LIGHTBRIDGE Corp

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Lightbridge Corporation (Lightbridge or the Company) and the Company’s wholly-owned subsidiary, Thorium Power, Inc. (TPI), a Delaware corporation. TPI is inactive, and all significant intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC) and do not contain certain information included in the Company’s annual financial statements and notes. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2026.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month and six-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Certain amounts in the prior year have been reclassified to conform with the current year presentation. These reclassifications had no impact on the previously reported balance sheets, statements of operations, statements of changes in stockholders’ equity, or changes in net cash provided by (used in) operating, investing, or financing activities on the statements of cash flows.

Summary of Significant Accounting Policies

There have been no significant changes in the Company’s accounting policies since December 31, 2025.

Certain Risks and Uncertainties

Based on the Company’s cash position as of June 30, 2026 and current operating plans, management believes the Company has sufficient capital to fund operations for at least 12 months from the issuance of these financial statements.

Beyond this period, 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 is subject to numerous other 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, changes in government regulations, risks related to the R&D of the Company’s 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, including the scale-up of the Company’s nuclear fuel technology and production capabilities, 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, 2026, R&D expenses associated with activities conducted at INL accounted for approximately 25% and 24% of the Company’s total R&D expenditure, respectively. For each of the three and six months ended June 30, 2025, R&D expenses associated with activities conducted at INL accounted for approximately 47% of the Company’s total R&D expenditure. Currently, the Company primarily 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

Disaggregation of Income Statement Expenses

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 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 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. Fair Value Measurements

The Company’s financial instruments consist 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. At June 30, 2026 and December 31, 2025, the Company held cash balances totaling $44.7 million and $199.5 million, respectively, in excess of the federally insured limits of $250,000. The Company deemed this credit risk not to be significant as cash in excess of the federally insured limits was held by prominent financial institutions during these periods.

Cash equivalents are primarily composed of U.S. Treasury instruments having maturity dates of 30-90 days. At June 30, 2026 and December 31, 2025, the Company held U.S. Treasury bills with an amortized cost basis of $192.1 million and $2.0 million, respectively, on its balance sheet.

The Company reviewed its U.S. Treasury instruments held at the end of each reporting period to determine whether the securities were 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 is 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 following table summarizes the valuation of the Company’s cash equivalents within the fair value hierarchy (in millions) at June 30, 2026:

The following table summarizes the valuation of the Company’s cash equivalents within the fair value hierarchy (in millions) at December 31, 2025:

Note 3. Prepaids and Other Assets

Prepaid expenses and other current assets consist of the following (in millions):

Prepaid project costs and other long-term assets consist of the following (in millions):

In 2022, the Company entered into two agreements with Battelle Energy Alliance, LLC (BEA), the U.S. Department of Energy’s (DOE) operating contractor for INL, to support the development of Lightbridge Fuel™. Under these agreements, as modified from time to time, the Company may make advance payments to support specific contracted project work. These advance payments are recorded as prepaid assets on the balance sheet, and classified as short-term or long-term, depending on the associated performance period remaining. As of June 30, 2026 and December 31, 2025, we had total short-term and long-term advance payments to BEA of $1.9 million and $1.2 million, respectively.

As of June 30, 2026, we had an additional $0.2 million of total short-term and long-term prepaid R&D project development costs related to cladding, critical heat flux testing, and a feasibility study for an expandable fuel facility, which are each classified on the balance sheet as short-term or long-term depending on their estimated project completion date.

Note 4. Accounts Payable and Accrued Liabilities

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

Note 5. Commitments and Contingencies

The Company has entered into initial project task statements (PTSs) with BEA related to R&D work being conducted under the Strategic Partnership Project Agreement (SPPA) and Cooperative Research and Development Agreement (CRADA) at INL. Performance of work under these agreements may be terminated at any time by either party, without any liability, after the effective date of termination, upon giving a thirty-day written notice under the SPPA and a sixty-day written notice under the CRADA. In the event of termination, the Company shall be responsible for BEA’s costs (including the closeout costs) through the effective date of termination, but in no event shall the Company’s cost responsibility exceed the total estimated cost stated in each PTS and any subsequent modification to the PTS.

