LIGHTBRIDGE Corp

Note 1. Basis of Presentation, Summary of Significant Accounting Policies, and Nature of Operations

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. The Company is a nuclear fuel technology company developing its nuclear fuel. The Company views its operations and manages its business as one business segment, which is the development and commercialization of its nuclear fuel.

Basis of Consolidation

These consolidated financial statements included the accounts of Lightbridge, a Nevada corporation, and the Company’s wholly-owned subsidiaries, TPI, a Delaware corporation, and Lightbridge International Holding LLC, a Delaware limited liability company. These wholly-owned subsidiaries were inactive. All intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation and Use of Estimates and Assumptions

The preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP), requires management to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions were periodically reviewed and the effects of revisions were reflected in the consolidated financial statements in the period they are determined to be necessary. There were no significant estimates at December 31, 2024 and 2023.

Fair Value of Financial Instruments

The Company determined fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unaffiliated market participants at the measurement date.

Accounting Standards Codification (ASC),Fair Value Measurement (ASC 820), established a fair value hierarchy that prioritizes the inputs used to measure fair value. Assets and liabilities measured at fair value were categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The categorization of financial instruments within the valuation hierarchy was based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy were as follows:

Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices that were observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that were not active and inputs other than quoted prices that were observable for the asset or liability; and

Level 3 - Unobservable inputs that reflect management’s assumptions.

For disclosure purposes, assets and liabilities were classified in their entirety in the fair value hierarchy level based on the lowest level of input that was significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement required judgment and may have affected the placement within the fair value hierarchy levels.

The Company’s financial instruments consisted principally of cash and cash equivalents, accounts payable and accrued liabilities. The carrying amounts of our financial instruments are considered to be a Level 1 measurement, because of the short-term nature of those instruments.

The following table summarize the valuation of the Company’s financial instruments that fall within the fair value hierarchy (in millions) at December 31, 2024:

The following table summarize the valuation of the Company’s financial instruments that fall within the fair value hierarchy (in millions) at December 31, 2023:

Certain Risks and Uncertainties

The Company will need additional funding and/or in-kind support via a combination of strategic alliances, government grants, further offerings of equity securities, or an offering of debt securities in order to support its future research and development (R&D) activities required to further enhance and complete the development and commercialization of its fuel products.

There can be no assurance that the Company will be able to successfully continue to conduct its operations if there is a lack of financial resources available in the future to continue its fuel development activities, and a failure to do so would have a material adverse effect on the Company’s future R&D 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, contingent liabilities, potential competition with other nuclear fuel developers, including those entities developing accident tolerant fuels (ATFs), changes in government regulations, risks related to the R&D of our nuclear fuel, regulatory approval of the Company’s fuel, support for nuclear power, changes in accounting and taxation standards, inability to achieve overall short-term and long-term R&D milestones toward commercialization, future impairment charges to the Company’s assets, and global or regional catastrophic events. The Company may also be subject to various additional political, economic, and other uncertainties.

The Company is engaged in significant research and development (R&D) activities to advance its nuclear fuel technology at Idaho National Laboratory (INL). For the year ended December 31, 2024, R&D expenses associated with activities conducted at the INL accounted for approximately 37% of the Company’s total R&D expenditure. The Company currently relies on INL for developing, testing and evaluating its nuclear fuel. Any disruption in access to INL’s resources, including changes in government policies, facility downtime, regulatory constraints, or unforeseen operational challenges could have a material adverse effect on the Company’s current ability to advance its R&D activities.

Cash and Cash Equivalents

The Company may at times invest its excess cash in interest bearing accounts and U.S. treasury bills. It classified all highly liquid investments with original 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 held cash balances in excess of the federally insured limits of $250,000. The Company deemed this credit risk not to be significant as cash was held by two prominent financial institutions in 2024 and 2023.

Contributed Services - Research and Development

The Company was awarded a grant in 2021 from the United States Department of Energy (DOE), which represented contributed services to further the Company’s R&D activities. The Company concluded that its government grants were not within the scope of ASC Topic 606, Revenue Recognition, as they did not meet the definition of a contract with a customer. Additionally, the Company concluded that the grants met the definition of a contribution, as the grants were a non-reciprocal transaction. As such, the Company determined that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition (Subtopic 958-605), applied for these contributed services, even though the Company is a business entity, as guidance in the contributions received subsections of Subtopic 958-605 applies to all entities (not-for-profits and business entities).

