Stock do not have the ability to require the Company to redeem the Series B Preferred Stock.
The accumulated dividend (unpaid) at March 31, 2019 and December 31, 2018 was approximately $0.3 million. The liquidation preference of the Series B Preferred Stock at March 31, 2019 was approximately $4.3 million, which includes the accumulated dividend.
The Company has the option of forcing the conversion of all or part of the Series B Preferred Stock if at any time the average closing price of the Company’s common stock for a thirty-trading day period is greater than $5.4902 prior to August 2, 2019 or greater than $8.2353 at any time. The Company can only exercise this option if it also requires the conversion of the Series A Preferred Stock in the same proportion as it is requiring of the Series B Preferred Stock.
Of the $4 million proceeds, approximately $0.3 million was allocated to the warrants with the remaining $3.7 million allocated to the Series B Preferred Stock. The Series B Preferred Stock was initially convertible into 2,666,667 shares of common stock. The average of the high and low market prices of the common stock on January 30, 2018, the date of the closing of the sale of the preferred stock, was approximately $2.34 per share. At $2.34 per share the common stock into which the Series B Preferred Stock was initially convertible was valued at approximately $6.2 million. This amount was compared to the $3.6 million of proceeds allocated to the Series B Preferred Stock to indicate that a BCF of approximately $2.6 million existed at the date of issuance, which was immediately accreted as a deemed dividend because the conversion rights were immediately effective. This deemed dividend is included on the statement of operations for the three months ended March 31, 2018.
Additionally, comparison of the $1.50 conversion price of the PIK dividends to the $2.34 commitment date fair value per share indicates that each PIK dividend will accrete $0.84 of BCF as an additional deemed dividend for every $1.50 of PIK dividend accrued. Total deemed dividends for this PIK dividend as of March 31, 2019 and December 31, 2018 was approximately $0.2 million and $0.1 million dollars, respectively.
Series A Preferred Stock - Securities Purchase Agreement
On August 2, 2016, the Company issued 1,020,000 shares of newly created Non-Voting Series A Convertible Preferred Stock (the “Series A Preferred Stock”) to General International Holdings, Inc. for $2.8 million or approximately $2.75 per share. Dividends accrue on the Series A Preferred Stock at the rate of 7% per year and will be paid in-kind through an increase in the liquidation preference per share. The liquidation preference, initially $2.7451 per share of Series A Preferred Stock, is the base that is also used to determine the number of common shares into which the Series A Preferred Stock will convert as well as the calculation of the 7% dividend. Each share of Series A Preferred Stock is convertible at the option of the holder into such number of shares of the Company’s common stock equal to the liquidation preference divided by the conversion price of $2.7451 per share subject to adjustments in the case of stock splits and stock dividends.
Holders of the Series A Preferred Stock are also entitled to participating dividends whenever dividends in cash securities (other than shares of the Company’s common stock) or property are paid on common shares. The amount of the dividends is the amount to which the holder would be entitled if all shares of Series A Preferred Stock had been converted to common stock immediately prior to the record date.
On September 30, 2018 the holders of the Series A Preferred Shares were issued 729 common shares in payment of the dividend for the month of April 2018. On the same date, the holders of the Series A Preferred Shares converted 95,116 preferred shares into 110,530 common shares. On April 30, 2018, the holders of the Series A Preferred Shares converted 111,260 preferred shares into 124,882 common shares.
The accumulated dividend (unpaid) at March 31, 2019 and December 31, 2018 was approximately $0.5 million and $0.4 million, respectively. The Series A Preferred Shares outstanding as of March 31, 2019 was 813,624 shares with a liquidation preference of approximately $2.7 million, including accumulated dividends, while the Series A Preferred Shares outstanding as of December 31, 2018 was 813,624 shares with a liquidation preference of approximately $2.6 million, including accumulated dividends.
The Company has the option of forcing the conversion of the Series A Preferred Stock if the trading price for the Company’s common stock is more than two times the applicable conversion price (approximately $2.75 per share) before the third anniversary of the issuance of the Series A Preferred Stock, or if the trading price is more than three times the applicable conversion price following the third anniversary of issuance. The Company may also redeem the Series A Preferred Stock following the third anniversary of the issuance.
