Lightbridge Corporation (LTBR) Earnings Call Transcript & Summary

Is that enough time if there's anyone still voting? I do not hear any response. So I assume that there is no further voting to be -- votes to be cast. I hereby declare the voting closed. Will the secretary please make a preliminary report on the results of the voting. Sherrie?

Thank you, Tom. The inspector of election has informed me of the preliminary voting results on each of the proposals. Each nominee for Director has received a plurality of the votes cast and each of the other proposals have received the affirmative vote of a majority of the votes cast on such proposals. The inspector of election's final report on the results of the voting will be filed with the minutes of the meeting, and we will report the final vote results in a Form 8-K filed with the Securities and Exchange Commission.

Thank you, Sherrie. Based on these results, each of the nominees for election to the Board of Directors has been duly elected; the 2020 Omnibus Incentive Plan has been approved; the compensation of Lightbridge's named Executive Officers has been approved; and selection of BDO USA, LLP as the company's independent registered public accounting firm has been ratified. That concludes the annual meeting. On behalf of our Board, I thank each of you for attending and for your continued interest and support of Lightbridge. The meeting is adjourned.

And now we can move on to the presentation and Q&A. This is Seth Grae, the CEO of Lightbridge. Thank you very much, Tom, and everyone for conducting the meeting, and thank you to all of the stockholders for joining today. If you can see the presentation on the website, I'll be using that for the next few minutes before we get to Q&A. If you can't see it, and you just have the audio, that's okay too, and I'll go through the details on the slides. I'll just call your attention to Slide 2, which is our safe harbor statement. And Slide 3 is some key accomplishments that I'd like to highlight for the company. As pretty much all of you know, we did receive a gain voucher from the U.S. Department of Energy, Gateway for Accelerated Innovation in Nuclear. Our first DOE funding aboard, for the first time that we are a DOE contractor, a government contractor. The award is for $845,000, of which 3 quarters, about $611,000 is paid in cash by DOE to Idaho National Laboratory for work on our project. And the other quarter is contributed in kind by Lightbridge Corporation. So this is tremendous validation for us as our first government contract validation that comes with cash for 3 quarters of our R&D budget. And as it says on the slide that when DOE awards this kind of brand in an amount over $500,000, which this one is, it's done "in cases with a clear need and involving a truly exceptional technology or innovation." So we are very happy to have that designation from DOE. In over the 12 months of work, which has already begun, we'll be designing an experiment for testing our fuel samples in the advanced test reactor at Idaho National Laboratory. We've been patenting the technology as we go, globally, this intellectual property is extremely important to us to make sure that our investors receive the financial benefit for all of our -- from all of our technology. In 2019, we received 20 new patents around the world. And so far, in 2020, we've received patents in 6 key countries. Moving on to the next slide on the global race for advanced nuclear technology and then on to the slide following that, Slide 5. We really see ourselves in 2 races: one is strategic and one is relating to climate. Strategically, the U.S., Russia and China are each putting tremendous resources into and priorities into competing internationally in nuclear power deployment. And the program that we're benefiting from funding under is certainly part of that. And why is this strategic to the United States? As we lose out to Russia or China to -- in deploying nuclear power plants to countries that are important to the U.S, it changes the strategic dynamic. I mean, for example, the reactor order in Turkey, a NATO member, went to Russia. And at roughly the same time, the reactor order in the United Arab Emirates went to a South Korean-led consortium, a U.S. ally with tremendous U.S. content and a lot of U.S. companies participating, including Lightbridge in advisory roles. What's happened since in Turkey has been a deterioration in relations with the United States, a strengthening of relations with Russia. We've seen Turkey, now a NATO member, buying weapons systems from Russia. What's happened in the UAE is, in the last 2 months, started their first nuclear power plant. They've launched a probe to Mars, designed and built in the UAE, launched on a Japanese rocket. They've announced full diplomatic relations with Israel. Now we're not saying all of this relates to the reactor orders. But at this point, you have to be able to see that there is a connection that so goes the reactor order, so does go some of the strategic benefit or harm in the U.S. relations with countries, and this has become a very bipartisan issue. These reactor orders establish a 100-year relationship from first signing the contract to decommissioning the last plant and handling the last of the spent fuel. And of course, it's enormous numbers of jobs and revenue and just good business for the country that gets the sale, and we see our technology is helping to position the United States to compete and win. On climate, there's also a race in that we hope by 2050 to avoid increasing average global temperatures, much more than they currently are and to have so much more energy that will be needed in the world by 2050, while