Subtopic 958-605 required nonfinancial assets, which includes services, such as the R&D services provided under the Gateway for Accelerated Innovation in Nuclear (GAIN) vouchers, (totaled $0 and $31,000 for 2024 and 2023, respectively) be shown on a gross method at the fair value of the services contributed, with contributed services - research and development shown as other operating income and the related costs as a charge to R&D expense, rather than depicting contributed services - research and development as a reduction of R&D expense. The fair value of contributed services was determined by the cost of professional time and materials, which were charged by the subcontractor who fulfilled the services contributed under the grant award. The principal market used to arrive at fair value is the market in which the Company operates.

Trademarks

Costs for filing and legal fees for trademark applications were capitalized. Trademarks were considered intangible assets with an indefinite useful life and therefore were not amortized. The Company performed an impairment test in the fourth quarter or more frequently if events or circumstances indicate that an impairment loss may have been incurred. For the fourth quarter 2024 test, the Company applied the accounting guidance which allowed the company to first assess qualitative factors to determine the extent of additional quantitative analysis, if any, that may have required to test trademarks for impairment. Based on the qualitative assessments performed, the company concluded that it was more likely than not that the fair value of the Trademarks substantially exceeded its carrying value and therefore, further quantitative analysis was not required. As a result, no impairment was recorded. As of December 31, 2024 and 2023, the carrying value of trademarks was approximately $0.1 million.

Leases

The Company recognizes operating lease right of use assets and liabilities at commencement date based on the present value of the future minimum lease payments over the lease term. Leases with an initial term of 12 months or less were not recorded on the consolidated balance sheet in accordance with the short-term lease recognition exemption. The Company applied the practical expedient to not separate non-lease components for all leases that qualified. Lease expense was recognized on a straight-line basis over the lease term. The Company had only one lease for office rent and the lease was for a term of 12 months without renewal options.

Income Taxes

Income taxes were accounted for using the asset and liability method. Deferred tax assets and liabilities were recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities were measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences were expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates was recognized in income in the period that included the enactment date. In accordance ASC 740,Accounting for Income Taxes, the Company reflected in the financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it was considered ‘more-likely-than-not’ that the position taken will be sustained on its technical merits by a taxing authority upon examination. As of December 31, 2024 and 2023, the Company had no unrecognized income tax benefits and correspondingly there was no impact on the Company’s effective income tax rate associated with these items. The Company’s policy for recording interest and penalties relating to uncertain income tax positions was to record them as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2024 and 2023, the Company had no such accruals.

Research and Development Expenses

Research and development expenses were expensed when incurred. Research and development expenses consisted primarily of wages and related payroll benefits, non-cash stock-based compensation, materials, R&D modeling computer hardware and software, testing, consulting, and other third-party research and development services, related to the development of the Company’s nuclear fuel. Advanced payments for goods or services for future research and development activities were deferred and expensed as the goods were delivered or the related services were performed.

Stock-Based Compensation

The stock-based compensation expense incurred by the Company for employees and directors in connection with its equity incentive plan was based on the employee model of ASC 718,Compensation—Stock Compensation, and the fair value of any stock options granted was measured at the grant date. Options or common stock granted to consultants for services performed were accounted for in the same manner as options and stock issued to employees for services.

Awards with service-based vesting conditions only were expensed on a straight-line basis over the requisite service period of the award.

The Company used a Black-Scholes pricing model to determine the fair value of stock options on the measurement date of the grant for service-based vesting conditions. Shares that were issued to employees upon exercise of the stock options or vesting of Restricted Stock Units (RSUs) or Restricted Stock Awards (RSAs) grants were issued net of the number of shares with a fair value equal to the amount required to satisfy applicable tax withholding requirements. As a result, the actual number of shares issued with tax withholding obligations were fewer than the actual number of shares exercised under the stock option or on the vesting dates of RSU or RSA grants.