The Series A Preferred Stock was initially convertible into 1,020,000 shares of common stock. The average of the high and low market prices of the common stock on August 6, 2016, the date of the closing of the sale of the Series A Preferred Stock, was approximately $3.315 per share. At $3.315 per share the common stock into which the Series A Preferred Stock was initially convertible was valued at approximately $3.4 million. This amount was compared to the $2.8 million of proceeds of the Series A Preferred Stock to indicate that a BCF of approximately $0.6 million existed at the date of issuance in 2016, which was immediately accreted as a deemed dividend because the conversion rights were immediately effective.
Additionally, comparison of the $2.7451 conversion price of the PIK dividends to the $3.315 commitment date fair value per share indicates that each PIK dividend will accrete $0.5699 of BCF as an additional deemed dividend for every $2.7451 of PIK dividend accrued. Total deemed dividends for this PIK dividend as of March 31, 2019 and December 31, 2018 was approximately $0.1 million and $0.1 million dollars, respectively.
The holders of the Series A Preferred Stock have no voting rights. In addition, as long as 255,000 shares of Series A Preferred Stock are outstanding, the Company may not take certain actions without first having obtained the affirmative vote or waiver of the holders of a majority of the outstanding shares of Series A Preferred Stock. The Company has the option at any time after August 2, 2019 to redeem some or all of the outstanding Series A Preferred Stock for an amount in cash equal to the liquidation preference plus the amount of any accrued but unpaid dividends of the Series A Preferred Stock being redeemed. The holders of the Series A Preferred Stock do not have the ability to require the Company to redeem the Series A Preferred Stock.
Warrants
|
|
March 31,
|
|
|
December 31,
|
|
Outstanding Warrants
|
|
2019
|
|
|
2018
|
|
Issued to Investors on October 25, 2013, entitling the holders to purchase 250,000 common shares in the Company at an exercise price of $11.50 per common share up to and including April 24, 2021. In 2016, 59,450 of these warrants were exchanged for common stock, and all remaining warrant holders agreed to new warrant terms, which excluded any potential net cash settlement provisions in exchange for a reduced exercise price of $6.25 per share.
|
|
|
163,986
|
|
|
|
163,986
|
|
|
|
|
|
|
|
|
|
|
Issued to Investors on November 17, 2014, entitling the holders to purchase 546,919 common shares in the Company at an exercise price of $11.55 per common share up to and including May 16, 2022. On June 30, 2016, the warrant holders agreed to new warrant terms, which excluded any potential net cash settlement provisions in order to classify them as equity in exchange for a reduced exercise price of $6.25 per share.
|
|
|
546,919
|
|
|
|
546,919
|
|
|
|
|
|
|
|
|
|
|
Issued to an investment bank and subsequently transferred to a principal of the investment bank regarding the Series B Preferred Stock investment on January 30, 2018, entitling the holder to purchase 133,432 common shares in the Company at an exercise price of $1.50 per share, up to and including January 30, 2021.
|
|
|
133,432
|
|
|
|
133,432
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
844,337
|
|
|
|
844,337
|
|
Stock-based Compensation – Stock Options
2015 Equity Incentive Plan
On March 25, 2015, the Compensation Committee and Board of Directors approved the Lightbridge Corporation 2015 Equity Incentive Plan (the “2015 Plan”) to authorize grants of (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, and (f) Performance Compensation Awards to the employees, consultants, and directors of the Company. The 2015 Plan initially authorized a total of 600,000 shares to be available for grant under the 2015 Plan, of which the amount was increased to 1,400,000 shares in May 2016, 2,900,000 shares in May 2017, and 6,300,000 shares in May 2018.
Total stock options outstanding at March 31, 2019 and December 31, 2018 under the 2006 Stock Plan and 2015 Plan were 5,342,192 and 5,604,154, of which 3,673,176 and 3,935,138 of these options were vested at March 31, 2019 and December 31, 2018, respectively.
