LIGHTBRIDGE Corp

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Nature of Operations and Basis of Presentation

When used in these notes, the terms “Lightbridge,” “Company,” “we,” “us” or “our” mean Lightbridge Corporation and all entities included in the 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. 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. These unaudited condensed consolidated financial statements include the accounts of the Company, 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 are inactive, and all significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of Lightbridge 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 footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), 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 footnotes necessary for comprehensive condensed consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 3, 2025.

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 and six-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Summary of Significant Accounting Policies

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. At the end of the reporting period, the Company reviews U.S. treasury instruments held to determine whether the securities are of the most recent issuance of that security with the same maturity (referred to as “on-the-run”, which is the most liquid version of the maturity band). If a U.S. treasury instrument held at the end of the reporting period was from the most recent issuance it is classified as level 1, otherwise it is referred to as “off-the-run” and is classified as level 2. 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 requires judgment and may have affected the placement within the fair value hierarchy levels.

At period-end, the Company evaluates U.S. Treasury instruments held to determine whether they are:

Although U.S. Treasury instruments held as cash equivalents have short maturities (typically 30–90 days) and cost closely approximates fair value, fair value disclosures are presented in accordance with ASC 820 and ASC 320 guidance.

The Company’s financial instruments consisted principally of cash and cash equivalents, accounts payable and accrued liabilities. The carrying amounts of cash, accounts payable and accrued liabilities are considered to be Level 1 measurements, because of the short-term nature of those instruments. Cash equivalents are primarily composed of U.S. Treasury instruments having maturity dates of 30 to 90 days. The Company purchased $66.9 million of U.S. Treasury instruments during the six months ended June 30, 2025.

The following table summarized the valuation of the Company’s financial instruments that fell within the fair value hierarchy (rounded in millions) at June 30, 2025:

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

Certain Risks and Uncertainties

The Company will need additional funding and/or in-kind support via a combination of strategic alliances, government grants, commercial loans, 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 the Lightbridge 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 R&D activities to advance its nuclear fuel technology at Idaho National Laboratory (INL). For the three and six months ended June 30, 2025, R&D expenses associated with activities conducted at the INL accounted for 47% of the Company’s total R&D expenditure. For the three and six months ended June 30, 2024, R&D expenses associated with activities conducted at the INL accounted for 34% and 38% of the Company’s total R&D expenditure, respectively. 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.

Recent Accounting Pronouncements

Accounting Standards Update (ASU) No. 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, was issued by the Financial Accounting Standards Board (FASB) in December 2023. This guidance enhances income tax disclosure requirements by mandating the disclosure of (1) specific categories in the rate reconciliation, (2) income or loss from continuing operations before income taxes, disaggregated between domestic and foreign, and (3) income tax expense or benefit from continuing operations, disaggregated by federal, state, and foreign. The ASU also requires disclosure of income tax payments to federal, state, local, and foreign jurisdictions, among other changes. The standard is effective for annual periods beginning after December 15, 2024, and will be adopted by the Company as permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements and related disclosures.

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 requires 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 Company is currently evaluating the impact of the adoption of this guidance on its 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 unaudited condensed 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 is computed using the weighted-average number of common shares outstanding during the reporting period, except that it does not include unvested common shares subject to repurchase or cancellation. Diluted net loss 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.

The outstanding securities noted below have been excluded from the computation of diluted weighted shares outstanding for the three and six months ended June 30, 2025 and 2024, as they would have been anti-dilutive due to the Company’s losses at June 30, 2025 and 2024 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 INL, in collaboration with the Department of Energy (DOE), to support the development of Lightbridge Fuel™. At the time of signing, the Company made advance payments for future project work totaling $0.4 million to Battelle Energy Alliance, LLC (BEA), the 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 advance payments by $0.1 million to $0.5 million. During the six months ended June 30, 2025, the Company made additional advance payments of $0.6 million which subsequently offset $0.6 million in project costs. As of June 30, 2025, and December 31, 2024, the Company’s prepaid project costs were $0.5 million.

Note 4. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist 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 2025 total approximately $0.1 million. Total rent expense for the three and six months ended June 30, 2025 was approximately $25,000 and $50,000, respectively. Total rent expense for the three and six months ended June 30, 2024 was approximately $24,000 and $48,000, respectively.

Note 6. Research and Development Costs

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” Strategic Partnership Project Agreement (SPPA) and an “umbrella” Cooperative Research and Development Agreement (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 (ATR) 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 three and six months ended June 30, 2025, the Company recorded $0.8 million and $1.6 million in R&D expenses associated with INL, respectively. For the three and six months ended June 30, 2024, the Company recorded $0.3 million and $0.7 million in R&D expenses associated with INL, respectively.

