Lightbridge Corporation (LTBR) Q4 2017 Earnings Report, Transcript and Summary

Greetings and welcome to the Lightbridge 2017 Fourth Quarter Earnings and Business Update Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. I’d now like to turn the conference over to your host, David Waldman. Thank you, you may begin.

My apologies. Greetings and welcome to the Lightbridge 2017 Fourth Quarter Earnings and Business Update Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] I’d now like to turn the conference over to your host, David Waldman. Thank you, you may begin.

Thank you, Matt. Good morning, and welcome to Lightbridge’s 2017 year-end business update conference call. The company’s press release was distributed Thursday morning and can be viewed on the Investor Relations page of Lightbridge website at ltbridge.com. If anyone has questions after the call, you may contact Investor Relations at 855-379-9900. Seth Grae, our Chief Executive Officer, will lead today’s call. In addition, the following executives are available to answer your questions. Linda Zwobota, Chief Financial Officer; Jim Malone, Chief Nuclear Fuel Development Officer; Andrey Mushakov, Executive Vice President for International Nuclear Operations; and Jonathan Baggett, Vice President for Program Management and Deputy Nuclear Quality Assurance Manager. Today’s presentation includes forward-looking statements about the company’s competitive position and product and service offerings. During the course of today’s call, words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. This presentation is based on our current expectations and involves certain risks and uncertainties that may cause actual results to differ significantly from such estimates. These and other risks are set forth in more detail in Lightbridge’s filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements, whether as a results of new developments or otherwise. You can participate in today’s call in two ways: First, you may submit questions for management in writing to ir@ltbridge.com. If you’ve already submitted a question, we thank you. You can also submit them at any time during the prepared remarks or during the Q&A period. Third, after the prepared remarks, telephone lines will be opened for live questions. Now, here is Lightbridge’s CEO, Seth Grae. Please go ahead, Seth.

Thank you, David, good morning, everyone. In 2017, we laid the foundation for Lightbridge’s recently announced 50-50 joint venture Framatome. The new name for AREVA NP. Less than two months ago, we launched that JV, called Enfission. To complete the development regulatory licensing and commercial deployment of nuclear fuel assemblies based on Lightbridge designed metallic fuel technology and other nuclear fuel intellectual property. Arguably this was the most pivotal event in our company’s history. Framatome is the ideal partner, with established manufacturing capabilities and impeccable reputation as a nuclear fuel supplier and a large global footprint. Not only is Framatome a global leader in the nuclear energy market focused on designing, servicing, fueling and advancing the global nuclear fleet, but it is also majority owned by EDF Group, the largest nuclear reactor operator in the world. This JV is a tremendous validation and accomplishment for Lightbridge. In our earlier conference calls, we discussed the economic potential of our fuel, based on our report by Siemens' U.S. subsidiary Pace Global, whereby even a 25% market penetration in the U.S. alone, could generate $150 million to $200 million in annual royalties to us. While we are not prepared publicly disclose specific details about the revenue model Enfission at this time. Suffice it to say we believe the new JV will provide greater upside for Lightbridge shareholders. It is also worth noting, that EDF’s own financial reports for 2017 stated that the fair market value of Framatome’s intellectual property is approximately €700 million. We now own 50% of the joint venture and have access to the portions of that IP that we need to complete the commercial design and produce the Lightbridge fuel. EDF’s annual report mentioned our Enfission JV with Framatome as a highlight of last year. Since launching Enfission on January 25, Lightbridge and Framatome have been moving forward aggressively with our plans. Specifically, we are working on developing a regulatory licensed plan for lead test assemblies, and we expect to present this plan to the U.S. Nuclear Regulatory Commission later this year. We are also developing analytical models for our metallic fuel technology that can be used for reactor analysis and regulatory licensing. Our near-term priority is to invest in metallic fuel fabrication capabilities to ensure that we can begin test reactor radiation of our fuel samples under prototypic commercial reactor operating conditions in 2020. We also continue to receive valuable feedback on our fuel technology development plan through our Nuclear Utility Fuel Advisory Board, which is comprised of four large nuclear operators in the U.S. Exelon, Duke, Dominion and Southern Company. They collectively generate over half of nuclear power in the United States. We would like to thank the team at Framatome for their commitment to commercializing our innovative fuel technology. Partnerships like this are vital to ensure that today's nuclear energy facilities have the technologies they need to operate safely and efficiently for decades to come and can continue to provide low carbon and reliable base load electricity. We are honored to work with Framatome on this important project and believe the economic and safety benefits of our fuel will incur greater use of nuclear power. We also continue to expand our intellectual property protection. Recently we received a noticeable allowance in the United States that allows Lightbridge's patent portfolio coverage to expand and extend Lightbridge's patent portfolio coverage to an entire metallic fuel assembly designed for Western type pressurized water reactors, which comprised two thirds of all power reactors in operation worldwide. This particular patent focuses on the fuel assembly design building on an earlier U.S. patent involving metallic fuel rod design and other U.S. patents for a different variant of the fuel assembly design. The intellectual property in our proprietary fuel designs reflects years of research and effort by our team including many of the leading experts within the nuclear energy field. Our metallic fuel designs can also be adapted for using in nearly all other power reactors around the world. We were also awarded key patents in Europe and China related to our innovative metallic fuel design, which extent through 2034. Just this past Monday, we announced another key patent in Japan that covers the process by which our fuel is manufactured. The ability to produce safer and more economic carbon free power with our fuel is aligned with Japan's mission of restarting the country's nuclear power program, thereby cutting greenhouse gas emissions and reducing the need to import fossil fuels to the island nation. This is especially important in Japan given the high cost of imported natural gas. To-date we've received patents covering our metallic nuclear fuel rod design and now have broad intellectual property protection in our key markets, including the United States, Europe, China, South Korea, Canada, Eurasia and Australia. With dozens of patents issued and pending around the world, we've assembled a strong intellectual property portfolio that through Enfission we plan to leverage via commercial arrangements. Earlier this month, an independent scientific paper was published in nuclear engineering and design. A technical journal affiliated with the European Nuclear Society. The paper reports the results of a study that shows that Lightbridge’s spend fuel could not be used to make nuclear bombs. The abstract states that the Plutonium from Lightbridge’s spent fuel will be useless for a nuclear explosive device. Last week, we presented again a clean equity monocot. Clean Equity is an annual invitation only event cohosted by Prince Albert Foundation, an innovator capital of London, featuring some of the world's most innovative sustainable technology companies. The audience included selective sovereign corporate family and professional investors, policy makers and end users. Prince Albert described the benefits of Lightbridge fuel during his address of the conference. We also look forward to presenting at the Gabelli & Company Fourth Annual Waste Conference on March 23rd in New York, where we will discuss the proliferation resistance of spent fuel using our technology, as well as how our fuel reduces the amount of waste. For those of you unfamiliar with Gabelli & Company it is one of the premier investment firms in the world. We are seeing growing interest not only among investors and commercial partners, but also increased government support for nuclear energy in the U.S. and around the world. Nearly all of the nuclear power plants in the U.S. have received license renewals to extend operations from 40 to 60 years. And the first applicants for subsequent license renewals to extend reactor operations to 80 years have announced plans to begin the process with the NRC this year. Importantly, the White House has placed nuclear energy at the forefront of its energy agenda, including new programs to boost nuclear power research and development. In fact, the White House has recently stated that President, Trump’s biggest achievements in his energy dominance agenda are all about nuclear energy. President, Trump has called for a complete review of U.S. nuclear energy policy in order to revive and expand our nuclear energy sector. The White House is leading the nuclear policy review, which includes a focus on restoring U.S. nuclear R&D capabilities and enabling innovation in the development and deployment of new reactors. I’d also like to point out for the first time in 23 years the U.S. Department of Energy has resumed operations at the Transient Reactor Test Facility also known as TREAT. This reactor is a crucial part of the nation’s nuclear R&D infrastructure and provides the capability to test nuclear reactor fuels and materials under extreme conditions. Such testing can help to improve safety and performance of the current and future nuclear reactor fleet. We believe this is a major development and holds an enormous promise for Lightbridge. We will provide more details on the TREAT Reactor at a later date. It is clear that our nuclear fuel designs are attracting attention at both the commercial and governmental levels given that our technology hold significant promise to enhance reactor safety, improve nuclear power plants economics through increased power output and or longer fuel cycles, improve proliferation resistance of spent fuel and reduce the amount of waste. Since the end of 2017 we have significantly enhanced our balance sheet including a recent capital raise with strategic and credited American and European investors, including family offices. As a result our balance sheet is stronger than at any time in our company’s history and we now have approximately $27 million of cash on hand, which will help to accelerate our commercialization efforts. We appreciate your support as we continue to progress towards commercialization of our technology into an improving and growing global nuclear power industry. We will keep you upraise of developments as they unfold. Now, I’ll turn the call over to Lightbridge’s Chief Financial Officer, Linda Zwobota to summarize the company’s financial results for the year.