The components of stock-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2019 and 2018 are as follows:
|
|
Three Months ended
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
$
|
170,134
|
|
|
$
|
503,217
|
|
General and administrative expenses
|
|
|
164,879
|
|
|
|
769,818
|
|
Total stock-based compensation expense
|
|
$
|
335,013
|
|
|
$
|
1,273,035
|
|
Long-Term Non-Qualified Option Grants
In August 2018 the Compensation Committee of the Board of Directors granted long-term non-qualified stock options relating to 1,752,791 shares to employees, consultants, and directors of the Company. These stock options have a strike price of $0.90. Out of this total, approximately 1,540,263 stock options were issued to employees and consultants. These non-qualified stock options contain service, performance and market conditions of which one must be achieved in order for the options to vest. The service condition vests one-third annually over a 3-year period with accelerated vesting of these options occurring upon applicable performance or market conditions being satisfied by certain milestone dates. Accelerated vesting of these option grants to employees and consultants would occur upon achievement of either of the following performance and market-based milestones:
|
1.
|
The Company’s closing stock price is above $3 per share for 10 consecutive trading days by December 31, 2019.
|
|
|
|
|
2.
|
The Company secures at least $5 million of funding from the Department of Energy by June 30, 2019.
|
The remaining approximately 212,528 stock options were service based options issued to the directors of the Company that vest over a one-year period on the anniversary date of the grant. All options granted have a 10-year contractual term.
In accordance with ASC 718, awards with service, market and performance conditions for the employees and consultants were assigned a fair value of $0.69 per share and the awards with service conditions for the directors of the Company were assigned a fair value of $0.70 per share (total value of $1.2 million). The value was determined using a Monte Carlo simulation. The following assumptions were used in the Monte Carlo simulation model:
Expected volatility
|
|
|
90
|
%
|
Risk free interest rate
|
|
|
2.84
|
%
|
Dividend yield rate
|
|
|
0
|
%
|
Weighted average years
|
|
|
9.8 months
|
|
Closing price per share – common stock
|
|
$
|
0.88
|
|
The weighted average years remaining of expected life was itself calculated based on a Monte Carlo simulation under which it was assumed that the options would be exercised, if vested, when the stock reached a price of $4.50, otherwise they would be exercised at expiration, if in the money. The Company determined that it was not probable that the outcome of the above performance-based milestone (i.e., DOE funding) would be met prior to the annual vesting dates. In accordance with ASC 718-10-55-104 the Company then based the amortization period for the compensation expense on the shorter of the explicit service periods or the “derived service period” based solely on the market condition.
Stock option transactions to the employees, directors and consultants are summarized as follows for the three months ended March 31, 2019:
|
|
Options
Outstanding
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Beginning of the period
|
|
|
5,604,154
|
|
|
$
|
2.72
|
|
|
$
|
1.96
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Forfeited
|
|
|
(215,598
|
)
|
|
|
2.44
|
|
|
|
1.75
|
|
Expired
|
|
|
(46,364
|
)
|
|
|
19.10
|
|
|
|
18.47
|
|
End of the period
|
|
|
5,342,192
|
|
|
$
|
2.59
|
|
|
$
|
1.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable
|
|
|
3,673,176
|
|
|
$
|
3.36
|
|
|
$
|
2.34
|
|
Stock option transactions of the employees, directors, and consultants are summarized as follows for the year ended December 31, 2018:
|
|
Options
Outstanding
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Beginning of the year
|
|
|
3,976,884
|
|
|
$
|
3.58
|
|
|
$
|
2.49
|
|
Granted
|
|
|
1,784,455
|
|
|
|
0.90
|
|
|
|
0.70
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Forfeited
|
|
|
(143,980
|
)
|
|
|
1.10
|
|
|
|
0.83
|
|
Expired
|
|
|
(13,205
|
)
|
|
|
30.60
|
|
|
|
21.13
|
|
End of the year
|
|
|
5,604,154
|
|
|
$
|
2.72
|
|
|
$
|
1.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable
|
|
|
3,935,138
|
|
|
$
|
3.50
|
|
|
$
|
2.49
|
|
A summary of the status of the Company’s non-vested options as of March 31, 2019 and December 31, 2018, and changes during the year ended December 31, 2018 and the three months ended March 31, 2019, is presented below:
|
|
Shares
|
|
|
Weighted-
Average Fair
Value
Grant Date
|
|
|
Weighted
Average
Exercise Price
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested – December 31, 2017
|
|
|
1,542,736
|
|
|
$
|
1.10
|
|
|
$
|
1.58
|
|
Granted
|
|
|
1,784,455
|
|
|
|
0.70
|
|
|
|
0.90
|
|
Vested
|
|
|
(1,514,195
|
)
|
|
|
1.27
|
|
|
|
1.58
|
|
Forfeited
|
|
|
(143,980
|
)
|
|
|
0.83
|
|
|
|
1.10
|
|
Non-vested – December 31, 2018
|
|
|
1,669,016
|
|
|
$
|
0.54
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Vested
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Forfeited
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-vested – March 31, 2019
|
|
|
1,669,016
|
|
|
$
|
0.54
|
|
|
$
|
0.91
|
|
The above tables include options issued and outstanding as of March 31, 2019 as follows:
i)
|
A total of 64,677 non-qualified 10-year options have been issued, and are outstanding, to advisory board members at exercise prices of $1.05 to $28.05 per share.