INL Modifications to the CRADA and SPPA Project Task Statements

On January 16, 2025, the Company and BEA entered into Modification No. 3 to the PTS No. 1 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.

On March 18, 2025, the Company and BEA entered into Modification No. 4 to the PTS No. 1 under the SPPA, dated December 9, 2022, as amended on May 23, 2023, March 26, 2024 and October 24, 2024, by and between the Company and BEA. Pursuant to the terms of Modification No. 4, the potential amounts payable by the Company to reimburse BEA for its expenses and employee time were increased by approximately $0.6 million, bringing the total estimated cost for the work to be performed under the “umbrella” SPPA to $2.6 million.

After accounting for Modification No. 4, cash payments from Lightbridge to BEA under both CRADA and SPPA are estimated at approximately $6.8 million on a cost reimbursable basis over the performance periods. The balance of the PTS obligations as of June 30, 2025 was $2.8 million. These PTS obligations are generally cancellable with 30 days’ notice and therefore, are not considered firm commitments.

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. The Company made its final payment in December 2024 when the study was completed. The Company has no further obligations under the agreement. For the three and six months ended June 30, 2025, the Company recorded $0 million in R&D expenses associated with RATEN ICN feasibility study. For the three and six months ended June 30, 2024, the Company recorded $0.1 million in R&D expenses associated with RATEN ICN feasibility study.

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. The Company made its final payment in December 2024 for the study that was completed in 2024 and has no further obligations under the agreement. For the three and six months ended June 30, 2025, the Company recorded $0 million in R&D expenses associated with this FEED study. For the three and six months ended June 30, 2024, the Company recorded $0 million and $0.2 million, respectively, in R&D expenses associated with this FEED study.

Note 7. Stockholders’ Equity and Stock-Based Compensation

Increase in Authorized Common Shares

On May 8, 2025, the Company held the 2025 annual meeting of stockholders (the Annual Meeting) at which the Company’s stockholders approved increasing the authorized common shares from 25,000,000 shares to 100,000,000 shares. The Amendment to the Articles of Incorporation became effective upon the filing of the Amended and Restated Certificate of Incorporation with the Secretary of State of Nevada on May 8, 2025.

Common Stock and Common Stock Equivalents Outstanding

At June 30, 2025, the Company had a total of 25,905,929 shares of common stock and common stock equivalents outstanding, comprised of 25,545,488 common shares outstanding (including outstanding restricted stock awards (RSAs) totaling 1,017,521 shares) and stock options to purchase 360,441 shares of common stock (of which 340,776 stock options were vested).

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

Issuance and Redemption of Series X Preferred Stock

On February 27, 2025, the Company entered into a Subscription and Investment Representation Agreement with the chair of the Audit Committee, 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 and the $100 was received by the Company. The Company redeemed the Series X Preferred Stock for $100 cash after the Annual Meeting and filed the Certificate of Withdrawal with the Secretary of State of Nevada on May 8, 2025. The Series X Preferred Stock did 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 was entitled to 25,000,000 votes on such proposal, voting together with the holders of the Company’s common stock. The votes by the holder of Series X Preferred Stock were 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 the common stock who voted on such proposal (excluding abstentions, broker non-votes and shares of common stock that were not voted “for” or “against” such proposal). The voting power attributable to the Series X Preferred Stock was disregarded for purposes of determining whether a quorum is present at the Annual Meeting.

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, pursuant to which the Company issued and sold shares of its common stock from time to time through Stifel as the Company’s sales agent. Under this amended agreement, the Company paid Stifel a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the agreement. The agreement was terminated on May 30, 2025. Sales of the Company’s common stock through Stifel, 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.

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 offered and sold shares of common stock having an aggregate offering price of up to $12.6 million from time to time through an ATM offering. The Company exhausted all sales under the First Prospectus Supplement. On November 22, 2024, the Company filed a prospectus supplement (the Second Prospectus Supplement) pursuant to which the Company offered and sold shares of common stock having an aggregate offering price of up to $45.0 million from time to time through an ATM offering. The Company exhausted all sales under the Second Prospectus Supplement.

The Company filed a shelf registration statement on Form S-3 (File No. 333-287563) with the SEC on May 23, 2025, registering the sale of up to $150.0 million of the Company’s securities that was declared effective on June 4, 2025. On June 5, 2025, the Company filed a prospectus supplement (the Prospectus Supplement) pursuant to which the Company may issue and sell from time to time up to $75.0 million of its shares of common stock through the Company’s new sales agent, Jefferies LLC (Jefferies).

On June 5, 2025, the Company entered into an Open Market Sale Agreement SM with Jefferies, pursuant to which the Company may issue and sell from time to time up to $75,000,000 of shares of its common stock through Jefferies as the Company’s sales agent. Sales of the Company’s common stock through Jefferies, 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, as amended, pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-287563), the base prospectus filed as part of such registration statement and the Prospectus Supplement.

The Company records its ATM sales on a settlement date basis. The Company sold 6,242,266 shares under the ATM for the six months ended June 30, 2025 resulting in net proceeds of $63.1 million (stock issuance costs were approximately $2.2 million). The Company sold 828,131 shares under the ATM for the six months ended June 30, 2024 resulting in net proceeds of $2.2 million (stock issuance costs were approximately $0.3 million). The Company sold 3,636,647 shares under the ATM for the three months ended June 30, 2025 resulting in net proceeds of $42.9 million (stock issuance costs were approximately $1.6 million). The Company sold 400,831 shares under the ATM for the three months ended June 30, 2024 resulting in net proceeds of $1.0 million (stock issuance costs were approximately $0.1 million).

Stock-Based Compensation

2020 Omnibus Incentive Plan

On March 9, 2020, the Board of Directors adopted the Company’s 2020 Omnibus Incentive Plan (as subsequently amended, the 2020 Plan). On September 3, 2020, the stockholders approved the 2020 Plan to authorize grants of the following types of awards: (a) Options, (b) Stock Appreciation Rights, (c) Restricted Stock Awards 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 annual meeting of stockholders on April 19, 2024.

On February 26, 2025, the Company’s Board of Directors approved an increase of 2,500,000 shares to the authorized number of shares under the 2020 Plan, increasing the total authorized number of shares from 2,500,000 to 5,000,000. This increase was approved by the stockholders at the annual meeting of stockholders on May 8, 2025.

The total number of shares of common stock available for future issuance under the 2020 Plan was 3,120,331 shares at June 30, 2025.

Stock Options

Stock options issued to the Company’s employees, directors and consultants are summarized as follows for the six months ended June 30, 2025:

For the six months ended June 30, 2025 and 2024, the Company issued 10,448 and 58,309 stock options, respectively, to one consultant. The 10,448 stock options and the 58,309 stock options were assigned a fair value of $5.74 per share and $1.03 per share, respectively (total fair value of $60,000 for each grant). The weighted-average grant-date exercise price per share of the stock options granted for the six months ended June 30, 2025 and 2024, was $9.42 and $3.00, respectively.

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 $13.37 per share and $3.37 per share at June 30, 2025 and 2024, 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 recognizes 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 for the three months ended June 30, 2025 and 2024:

As of June 30, 2025, total unrecognized compensation cost related to option awards was $29,155, which is expected to be recognized over a remaining weighted-average vesting period of 1.7 years. As of June 30, 2024, total unrecognized compensation cost related to option awards was $29,166, which is expected to be recognized over a remaining weighted-average vesting period of 1.7 years.

Exercise of Options

For the six months ended June 30, 2025, the Company received approximately $0.6 million of net proceeds from the exercise of 99,714 stock options from employees and consultants. There were no options exercised for the six months ended June 30, 2024.

Common Stock

Consultants’ Stock Issuances

For the six months ended June 30, 2025 and 2024, the Company issued 5,181 shares (with an average stock price of $5.79 per share) and 8,750 shares (with stock prices at $3.00 to $4.00 per share) of common stock, respectively, to its investor relations firm for services provided during the period, which were recorded as stock-based compensation expenses. These shares vested immediately upon issuance. The expense recorded for these share issuances was $15,000 for each quarter. 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 began to be recognized on a straight-line basis over the requisite service period. Approximately $90,000 was recorded as consulting expenses for the six months ended June 30, 2025.

As of June 30, 2025, the unrecognized compensation cost of approximately $24,000 was recorded under prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet, which is expected to be recognized over a remaining service period of 0.14 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 independent 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 on December 4, 2024, which shares vested 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 independent 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 on November 20, 2023, which shares vested on January 2, 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

Restricted stock awards (RSAs) are awards of common stock that are legally issued and outstanding. RSAs are subject to time-based restrictions on transfer and unvested portions are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions or does not meet certain performance conditions.

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 diluted loss per share. The Grantees receiving RSAs have all rights as a shareholder with respect to these shares, whether vested or unvested, including, without limitation, rights to vote the shares, receive dividends, etc.

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

The aggregate fair value was calculated as the fair value of the Company’s common stock. The fair value of the Company’s common stock was $13.37 per share and $3.37 per share at June 30, 2025 and 2024, respectively. The fair value of the RSAs vested for the six months ended June 30, 2025 and 2024 was $1.0 million and $0 million, respectively.

As of June 30, 2025, all the outstanding shares of RSAs are unvested. As of June 30, 2025, total unrecognized compensation cost related to RSAs was $4.9 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.29 years.

Issuance of Performance-Based Restricted Stock Awards (PSAs)

On April 3, 2025, the Company’s Compensation Committee and Board of Directors approved the grant of 300,000 performance-based RSAs (PSAs) to certain executives, key employees, and consultants under the 2020 Plan. These PSAs are subject to both service and performance-based vesting conditions. The performance condition requires the achievement of a specific R&D milestone, the successful insertion of the Company’s coupon fuel samples into the Advanced Test Reactor at INL for irradiation testing by December 31, 2026. The service condition requires continuous service over a three-year period from the grant date.

The Company recognizes stock-based compensation expense for PSAs beginning on the grant date. The amount and timing of expense recognition is based on management’s assessment of the probability of achieving the specified performance condition. These awards were valued at $2.1 million, based on the Company’s closing stock price of $6.99 per share on April 7, 2025. For the three and six months ended June 30, 2025, the Company recognized $0.2 million in stock-based compensation expense, reflecting management’s assessment that achievement of the performance condition was probable as of June 30, 2025.

Issuance of Restricted Stock Awards (RSAs)

On March 12, 2025, the Board of Directors approved a grant of RSAs with a total value of $0.5 million to its five independent directors for the service year ending December 31, 2025. This grant comprised 57,940 RSAs, valued at $8.63 per share on the grant date, with vesting scheduled in four quarterly installments commencing on March 31, 2025. As of June 30, 2025, a total of 28,970 RSAs had vested. This resulted in the recognition of $0.2 million and $0.3 million in stock-based compensation expense for the three and six months ended June 30, 2025.

Restricted Stock Awards Modification and Net Share Settlements for Payments of Withholding Taxes

On March 24, 2025, the Company entered into a separation agreement with a former employee. As part of the agreement, the Board of Directors approved the accelerated vesting of 70,710 RSAs, which would have otherwise been forfeited upon termination. In accordance with ASC 718, this was treated as a modification, leading to the recognition of $0.5 million in stock-based compensation expense in March 2025, including $0.3 million of incremental fair value from the modification of the RSAs awarded.

To satisfy approximately $0.2 million in payroll withholding taxes associated with the accelerated RSAs vesting, the Company withheld 21,285 shares, resulting in the issuance of 49,425 net shares to the former employee. The withheld shares were returned to the 2020 Plan share reserve for potential future issuance.

On March 14, 2025,10,907 RSAs vested to the former employee based on his service to the Company. To satisfy approximately $36,000 in payroll withholding taxes, the Company withheld 3,863 shares, resulting in the issuance of 7,044 net shares to the former employee. The withheld shares were returned to the 2020 Plan share reserve for potential future issuance.

RSAs Summary - 2025 and 2024

As of June 30, 2025 and December 31, 2024, there were 1,017,521 shares and 781,864 shares of RSAs included in the total issued and outstanding common stock, respectively. Compensation expense for service-based RSAs issued to employees and consultants are generally recognized straight line over the three-year vesting period. RSAs with combined performance-based and service-based vesting conditions are expensed using the graded vesting attribution method. A total of $1.9 million (including the $0.5 million accelerated RSAs vesting for the former employee) and $0.8 million of stock-based compensation expense was recorded for the six months ended June 30, 2025 and 2024, respectively, for the RSAs.

Stock-Based Compensation Expense

Total non-cash stock-based compensation expense recorded related to options and RSAs included in the Company’s unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 are as follows (rounded in millions):

Note 8. 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 condensed 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 condensed consolidated balance sheet as total assets.

The CODM uses segment net loss to allocate resources predominantly 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 (G&A) 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 G&A 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 three and six months ended June 30, 2025 and 2024 (rounded in millions):

(1) Other segment items include interest income.

Note 9. Subsequent Events

ATM Sales

Sales of common stock under the Company’s ATM from July 1, 2025 to August 12, 2025 amounted to 357,924 shares, which resulted in total net proceeds of approximately $4.4 million (stock issuance costs were approximately $0.1 million).