emitting less CO2 than is emitted today, really means that nuclear just has to be a growing part of the power generation mix, and this is a tremendous business opportunity for U.S. companies versus opportunities for companies from other countries as well. And this translates to a lot of manufacturing jobs in the U.S., which is also a very important bipartisan issue. As it says on the bottom of Slide 5, the Nuclear Fuel Working Group report estimates from the U.S. Department of Commerce, about $500 billion to $740 billion of nuclear reactor business over the next 10 years of stake. So this is important to the U.S. On the next slide, moving on to Slide 6. Talking about the strong bipartisan support for nuclear power, this really is unique for the first time since Nixon was President, the top of the ticket on both the Republican and democratic sides and the presidential race, both actively are supporting government support for nuclear power. And the first point we mentioned here on Slide 6 is support from House committee, and the second is from a Senate committee. And one way to look at that is that the House is democratically controlled. The Senate is Republican controlled. So these bills really are bipartisan, and that's why they're going through with such strong support. And the last thing we'll mention is something that comes out of a recommendation in the Nuclear Fuel Working Group report, that the U.S. International Development Finance Corporation has lifted its ban on financing nuclear exports from the United States. So the U.S. government funding support, like the GAIN Voucher support that Lightbridge is getting and funding support that many other companies are receiving doesn't end with developing the technology, U.S. government financing support now extends to help bringing U.S. technologies and nuclear products into overseas markets. And that's something we'll look forward to benefiting from in the future as well. In addition to the legislative branch support on the next slide, on Slide 7, we have some points on executive branch support. President Trump is the first U.S. President since Reagan, to have a meeting with leaders of the U.S. nuclear power industry. He invited 10 CEOs to the White House and had an extensive discussion. I was pleased and honored that Lightbridge was part of the meeting and that we had an opportunity to speak in some detail with the President and other key leaders from the executive branch about our technology, and in particular, to speak with the President about it. This meeting helped lead to the Nuclear Fuel Working Group report. We were very happy to be asked to have follow-up meetings at the White House and elsewhere to help provide advice on what should be in the report. We're honored to participate on the Civil Nuclear Trade Advisory Committee, or CINTAC, to the U.S. Secretary of Commerce. And as we mentioned before, we now participate in the GAIN program and are benefiting financially in our project by receiving government funding for that. On the next slide, on Slide 8, the Nuclear Fuel Working Group report is a product of really a whole of government approach across many departments of government, deep into the departments with real expertise. And it reflects the bipartisan consensus and also the Trump administration's strong support for what's coming out of that consensus. And some specifics within that report, which really lays out, as it says on the cover of the report, you can see on the slide, a strategy to assure U.S. national security. Some of what's in there is just extremely important to Lightbridge, including the bullets on the slide, about the commitments towards federal funding of R&D for advanced fuels for reactors and for HALEU, High-Assay Low Enriched Uranium, including completing a HALEU enriched demonstration programs, the U.S. will be able to produce more HALEU domestically, which is needed for Lightbridge fuel. And this is a government commitment as part of the strategy now. There is, in the report, the commitment to funding R&D for domestic origin commercial fuel replacements for international sale, for use in foreign origin reactors, including accident-tolerant fuels. And as mentioned on the bottom of this slide, we're very happy that now Lightbridge is included by the U.S. Nuclear Regulatory Commission, where our fuel is included on their website in the accident tolerant fuel portion. So we view our technology as being well aligned with the U.S. government's goals, enabling policies outlined in the Nuclear Fuel Working Group report because of the design of Lightbridge fuel. On the next slide, just briefly, looking at our addressable market, which is the water-cooled reactors in the world. There are 419 of them operating today in the world, [ we're ] going through their scheduled refueling outages. All of them could use this technology. 94 of them are in the U.S., plus 2 that are under construction in the U.S. And of those, 49 of the operating ones are operated by the nuclear fuel -- Nuclear Utility Fuel Advisory Board or NUFAB that advises Lightbridge. So if you look at an annual fuel spend per reactor of about $50 million, that means that the total addressable market of these reactors that could use this technology is about $21 billion, of which about $5 billion is in the U.S. So while we're looking forward to new reactors being deployed, large and small and expanding our market, the existing market, even if some of these reactors close is very good. And with that, we'll just go on to the next slide, which gives our contact information, and we're always open to hear from you. And with this, we can go to the questions that we've received, submitted by shareholders.