Thank you, Seth. For information regarding our 2017 financial results please refer to our recently filed earnings release for all of the financial details. As Seth mentioned our current cash balance is the highest in the company’s history approximately $27 million as of today. We have raised gross proceeds of approximately $21 million from our aftermarket financing facility in 2018 at market prices on a weighted average basis of approximately $2.09 per share, which is well above the current market price of our stock with no warrants attached, which are typical for other types of equity financing instruments. On January 30, 2018 we also closed on our offering of $4 million in convertible Series B preferred stock with strategic and accredited American and European investors including family offices. We issued 2.7 million shares of the company’s newly created non-voting Series B convertible preferred stock plus warrants with a six months term to purchase up to 656,664 common shares at a $1.875, we have raised this money in 2018 because we wanted to put ourselves in the financial position to apply for and potentially receive funding from the U.S. Department of Energy later this year. We anticipate that this recent financing activities in 2018 will help us meet the minimum cost sharing requirements the commercial recipient of DOE funding must satisfy. This means that the strength of our current balance sheet will enable us to apply for a non-dilutive DOE funding and grant that would otherwise not have been available to us. This potential DOE funding could be used toward the future developments and or regulatory licensing of Lightbridge fuel. The dollar amounts of DOE funding if awarded to us are unknown at this time, but we expect them to be significant and meaningful to our project. We have no debt and no longer have an equity line of credit. We also carefully managed our expenses in 2017, and excluding funding that maybe required for search of development expenses we expect our monthly cash burn for general and administrative expenses to be in the range of $400,000 to $500,000 per month for the next 12 months. We anticipate our spending for research and development activities, including our work through Enfission will be in the range of $10 million to $12 million in 2018, which is also well within our mean given the strength of our current balance sheet. This spending will be used to advance our technical milestones earlier described by Seth. The 2018, financing has provided us with more than sufficient working capital to execute our research and development strategy for the next 12 months and beyond and has given us the opportunity to apply for a sizeable DOE grant. I will be available for you questions during the next segment of today’s presentation, but Seth, back to you.

Thank you, Linda. Let’s open the call to your questions. In addition to asking live questions by telephone, you can also submit questions in writing to ir@ltbridge.com. We will pause, while the operator Matt reviews the procedure for asking live questions.

Great, thank you. [Operator Instructions]

Hey and while we are waiting for the live questions, David Waldman, who’s with Crescendo Communications, which handles our Investor Relations, will proceed with questions coming in via e-mail. David?

Thank you, Seth. Our first question, an expert from Framatome recently presented at the NEI Nuclear R&D Summit, can you provide further details about that presentation as well as what described as Project 1 in your SEC filings?

I would like seeing that a little over week ago, a senior executive from Framatome was the first participant at a major conference, speaking at a major conference in the name of Enfission. It was Enfission debut at a major nuclear energy conference and what we call Project 1 what we are focusing on the efforts of Enfission now is focused on what’s call the 17 by 17 PWR fuel assembly design. So the four utilities that are advising us that are preparing to apply to the Nuclear Regulatory Commission for the lead test assemblies of Lightbridge fuel will start with the most common typical type of reactor in the world, which is a pressurized water reactor, a PWR, and the fuel assemblies are 17 rods by 17 rods square hence it's call the 17 by 17 PWR fuel assembly. We will start with that that's the most common in the world that's what our customers most want us to fill. We will then move on to other reactor designs as well as other countries once we have that NRC license, which we think will help from around the world. Next question, Dave.

Sorry, our next question is what is the current timeline per radiation testing at Holdren, as well as announcing the first commercial utility and timing of the first lead test assembly?

Okay. So I’ll ask Jim Malone to take this one.

Okay. As indicated in our recent 10-K filings and based on our current expectations, we anticipate that either directly or true infusion we will develop a regulatory licensing plan for lead test assemblies and present it to the U.S. Nuclear Regulatory Commission in 2018. We are also working with the industry, the proper way to address the lead test assemblies and get the approval of the NRC in the most expeditious manner possible. We will then enter into a lead test assembly agreement with the host reactor in 2019, 2020. We’ll develop analytical models in 2018 through 2023 for our metallic fuel technology, and those models will be used for reactor analysis and regulatory licensing. We’ll also perform in reactor and out of reactor experiments in 2020 and 2023. We'll have a semi scale metallic fuel sample fabricated in 2019, 2020 for radiation testing in a test reactor environment under prototypic commercial reactor conditions. We'll also established a pilot scale fuel fabrication facility and demonstrate full length fabrication of our metallic fuel rods in 2020 through 2023. And we'll begin lead test assembly or LTA operation in a full size commercial light water reactor as soon as 2023-24. This involves testing a limited number of full scale fuel assembly in the core of the commercial newly a power plant over three 18 months cycles. There is a degree of uncertainty associated with this schedule due to various project risks including funding availability, regulatory licensing risk, availability of high assay low and rich uranium for our lead test assemblies, availability of test facilities, et cetera. We are currently working with Framatome to reduce schedule uncertainty and we'll update you as we make progress.

Thank you, Jim.

David, another question.

Yes, thank you. And then let me ask one more then we'll open up for some of the live questions. We touched on this a little bit earlier, but how does Lightbridge plan to fund the balance of the R&D costs and what are the possibilities for grant funding for some or all of these costs?

Lightbridge intends to prioritize funding contributions to the project from third-party sources, such as government funding, including U.S. Department of Energy, DOE and perspective nuclear utility customers. So we expect funding from third-party sources could provide 50% or more of the total estimated fuel development costs. We anticipate that the remaining balance will be funded through cash contributions to Enfission by Lightbridge and Framatome. So why don’t we go to some of the live questions and then come back to any more email questions. Matt, any live questions?

We do have a question here from James Anderson, a Private Investor. Please go ahead.

The stock is trading below its 200 day moving average and doesn’t reflect the rapid progress you report. Because even with the JV finalized, theoretical benefits, and recent positive macroeconomic nuclear developments… the fuel remains unproven in a reactor. Which is noted as a risk in your 10K filing. Related to this: In several articles on the World Nuclear News website you expressed confidence Halden testing would commence in 2017. But now, even with the engineering might of Framatome and all the years of planning you’ve done we’re told the testing date is 2020. I realize waiting for the JV slowed things down but that doesn’t explain a multi-year delay. What is the reason for this delay? Without a fuel testing catalyst this year what’ll keep the stock from crashing? This unexplained setback benefits only short sellers. So I hope you’ll clear up the testing timelines past & present and bring a major milestone MUCH sooner than 2020. Secondly, there’s been significant dilution since the JV. Linda mentioned you’re applying for DOE funding, I assume through the GAIN program to utilize the Treat reactor. Is this funding opportunity the reason for the bulk of your dilution? Bottom line: Investors are concerned if you don’t test the fuel in a timely fashion you won’t increase shareholder value and the industry will advance without you. Thank you.

Well, thank you for those questions. And I’ll say first of all you are seeing not just our own validation of the technology, but a lot of independent validation starting to come out including in that journal affiliated with the European Nuclear Society that that study of the fuel from a non-proliferation standpoint. I’ll say that the overall schedule of the program is on track, what you have to be concerned about is when do we get lead test assemblies in a commercial reactor. The exact timing of certain steps between now and then might move around, but we’re still looking at 2023, maybe 2024, for what will really be the final commercial product the full bundle of the fuel assemblies in a commercial reactor in the United States. But we were talking around in 2017 at Halden was not that and it wasn’t even the enriched fuel or the Lightbridge shape fuel, what we were talking about in 2017 was so Seligner [ph] go rods not enriched showing the thermal conductivity of the metal in Halden in 2017. That is not what we are talking about for 2020, which in on track, which is actual enriched uranium and actual quad lobed twisted metallic fueling Halden that hasn’t changed. So what’s change is where that thermal conductivity might be done and that’s part of what we are looking at with DOE including at Idaho National Laboratory. So a test not being done in a Halden Reactor, but done in another reactor that’s just as good paid for half by somebody else is not a bad thing. And that’s what we’re going for. As for the funding we have raised, we don’t regardless as being dilutive, if it’s what we need to attract massive government funding into the project to show the balance sheet strength to receive it. And to achieve the technical milestones we’re achieving to show the government that we can meet those goals. So with that I don’t think you should look at Halden as being delayed, I think you need to look at that 2020 date as getting the actual Lightbridge fuel rods with uranium enrichment in there. And which reactors so in tests are done at before then is something that’s going to happen, it’s just that we haven’t exactly put out, which reactions possibly done in, but they are getting done as you know we’re working with the largest company in the world in our industry with access to a lot of places. And we are working with the government of the country that has been most test reactors and facilities and national adds in the world. And there are new possibilities opening up to us that we’re taking advantage of including new grant funding opportunities. So thanks for the question James and let me ask Matt for another live question.

Next question is from Peter [indiscernible] Dolphin James. Please go ahead.

How are you, Seth?

Hello, Peter.

Yes. Question for you, on that recent money raise the 209 average was there like black shows issue with that, so the stock went down like it did they will get to the lowest price?

You mean on the warrants.

No.

This is on the ATM.

On the ATM.

Yes, the $2.09 is the average on the -- on what we raised in 2018 through the ATM.

Okay. Another thing on that $75 million shelf you put out yesterday, is that out -- you said you don’t need any more money for this year. And are you -- is that there for government or that comes in with funding are you going to issue share to them is that why that setup that way so that's a big shelf.

No, we've always taken advantages as a NASDAQ listed company of having whatever shelf we can have or future financing flexibility. It doesn't mean we're going to use at all, we haven't always used at all. We love Bloomberg, we appreciate the coverage Bloomberg has given us, they made a little mistake yesterday when they reported that we filed the $750 million shelf, which was eventually corrected yesterday. But no the $75 million shelf is something that we're allowed to have under the NASDAQ rules and we find that most NASDAQ listed companies do at least file to have the capacity should they needed in the future. We do not intend on using that whole amount, but it's good to have available those with the future holds.

And we do have another question over the phone from Polin Kershabaum, a Private Investor. Please go ahead.

Good morning, Seth.

Good morning.

It was anticipated that the joint venture would contribute a significant amount of cash to the new joint venture. However half of €700 million is significant, congratulations on that. I think that should significantly change the perspective towards the company. My question though a number of the others have been answered is in the next 24 months you anticipate any further revenues coming from the consulting area as much as that's always been a hallmark and a visual accomplishment of the company. Saudi Arabia or any of the other countries that are interested in advancing their nuclear capability.

Yes, and first just to clarify those who might have missed the beginning of the call. We haven't received €700 million the ADS has valued Framatome’s intellectual property at €700 million. And we...

But I understand you own half of that. That’s what I understood.

Half of all the rights to what we need from it to bring forward Lightbridge fuel correct as part of Framatome's contribution to the JV. The revenues -- first let me say we do expect some as soon as this year on a lead fuel rod contract with a major utility to be negotiated and we hope announced later this year. On the consulting our revenues to-date or about $25 million at about a 45% sorry about $55 million $56 million at about a 45% gross margin and we've really shifted away from that to focus on the fuel and much of that earnings that we've received over the last several years have been in the Gulf region of the Middle East particularly in the United Arab Emirates starting a new nuclear program. And we just haven't seen countries starting new nuclear programs and reactors that didn't have reactors before that really want independent consultants to guide them as to who to buy it from. They more go to these state owned enterprises that just bring everything turnkey and you can't pick and choose. If you buy from Russia or you buy from China and they're funding it. You don't need an American consultants say well this could come from an American company instead especially if the Americans aren't bringing as much financing, but we do have some work in the area. And we've been contacted about some new opportunities that we are exploring starting as one we’re a little hesitant on because it almost acquired some lobbying roles by Lightbridge, which we've never done and we don't plan on ever doing in the United States. But for consulting overseas that’s something we're willing to do and we are looking at some possible opportunities. But the focus really is on the fuel and I think the more material revenues starting later this year won't be from consulting, but will be on the fuel one of the test rod contract.

What will they provide per facility per year and for how long from the nuclear utilities?

Well, during this development and testing phase, it's going to be what we'll announce in those contracts those are not fully negotiated yet and we don’t have a number to give you. But I’ll say I think it’s something that will be material for Lightbridge and to Enfission. It will be meaningful payments by utilities for fuel that they expect to receive in the future for electricity they will sell. We think it’s going to be really something -- that’s going to be a very different conference call we discuss it. As I said earlier in this call, that the signing of the joint venture with Framatome on Enfission was the most significant events in the company’s history and that’s true and that’s all sort of what I call the supply side so we can develop this fuel, we can provide the fuel. But if no one is buying it we can supply all capacity in the world and it won’t matter. So I think the next announcement that we truthfully say again is the most significant announcement in the company’s history is someone paying material amounts of cash to buy the fuel to use it, to sell electricity to customers and the revenues from that selling electricity will in the future then keep flowing to us as we are selling the fuel to generate the power. So we’re looking forward to that later this year and we’ll provide updates certainly when that is signed and announced. And we expect that will be rather significant and public event at a U.S. nuclear power plant powering a major city. So thank you for that and Matt any other live questions?

Thank you, we are limiting questions. [Operator Instructions]

Okay, while we’re waiting David go back to any other email questions?

Yes, and we would certainly encourage anyone to read prompt if they have follow-up questions, but in the sake of time let me go to some of the pre-submitted questions. The next one is I understand that the four utilities on your advisory board are anxious to use your technology and are confident that it is viable can you comment on possibilities of investment by these utilities or the potential economics in any upfront license or technology access fees?

Well, let me take that one David, this is Jim. We believe there is a possibility of securing upfront funding contributions toward our fuel development program from perspective utility customers that will be tied to key technical milestones. It is in the utility customers’ interest to ensure the project has sufficient funding to proceed as expeditiously as possible in order to meet their expectations. So this is a distinct possibility for us.

Great, thank you. Our next pre-submitted question, are there any parallel testing programs available in another reactor besides Halden? And what way does INL is going online help to alleviate a timeframe or bottleneck concerns at the Halden reactor for Lightbridge fuel testing?

This is Jim again, I’ll take that one. In November last year, DOE restarted operations of the Transient Reactor test facility or TREAT after it had been maintained in standby mode for 23 years. The TREAT reactor can be used for transient testing of our fuel samples. The testing would be in addition to the planned radiation testing at Halden and may actually use some samples from Halden that have been radiated fully transported to Idaho for use in the TREAT reactor improving the fuel, even at the end of its life is more robust than the competition.

Great, thank you.

Any other by email, David.

We do, can you comment further on the safety advantages of a Lightbridge fuel and how you plan to promote those advantages?

Well let me start and I’ll turn it over to Jim. Safety is the top priority of the nuclear power industry certainly of the utilities and suppliers we’re working with. And this fuel was designed to bring major safety advantages that manifest through about a 1,000 Degree Celsius cooler operating temperature significantly more coping time and what’s called a large break LOCA loss of coolant accident or design basis loss of coolant accident when the reactor is losing water or the water is not flowing through the reactor. You can see in our investor presentation a comparison to the current fuel that when it hits about 850 Degrees Celsius there’s what’s called steams or conium interaction that separates the hydrogen from the oxygen and that free flowing hydrogen can explode, which is what happened in Fukushima. And in these design basis LOCA accidents the Lightbridge fuel does not hit 850 degrees it stays cool it’s literally cool fuel. And doesn’t generate the hydrogen gas that can explode we have some people that have been inviting us for utilities they call this a LOCA proof fuel just tremendous safety advantages of the fuel. Now in the industry that’s what we talk about what we mean safety out there in the public, people also talk about nuclear weapons and you will see the Siemens report to its pace global U.S. subsidiary on our website that go through the proliferation resistance benefits of our fuel. And this new report from the journal affiliated with the European Nuclear Society with its dramatics weeping statement about how the Lightbridge fuel would be useless, the plutonium from the fuel would be useless for producing a bomb and that’s partly because of the Lightbridge fuel produces so little plutonium 239, which the weapons usable isotope it’s partly because the little plutonium 239 that has produced fission in situ in the core as its produced generating more power making the plutonium 239 go away becoming dotter isotopes. But also because the Lightbridge fuel through a chain from the uranium 238 produces plutonium 238, which is not a weapons usable isotope of plutonium that is a heat generator and would spoil the explosive capability of any weapon and even in reprocessing the plutonium 238 can be separated from the plutonium 239. And if you want you can go look at the abstract online in that journal or you can buy it behind the payroll of the full article. But I think we gave a pretty good preview of it here. But more from a utility perspective, let me turn it back over to Jim who was the Head of Fuel for the largest utility in the U.S. and had leading responsibilities for safety when he was at Exelon.

Thanks, Seth. The attributes of our fuel really manifest themselves and what the nuclear regulatory commission refers to as Chapter 15, were anticipated operational currencies these are transient events that could disturb the performance of the fuel. Initial analysis of our fuel indicates that we are far superior to the competition with respect to performance in these prescribed accident or upset events that the NRC requires be analyze before they will permit the fuel to be used in a commercial reactor and industrial scale. That fact by itself is very significant in addition to the Seth’s description of the behavior of the fuel and the loss of coolant accident and the comment we received from a very credible engineer regarding the fact that the fuel is LOCA proof, just speaks volumes about it no one else can make that comment. So we have a distinct advantage in that regard.

Great, thank you.

Anymore David?

Yes, let me read one more question and then we will turn it back to Matt for live questions. And then we will back to some of the other questions that been pre-submitted. Our next question, does Lightbridge fuel fall into the category for walk away safe reactor and if not what is the relevance of that term?

Well, first of all walk away safe is not a nuclear industry term, that is something out there in a popular press. The term has been in the press a little bit recently because of fantastic reactor design by New Scale of a small modular pressurized water reactor is going through the design certification process at the U.S. Nuclear Regulatory Commission we expect in the next couple of years that we will receive that license putting the U.S. in the driver seat for really what I view is the best small modular reactor design in the world. And frankly one that could use our fuel too, and Framatome is a fuel designer and provider. But New Scale has just done a fantastic job on the design on that reactor. And what’s been in the press is that recently during the course of its review the NRC has said that the reactor would not need offsite power, that in the event of an incident if all power were cut off to it, which is what happened at Fukushima the natural safety systems of that reactor including convection to continue circulating the water just with forces of nature including gravity and the pressures in the reactor would not need an external power supply or not need an external water supply. And the term walk away safe was raised in the media in the last few years as people could literally walk away from a New Scale reactor in a worst case scenario. And nobody would get hurt and the reactor [technical difficulty] the water and the incident would eventually end. So our fuel brings tremendous benefit as we've described on the call of much longer coping time to the large gigawatt plus 1000 megawatt plus reactors that power the major cities that are very different from a small modular reactors that’s mostly underground. The large reactors don’t yet have those kinds of natural protection systems, although Westinghouse AP1000 has a very good one and that reactor being built in the U.S. and in China. So our reactor would add a lot of coping time as Jim said, it would add a lot of safety benefits. But in the end eventually if there were never offsite power restored, if there were never water added to the reactor, any substance in the core of that reactor could eventually be destroyed. Now our fuel would provide a lot of benefits, a lot of time to deal with the problem. As we said in a design basis LOCA it would not produce the hydrogen that explodes. But in the end that reactor would not be what people LOCA call walk away safe, you'd have to combine it with other systems like you see in the AP1000 from Westinghouse the convections circulating water the water tank on the top of the reactor systems to resupply the water tank. So our fuel combined with others might get you there, but the current fleet of operating reactors would still be a bit short of that even with our fuel, but tremendous advantages over the situation today. David another question.

Yes, thanks. At this time we'll turn it back to Matt for some more live and then we'll come back to the pre-submitted questions.

Great, thank you. [Operator Instructions] And our next question is from Ken [indiscernible], Private Investor. Please go ahead.

Yes, I just have a financial question for your CFO. Was it right that the Framatome book value or their value of the company is about $700 million? And Lightbridge share of it is now about 50% is that correct?

Not exactly. But what was being discussed here was the value of Framatome's IP and Enfission our joint venture has a license to use that IP. Now on their financial statement that IP was valued at €700 million. Is that clear?

Yes, it is. And I just -- basically what I'm just trying to do is, I just wanted to make sure I understood that by the way congratulations on the joint venture. And then also…

Thank you.