The Company granted RSAs, which was an award of common shares that have full voting rights and dividend rights (with dividends paid upon vesting of the RSA) but are restricted regarding the sale or transfer before vesting. These restrictions lapse as the award vests. The shares were forfeited and returned to the Company if they did not vest. The RSAs were included in common stock issued and outstanding and were considered contingently issuable in the calculation of weighted-average shares outstanding for purposes of calculating earnings per share. The consolidated statement of changes in stockholders’ equity showed the initial grant of RSAs as a reclassification from additional paid-in capital to common stock, with any compensation expense related to the RSAs included in stock-based compensation. The cash flow impact is reflected within financing activities in the consolidated statements of cash flows. The number of RSAs to be granted are determined by the closing stock price on the date of the RSAs grant.

Under ASC 718, the Company elected to account for forfeitures as they occur and recorded compensation cost assuming all option holders have completed the requisite service period. If an employee forfeited an award because they failed to complete the requisite service period, the Company reversed compensation cost previously recognized in the period the award was forfeited. Thus, the total cumulative amount of compensation cost recognized for an award was the same regardless of whether the Company elected to estimate forfeitures or accounted for forfeitures as they occurred.

Comprehensive Loss

Comprehensive loss was defined as a change in equity of a business enterprise during a period resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive loss and, therefore, for all periods presented, the Company's comprehensive loss was the same as its reported net loss.

Recent Adopted Pronouncements

In November 2023, the FASB issued ASU No. 2023-07,Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures (ASU 2023-07), which expanded on the required disclosure of incremental segment information. The new guidance was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU on January 1, 2024. This ASU resulted in additional disclosures upon adoption.

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06,Debt-Debt with Conversion and Other Options(Subtopic 470-20)* and Derivatives and Hedging- Contracts in Entity’s Own Equity*(Subtopic 815-40), which simplified the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplified the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20,Debt: Debt with Conversion and Other Options, that required entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revised the scope exception from derivative accounting in Subtopic 815-40 for freestanding financial instruments and embedded features that were both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revised the guidance in ASC 260,Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. ASU 2020-06 was effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption was permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Adoption was either through a modified retrospective method or a full retrospective method of transition. The Company adopted this guidance on January 1, 2024 and the adoption did not have a material impact on its results of operations, financial position, and disclosures because the Company did not have any transactions or instruments to which this standard applied. If in the future the Company issued new convertible debt, warrants or other instruments, the standard may have a material effect, but it cannot be determined at this time.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09,Income Taxes (Topic 740):Improvements to Income Tax Disclosures (ASU 2023-09), which modified the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also required entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance was effective for annual periods beginning after December 15, 2024. Early adoption was permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application was permitted. The Company does not expect this guidance to have a material impact on its consolidated financial statements and related disclosures upon adoption.

In November 2024, the FASB issued ASU No. 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):Disaggregation of Income Statement Expenses (“ASU 2024-03”), which required disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the potential impact of adopting this new guidance on the consolidated financial statements and related disclosures.

The Company has evaluated other recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these consolidated financial statements and does not believe the future adoption of any such standards will have a material impact on the consolidated financial statements and related disclosures.

Note 2. Net Loss Per Share

Basic net loss per share was computed using the weighted-average number of common shares outstanding during the reporting period, except that it did not include unvested common shares subject to repurchase or cancellation. Diluted net loss per share was computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consisted of the incremental common shares issuable upon the exercise of stock options. For the years ended December 31, 2024 and 2023, there was no difference in the number of shares used to calculate basic and diluted shares outstanding as the inclusion of the potentially dilutive securities would be antidilutive.

The outstanding securities in the table below have been excluded from the computation of diluted weighted shares outstanding for the years noted below, as they would have been anti-dilutive due to the Company’s losses at December 31, 2024 and 2023 and also because the exercise price of certain of these outstanding securities was greater than the average closing price of the Company’s common stock.