|
|
|
ii)
|
A total of 4,801,248 incentive stock options and non-qualified 5-10 year options have been issued, and are outstanding, to the directors, officers, and employees at exercise prices of $0.90 to $43.25 per share. From this total, 1,409,248 options are outstanding to the Chief Executive Officer, who is also a director, with remaining contractual lives of 0.1 years to 9.4 years. All other options issued to directors, officers, and employees have a remaining contractual life ranging from 0.1 years to 9.4 years.
|
|
|
iii)
|
A total of 476,267 non-qualified 3-10-year options have been issued, and are outstanding, to consultants at exercise prices of $0.90 to $43.25 per share.
|
As of March 31, 2019, there was approximately $0.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a weighted-average period of approximately 0.41 years. For stock options outstanding at March 31, 2019, the intrinsic value was approximately $0. For stock options outstanding at December 31, 2018, the intrinsic value was approximately $0 million.
The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at March 31, 2019:
|
|
Stock Options Outstanding
|
|
|
Stock Options Vested
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
Weighted
|
|
|
Remaining
|
|
|
|
|
|
Weighted
|
|
|
|
Contractual
|
|
|
Number
|
|
|
Average
|
|
|
Contractual
|
|
|
Number
|
|
|
Average
|
|
|
|
Life
|
|
|
of
|
|
|
Exercise
|
|
|
Life
|
|
|
of
|
|
|
Exercise
|
|
Exercise Prices
|
|
|
-Years
|
|
|
Awards
|
|
|
Price
|
|
|
|
-Years
|
|
|
Awards
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.90-$1.04
|
|
|
9.35
|
|
|
|
1,616,402
|
|
|
$
|
0.90
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
$1.05-$2.00
|
|
|
8.32
|
|
|
|
2,397,193
|
|
|
$
|
1.18
|
|
|
|
8.31
|
|
|
|
2,344,579
|
|
|
$
|
1.19
|
|
$2.01-$6.00
|
|
|
6.61
|
|
|
|
787,760
|
|
|
$
|
4.59
|
|
|
|
6.61
|
|
|
|
787,760
|
|
|
$
|
4.59
|
|
$6.01-$20.00
|
|
|
3.95
|
|
|
|
465,850
|
|
|
$
|
7.49
|
|
|
|
3.95
|
|
|
|
465,850
|
|
|
$
|
7.49
|
|
$20.01-$43.25
|
|
|
0.79
|
|
|
|
74,987
|
|
|
$
|
32.87
|
|
|
|
0.79
|
|
|
|
74,987
|
|
|
$
|
32.87
|
|
Total
|
|
|
7.89
|
|
|
|
5,342,192
|
|
|
$
|
2.59
|
|
|
|
7.24
|
|
|
|
3,673,176
|
|
|
$
|
3.36
|
|
The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at December 31, 2018:
|
|
Stock Options Outstanding
|
|
|
Stock Options Vested
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
Weighted
|
|
|
Remaining
|
|
|
|
|
|
Weighted
|
|
|
|
Contractual
|
|
|
Number
|
|
|
Average
|
|
|
Contractual
|
|
|
Number
|
|
|
Average
|
|
|
|
Life
|
|
|
of
|
|
|
Exercise
|
|
|
Life
|
|
|
of
|
|
|
Exercise
|
|
Exercise Prices
|
|
|
-Years
|
|
|
Awards
|
|
|
Price
|
|
|
|
-Years
|
|
|
Awards
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.90-$1.04
|
|
|
9.60
|
|
|
|
1,616,402
|
|
|
$
|
0.90
|
|
|
|
—
|
|
|
|
-
|
|
|
$
|
—
|
|
$1.05-$2.00
|
|
|
8.57
|
|
|
|
2,560,330
|
|
|
$
|
1.18
|
|
|
|
8.56
|
|
|
|
2,507,716
|
|
|
$
|
1.18
|
|
$2.01-$6.00
|
|
|
6.86
|
|
|
|
813,583
|
|
|
$
|
4.59
|
|
|
|
6.86
|
|
|
|
813,583
|
|
|
$
|
4.59
|
|
$6.01-$20.00
|
|
|
4.16
|
|
|
|
501,334
|
|
|
$
|
7.48
|
|
|
|
4.16
|
|
|
|
501,334
|
|
|
$
|
7.48
|
|
$20.01-$43.25
|
|
|
0.72
|
|
|
|
112,505
|
|
|
$
|
29.46
|
|
|
|
0.72
|
|
|
|
112,505
|
|
|
$
|
29.46
|
|
Total
|
|
|
8.07
|
|
|
|
5,604,154
|
|
|
$
|
2.72
|
|
|
|
7.42
|
|
|
|
3,935,138
|
|
|
$
|
3.50
|
|
Note 8. Related Party Transactions
The Company invested approximately $1.4 million in Enfission during the quarter ended March 31, 2019. The total administrative consulting services was $100,000 for the quarter ended March 31, 2019. This $100,000 amount charged to Enfission was recorded as a $50,000 reduction of general and administrative expenses and a $50,000 reduction of research and development expenses.
The Company also provided research and development consulting services and management services to Enfission. The total consulting services was $0.4 million for each of the quarters ended March 31, 2019 and 2018, recorded under the caption “Other income from joint venture” in the accompanying condensed consolidated statement of operations. As of March 31, 2019 and December 31, 2018, the total receivable due from Enfission was approximately $0.4 million and $0.1 million, respectively, which represents all consulting fees Lightbridge charged to Enfission and reimbursable expenses paid by Lightbridge on Enfission’s behalf.