You're welcome. And then on your last filing on March 8th, is it right that right now you guys have about 22.8 million shares outstanding?

That's about right. I don't have it in front of me. I think, I know it's been 22 million, 23 million.

Okay, great. So I mean it’s not as simple as just the book value of Lightbridge where you could not value it at its taken Framatome plus the $5.79 million on your financial statements. Kind of it divided by the shares outstanding that looks like it's $15.35 a share plus your assets minus your liabilities, which are none. Am I missing something with that?

Yes.

Okay.

We state our IP in terms of historical costs. And I think if you really wanted to look at our company you would have to analyze the future cash flows. And the present value of the future cash flows. And so the accounting data that you're referring to is not going to provide you with that.

Okay. So it should be used more as a guide not as an absolute valuation tool?

This is true. But the present value of the future of cash flow, I don’t have this in front of me.

Okay.

But this is a very impressive number.

Okay, yes that’s what I was kind of shocked when I heard how good the numbers were, I just wanted to make sure I understood. Okay, well thank you so much.

Let me just add one thing on that, which is again some context the EDF ELECTRICITÉ DE FRANCE I apologize for my French for those who speak it who are listening. EDF is the largest company in the world in the nuclear power industry, it owns and operators not only 59 reactors in France and building another one, but also British Energy in Britain and is very active and expanding globally. It’s been in an acquisition mode and its biggest recent acquisition is Framatome. It owns a majority in controlling stack in Framatome, Mitsubishi Heavy Industries of Japan and A System of France have minority stakes in Framatome. And EDF in its annual report for 2017, which came out recently and that featured mentioned of the Enfission JV with Lightbridge as a highlight of the year in EDF’s annual report. It says that EDF valued Framatome’s IP at €700 million. Now not every single piece of that IP is going to be relevant to Lightbridge. Framatome has other IP in other areas too, but a lot of it is. And we just have sweeping access to all of it that is and we do own half of that within Enfission.

Our next question is from Peter [indiscernible]. Please go ahead.

Yes, most of my questions are answered. So I was just figuring about $27 million in cash and you said 22 million or 24 million shares are fully diluted. Just figuring out cash value per share, what would you say it would be $1.22 or $1.20?

Yes, just do the math, it’s just a vision, yes. So about that and let me just mention technically the response to last question too is it’s not that we own €700 million of IP it’s that we have a license to it, we have the license to use it.

Okay, great. Thank you.

Yes, but your math is right, Peter. And Matt any other questions.

Let me -- there are a couple of more that have been submitted electronically, our next one is how does Framatome’s marketing of EATF conflictor support efforts around current Lightbridge fuels.

This is Jim, I’ll take that one. Some at ATF concept such as chromium coding being developed by Framatome can be combined with the Lightbridge Fuel to further increase its safety benefits. Particularly in the beyond design basis or severe accident scenarios. Preliminary modeling shows that the Lightbridge fuel performs much better compared to conventional UO2 fuel in major design basis events, such as a large break loss of coolant accident that Seth referred to earlier. Incorporating chromium coding could provide additional safety benefits in severe accidents where there is extended loss of onsite and offsite power. As a result of Lightbridge fuel can be viewed as a natural extension of the ATF program. And we are working in early stages with two companies to help us further the application of the Framatome developed coding to the Lightbridge fuel design.

Great, thank you. The next question is, what is the status of the thorium-based seed and blanket fuel technologies.

Well we’re not actively pursuing that now, we’re not putting any resources into that now. The technology is available in case uranium prices surge significantly in the future and that can make a thorium fuel cycle economically attractive to utilities. We are focusing on what the utilities want and what the customers want. And they are focusing on paying for improving the economics of the current fleet and new reactors and improving the safety of the current fleet and new reactors and that’s what our metallic fuel does. Our metallic fuel was a thorium blanket doesn’t add to that with the thorium, thorium adds other benefits. And when we were developing the thorium fuel, which led to our metallic fuel development we received U.S. government funding for development work in Russia for disposing of weapon grade plutonium in Westinghouse under government funding did report that with excellent results of using our thorium fuel to dispose of weapons grade plutonium both the U.S. and Russia decided to end the program without disposing of any weapons grade plutonium at all and still haven’t. And there are no government programs to support that. So it’s not a good idea to have that as a business line. It was also a time when India, which is plentiful in thorium, but has hardly any uranium was interested in thorium fuel designs for reactors to be self-sufficient using their own thorium. But the deal with the United States opened India to world uranium market and their interest in thorium is much less now. And in fact the reactors they’ve been buying could use our metallic fuel as they are uranium fueled pressurized water reactors. So the thorium seed and blanket fuel technologies are technologies that we developed and owned. But we are not going to be putting resources into them until customers either at the government level or the utility level express interest in actually paying to use such fuels, which right now is not the case.

Great, thank you. The next question was a follow-up on the grant program, can you provide any more details around what you anticipate the grants might be used for?