Note 3. Prepaid Project Costs and Other Long-term Assets

In 2022, the Company entered into two agreements with Idaho National Laboratory (INL), in collaboration with the DOE, to support the development of Lightbridge Fuel™. At the time of signing, the Company made advanced payments for future project work totaling $0.4 million to Battelle Energy Alliance, LLC (BEA), DOE’s operating contractor for INL. In May 2023, the Company and INL modified the agreements to extend the contract term to May 2029, aligning it with the duration of the irradiation testing and increasing the advanced payments by $0.1 million to $0.5 million. The prepaid project costs were $0.5 million as of both December 31, 2024 and 2023, recorded under Other Assets - Prepaid project costs and other long-term assets on the accompanying consolidated balance sheets.

Note 4. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following (rounded in millions):

Note 5. Commitments and Contingencies

Operating Leases

The Company leased office space for a 12-month term from January 1, 2025 through December 31, 2025 with a monthly payment of approximately $8,000. The future minimum lease payments required under the non-cancellable operating leases for 2024 total approximately $0.1 million. Total rent expense for the year ended December 31, 2024 and 2023 was approximately $0.1 million.

Note 6. Research and Development Expenses

INL Project

In 2022, Lightbridge entered into agreements with BEA, to support the development of Lightbridge Fuel™. These framework agreements use an innovative structure that consists of an “umbrella” SPPA and an “umbrella” CRADA, with an initial duration of seven years. Throughout the duration of these umbrella agreements, all R&D work contracted with BEA is through the issuance of Project Task Statements (PTS). The initial phase of work under the two agreements is expected to culminate in future irradiation testing in the INL Advanced Test Reactor of fuel samples using enriched uranium supplied by the DOE. The initial phase of work aims to generate irradiation performance data for Lightbridge’s delta-phase uranium-zirconium alloy relating to various thermophysical properties. Data gathered during future post-irradiation examination work are expected to support fuel performance modeling and regulatory licensing efforts for the commercial deployment of Lightbridge Fuel™. For the year ended December 31, 2024 and 2023, the Company recorded $1.7 million and $0.8 million in R&D expenses associated with INL, respectively.

Romania Feasibility Study

On October 16, 2023, the Company engaged RATEN ICN in Romania to perform an engineering study to assess the compatibility and suitability of Lightbridge Fuel™ for use in Canada Deuterium Uranium (CANDU) reactors. The total price of approximately $0.2 million was payable in three installments, including an advance payment of $0.1 million and an interim milestone payment and final payment totaling approximately $0.1 million. For the year ended December 31, 2024 and 2023, the Company recorded $0.2 million and $27,000, respectively in R&D expenses associated with RATEN ICN feasibility study. The Company made its final payment in December 2024 and has no further obligations under the agreement.

FEED Study with Centrus Energy for a Lightbridge Pilot Fuel Fabrication Facility

On December 5, 2023, the Company entered into an agreement with Centrus Energy to conduct a front-end engineering and design (FEED) study to evaluate deployment of a Lightbridge Pilot Fuel Fabrication Facility (LPFFF) at the American Centrifuge Plant in Piketon, Ohio. For the year ended December 31, 2024 and 2023, the Company recorded $0.3 million and $23,400, respectively in R&D expenses associated with this FEED study and has no further payment obligations.

Note 7. Income Taxes

The Company’s ability to utilize its net operating loss (NOL) carryforwards may be substantially limited due to ownership changes that have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups.

During the course of preparing the Company’s consolidated financial statements, as of and for the year ended December 31, 2024, the Company completed a preliminary assessment of the available NOL carryforwards under Section 382 of the Code. The Company determined that it likely had undergone multiple ownership changes from 2009 to 2024 as defined under Section 382. As a result of these identified ownership changes, the portion of NOL carryforwards attributable to the pre-ownership change periods are subject to a substantial annual limitation under Section 382 of the Code. A conclusive Section 382 study had not been performed for December 31, 2024 due to the Company’s current projections of the lack of taxable income for the foreseeable future. NOLs created in years beginning after 2017 now only offset 80% of taxable income but no longer have a 20-year expiration.

The 2024 and 2023 annual effective tax rate was estimated to be 25% for the combined U.S. federal and state statutory tax rates. The Company reviews tax uncertainties in light of changing facts and circumstances and adjusts them accordingly.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting, and the amounts recognized for income tax purposes. The significant components of deferred tax assets (at an approximate 25% total effective tax rate, consisting of a 21% effective tax rate for Federal and a 4% effective tax rate for the state) as of December 31, 2024 and 2023, respectively, are as follows.