Note 9. Subsequent Events
Series A Preferred Stock Conversion
On April 16, 2019, an investor converted 27,747 Series A Preferred Shares into the 33,383 common shares issued as payment of the dividend leaving 785,877 Series A Preferred Shares outstanding with a liquidation preference of $2.6 million at April 30, 2019.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. We use words such as “believe”, “expect”, “anticipate”, “project”, “target”, “plan”, “optimistic”, “intend”, “aim”, “will”, or similar expressions, which are intended to identify forward-looking statements. Such statements include, among others:
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·
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those concerning market and business segment growth, demand, and acceptance of our nuclear fuel technology;
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|
|
|
|
·
|
any projections of sales, earnings, revenue, margins, or other financial items;
|
|
|
|
|
·
|
any statements of the plans, strategies, and objectives of management for future operations and the timing of the development of our nuclear fuel technology;
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|
|
|
|
·
|
any statements regarding future economic conditions or performance;
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|
·
|
uncertainties related to conducting business in foreign countries;
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|
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|
·
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any statements about future financings and liquidity; and
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|
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|
·
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all assumptions, expectations, predictions, intentions, or beliefs about future events.
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You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, as well as assumptions that if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties, among others, include:
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·
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our ability to commercialize our nuclear fuel technology, including risks related to the design and testing of nuclear fuel incorporating our technology;
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|
|
|
·
|
the realization of expected benefits from our joint venture with Framatome Inc. (Enfission, LLC), and our future collaboration with Framatome;
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|
|
|
·
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our ability to attract new customers;
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|
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|
·
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our ability to employ and retain qualified employees and consultants that have experience in the nuclear industry;
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|
·
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competition and competitive factors in the markets in which we compete;
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|
·
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public perception of nuclear energy generally;
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|
·
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changes in laws, rules, and regulations governing our business;
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|
·
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development and utilization of, and challenges to, our intellectual property;
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|
|
|
|
·
|
potential and contingent liabilities; and
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|
|
|
|
·
|
the other risks identified in Part II, Item 1A,
Risk Factors
included herein and in our Form 10-K filing.
|
Most of these factors are beyond our ability to predict or control. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.