So we have a question here that says, what variables are you seeing in the next 3 to 5 years as pivotal milestones to cross to bring the company to the next level and dramatically increase the market cap? Is that the underlying demand in nuclear fuels, is it turning on existing unfractured or completion of SMRs? Yes. I think this is a very important question, where it's looking at the existing market in the world, which is 419 reactors that could use this technology or is it the coming new reactors, including the small modular reactors, the SMRs. And I think of those 2, it's definitely the first. It's definitely that the existing market of 194 reactors is already there that this fuel will improve the economics, the safety, the nonproliferation characteristics of all of them. Of those, the utilities are most interested in improving their economics, especially versus natural gas and renewables. Upgrading a reactor using this fuel will add incremental electricity at a lower cost for baseload power than any other way of providing that power including natural gas or coal or wind or solar. So the existing market and the uprates to those reactors, I think, is extremely important to us. In fact, when we look at the advanced reactor, companies that pushed it well, and we have many friends at these companies, obviously, they have no existing marketplace, each new reactor that has to be deployed starts from scratch to have their market come into exist, whereas our potential market is already out there in 419 reactors plus the new ones that will be built, including advanced reactors that are SMRs that are water cools. The part of the question on the next 3 to 5 years of pivotal milestones to bring the company to the next level and dramatically increase the market cap, obviously, is extremely important, and we'll be taking steps to do that. As we go through the work on this GAIN Voucher, I believe you'll see us very successfully perform under this and design the experiment to insert the fuel samples into the advanced test reactor at Idaho National Laboratory, which leads very well into the next stages, which is actually obtaining High-Assay Low Enriched Uranium, HALEU, under a contract to come with the government. Actually having the contract to produce those nuclear fuel samples with HALEU in them, which we expect will be at our full enrichment levels, have them inserted into the reactor, get the data from the use in the reactor. And ultimately then in the next 5 years, begin lead test rod operation in commercial reactors as we go beyond these test reactors, which we can actually do more with in many ways than commercial reactors, but we want to start seeing the demonstration also in the commercial units. So I think as we go through these steps, we're going to see reflected in the market cap of the company, particularly as we're proving out all these benefits, the dramatic improvement in economics, in safety and the nonproliferation benefits. We have another question here. It says, what steps are you taking to ensure management and the Board own more stock in Lightbridge? Well, this is also a very important question that management and the Board be aligned in our interests with stockholders. All the members of management and the Board over time have bought stock in this company and some quite significantly, including the Chairman and myself and others. And we have now an employee stock purchase plan that all named executive officers have purchased stock under as well as some people or employees of the company who are not named executive officers. And we intend to keep that up and have management buying through that. I'll also say that when people are brought in to management or Board positions, the company needs to be clear, what is expected of them. And when you look at the needs of what a company like Lightbridge needs to chair our independent committees on the Board, to bring deep knowledge of nuclear policy, of nuclear technology, of many specialized areas that we're in, that tends to be what we prioritize versus whether you will become a large investor personally. But certainly, we have those skills on the people here. They're extremely important to us. And we do welcome everyone's investments. The third, what steps are Lightbridge taking? Third question I have here. What steps are Lightbridge taking to raise awareness of your stock in the company's stories? Well, I think that as we go through these milestones, we'll have a lot to say to raise awareness. As you've probably seen Lightbridge has outsized attention from the federal government and from the media for a company of our size, based on what we're doing. We were by far the smallest company to -- of the 10 invited to meet with the President and in many of the follow-up meetings with White House staff and with others around government. We have had some significant television interviews, major newspapers, major conference presentations. We have some more coming up. And I think that we will use those vehicles and continue to have close government ties regardless of outcomes of elections. I think we'll continue to have close media ties because of the interest in the benefits of what our technology can bring here and in other countries where we're finding interest now and as our patents are being granted in other countries. So we will focus on achieving these milestones. Some of them are pretty near term and in raising awareness in the stock as we show how these benefits of our fuel will be monetized. The last question I have here, if there are any more, please submit them online. It says, you mentioned the global race for advanced nuclear technology, will this prohibit Lightbridge from exporting and engaging international reactors? That's a very interesting question. These are all 4 very good questions. What I talked about a global race in 2 contexts: one strategic, particularly against China and Russia as the U.S. exporting reactors and nuclear technologies, advanced nuclear technology; and the second is the race, including with nuclear technology to head off the severe effects of climate change. And I believe this question relates to in effect for where China and Russia are exporting to, does that cut off our market in those places. I don't think that's what the question means. And interestingly, so far, the answer is no. It's interesting how [ it's a ] race, but it's interesting how generally, how open the market is. We're seeing U.S. companies have deployed major reactors in China, including 2 Westinghouse AP1000s at Sanmen, one of which I visited on the U.S. government delegation and 2 of more at Haiyang in China. They're all operating now. We've also seen other western countries deploy reactors in China. We are competing U.S. companies with Russia and China. In many places, this Chinese funding for new reactors being built in the U.K. and China is seeking perhaps to even build a reactor in the U.K. They're certainly in Central and Eastern Europe. Our Russian reactor projects that include content from U.S. companies, including Westinghouse fuel in reactors in Eastern Europe. So far, it's interesting how open the market is in a sense now some of those markets might close as China or Russia establish stronger strategic relations with some countries or the U.S. does. But it's a very large market. And I think our ability in the end to either produce fuel alone or with partners or simply license the technology and have it produced in another country will bring virtually all markets to have benefit to Lightbridge's stockholders. I think that I really don't see, based on our relationships around the world, why a country would not take the economic safety and nonproliferation benefits of this technology, especially if under license it can be produced for those markets separately. Now our intent right now is we're focusing on the United States, and then we'll expand from there. And our NUFAB advisers, the Nuclear Utility Fuel Advisory Board are all American utilities. So with that, we will focus on the U.S. and benefit, we believe, from U.S. government support for advanced nuclear and go from there. Let me just give us a second. That's the last question, I have to see if there's any more. I don't see any coming at this time. Those were very good questions. We very much appreciate all of your investments in the company. We know it can be hard investing in nuclear at times. We do believe that with this government support and the benefits of our technology and the progress we're making under the GAIN Voucher that you're going to see some good things coming from us in the near term. That last slide, you see, you could always contact us, particularly at ir@ltbridge.com for investorrelations@ltbridge.com. And thank you very much. And with this, we will close the presentation and Q&A portion and end this last part of the annual meeting of this virtual stockholders meeting. Thank you, everybody, and goodbye.