Deferred tax assets consisted of the following (rounded in millions):

The Company has NOL carryforwards for federal and state tax purposes of approximately $71.8 million at December 31, 2024 and $60 million at December 31, 2023, that is potentially available to offset future taxable income. There were no deferred tax liabilities at December 31, 2024 and 2023. As of December 31, 2024 and 2023, the Company had federal research and development credit carry-forwards of approximately $0.3 million. The federal research and development credit carry-forwards have a 20-year carry-forward period and expire from 2036 to 2040. The Company’s NOL carryforwards included the NOL from 2018 (post-2017) to current reporting year and all have an unlimited carryforward period. For financial reporting purposes, no deferred tax asset was recognized because as of December 31, 2024 and 2023, management currently estimates that it is more likely than not that substantially all the deferred tax assets, the majority of which are NOLs, will be unused. The increase in the total valuation allowance for the years ended December 31, 2024 and 2023 was approximately $0.7 million and $2.0 million, respectively. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences are deductible. Any unused annual limitation may be carried over to later years, and the amount of the limitation may under certain circumstances be increased by the built-in gains in assets held by us at the time of the change that are recognized in the five-year period after the change.

The reconciliation between income taxes (benefit) at the U.S. and State statutory combined tax rates of approximately 25% and the amount recorded in the accompanying consolidated financial statements is as follows (rounded in millions):

Uncertain Tax Positions

We file income tax returns in the U.S. federal jurisdiction and State of Idaho, New York and Virginia. The tax years 2021 through 2023 remain subject to examination by the appropriate governmental agencies. At December 31, 2024 and 2023, the Company had no unrecognized tax benefits. As of December 31, 2024 and 2023, there were no tax contingencies or unrecognized tax positions recorded. As of December 31, 2024 and 2023, we did not accrue interest and penalties.

Note 8. Stockholders’ Equity and Stock-Based Compensation

At December 31, 2024, the Company had 18,783,912 common shares outstanding (including outstanding RSAs totaling 781,864 shares). Also outstanding were stock options relating to 464,940 shares of common stock (of which 445,275 stock options were vested), all totaling 19,248,852 shares of common stock and all common stock equivalents, outstanding as of December 31, 2024.

At December 31, 2023, the Company had 13,698,274 common shares outstanding (including outstanding RSAs totaling 557,688 shares). Also outstanding were stock options relating to 510,787 shares of common stock (of which 498,177 stock options were vested), all totaling 14,209,061 shares of common stock and all common stock equivalents, outstanding at December 31, 2023.

Common Stock Equity Offerings

At-the-Market (ATM) Offerings

On May 28, 2019, the Company entered into an at-the-market equity offering sales agreement with Stifel, Nicolaus & Company, Incorporated (Stifel), which was amended on April 9, 2021 and May 8, 2024 (the ATM Agreement), pursuant to which the Company may issue and sell shares of its common stock from time to time through Stifel as the Company’s sales agent. Under this amended agreement, the Company pays Stifel a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the agreement. The offering of common stock pursuant to this agreement can be terminated with 10 days written notice by either party. Sales of the Company’s common stock through Stifel, if any, will be 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.

The Company filed a shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC) on March 29, 2024, registering the sale of up to $75.0 million of the Company’s securities that was declared effective on April 19, 2024. On May 10, 2024, the Company filed a prospectus supplement, which was further supplemented on July 19, 2024 and August 9, 2024 (collectively, the “First Prospectus Supplement”), pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $12.6 million from time to time through the ATM. The Company exhausted all sales under the First Prospectus Supplement. On November 22, 2024, the Company filed a prospectus supplement (the “Second Prospectus Supplement”) to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $45.0 million from time to time through the ATM.

The Company records its ATM sales on a settlement date basis. The Company sold 4,547,207 shares under the ATM for the year ended December 31, 2024 resulting in net proceeds of $21.4 million (stock issuance costs were $1.1 million). The Company sold 1,492,148 shares under the ATM for the year ended December 31, 2023 resulting in net proceeds of $6.4 million (stock issuance costs were $0.4 million).

Stock-Based Compensation

Amendment to 2020 Omnibus Incentive Plan

On March 9, 2020, the Board of Directors adopted the Company’s 2020 Omnibus Incentive Plan (2020 Plan). On September 3, 2020, the shareholders approved the 2020 Plan to authorize grants of the following types of awards: (a) Options, (b) Stock Appreciation Rights, (c) Restricted Stock and Restricted Stock Units, and (d) Other Stock-Based and Cash-Based Awards.

On February 27, 2024, the Board of Directors approved an increase of 700,000 shares to the authorized number of shares under the 2020 Plan, increasing the total authorized number of shares from 1,800,000 shares to 2,500,000 shares. This increase was approved by the stockholders at the shareholders’ annual meeting on April 19, 2024. The total number of shares of common stock available for issuance under the 2020 Plan was 2,500,000 shares with 1,073,914 shares available for future issuance at December 31, 2024.

Stock Options

Stock options issued to the Company’s employees, directors and consultants are summarized as follows for the year ended December 31, 2024:

During the year ended December 31, 2024, the Company received approximately $42,000 of net proceeds from the exercise of 10,974 stock options.

During the year ended December 31, 2024, the Company issued 71,330 stock options to two consultants. These options were assigned a fair value of $1.19 per share (total fair value of $85,000). During the year ended December 31, 2023, the Company issued 35,482 stock options to two consultants. These options were assigned a fair value of $1.77 per share (total fair value of $42,800). The weighted-average grant-date fair value per share of the stock options granted for the years ended December 31, 2024 and 2023, was $2.91 and $4.58, respectively.

The fair value was determined using the Black-Scholes pricing model. For expected volatility, the Company concluded that the historical volatility over the option’s expected holding term provided the most reasonable basis for this estimate. For the risk-free interest rate, the Company used U.S. Treasury Note rates, which mature at approximately the same time as the option’s expected holding term or option life determined by using the simplified method. The Company recognized forfeitures of equity-based awards as a reduction to compensation costs in the period in which they occur.

The following assumptions were used in the Black-Scholes pricing model to determine the fair value of stock options granted during the years ended December 31, 2024 and 2023:

The intrinsic value is calculated as the difference between the fair value of the Company's common stock and the exercise price of the stock options. The fair value of the Company's common stock was $4.73 and $3.21 per share at December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, total unrecognized compensation cost related to option awards was $41,600, which is expected to be recognized over a remaining weighted-average vesting period of 2.06 years.

Common Stock

Consultants’ Stock Issuances

For the year ended December 31, 2024 and 2023, the Company issued 18,201 shares (with stock prices ranging from $3.00 to $4.00 per share with a weighted average stock price of $3.30 per share) and 13,325 shares (with stock prices ranging from $4.00 to $5.82 per share) of common stock, respectively, to its investor relations firm for services provided during the period, recorded to general and administrative expenses. These shares vested immediately upon issuance. The expense recorded for these share issuances was $15,000 for each quarter with a weighted average grant date fair value of $3.30 per share in 2024 and $4.50 per share in 2023, respectively. The shares were valued based on the closing market price of the Company’s common stock on the date of grant.

On August 19, 2024, the Board of Directors approved an equity grant valued at $180,000 to a consulting and investment research firm, for corporate advisory services to be provided over a twelve-month period, and preparation and dissemination of a report regarding the Company, which resulted in issuing the consultant 71,713 shares of common stock on the grant date, valued at $2.51 per share. These shares vested immediately upon issuance and are not forfeitable. The compensation cost of $180,000 is recognized on a straight-line basis over the requisite service period. Approximately $66,000 was recorded as consulting expense for the year ended December 31, 2024.

As of December 31, 2024, the unrecognized compensation cost of approximately $114,000 was recorded under Prepaid expenses and other current assets on the accompanying consolidated balance sheet, which is expected to be recognized over a remaining service period of 0.6 years.

Director Compensation – Equity-Settled Awards

On December 4, 2024, the Board of Directors approved an equity grant valued at $500,000 in total to its five directors for the service period and year ended December 31, 2024, which resulted in granting a total of 85,915 shares of common stock, valued on the grant date at $5.82 per share, with a scheduled share release date on January 2, 2025. On November 20, 2023, the Board of Directors approved an equity grant valued at $240,000 in total to its six directors for the service period and year ended December 31, 2023, which resulted in granting a total of 60,456 shares of common stock, valued on the grant date at $3.97 per share, with the shares issued in January 2024.