Well, basically the grants would be used for the fuel development work that we’ve described. The grants would be used particularly for U.S. government facilities. Let me broaden this a little bit just to discuss a little more about the use of proceeds behind the recent capital raises, the timing what we’ll look at going forward including with grant money from the government. So really there are two main drivers that Linda has talked about behind our recent capital raises. The first is that we want to have sufficient funding to accelerate the fuel development program with Framatome through Enfission and we are doing that. And the second is we need to have a strong balance sheet and a significant cash balance to be able to apply for the DOE funding. So we need to meet the criteria and get the DOE money before we can have the use of proceeds for it. We need to show this balance sheet strength to DOE, which is obviously very sensitive after Cylindra [ph] and some others that didn’t do so well in the energy area with government funding and we’re going to plan to be a big success story for them. So let’s focus on that second factor and answer directly the question a little more on the government funding. So in December 2017 is when the Department of Energy issued funding opportunity announcement know as a FOA funding opportunity announcement. It was not under RPE as one of the earlier questioners mentioned. It was this fuller is what we’ll be applying under. And DOE is seeking applications for unique or new ideas that will improve the existing reactor fleet and the potential for future U.S. nuclear power deployment. They want to see U.S. nuclear technology leadership, U.S. industry competitiveness, I’ve been asked about this a bit on by Stuart Varney on some Fox Business news appearances where the administration is really pushing meeting these goals and we think that Lightbridge technology helps meet them. And according to this FOA, this funding opportunity announcement, it says the fundamental premise behind this FOA is to provide a direct vehicle to support innovative domestic nuclear industry driven designs and technologies that have high potential to improve the overall economic outlook for nuclear power in the U.S. The investment provided by the government will accelerate development of these designs and technologies so the existing domestic fleet of nuclear power plants remain viable. And the most matured new advanced U.S. designs can be deployed as early as mid-to-late 2020s and be globally competitive, I just read that off this FOA document I have in front of me. So based on our recent discussions DOE officials, we believe our project fits exactly within the objective of this FOA, we intent to apply for this DOE funding. One of the key requirements is the ability of the applicant to provide costs sharing contributions. The minimum amount of costs sharing contributions varies on the specific scope of work. And specific test can range anywhere from 20% to 50% of the total project costs under the FOA, where the company pays 20% to 50% of the task and the government provide between 80% or 50%. So it can be a pretty good deal. Since we like to see as much DOE funding as is available per award and is $10 million per award and you get up two applications running at once overlapping and this cloud add up to be quite a lot for our project over the next several years. We need to have cash on hand to demonstrate the DOE or ability to meet the minimum cost sharing contributions that are required. And I think Jim kind of went through very well the timing and details by year of what we're looking to do with that funding as we go through at Holdren, Idaho National Laboratory, at lead test rod in U.S. Commercial Reactors and finally the lead test assemblies in the U.S. Commercial Reactors. So any other questions you want to bring up David or I go back to Matt?

Yes, in the interest of time, I'm going to read one more question that that was submitted to us and then I'll turn the call back to you, Seth. What steps is the company taking to increase its exposure within the mainstream media, trade media and the investment community?

Well, as I just mentioned, we did twice once this week on Tuesday and back on January 25th, when we announced the Enfission joint venture have appearances on Fox Business News, which is amazing how many people watch that, and gets the word out and how many people contact us. Each time we have something like that and we expect to have more particularly with Stuart Varney who seems to like to argue with me about nuclear power. There has been several trade media articles coming out, particularly in World Nuclear News and other press from the World Nuclear Association based in London, as well as Trade Press from the Nuclear Energy Institute in Washington DC. Also quite a bit over the last month and half of so since we announced the Enfission JV. As I mentioned, Prince Albert speaking to this very august group in Monaco last week. Specifically and in detail described benefits of Lightbridge fuel and his speech to the conference that included many of the most sophisticated and largest investors that are interested in clean technology and in sustainability. We have coming up this month as we mentioned speaking at the Gabelli Conference in New York particularly focusing on environmental benefits, which for us will include the non-proliferation and volume of west advantages. We mentioned that a senior Framatome official recently -- so the first time appeared the conference in the name of Enfission at a nuclear energy institute conference in the last couple of weeks. So I think you'll see more trade press, more popular media like the Fox Business News appearances, more conferences like the Gabelli Conference. I think these are what I call little bit higher shelf conferences we’re getting invited to as well like Clean Equity Monaco and the Gabelli don’t often companies who are market cap at these kind of conferences that particular one like Gabelli. So we are getting back to the question about doing the math on the cash per share, we expect to deliver in ways that as Linda said investors will start looking at the cash flows that will come to this project. And the discount at present values of those cash flows and value of the stock that way. And with that we are a few minutes over time, but these have been fantastic questions. And our lines are always open here at ir@lcbridge.com. So please contact us in between these calls as well. You can also call us with your questions or comments at one for those calling outside of the U.S. and the number 855-379-9900. Again thank you very much for participating in the call. We look forward to our first quarter call coming up in May. Thank you and good bye.

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.