As of June 30, 2026, the aggregate funding commitment remaining under the Company’s PTSs with BEA, if and when incurred, would not exceed $18.1 million over the anticipated performance period. Actual expenditures may differ from this amount based on the scope and timing of work performed through the issuance of additional PTSs to BEA.

Note 6. Stockholders’ Equity

At June 30, 2026 and December 31, 2025, the Company had 37,404,544 and 33,407,495 common shares outstanding, respectively (including outstanding restricted stock awards (RSAs) and performance-based restricted stock awards (PSAs) totaling 2,221,169 shares and 2,090,946 shares, respectively). No preferred shares were outstanding at June 30, 2026 and December 31, 2025.

At-the-Market (ATM) Offerings

The Company has entered into sales agreements with agents pursuant to which the Company may issue and sell shares of its common stock in “at-the-market” (ATM) equity offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The Company records its ATM sales on a settlement date basis. The sales commissions and expenses related to each ATM program are considered direct and incremental costs and are charged against “Additional paid-in capital” on the consolidated balance sheets in the period in which the corresponding shares are issued and sold.

During the three months ended June 30, 2026, the Company sold an aggregate of 2,392,247 shares under its sales agreement with Jefferies, LLC (Jefferies), resulting in aggregate net proceeds of $25.8 million. During the three months ended June 30, 2025, the Company sold an aggregate of 3,636,647 shares under its sales agreement with Jefferies and under a previous sales agreement with Stifel, Nicolaus & Company (Stifel), resulting in aggregate net proceeds of $42.9 million.

During the six months ended June 30, 2026, the Company sold an aggregate of 3,752,460 shares under its sales agreement with Jefferies, resulting in aggregate net proceeds of $44.4 million. During the six months ended June 30, 2025, the Company sold an aggregate of 6,242,266 shares under its sales agreement with Jefferies and under a previous sales agreement with Stifel, resulting in aggregate net proceeds of $63.1 million.

The Company has a $350 million shelf registration statement on Form S-3 (File No. 333-291837). As of June 30, 2026, approximately $96.1 million of our common stock remained available for issuance and sale under the Company’s $150 million at-the-market offering program pursuant to the related prospectus supplement, as amended.

Note 7. Stock-Based Compensation

Total non-cash stock-based compensation expense recorded related to common stock awards, stock options, RSAs and PSAs for the three and six months ended June 30, 2026 and 2025 is as follows (in millions):

The total stock-based compensation expense recorded in R&D and general and administrative expenses in the Company’s consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 is as follows (in millions):

2020 Omnibus Incentive Plan

The Company maintains the 2020 Omnibus Incentive Plan (the 2020 Plan), under which eligible participants may be awarded various types of stock-based compensation, including stock options, restricted stock awards, and other stock-based and cash-based awards. As of June 30, 2026, there were 1,300,299 shares of common stock reserved and available for issuance under the 2020 Plan.

Restricted Stock Awards

The following summarizes the Company’s RSA activity (limited to RSAs with no performance-based conditions) for the six months ended June 30, 2026:

During the six months ended June 30, 2026, the Company granted 53,155 RSAs to the independent members of its Board of Directors (the Board) and 16,000 RSAs to an external consultant. These awards vest in four equal installments at the end of each calendar quarter of 2026. During the six months ended June 30, 2026, the Company also granted 44,833 RSAs to new employees. These awards vest in three equal installments on each of the first three anniversaries of the grant date.

The weighted-average grant-date fair value per share of RSAs granted for the six months ended June 30, 2026 and 2025 was $13.12 and $8.63, respectively. During the six months ended June 30, 2026, a total of 51,276 RSAs vested, with an aggregate fair value of $0.6 million, and the Company withheld 2,848 shares to satisfy tax obligations, resulting in 48,428 net shares issued. During the six months ended June 30, 2025,122,283 RSAs with an aggregate fair value of $1.0 million vested, and the Company withheld 29,440 shares to satisfy tax obligations, resulting in 92,843 net shares issued.

During the three months ended June 30, 2026 and 2025, the Company recognized approximately $1.3 million and $0.4 million in total stock-based compensation expense from RSAs, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized approximately $2.6 million and $1.7 million in total stock-based compensation expense from RSAs, respectively. The stock-based compensation expense recorded during the six months ended June 30, 2025 included approximately $0.5 million of stock-based compensation expense related to accelerated vesting in connection with a separation agreement with a former employee. As of June 30, 2026, total unrecognized compensation cost related to RSAs was $8.8 million, which is expected to be recognized over a remaining weighted-average vesting period of 2.04 years.