As a result, the fair value of the stock awards was measured on the grant date and recorded as an increase to stock-based compensation expense and additional paid-in capital in 2024. The fair value of the shares granted was determined based on the closing market price of the Company's common stock on the grant date.

Restricted Stock Awards

The following summarizes the Company’s restricted stock award activity and the RSA outstanding:

The intrinsic value was calculated as the fair value of the Company's common stock. The fair value of the Company's common stock was $4.73 and $3.21 per share at December 31, 2024 and 2023, respectively. The fair value of the RSAs vested in 2024 and 2023 was $1.4 million and $0.6 million, respectively.

As of December 31, 2024, all the outstanding restricted stock awards are unvested. As of December 31, 2024, total unrecognized compensation cost related to restricted stock awards was $3.9 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.50 years.

2024 Transactions

In 2024, a total of 253,425 RSAs vested. These RSAs vest annually with a three-year straight line vesting period. The Company withheld 100,514 shares to make payments for withholding taxes of $0.4 million on these vested shares, resulting in the issuance of 152,911 net shares to its employees and consultants. The common shares withheld became available for reissuance under the 2020 Plan.

On December 4, 2024, the Board of Directors approved an RSA equity grant of approximately $2.8 million, which equated to 484,269 RSAs granted to all of its employees and two consultants, valued at the closing market price of the Company’s stock on the grant date of $5.82 per share. These RSAs awards vest annually in three equal installments on the grant date anniversary.

2023 Transactions

On May 3, 2023, the Board of Directors approved a RSA equity grant valued at $120,000 to one new officer of the Company, which resulted in the issuance of a total of 35,088 shares of common stock to the new officer, valued on the grant date at $3.42 per share and issued on May 3, 2023. These RSAs vest annually in equal installments over three years. These 35,088 shares were included in the total outstanding common shares at December 31, 2023 and compensation expense will be recognized straight line over the three-year vesting period.

On November 20, 2023, the Board of Directors approved a RSA equity grant of approximately $1.1 million, which equated to 266,011 RSAs granted to all of its employees and two consultants, valued at the closing market price of the Company’s stock on the grant date of $3.97 per share. These RSAs awards vest annually in three equal installments on the grant date anniversary.

In 2023, a total of 159,727 RSAs vested. These RSAs vest annually with a three-year straight line vesting period. The Company withheld 60,600 shares to make payments for withholding taxes of $0.2 million on these vested shares, resulting in the issuance of 99,127 net shares to its employees and consultants. The common shares withheld became available for reissuance under the 2020 Plan.

RSA Summary – 2024 and 2023

As of December 31, 2024 and 2023, there were 781,864 shares and 557,688 shares of RSAs included in the total issued and outstanding common stock, respectively. The weighted-average grant-date fair value per share of RSAs granted for the years ended December 31, 2024 and 2023, was $5.82 and $3.91, respectively. Compensation expense is recognized in a straight line over the three-year vesting period. A total of $1.4 million and $1.2 million of compensation expense was recorded for the years ended December 31, 2024 and 2023, respectively, for the RSAs.

Stock-Based Compensation Expense

Total non-cash stock-based compensation expense recorded related to options granted and restricted stock awards included in the Company’s consolidated statements of operations for the years ended December 31, 2024 and 2023 are as follows (rounded in millions):

Note 9. Defined Contribution 401K Retirement Plan

The Company has an established 401k retirement plan for its employees. The Company matches employee contributions to the plan 100%, with immediate vesting. The Company contributed approximately $0.3 million and $0.2 million to the 401k plan for the years ended December 31, 2024 and 2023, respectively.

Note 10. Related Party Transactions

On February 9, 2022, the Company entered into an agreement with We Don’t Have Time Inc. (WDHT), an organization with a social media network platform dealing with the climate crisis, pursuant to which WDHT provided a variety of climate-change related consulting services to the Company and the Company paid a monthly membership fee of $1,200 to WDHT. Dr. Chakraborty, a member of the Company’s Board of Directors, was also the CEO of WDHT’s US division. For the years ended December 31, 2024 and 2023, the Company incurred $0 and $14,400, respectively, in dues paid to WDHT. This agreement was terminated on January 1, 2024.

Note 11. Segment Reporting

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance. The Company has one reportable business segment: nuclear fuel technology. This segment consists of the research and development and commercialization of its nuclear fuel. The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the segment based on net loss as reported on the consolidated statement of operations. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances its nuclear fuel through all the stages of its development and commercialization. In addition, the measure of segment assets is reported on the consolidated balance sheet as total assets.

The CODM uses segment net loss to allocate resources predominately in the annual budget and forecasting process and uses that measure as a basis for evaluating progress toward R&D milestones. The CODM uses cash forecast models in deciding how to invest into the segment. Research and development expenses, general and administrative expenses are included in segment net loss and used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment, while research and development milestones scorecard results and scorecard general and administrative budgeted results are used in establishing management’s incentive compensation.

The table below summarizes the significant expense categories regularly provided to the CODM for the years ended December 31, 2024, and 2023 (rounded in millions):

(1) Other segment items include interest income and contributed services – research and development

Note 12. Subsequent Events

ATM Sales

Sales of common stock under the Company’s ATM from January 1, 2025 to February 28, 2025 amounted to 1.4 million shares, which resulted in total net proceeds of approximately $10.1 million.

INL Modification No. 3 to the CRADA PTS

On January 16, 2025, the Company and BEA entered into Modification No. 3 to the PTS under the CRADA, dated September 27, 2022, as amended on May 22, 2023 and May 30, 2023, by and between the Company and BEA. Pursuant to the terms of Modification No. 3, the potential amounts payable by the Company to reimburse BEA for its expenses and employee time associated with R&D activities were increased by approximately $1.6 million, bringing the total estimated cost for the work to be performed under the “umbrella” CRADA to $4.2 million. This modification also required that a $600,000 advance payment be made, which was due and paid on January 16, 2025.

After Modification No. 3 to the PTS under the CRADA and the anticipated Modification No. 4 to the PTS under the SPPA, total cash payments from the Company to BEA under both Agreements were estimated at approximately $6.5 million excluding project contingencies) on a cost reimbursable basis over the performance periods under the initial releases.

Increase in Authorized Common Shares

On February 26, 2025, the Company’s Board of Directors approved increasing the authorized common shares from 25,000,000 shares to 100,000,000 shares. This change will take effect upon receiving majority shareholder approval at the 2025 shareholder annual meeting.

Issuance of SeriesX** Preferred** Stock

On February 27, 2025, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with Jesse Funches, chairman of the Audit Committee and an independent member of the Board (the “Purchaser”), pursuant to which the Company agreed to issue and sell one (1) share of the Company’s Series X** Preferred Stock, par value $0.001 per share (the “Series X Preferred Stock”), to the Purchaser for $100 in cash. The sale closed on February 27, 2025. The Company will redeem the Series X **Preferred Stock for $100 in cash after the Company’s annual 2025 shareholder meeting (the “Annual Meeting”).

The Series X Preferred Stock does not have any voting rights except with respect to any proposal to increase the number of authorized shares of common stock of the Company. Each share of Series X Preferred Stock will be entitled to 25,000,000 votes on such proposal, voting together with the holders of our common stock. The votes by the holder of Series X Preferred Stock will be cast at the Annual Meeting automatically in the same “mirrored” proportion as the aggregate votes cast “for” and “against” the proposal by the holders of our common stock who vote on such proposal (excluding abstentions, broker non-votes and shares of common stock that are not voted “for” or “against” such proposal). The voting power attributable to the Series X Preferred Stock will be disregarded for purposes of determining whether a quorum is present at the Annual Meeting.

An amendment to the Lightbridge Corporation 2020 Omnibus Incentive Plan

On February 26, 2025, the Company’s Board of Directors approved an amendment to the Lightbridge Corporation 2020 Omnibus Incentive Plan to increase the number of shares of common stock available for issuance thereunder from 2,500,000 shares to 5,000,000 shares. This change will take effect upon receiving shareholder approval at the Company’s 2025 shareholder annual meeting.