Performance-based Restricted Stock Awards

The following summarizes the Company’s PSA activity for the six months ended June 30, 2026:

The weighted-average grant-date fair value per share of PSAs granted for the six months ended June 30, 2026 and 2025 was $11.80 and $6.99, respectively. During the six months ended June 30, 2026, a total of 100,001 PSAs vested, with an aggregate fair value of $1.1 million, and the Company withheld 41,559 shares to satisfy tax obligations, resulting in 58,442 net shares issued.

For the three months ended June 30, 2026, the Company recognized an immaterial amount of stock-based compensation expense from PSAs. For the three months ended June 30, 2025, the Company recognized approximately $0.2 million in stock-based compensation expense from PSAs. For the six months ended June 30, 2026 and 2025, the Company recognized approximately $1.1 million and $0.2 million in stock-based compensation expense from PSAs, respectively. As of June 30, 2026, total unrecognized compensation cost related to PSAs was $4.1 million, which is expected to be recognized over a remaining weighted-average vesting period of 1.48 years.

As of June 30, 2026, the Company had 1,013,738 PSAs outstanding with three specific R&D fuel program milestones and one specific financial milestone (the Tranche-based PSAs). During the six months ended June 30, 2026,167,512 shares of Tranche-based PSAs were granted to new employees. Each milestone applies only to a separate portion of the Tranche-based PSAs. Vesting of the Tranche-based PSAs occurs in unequal tranches depending on which milestone is certified and is subject to the grantee having completed at least twelve months of continuous service with the Company as of the milestone achievement date. The performance period for achieving these milestones extends from the grant date to December 31, 2028. As of June 30, 2026, management concluded that only one performance milestone was probable of achievement.

During the three-months ended June 30, 2026, management concluded a performance milestone previously deemed probable was no longer probable based on revised expectations during the quarter. As a result, the Company reversed $0.7 million of previously recorded stock-based compensation related to this performance milestone. During the three and six months ended June 30, 2026, the Company recognized net stock-based compensation expense of $(0.2) million and $0.6 million, respectively, related to the Tranche-based PSAs. These amounts include the reversal of $0.7 million of previously recognized stock-based compensation related to the performance milestone. No stock-based compensation expense related to the Tranche-based PSAs was recorded during the six months ended June 30, 2025.

As of June 30, 2026, the Company had 199,999 PSAs outstanding, which were granted in April 2025 (the April 2025 PSAs) with a performance condition requiring the successful insertion of the Company’s fuel material coupon samples into the Advanced Test Reactor at INL by December 31, 2026. This condition was satisfied in November 2025 and satisfaction was subsequently certified by the Compensation Committee. The April 2025 PSAs are also subject to the participant’s continuous service over a three-year period from the grant date. During the three months ended June 30, 2026 and 2025, the Company recognized $0.2 million and $0.2 million in stock-based compensation expense related to the April 2025 PSAs. During the six months ended June 30, 2026 and 2025, the Company recognized $0.5 million and $0.2 million in stock-based compensation expense related to the April 2025 PSAs.

Note 8. 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, such as the Company’s RSAs and PSAs. 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 and unvested RSAs and PSAs.

The outstanding securities in the table below have been excluded from the computation of diluted weighted shares outstanding for the three and six months ended June 30, 2026 and 2025, as they would have been anti-dilutive due to the Company’s losses for the three and six months ended June 30, 2026 and 2025 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 9. Segment Reporting

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 CODM assesses performance for the segment and allocates resources based on net loss as reported on the consolidated statement of operations. The CODM also reviews total assets as reported on the consolidated balance sheet to assess capital deployment and liquidity available to support the Company's commercialization strategy. The measure of segment assets is reported on the consolidated balance sheet as total assets.

The table below summarizes the significant expense categories regularly provided to the CODM for the three and six months ended June 30, 2026 and 2025 (in millions):

Note 10. Subsequent Events

August 2026 Equity Awards

On August 6 2026, the Board approved the following equity awards designed to support the Company’s lead test assembly (LTA) production strategy and retain and attract key personnel involved in the development and commercialization of Lightbridge Fuel™: