UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September~~June 30, ~~2020~~2021

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 001-34487

LIGHTBRIDGE CORPORATION
(Exact name of registrant as specified in its charter)

Nevada

91-1975651

(State or other jurisdiction of

of incorporation or ~~organization)~~organization)

(I.R.S. Empl.

Ident. No.)

11710 Plaza America Drive, Suite 2000

Reston, VA 20190

(Address of principal executive offices, Zip Code)

(571) 730-1200

(~~Registrant’s~~Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:		Trading Symbol(s):		Name of Each Exchange on Which Registered:
Common Stock, $0.001 par value		LTBR		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting ~~company”~~company" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non- accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the ~~issuer’s~~issuer's common stock, as of ~~November 5, 2020~~August 3, 2021 is as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		~~5,631,561~~6,597,538

LIGHTBRIDGE CORPORATION

Form 10-Q

~~SEPTEMBER~~JUNE 30 ~~2020~~, 2021

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3
	Unaudited Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020	3
	Unaudited Condensed Consolidated Statements of Operations ~~for~~For The Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	4
	Unaudited Condensed Consolidated Statements of Cash Flows ~~for~~For The ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	5
	Unaudited Condensed Consolidated Statement of Changes in ~~Stockholders’~~Stockholders' Equity ~~for~~For The ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~For The Nine Months Ended September~~June 30, ~~2020~~2021	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	87
	~~Forward-Looking~~Forward - Looking Statements	2519
Item 2.	~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations	2721
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3728
Item 4.	Controls and Procedures	3728

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	3829
Item 1A.	Risk Factors	3829
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3829
Item 3.	Defaults Upon Senior Securities	3829
Item 4.	Mine Safety Disclosures	3929
Item 5.	Other Information	3929
Item 6.	Exhibits	3930

SIGNATURES		4031

Table of Contents

PART I—FINANCIAL INFORMATION

~~Lightbridge Corporation~~LIGHTBRIDGE CORPORATION

~~Unaudited Condensed Consolidated Balance Sheets~~UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

									June 30,			December 31,
		September 30,			December 31,				2021			2020
		2020			2019
ASSETS	ASSETS							ASSETS
Current Assets
Cash and cash equivalents		$	17,410,899		$	17,958,989			$	13,855,982		$	21,531,665
Other receivable from joint venture			—			400,000
Other receivables										785,000			0
Prepaid expenses and other current assets			164,652			47,371				389,461			172,460
Total Current Assets			17,575,551			18,406,360				15,030,443			21,704,125
Other Assets
Patent costs			1,825,326			1,798,484
Trademarks										100,217			85,562
Total Assets		$	19,400,877		$	20,204,844			$	15,130,660		$	21,789,687

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities		$	1,815,791		$	350,299			$	539,095		$	382,130
Accrued legal settlement costs										675,000			4,200,000
Total Current Liabilities			1,815,791			350,299				1,214,095			4,582,130

Commitments and contingencies – (Note 5)
Commitments and Contingencies - Note 4

Stockholders’ Equity
Preferred stock, $0.001 par value, 10,000,000 authorized shares:
Convertible Series A preferred shares, 712,126 and 757,770 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively (liquidation preference $2,612,802 and $2,636,764 at September 30, 2020 and December 31, 2019, respectively)			712			757
Convertible Series B preferred shares, 2,666,667 issued and outstanding at September 30, 2020 and December 31, 2019, (liquidation preference $4,813,284 and $4,569,180 at September 30, 2020 and December 31, 2019, respectively)			2,667			2,667
Common stock, $0.001 par value, 8,333,333 authorized, 4,416,961 and 3,252,371 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively			4,417			3,252
Stockholders' Equity
Preferred stock, $0.001 par value, 10,000,000 authorized shares										0			0
Convertible Series A preferred shares, 683,852 shares and 699,878 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively (liquidation preference $2,644,045 and $2,613,025 at June 30, 2021 and December 31, 2020, respectively)										683			699
Convertible Series B preferred shares, 2,666,667 shares issued and outstanding at June 30, 2021 and December 31, 2020 (liquidation preference $5,070,430 and $4,897,517 at June 30, 2021 and December 31, 2020, respectively)										2,667			2,667
Common stock, $0.001 par value, 13,500,000 shares authorized, 6,595,503 shares and 6,567,110 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively										6,595			6,567
Additional paid-in capital			139,121,290			133,932,615				146,684,313			146,353,232
Accumulated deficit			(121,544,000	)		(114,084,746	)			(132,777,693	)		(129,155,608	)
Total Stockholders’ Equity			17,585,086			19,854,545
Total Liabilities and Stockholders’ Equity		$	19,400,877		$	20,204,844
Total Stockholders' Equity										13,916,565			17,207,557
Total Liabilities and Stockholders' Equity									$	15,130,660		$	21,789,687

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LIGHTBRIDGE CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Revenue

$ 0

$ 0

$ 0

$ 0

Operating Expenses

General and administrative

1,515,899

2,028,667

3,298,759

3,965,421

Research and development

273,314

115,776

642,764

505,600

Total Operating Expenses

1,789,213

2,144,443

3,941,523

4,471,021

Other Operating Income

Distribution from joint venture

110,000

0

110,000

0

Grant income

67,794

0

171,113

0

Total Other Operating Income

177,794

0

281,113

0

Operating Loss

(1,611,419 )

(2,144,443 )

(3,660,410 )

(4,471,021 )

Other Income

Interest income

1,322

12,337

4,631

74,829

Foreign currency transaction gain

0

0

33,694

0

Total Other Income

1,322

12,337

38,325

74,829

Net Loss Before Income Taxes

(1,610,097 )

(2,132,106 )

(3,622,085 )

(4,396,192 )
Income taxes

0

0

0

0

Net Loss

$ (1,610,097 )

$ (2,132,106 )

$ (3,622,085 )

$ (4,396,192 )

Accumulated preferred stock dividend

(133,313 )

(128,238 )

(264,747 )

(254,149 )
Deemed additional dividend on preferred stock dividend due to the beneficial conversion feature

(58,408 )

(55,294 )

(115,897 )

(109,611 )

Net loss attributable to common stockholders

$ (1,801,818 )

$ (2,315,638 )

$ (4,002,729 )

$ (4,759,952 )

Net Loss Per Common Share,
Basic and Diluted

$ (0.27 )

$ (0.66 )

$ (0.61 )

$ (1.40 )
Weighted Average Number of Common Shares Outstanding

6,595,483

3,486,566

6,592,454

3,390,782

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

34
Table of Contents

~~Lightbridge Corporation~~LIGHTBRIDGE CORPORATION
~~Unaudited Condensed Consolidated Statements of Operations~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

Revenue

$ —

$ —

$ —

$ —

Operating Expenses

General and administrative

2,835,471

1,463,568

6,800,892

4,051,484

Research and development

261,898

751,473

767,498

2,218,826

Total Operating Expenses

3,097,369

2,215,041

7,568,390

6,270,310

Other Operating Income and (Loss)

Grant income

29,662

—

29,662

—

Other income from joint venture

—

247,568

—

908,224

Equity in loss from joint venture

—

(555,113 )

—

(3,812,463 )
Total Other Operating Income and (Loss)

29,662

(307,545 )

29,662

(2,904,239 )
Operating Loss

(3,067,707 )

(2,522,586 )

(7,538,728 )

(9,174,549 )

Other Income

Interest income

4,645

81,172

79,474

315,691

Total Other Income

4,645

81,172

79,474

315,691

Loss before income taxes

(3,063,062 )

(2,441,414 )

(7,459,254 )

(8,858,858 )
Income taxes

—

—

—

—

Net Loss

$ (3,063,062 )

$ (2,441,414 )

$ (7,459,254 )

$ (8,858,858 )

Accumulated preferred stock dividend

(128,937 )

(123,455 )

(383,086 )

(365,973 )
Deemed additional dividend on preferred stock dividend due the beneficial conversion feature

(55,940 )

(53,047 )

(165,551 )

(156,232 )
Net loss attributable to common stockholders

$ (3,247,939 )

$ (2,617,916 )

$ (8,007,891 )

$ (9,381,063 )

Net Loss Per Common Share

Basic and Diluted

$ (0.80 )

$ (0.81 )

$ (2.22 )

$ (3.07 )
Weighted Average Number of Common Shares Outstanding

4,053,644

3,222,226

3,613,349

3,058,797

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements~~
4
~~Table of Contents~~
~~Lightbridge Corporation~~
~~Unaudited Condensed Consolidated Statements of Cash Flows~~

Nine Months Ended

Six Months Ended

September 30,

June 30,

2020

2019

2021

2020

Operating Activities

Net Loss

$ (7,459,254 )

$ (8,858,858 )

$ (3,622,085 )

$ (4,396,192 )
Adjustments to reconcile net loss from operations to net cash used in operating activities

Common stock issued for services and stock-based compensation

25,110

591,663

Patent write-off

111,850

—

Equity in loss from joint venture

—

3,812,463

Adjustments to reconcile net loss from operations to net cash used in operating activities:

Common stock issued for services

30,000

0

Stock-based compensation

246,403

12,170

Patent write-offs

0

111,850

Changes in operating working capital items:

Other receivable from joint venture

400,000

(540,155 )
Other receivables

(785,000 )

400,000

Prepaid expenses and other current assets

(117,281 )

(60,288 )

(217,001 )

(207,281 )
Accounts payable and accrued liabilities

1,465,492

937,836

211,655

543,639

Accrued legal settlement costs

(3,525,000 )

0

Net Cash Used in Operating Activities

(5,574,083 )

(4,117,339 )

(7,661,028 )

(3,535,814 )

Investing Activities

Investment in joint venture

—

(3,540,000 )
Patent costs

(138,692 )

(148,432 )
Patents and trademarks

(14,655 )

(69,872 )
Net Cash Used in Investing Activities

(138,692 )

(3,688,432 )

(14,655 )

(69,872 )

Financing Activities

Net proceeds from issuances of common stock and exercise of stock options

5,164,685

3,750,454

0

2,703,010

Net Cash Provided by Financing Activities

5,164,685

3,750,454

0

2,703,010

Net Decrease in Cash and Cash Equivalents

(548,090 )

(4,055,317 )

(7,675,683 )

(902,676 )

Cash and Cash Equivalents, Beginning of Period

17,958,989

24,637,295

21,531,665

17,958,989

Cash and Cash Equivalents, End of Period

$ 17,410,899

20,581,978

$ 13,855,982

17,056,313

Supplemental Disclosure of Cash Flow Information

Cash paid during the period

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period:

Interest paid

$ —

$ —

$ 0

$ 0

Income taxes paid

$ —

$ —

$ 0

$ 0

Non-Cash Financing Activities

Non-Cash Financing Activities:

Accumulated preferred stock dividend

$ 548,637

$ 522,205

$ 380,644

$ 363,760

Conversion of Series A convertible preferred stock to common stock and payment of paid-in-kind dividends to Series A preferred stockholder

$ 38,071

$ 91,635

$ 17,173

$ 23,032

Common stock issued for services

$ 17,000

$ —

Payment of accrued liabilities with common stock

$ 54,690

$ 0

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5
~~Table of Contents~~
~~Lightbridge Corporation~~
~~Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity~~
~~For the Three and Nine Months Ended September 30, 2019 and September 30, 2020~~

Series A

Series B

Additional

Preferred Stock

Preferred Stock

Common Stock

Paid-in

Accumulated

Total

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance – January 1, 2019

813,624

$ 813

2,666,667

$ 2,667

2,738,508

$ 2,738

$ 129,359,799

$ (103,497,622 )

$ 25,868,395

Shares issued - registered offerings – net of offering costs

—

—

—

—

273,936

274

1,986,211

—

1,986,485

Stock-based compensation

—

—

—

—

—

—

335,013

—

335,013

Net loss for the three months ended March 31, 2019

—

—

—

—

—

—

—

(3,110,527 )

(3,110,527 )
Balance – March 31, 2019

813,624

$ 813

2,666,667

$ 2,667

3,012,444

$ 3,012

$ 131,681,023

$ (106,608,149 )

$ 25,079,366

Conversion of 27,747 Preferred Shares to 2,782 common shares

(27,747 )

(28 )

—

—

2,782

3

25

—

—

Shares issued - registered offerings – net of offering costs

—

—

—

—

118,600

119

929,795

—

929,914

Stock-based compensation

—

—

—

—

—

—

237,272

—

237,272

Net loss for the three months ended June 30, 2019

—

—

—

—

—

—

—

(3,306,917 )

(3,306,917 )
Balance – June 30, 2019

785,877

$ 785

2,666,667

$ 2,667

3,133,826

$ 3,134

$ 132,848,116

$ (109,915,066 )

$ 22,939,635

Shares issued - registered offerings – net of offering costs

—

—

—

—

115,527

115

833,940

—

834,055

Stock-based compensation

—

—

—

—

—

—

19,378

—

19,378

Net loss for the three months ended September 30, 2019

—

—

—

—

—

—

—

(2,441,414 )

(2,441,414 )
Balance – September 30, 2019

785,877

$ 785

2,666,667

$ 2,667

3,249,353

$ 3,249

$ 133,701,433

$ (112,356,480 )

$ 21,351,654

65
Table of Contents

Series A

Series B

Additional

Preferred Stock

Preferred Stock

Common Stock

Paid-in

Accumulated

Total

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance – January 1, 2020

757,770

$ 757

2,666,667

$ 2,667

3,252,371

$ 3,252

$ 133,932,615

$ (114,084,746 )

$ 19,854,545

Conversion of 11,875 preferred shares to 1,255 common shares

(11,875 )

(12 )

—

—

1,255

1

11

—

—

Shares issued - registered offerings – net of offering costs

—

—

—

—

110,053

111

399,564

—

399,675

Stock-based compensation

—

—

—

—

—

—

6,085

—

6,085

Net loss for the three months ended March 31, 2020

—

—

—

—

—

—

—

(2,264,086 )

(2,264,086 )
Balance – March 31, 2020

745,895

$ 745

2,666,667

$ 2,667

3,363,679

$ 3,364

$ 134,338,275

$ (116,348,832 )

$ 17,996,219

Conversion of 17,080 preferred shares to 1,847 common shares

(17,080 )

(17 )

—

—

1,847

2

15

—

—

Shares issued - registered offerings – net of offering costs

—

—

—

—

437,341

437

2,277,885

—

2,278,322

Exercise of 6,548 options at $3.82 each

—

—

—

—

6,548

6

25,007

—

25,013

Stock-based compensation

—

—

—

—

—

—

6,085

—

6,085

Net loss for the three months ended June 30, 2020

—

—

—

—

—

—

—

(2,132,106 )

(2,132,106 )
Balance – June 30, 2020

728,815

$ 728

2,666,667

$ 2,667

3,809,415

$ 3,809

$ 136,647,267

$ (118,480,938 )

$ 18,173,533

Conversion of 16,689 preferred shares to 1,846 common shares

(16,689 )

(16 )

—

—

1,846

2

14

—

—

Shares issued - registered offerings – net of offering costs

—

—

—

—

601,700

602

2,461,073

—

2,461,675

Common stock issued to consultant for services

—

—

—

—

4,000

4

16,996

—

17,000

Reverse of stock-based compensation for forfeited stock options

—

—

—

—

—

—

(4,060 )

—

(4,060 )
Net loss for the three months ended September 30, 2020

—

—

—

—

—

—

—

(3,063,062 )

(3,063,062 )
Balance – September 30, 2020

712,126

$ 712

2,666,667

$ 2,667

4,416,961

$ 4,417

$ 139,121,290

$ (121,544,000 )

$ 17,585,086

LIGHTBRIDGE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND JUNE 30, 2021

Series A

Series B

Additional

Preferred Stock

Preferred Stock

Common Stock

Paid-in

Accumulated

Total

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance – January 1, 2020

757,770

$ 757

2,666,667

$ 2,667

3,252,371

$ 3,252

$ 133,932,615

$ (114,738,342 )

$ 19,200,949

Conversion of 11,874 preferred shares to 1,255 common shares

(11,874 )

(12 )

—

0

1,255

1

11

0

0

Shares issued - registered offerings – net of offering costs

—

0

—

0

110,053

111

399,564

0

399,675

Stock-based compensation

—

0

—

0

—

0

6,085

0

6,085

Net loss for the three months ended March 31, 2020

—

0

—

0

—

0

0

(2,264,086 )

(2,264,086 )
Balance – March 31, 2020

745,896

$ 745

2,666,667

$ 2,667

3,363,679

$ 3,364

$ 134,338,275

$ (117,002,428 )

$ 17,342,623

Conversion of 17,080 preferred shares to 1,847 common shares

(17,080 )

(17 )

—

0

1,847

2

15

0

0

Shares issued - registered offerings – net of offering costs

—

0

—

0

437,341

437

2,277,885

0

2,278,322

Exercise of 6,548 options at $3.82 each

—

0

—

0

6,548

6

25,007

0

25,013

Stock-based compensation

—

0

—

0

—

0

6,085

0

6,085

Net loss for the three months ended June 30, 2020

—

0

—

0

—

0

0

(2,132,106 )

(2,132,106 )
Balance – June 30, 2020

728,816

$ 728

2,666,667

$ 2,667

3,809,415

$ 3,809

$ 136,647,267

$ (119,134,534 )

$ 17,519,937

Balance – January 1, 2021

699,878

$ 699

2,666,667

$ 2,667

6,567,110

$ 6,567

$ 146,353,232

$ (129,155,608 )

$ 17,207,557

Shares issued to consultant & directors for services

—

0

—

0

24,200

24

69,666

0

69,690

Stock-based compensation

—

0

—

0

—

0

60,068

0

60,068

Net loss for the three months ended March 31, 2021

—

0

—

0

—

0

0

(2,011,988 )

(2,011,988 )
Balance – March 31, 2021

699,878

$ 699

2,666,667

$ 2,667

6,591,310

$ 6,591

$ 146,482,966

$ (131,167,596 )

$ 15,325,327

Conversion of 16,026 preferred shares to 1,846 common shares

(16,026 )

(16 )

—

0

1,846

2

14

0

0

Shares issued to consultant for services

—

0

—

0

2,347

2

14,998

0

15,000

Stock-based compensation

—

0

—

0

—

0

186,335

0

186,335

Net loss for the three months ended June 30, 2021

—

0

—

0

—

0

0

(1,610,097 )

(1,610,097 )
Balance – June 30, 2021

683,852

$ 683

2,666,667

$ 2,667

6,595,503

$ 6,595

$ 146,684,313

$ (132,777,693 )

$ 13,916,565

The accompanying notes are an integral part of these unaudited condensed consolidated financial ~~statements~~statements.

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LIGHTBRIDGE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~(Unaudited)~~

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

Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Lightbridge Corporation 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 note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, including a summary of the ~~Company’s~~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 notes necessary for comprehensive consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, ~~2019,~~2020, included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

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 ~~nine-month periods~~six-month period 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. When used in these notes, the terms ~~“Lightbridge”~~"Lightbridge", ~~“Company,” “we,” “us”~~"Company," "we," "us" or ~~“our”~~"our" mean Lightbridge Corporation and all entities included in our 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”~~("TPI"), which was incorporated in the state of Delaware on January 8, ~~1992.~~1992 (subsequently and collectively referred to as "we" or the "Company"). 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 and ~~commercializing~~working to commercialize it next generation nuclear fuel technology.

Going Concern, Liquidity and ~~Management’s~~Management's Plan

The ~~Company currently believes the combination of cash on hand~~Company's available working capital at ~~September~~June 30, 2020 and management’s reduction in budgeted operating expenses for 2020, will be sufficient to allow the Company to meet its obligations, as they become due in the ordinary course of business, for at least 12 months following the date of this filing. While the Company’s cash at September 30, 2020 exceeds2021 does not exceed its currently ~~budgeted~~anticipated expenditures through the ~~third~~second quarter of ~~2021, there~~2022. There are inherent uncertainties in forecasting future expenditures, especially forecasting for ~~a significantly revised level of operations and with~~ uncertainties such as tofuture research and development (R&D) costs and how the COVID-19 outbreak, including the emergence and spread of variant strains of the virus, may affect future costs and operations. ~~Accordingly,~~Also, the ~~potential for budget variances in the projection~~cash requirements of the ~~Company’s~~Company's future planned operations ~~plus~~to commercialize its nuclear fuel, including any additional expenditures that may result from unexpected developments, ~~such as~~requires it to raise significant additional ~~expenditures that might result from additional legal costs and unexpected fees relating to ongoing legal matters (see Note 5).~~capital, including receiving government support. Taking into account these uncertainties ~~it raises~~as well as the updated projected fuel development timeline of 15-20 years to commercialization, projected operational costs to keep the fuel development project on schedule and the various risks of developing and commercializing its nuclear fuel, these factors raise substantial doubt about the ~~Company’s~~Company's ability to continue as a going concern for the 12 months following the date of this filing.
To the extent ~~these recent cost-cutting measures do not provide sufficient~~any uncertainties reduce the Company's liquidity for the next 12 months, the Company will consider, if available, additional debt or equity raises and delaying certain expenditures, including ~~research and development~~delaying R&D expenses, until sufficient capital becomes available.

At ~~September~~June 30, ~~2020,~~2021, the Company had approximately ~~$17.4~~$13.8 million in cash and had a working capital surplus of approximately ~~$15.8~~$13.8 million. The ~~Company’s~~Company's net cash used in operating activities ~~during~~for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was approximately ~~$5.6~~$7.7 million, and current projections indicate that the Company will have continued negative cash flows ~~until~~for the ~~commercialization of its nuclear fuel.~~foreseeable future. Net losses incurred for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 amounted to approximately ~~$7.5~~$(3.6) million and ~~$8.9~~$(4.4) million, respectively. As of ~~September~~June 30, ~~2020,~~2021, the Company ~~has~~had an accumulated deficit of approximately ~~$121.5~~$132.8 million, representative of recurring losses since inception. The Company ~~has incurred recurring losses since inception because it is a development stage nuclear fuel development company. The Company expects to~~will continue to incur losses ~~due to future costs and expenses related to~~because it is in the ~~Company’s research and~~early development ~~expenses and general and administrative expenses.~~stage of commercializing its nuclear fuel.
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The ~~Company also may consider other~~Company's plans to fund future operations ~~including:~~include: (1) raising additional capital through future equity issuances or convertible debt financings; (2) additional funding through new relationships to help fund future ~~research and development~~R&D costs; and (3) seeking other sources of capital. The Company may issue securities, including common stock, preferred stock, and stock purchase contracts through private placement transactions or registered public offerings, pursuant to ~~its~~current and future registration ~~statement on~~statements. The current Form S-3 was filed with the SEC on March ~~15, 2018~~25, 2021 registering the sale of up to $75 million of the Company's securities and declared effective on ~~March 23, 2018.~~April 5, 2021. There can be no assurance as to the future availability of equity capital or the acceptability of the terms upon which financing and capital might bebecome available. The ~~Company’s~~Company's future liquidity needs to develop its nuclear fuel are long-term, and the ability to address those needs and to raise capital will largely be determined by the success of the development of its nuclear fuel, key nuclear development and government regulatory events, and its business decisions in the future.

~~Equity Method Investment – Enfission, LLC - Joint Venture with Framatome Inc.~~
In January 2018, Lightbridge and Framatome Inc., a subsidiary of Framatome SAS (formerly part of AREVA SAS) (collectively “Framatome”), finalized and launched Enfission, LLC (“Enfission”), a 50-50 joint venture company, to develop, license, and sell nuclear fuel assemblies based on Lightbridge-designed metallic fuel technology and other advanced nuclear fuel intellectual property. Lightbridge and Framatome began joint fuel development and regulatory licensing work under previously signed agreements initiated in March 2016. The joint venture, Enfission, is a Delaware-based limited liability company that was formed on January 24, 2018.
Management determined that its investment in Enfission be accounted for under the equity method of accounting. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s condensed consolidated balance sheets and condensed consolidated statements of operations; however, the Company’s share of the losses of the investee company is reported in the “Equity in loss from joint venture” line item in the condensed consolidated statements of operations, and the Company’s carrying value in an equity method investee company is reported in the “Investment in joint venture” or “Investee losses in excess of investment” line item in the condensed consolidated balance sheets.
The Company allocates income or loss utilizing the hypothetical liquidation book value (“HLBV”) method, based on the change in each JV member’s claim on the net assets of the JV under the JV’s operating agreement at period end after adjusting for any distributions or contributions made during such period. The Company uses this method because of the difference between the distribution rights and priorities set forth in the Enfission operating agreement and what is reflected by the underlying percentage ownership interests of the joint venture.
The Company evaluates on a quarterly basis whether our investment accounted for under the equity method of accounting has an other than temporary impairment (“OTTI”). An OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined not likely to be recoverable. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the security until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors.
Enfission was inactive as of September 30, 2020 and December 31, 2019. No amounts related to the equity method investment in Enfission have been recorded on the condensed consolidated balance sheets or the condensed consolidated statements of operations for the three and nine months ended September 30, 2020.

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Basis of Consolidation

These condensed consolidated financial statements include the accounts of Lightbridge, a Nevada corporation, and the ~~Company’s~~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. All significant intercompany transactions and balances have been eliminated in consolidation.

The Company owns a 50% interest in Enfission, accounted for using the equity method of accounting (see Note 3, Investment in Joint Venture (Investee Losses in Excess of Investment). Investment in Joint Venture (Investee Losses in Excess of Investment). Enfission is deemed to be a variable interest entity (“VIE”) under the VIE model of consolidation because it does not have sufficient funds to finance its operations. The Company has determined that it is not the primary beneficiary of the VIE since it does not have the power to direct the activities that most significantly impact the VIE’s performance.
In determining whether the Company is the primary beneficiary and whether it has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all its economic interests in the entity, regardless of form. This evaluation considers all relevant factors of the entity’s structure including the entity’s capital structure, contractual rights to earnings (losses) as well as other contractual arrangements that have potential to be economically significant. The Company is not the primary beneficiary since the major decision making for all significant economic activities require the approval of both the Company and Framatome. The significant economic activities identified were financing activities, research and development activities, licensing activities, manufacturing of fuel assembly product activities, and marketing and sales activities. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests and control is a matter that requires the exercise of management judgment.
Certain Risks, Uncertainties and Concentrations

The Company ~~is an early stage company and~~ will need additional funding by way of a combination of strategic alliances, government grants, further offerings of equity securities, or an offering of debt securities ~~or a financing through a bank~~ in order to support ~~the remaining research and development~~its future R&D activities required to further enhance and complete the development of its fuel products to a proof of concept stage and a commercial ~~stage.~~stage thereafter.

The Company participates in a government-regulated industry. Our operating results are affected by a wide variety of factors including decreases in the use or public favor of nuclear power, the ability of our technology to safeguard the production of nuclear power, the ability to receive the required approval from the nuclear regulatory commission for utilities to use our fuel and our ability to safeguard our patents and intellectual property from competitors. Due to these factors, the Company may experience substantial period-to-period fluctuations in our future operating results. Potentially, a loss of key officer, key management, and other personnel could impair our ability to successfully execute our business strategy, particularly when these individuals have acquired specialized knowledge and skills with respect to nuclear power and our operations.
~~Our future operations and earnings may depend on the results of the Company’s operations outside the United States, including some of its research and development activities.~~ There can be no assurance that the Company will be able to successfully continue to conduct ~~such~~its operations if there is a lack of financial resources available in the future to continue its fuel development, and a failure to do so would have a material adverse effect on the ~~Company’s research and development~~Company's future R&D activities, financial position, results of operations, and cash flows. Also, the success of the ~~Company’s~~Company's operations will be subject to other numerous contingencies, some of which are beyond ~~management’s~~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, ~~and~~ support for nuclear power, changes in accounting and taxation standards, inability to achieve overall long-term goals, future impairment charges to its assets, and global or regional catastrophic events. The Company may also be subject to various additional political, economic, and other uncertainties.

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On January 30, 2020, the World Health Organization ~~(“WHO”~~("WHO") announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the ~~“COVID-19 outbreak”~~"COVID-19 outbreak") and the risk to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak a pandemic, based on ~~increase in~~increased exposure globally. The current spread of COVID-19, including the emergence and spread of variant strains of the virus, that is impacting global economic activity and market conditions could lead to adverse changes in ~~our~~the Company's ability to conduct ~~research and development~~R&D activities with the United States national labs and others. The ~~recent~~ COVID-19 ~~pandemic~~outbreak has impacted our business operations and results of operations for the ~~first nine~~six months ofended June 30, 2021 and year ended December 31, 2020, resulting in the reduction of ~~our research and development~~R&D expenses and an increase in ~~our~~ general and administrative expenses due to severance payments to ~~our~~ former employees. However, the effects of the pandemic are fluid and changing rapidly, including with respect to vaccine and treatment developments and deployment and potential mutations of COVID-19. While ~~we continue~~the Company continues to monitor the impact of COVID-19 on ~~our~~its business, ~~we are~~the Company is unable to accurately predict the ultimate impact on ~~our~~future results of operations, financial condition and liquidity that COVID-19 will have due to various uncertainties, including the geographic spread of the virus, the severity of the disease, the duration of the outbreak, and actions that may be taken by governmental authorities and other third-parties.

On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payment, net operating loss carryback period, alternative minimum tax credit refund, modification to the net interest deduction limitation, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation method for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. Management decided not to apply for these funds. ~~We continue to examine the impact that the~~The CARES Act ~~may~~did not have an impact on our results of operations, financial condition and liquidity.
~~Cash and Cash Equivalents~~
The Company may at times invest its excess cash in interest bearing accounts and US Treasury Bills. It classifies all highly liquid investments with original stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months as marketable securities. The Company holds cash balances in excess of the federally insured limits of $250,000. It deems this credit risk not to be significant as cash is held by two prominent financial institutions in 2020 and 2019. The Company buys and holds short-term US Treasury Bills from Treasury Direct to maturity. US Treasury Bills totaled approximately $13.0 million and $9.0 million at September 30, 2020 and December 31, 2019, respectively. The remaining $4.4 million and $9.0 million at September 30, 2020 and December 31, 2019, respectively, are on deposit with one notable financial institution. Total cash and cash equivalents held, as reported on the accompanying condensed consolidated balance sheets, totaled approximately $17.4 million and $18.0 million at September 30, 2020 and December 31, 2019, respectively.

Grant Income

The Company ~~has~~ concluded that its government grant iswas not within the scope of ASC Topic 606 as it ~~does~~did not meet the definition of a contract with a customer. Additionally, the Company ~~has~~ concluded that the grant ~~meets~~met the definition of a contribution and ~~are~~the grant is a non-reciprocal ~~transactions, and has also~~transaction. The Company determined that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition ~~does~~did not apply, as the Company is a business entity and the grant is ~~with~~received from governmental agencies.

In the absence of applicable guidance under ~~US GAAP,~~U.S. generally accepted accounting principles ("U.S. GAAP"), the ~~Company~~Company's management ~~has~~ developed a policy to recognize grant income at the time the related costs are incurred and the right to payment is realized.
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The Company believes this policy is consistent with the overarching premise in ASC Topic 606, to ensure that revenue recognition reflects the transfer of promised goods or services to customers in an amount that reflects the consideration that we expect to be entitled to in exchange for those goods or services, even though there is no exchange as defined in ASC Topic 606. Additionally, the Company ~~has~~ determined that the recognition of grant income as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under ASC Topic 606.

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Further, the Company believes that showing grant income on a gross method, with the grant income shown as other operating income and the related costs as a charge to ~~research and development~~R&D expense, rather than depicting the grant income as a reduction of ~~research and development~~R&D expense, is a more meaningful presentation.

The Company recognized grant income of approximately ~~$30,000~~$0.1 million and $0.2 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021, respectively. There was no grant income ~~recognized~~for the three and six months ended June 30, 2020.
Patents and Trademarks
Through September 30, 2020, patents were stated on the consolidated balance sheets at cost. Costs, such as filing fees with patent granting agencies and legal fees directly relating to those filings, incurred to file patent applications were capitalized when the Company believed that there was a high likelihood that the patent would be issued and there would be future economic benefit associated with the patent. These costs were amortized from the date of the patent application on a straight-line basis over the estimated useful life of 20 years, which is the legal life of the patent. All costs associated with abandoned patent applications were expensed. The Company expensed patent annuity fees as these fees were maintenance fees required by the patent office at certain points in ~~2019.~~time after a patent was granted in order to keep the patent legal rights in force. During the years ended December 31, 2020 and 2019, these patent annuity fees were insignificant. In the fourth quarter of 2020, the remaining patent costs were written-off as impaired.
Beginning January 1, 2021, patent filing fees with patent granting agencies and legal fees directly relating to those filings, incurred to file patent applications were expensed as the Company believes that there is not a high likelihood that there will be a future economic benefit associated with the patents, due to the uncertainties in the current fuel development timelines and the patents being commercialized. The Company continues to expense patent annuity fees as these fees are maintenance fees required by the patent office at certain points in time after a patent is granted, in order to keep the patent legal rights in force. As of June 30, 2021, and December 31, 2020 the carrying value of the patents on the balance sheets was $0.
Costs for filing and legal fees for trademark applications are capitalized. Trademarks are considered intangible assets with an indefinite useful life and therefore should not be amortized. The Company performed an impairment test in the fourth quarter of 2020 and no impairment of the trademarks was identified. As of June 30, 2021 and December 31, 2020, the carrying value of trademarks was approximately $0.1 million.

~~Recently Adopted Accounting Pronouncements~~Leases

In accordance with ASU 2016-02, ~~Intangibles, Goodwill~~Leases (Topic 842), which requires recognition of most lease arrangements on the balance sheet, the Company recognizes operating lease right of use assets and ~~Other~~ ~~— In January 2017,~~liabilities at commencement date based on the ~~Financial Accounting Standards Board (FASB) issued ASU 2017-04,~~ ~~Intangibles – Goodwill~~present value of the future minimum lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet in accordance with the short-term lease recognition exemption. The Company applies the practical expedient to non-separate and ~~Other (Topic 350) – Simplifying~~non-lease components for all leases that qualify. Lease expense is recognized on a straight-line basis over the ~~Test~~lease term. The Company has only one lease for ~~Goodwill Impairment. To simplify~~office rent and the ~~subsequent measurement~~lease is for a term of ~~goodwill, ASU 2017-04 eliminates Step 2 from~~12 months without renewal options. See Note 4 for additional information.
Stock-Based Compensation
The stock-based compensation expense incurred by Lightbridge for employees and directors in connection with its equity incentive plan is based on the ~~goodwill impairment test. In computing~~employee model of ASC 718, and the ~~implied~~ fair value of ~~goodwill under Step 2,~~the options is measured at the grant date. In accordance with ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, options granted to our consultants are accounted for in the same manner as options issued to employees.
Awards with service-based vesting conditions only – Expense recognized on a straight-line basis over the requisite service period of the award.
Awards with performance-based vesting conditions – Expense is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense is recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line over the requisite service period basis until a higher performance-based condition is met, if applicable.
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Awards with market-based vesting conditions – Expense recognized on a straight-line basis over the requisite service period, which is the lesser of the derived service period or the explicit service period if one is present. However, if the market condition is satisfied prior to the end of the requisite service period, the Company accelerates all remaining expense to be recognized.
Awards with both performance-based and market-based vesting conditions – If an ~~entity had~~award vesting or exercisability is conditional upon the achievement of either a market condition or performance or service conditions, the requisite service period is generally the shortest of the explicit, implicit, and derived service period.
The Company elected to ~~perform procedures~~use the Black-Scholes pricing model to determine the fair value atof stock options on the ~~impairment testing~~measurement date of ~~its assets~~the grant for service-based vesting conditions and ~~liabilities following~~ the ~~procedure~~Monte-Carlo valuation method for performance-based or market-based vesting conditions. Shares that ~~would be required in determining~~are issued to officers on the fair value of assets acquired and liabilities assumed in a business combination. Instead, ASU 2017-04 requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2exercise dates of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount ofstock options may be issued net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company adopted ASU 2017-04 commencing in the first quarter of fiscal 2020 and this ASU did not have a material impact on its condensed consolidated financial statements and related footnote disclosures.
~~ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework~~ — ~~Changes to the Disclosure Requirements for Fair Value Measurement —~~ This ASU modifies the disclosure requirements on fair value measurements in Topic 820, including the removal, modification to, and addition of certain disclosure requirements. This ASU is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. The majority of the ~~disclosure changes are~~minimum statutory withholding requirements to be ~~applied~~paid by the Company on behalf of the employees. As a ~~prospective basis. The Company adopted ASU 2018-13 commencing in~~result, the ~~first quarter~~actual number of ~~fiscal 2020 and this ASU did not have a material impact on~~shares issued are fewer than the ~~Company’s fair value disclosures in~~actual number of shares exercised under the ~~Company’s condensed consolidated financial statements.~~stock option.
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The amendments in the ASU have various transition requirements.
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Recent Accounting Pronouncements – To Be Adopted

~~The Company does not believe~~In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. Convertible instruments that ~~other standards, which have been issued but~~continue to be subject to separation models are (1) those with embedded conversion features that are not ~~yet~~clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective ~~will have a significant impact~~July 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. Management is currently evaluating the effect of the adoption of ASU 2020-06 on ~~its condensed~~the consolidated financial statements and related footnote 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 period except that it does not include unvested common shares subject to repurchase or cancellation. Diluted net income 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, warrants and convertible preferred shares (see Note ~~7, Stockholders’~~6. Stockholders' Equity and Stock-Based Compensation).
The treasury stock method is used in calculating diluted EPS for potentially dilutive ~~effect of outstanding~~ stock options and share purchase warrants, which assumes that any proceeds received from the exercise of in-the-money stock options and ~~convertible preferred~~share purchase warrants, would be used to purchase common shares ~~is not reflected in~~at the average market price for the period, unless including the effects of these potentially dilutive securities would be anti-dilutive.
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The following table sets forth the computation of the basic and diluted ~~earnings~~loss per ~~share because~~share:

Three Months Ended

Six Months Ended

June 30,

June 30,

2021

2020

2021

2020

Basic

Numerator:

Net loss attributable to common stockholders

$ (1,801,818 )

$ (2,315,638 )

$ (4,002,729 )

$ (4,759,952 )
Denominator:

Weighted-average common shares outstanding

6,595,483

3,486,566

6,592,454

3,390,782

Basic net loss per share

$ (0.27 )

$ (0.66 )

$ (0.61 )

(1.40 )

Diluted

Numerator:

Net loss attributable to common stockholders, basic

$ (1,801,818 )

$ (2,315,638 )

$ (4,002,729 )

$ (4,759,952 )
Effect of dilutive securities

0

0

0

0

Net loss, diluted

$ (1,801,818 )

$ (2,315,638 )

$ (4,002,729 )

$ (4,759,952 )
Denominator:

Weighted average common shares outstanding - basic

Potential common share issuances:

6,595,483

3,486,566

6,592,454

3,390,782

Incremental dilutive shares from equity instruments (treasury stock method)

—

—

—

—

Weighted-average common shares outstanding

6,595,483

3,486,566

6,592,454

3,390,782

Diluted net loss per share

$ (0.27 )

$ (0.66 )

$ (0.61 )

$ (1.40 )
The following outstanding securities have been excluded from the ~~Company incurred net~~computation of diluted weighted shares outstanding for the periods noted below, as they would have been anti-dilutive due to the Company's losses for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 and ~~2019, and~~because the ~~effect~~exercise price of ~~including~~certain of these ~~potential~~outstanding securities was greater than the average closing price of the Company's common ~~shares in the net loss per share calculations would be anti-dilutive, therefore not included in the calculations.~~stock:

Three and Six Months Ended

June 30,

2021

2020

Warrants outstanding

45,577

70,361

Stock options outstanding

563,734

508,762

RSUs outstanding

243,800

0

Series A convertible preferred stock to common shares

80,235

79,744

Series B convertible preferred stock to common shares

281,690

262,805

Total

1,215,036

921,672

Note 3. ~~Investment in Joint Venture (Investee Losses in Excess of Investment)~~
~~Current Status of the Joint Venture - Inactive~~
Pursuant to the Enfission operating agreement, both partners agreed that Enfission would serve as the vehicle to develop, license, and sell nuclear fuel assemblies based on Company-designed metallic fuel technology and other advanced nuclear fuel intellectual property licensed to Enfission by both the Company and Framatome or their affiliates. The joint venture built upon the joint fuel development and regulatory licensing work under previously signed agreements initiated in March 2016.
On November 18, 2019, the Company delivered to the Board of Directors of Enfission a notice of termination of the R&D Services Agreement, dated November 14, 2017, by and among Framatome, Enfission and the Company (as amended by Amendment Number One, dated January 25, 2018, and Amendment Number Two, dated June 20, 2018, the “RDSA”), which, among other things, defined the terms and conditions for joint research and development activities among Framatome, Enfission, and the Company. The notice terminated the RDSA, effective immediately. On November 23, 2019, in connection with the termination of the RDSA, the Board of Directors and the management of Lightbridge determined that it is advisable and in the best interest of the Company and its shareholders to take the necessary steps to dissolve Enfission. Various corporate and operational matters relating to Enfission are governed pursuant to the Enfission operating agreement. Although Enfission’s Board of Directors has not approved a formal dissolution plan as of the date of this filing, Enfission was inactive as of December 31, 2019 and during the nine months ended September 30, 2020 and through the date of this filing.
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~~Equity method~~
The Enfission operating agreement provided that Lightbridge and Framatome each hold 50% of the total issued Class A voting membership units of the joint venture. The Company’s equity in losses are accounted for under the equity method consisted of the following as of September 30, 2020 and December 31, 2019 (rounded in millions):

September 30,

December 31,

2020

2019

Enfission, LLC

Ownership Interest

50 %

50 %
Carrying Amount

Total contributions

$ 9.2

$ 9.2

Less: Share of the loss in investment in Enfission

(9.2 )

(9.2 )
Equity balance

$ —

$ —

The Company invested approximately $9.2 million in Enfission and Framatome invested approximately $2.9 million of equity for the period from January 24, 2018 (date of inception of Enfission) to September 30, 2020. There were no contributions made to Enfission for the nine months ended September 30, 2020. The cash balance in Enfission at September 30, 2020 was approximately $0.2 million. During the nine months ended September 30, 2020, Enfission incurred a loss of approximately $0.1 million, and in accordance with the provisions in the joint venture operating agreement, the Company did not record its share of the loss in investment in Enfission for the three and nine months ended September 30, 2020.
As of September 30, 2020 and December 31, 2019, the Company’s total equity share of the joint venture accumulated losses is limited to the total equity contributions Lightbridge made since January 24, 2018 according to the Enfission joint venture operating agreement. The joint venture operating agreement states that at no time during the term of the company or upon dissolution or liquidation of the company shall a member with a deficit balance in its capital account have any obligation to Enfission or to the other members of Enfission to restore such deficit capital balance, to the fullest extent permitted by applicable law and to the provisions of the joint venture operating agreement. The Company had not separately guaranteed any obligations of Enfission. The Company does not expect to provide additional equity contributions in 2020 nor for the foreseeable future until Enfission is dissolved.
~~Summarized balance sheet information for the Company’s equity method investee Enfission as of September 30, 2020 and December 31, 2019 is presented in the following table (rounded in millions):~~

September 30,
2020

December 31,
2019

Assets

Cash

$ 0.2

$ 1.0

Other current assets

—

—

Total assets

$ 0.2

$ 1.0

Liabilities and equity

Total liabilities

$ 1.3

$ 2.1

Equity (Deficit)

(1.1 )

(1.1 )
Total liabilities and equity

$ 0.2

$ 1.0

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Summarized statement of operations information for the Company’s equity method investee Enfission is presented in the following table for the nine months ended September 30, 2020 and 2019 (rounded in millions):

For the Nine Months Ended September 30,

2020

2019

Revenue

$ —

$ —

Research and development costs

—

4.4

Administrative expenses

0.1

1.0

Total Operating Loss

$ 0.1

$ 5.4

Loss from operations

$ 0.1

$ 5.4

Net loss

$ 0.1

$ 5.4

As of September 30, 2020 and December 31, 2019, the total receivable due from Enfission was approximately $0 and $0.4 million, respectively, which represents management and administrative services, consulting fees and reimbursable expenses Lightbridge charged to Enfission in 2019 (see Note 8, Related Party Transactions). Lightbridge did not bill any management and administrative services, consulting fees or other services to Enfission for the three months and nine months ended September 30, 2020, as Enfission was inactive during these reporting periods.
~~Disputed Invoices~~
Included in the total liabilities of Enfission of $1.3 million at September 30, 2020 and $2.1 million at December 31, 2019, are disputed invoices totalling $1.3 million for research and development work submitted by Framatome in 2019. These invoices have been disputed by the Company and remain unpaid as of the date of this filing. There are various disagreements between Framatome and Lightbridge regarding these disputed Framatome invoices. It is expected that these disputes will be resolved through either further negotiation by the joint venture partners or in arbitration. The Company had not separately guaranteed any obligations of Enfission at September 30, 2020 and December 31, 2019 and does not believe that it is obligated under the joint venture operating agreement to fund its deficit capital account balance to pay any current or future liabilities incurred and owed by Enfission.
~~Note 4.~~ Accounts Payable and Accrued Liabilities

Accounts payable and accrued ~~expenses~~liabilities consisted of the following (rounded ~~in millions)~~to the nearest thousand):

June 30,

December 31,

September 30,

December 31,

2021

2020

2020

2019

Trade payables

$ 0.1

$ 0.3

$ 65,000

$ 233,000

Accrued bonuses

0.7

—

340,000

0

Accrued legal and consulting expenses

128,000

146,000

Accrued expenses

1.0

0.1

6,000

3,000

Total

$ 1.8

$ 0.4

$ 539,000

$ 382,000

Note 5.4. Commitments and Contingencies

Commitments

Operating Leases

The Company leases office space for a 12-month term with a monthly payment of approximately ~~$15,000 per month for office rent.~~$11,000. The ~~term of the~~Company entered into a new lease ~~was renewed~~ on January 1, ~~2020 and extends~~2021 through December 31, ~~2020.~~2021.

The future minimum lease payments required under the Company's non-cancellable operating leases ~~at September 30, 2020~~for 2021 total approximately ~~$45,000.~~$0.1 million. Total rent expense for the six months ended June 30, 2021 and 2020 was $0.1 million for both periods.
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~~Contingencies~~Contingency

~~Litigation~~Settlement of Arbitration
On February 11, 2021, the Company entered into a settlement agreement (the "Settlement Agreement") with Framatome SAS and Framatome Inc. (together, "Framatome"), resolving the pending claims and counterclaims between the parties in arbitration and judicial proceedings related to the parties' inactive joint venture, Enfission, LLC. Under the terms of the Settlement Agreement, all joint venture agreements were terminated and the joint venture was dissolved on March 23, 2021. The Company accrued $4.2 million related to the Settlement Agreement at December 31, 2020. The Company paid Framatome approximately $4.2 million for outstanding invoices for work performed by Framatome and other expenses incurred by Framatome on March 15, 2021. Additionally, the Company recorded an approximate $34,000 foreign currency transaction gain related to the settlement payment for the six months ended June 30, 2021. The Company expects to receive approximately a $110,000 distribution relating to the dissolution and wind-down of Enfission, which is included in other receivables on the condensed consolidated balance sheet at June 30, 2021.
Mediation Settlement

A former Chief Financial Officer of the Company filed a complaint against the Company with the US Occupational Safety and Health Administration ~~(“OSHA”~~("OSHA") on March 9, 2015. This complaint was dismissed by OSHA in January 2018 without any findings against the Company. On March 14, 2018, an appeal was ~~filed. The Company has and will continue to vigorously defend this appeal and believes that this appeal hearing will not result in any findings against~~filed with the ~~Company.~~U.S Department of Labor Office of Administrative Law Judges ("OALJ"). On September 6, 2019, the Company filed a motion for summary decision seeking a decision in its favor as a matter of law. ~~This~~The motion for summary ~~decision~~judgement was denied on September 30, 2020. The complaint was mediated on May 13, 2021 and the parties subsequently reached an agreement to resolve all claims for the total monetary sum of approximately $675,000 in exchange for a dismissal of the pending litigation, full release of all claims against the Company, and other conditions. On July 13, 2021, the settlement agreement was finalized by both parties and the Company applied for court approval by the OALJ assigned to this matter. The settlement was approved by the OALJ on July 22, 2021. The Company will issue the settlement payment and the insurers will reimburse the Company for the $675,000 settlement payment. The settlement sum was authorized and approved by the Company's insurers. This reimbursement amount of $675,000 is recorded in other receivables and the settlement amount of $675,000 is accrued as legal settlement costs on the condensed consolidated balance sheet at June 30, 2021.
As of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, legal fees of approximately ~~$2,300~~$27,000 and ~~$6,000~~$13,000 were owed ~~respectively,~~in connection with the mediation, and are expected to be paid in full by the ~~Company’s~~Company's insurance carriers.

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~~Filing of Arbitration~~
On November 18, 2019, the Company delivered a notice of termination of the RDSA to Framatome, thereby terminating the RDSA, based on the Company’s assertion that Framatome materially breached certain material terms of the RDSA, relating to its invoicing obligations, as well as a failure of the escalation process under the RDSA to agree to a budget commitment for 2019-2020. Framatome has contested the Company’s right to terminate the RDSA, raised questions as to the Company’s rights relating to their co-owned intellectual property and the Company’s right to conduct certain research and development activities, and reserved its right to seek compensation from the Company. On this basis and based on the Company’s assertion that the conduct of Framatome prevented Enfission from functioning and progressing towards its goals, on February 7, 2020, the Company has filed a request for arbitration (the “Arbitration Request”) in the International Court of Arbitration of the International Chamber of Commerce against Framatome. The Company has undertaken this action in order to obtain, inter alia, a declaration that the RDSA was validly terminated and is no longer in force, and to obtain compensation for the damages incurred. Following the termination of the RDSA and the subsequent filing of the Arbitration Request, Lightbridge has reduced its research and development activities as it is no longer conducting research and development activities with Framatome and Enfission.
On April 3, 2020, Framatome submitted its answer to the Arbitration Request, disputing the Company’s claims, setting out its own counterclaims against the Company and its request for relief sought from the International Court of Arbitration. The Company believes it has meritorious claims in the arbitration and intends to pursue its interests vigorously.
We have incurred and will continue to incur material legal fees associated with our ongoing arbitration. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and record a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. It is possible that resolution of any legal matters currently pending or threatened could result in losses material to our consolidated results of operations, liquidity, or financial condition. The estimated liability that is probable may be adjusted at each reporting period until it is finally settled. As of the date of this filing, it has been determined not to be probable that a liability has been incurred and that the amount of loss can be reasonably estimated.
Note 6.5. Research and Development Costs
Lightbridge’s total corporate research and development costs, included in the caption research and development expenses in the accompanying condensed consolidated statement of operations, amounted to approximately $0.3 million and $0.8 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $2.2 million for the nine months ended September 30, 2020 and 2019, respectively. See Note 8, Related Party Transactions, regarding consulting fees charged to Enfission for research and development expenses incurred by Lightbridge on behalf of Enfission in 2019.

On December 19, 2019, the Company was awarded a voucher from the U.S. Department of ~~Energy’s~~Energy's (DOE) Gateway for Accelerated Innovation in Nuclear (GAIN) program to support development of Lightbridge Fuel™ in collaboration with Idaho National Laboratory (INL). The scope of the project ~~includes~~included experiment design for irradiation of Lightbridge metallic fuel material samples in the Advanced Test Reactor (ATR) at INL. On April 22, 2020, the Company entered into a Cooperative Research and Development Agreement (CRADA) with Battelle Energy Alliance, LLC, the operating contractor of INL, in collaboration with DOE. Signing the CRADA was the last step in the contracting process to formalize a voucher award from the GAIN program. The project ~~has~~ commenced in the second quarter of 2020. The initial total project value iswas estimated at approximately $846,000, with three-quarters of this amount expected to be funded by DOE for the scope performed by INL and the remaining amount funded by Lightbridge, by providing in-kind services to the project.
For the three months and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, the Company recorded approximately ~~$30,000~~$0.1 million and $0.2 million of work that was completed by INL that caused the DOE to incur payment obligations related to the GAIN ~~voucher.~~voucher, respectively. This amount was recorded as grant income in ~~other operating income (loss) line item~~Other Operating Income section of the condensed consolidated statement of operations and the corresponding amount as research and development expenses. ~~No work~~The cumulative amount from September 1, 2020, to June 30, 2021, of $0.2 million was recorded as grant income. As of June 30, 2021, there is approximately $0.4 million in grant income that will be recognized in future periods upon completion of certain grant milestones. The Company completed ~~by INL~~a contract extension for the ~~three and nine months ended~~INL GAIN voucher in January 2021. The period of performance now runs through September 30, ~~2019.~~2021. The Company currently expects that INL GAIN project will be completed within this period of performance, with a significantly reduced total project cost.
On March 25, 2021, the Company was awarded a second voucher from the DOE's GAIN program to support development of Lightbridge Fuel™ in collaboration with the Pacific Northwest National Laboratory (PNNL). The scope of the project is to demonstrate Lightbridge's nuclear fuel casting process using depleted uranium, a key step in the manufacture of Lightbridge Fuel™. The project commenced in July 2021. The total project value is approximately $663,000, with three-quarters of this amount funded by DOE for the scope performed by PNNL. On July 8, 2021, the Company entered into a CRADA with the Battelle Memorial Institute, Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE, as also described in Note 7. Subsequent Events below.

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Note ~~7. Stockholders’~~6. Stockholders' Equity and Stock-Based Compensation

On June 28, 2021, at our annual shareholder meeting, the shareholders' approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of common stock from 8,333,333 shares to 13,500,000 shares and an amendment to the Lightbridge Corporation 2020 Omnibus Incentive Plan to increase the number of shares of common stock available for issuance under this Incentive Plan from 350,000 shares to 650,000 shares.
At ~~September~~June 30, ~~2020,~~2021, the Company had ~~4,416,961~~6,595,503 common shares outstanding. Also outstanding were warrants relating to ~~70,361~~45,577 shares of common stock, stock options relating to ~~515,985~~563,734 shares of common stock, ~~712,126~~243,800 restricted shares units of common stock, 683,852 shares of Series A convertible preferred stock convertible into ~~59,344~~56,988 shares of common stock (plus accrued dividends of ~~$657,299 relating to~~ an additional ~~19,954~~23,247 common shares), and 2,666,667 shares of Series B convertible preferred stock convertible into 222,222 shares of common stock (plus accrued dividends of ~~$813,285, relating to~~ an additional ~~45,182~~59,468 common shares), all ~~totaling 5,350,009~~totalling 7,810,539 shares of common stock and all common stock equivalents, including the accrued preferred stock dividends, outstanding at ~~September~~June 30, ~~2020.~~2021.

At December 31, ~~2019,~~2020, the Company had ~~3,252,371~~6,567,110 common shares outstanding. Also outstanding were warrants relating to 70,361 shares of common stock, stock options relating to ~~518,551~~515,847 shares of common stock, ~~757,770~~243,800 restricted shares units of common stock, 699,878 shares of Series A convertible preferred stock convertible into ~~63,148~~58,323 shares of common stock (plus accrued dividends of ~~$556,390~~$691,120 relating to an additional ~~16,890~~20,980 common shares), and 2,666,667 shares of Series B convertible preferred stock convertible into 222,222 shares of common stock (plus accrued dividends of ~~$569,181,~~$897,518, relating to an additional ~~31,621~~49,862 common shares), all ~~totaling 4,175,164~~totalling 7,748,505 shares of common stock and all common stock equivalents, including accrued preferred stock dividends, outstanding at December 31, ~~2019.~~2020.

Common Stock Equity Offerings

ATM Offerings

On May 28, 2019, the Company entered into an at-the-market ("ATM") equity offering sales agreement ~~(“2019 ATM”~~("ATM Sales Agreement") with Stifel, Nicolaus & Company, Incorporated ~~(“Stifel”~~("Stifel"), which was amended on April 9, 2021, pursuant to which the Company may issue and sell shares of its common stock from time to time through Stifel as the ~~Company��s~~Company's sales agent. Sales of the ~~Company’s~~Company's common stock through Stifel, if any, will be made by any method that is deemed to be an ~~“at-the-market”~~"at-the-market" equity offering as defined in Rule 415 promulgated under the Securities Act of ~~1933, as amended, pursuant to~~1933. On March 25, 2021, the ~~Company’s effective~~Company filed a new shelf registration statement on Form S-3, ~~(File No. 333-223674) filed on March 15, 2018 and~~registering the sale of up to $75 million of the Company's securities, which registration statement was declared effective ~~March 23, 2018.~~on April 5, 2021. Due to the offering limitations currently applicable to the Company under General Instruction I.B.6. of Form S-3 and the ~~Company’s~~Company's public float as of ~~May 28, 2019,~~April 8, 2021, and in accordance with the terms of the ~~sales agreement,~~ATM Sales Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to ~~$13,500,000. See Note 9, Subsequent Events, for additional information on~~$9,000,000 pursuant to the ~~filing of a~~ prospectus supplement ~~and~~filed with the ~~increase in the aggregate amount that may be issued and sold under the 2019 ATM.~~SEC on April 9, 2021.

On March 30, 2018, the Company entered into an at-the-market issuance sales agreement with B. Riley FBR, Inc. (“B. Riley”) that superseded the prior at-the-market agreement with B. Riley (collectively, the “2018 ATM”), pursuant to which the Company could issue and sell shares of its common stock from time to time through B. Riley as the Company’s sales agent. Effective March 29, 2019, the Company and B. Riley terminated the 2018 ATM agreement.
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The Company sold 0.6 million shares and 1.1 million shares under the 2019 ATM during the three and nine months ended September 30, 2020, respectively. Net proceeds received from the ATM sales during the three and nine months ended September 30, 2020 were approximately $2.5 million and $5.1 million, respectively. The Company records its ATM sales on a settlement date basis. A total of 109,500 shares sold on September 29 and September 30, 2020, for total gross proceeds of $476,000, were recorded with settlement dates in the first week in October 2020. See Note 9, Subsequent Events, for additional information onNo ATM sales ~~made after September~~occurred during the six months ended June 30, ~~2020.~~
2021. The Company sold ~~115,527 shares and 508,063~~approximately 0.5 million shares under the ~~2019~~ ATM ~~and~~for the ~~2018 ATM during the three and nine~~six months ended ~~September~~June 30, ~~2019, respectively. Net~~2020 resulting in net proceeds ~~received from the ATM sales during the three and nine months ended September 30, 2019 were~~of approximately ~~$0.8 million and $3.8 million, respectively. The Company records its ATM sales on a settlement date basis.~~$2.7 million.

Preferred Stock Equity Offerings
~~Series B Preferred Stock - Securities Purchase Agreement~~
On January 30, 2018, the Company issued 2,666,667 shares of newly created Non-Voting Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and associated warrants to purchase up to 55,555 shares of the Company’s common stock to the several purchasers for approximately $4.0 million or approximately $1.50 per share of Series B Preferred Stock and associated warrant. Dividends accrue on the Series B Preferred Stock at the rate of 7% per year and will be paid in-kind through an increase in the liquidation preference per share. The liquidation preference, initially $1.50 per share of Series B Preferred Stock, is the base that is also used to determine the number of common shares into which the Series B Preferred Stock will convert as well as the calculation of the 7% dividend. Each share of Series B Preferred Stock is convertible at the option of the holder into such number of shares of the Company’s common stock equal to the liquidation preference divided by the conversion price of $18 per share subject to adjustments in the case of stock splits and stock dividends.
Holders of the Series B Preferred Stock are also entitled to participating dividends whenever dividends in cash, securities (other than shares of the Company’s common stock paid on shares of common stock) or property are paid on common shares or shares of Series A Preferred Stock. The amount of the dividends will equal the amount to which the holder would be entitled if all shares of Series B Preferred Stock had been converted to common stock immediately prior to the record date.
The warrants had a per share of common stock exercise price of $22.50. The warrants were exercisable upon issuance and expired six months after issuance on July 30, 2018. Warrants were also issued to the investment bank who introduced these investors, which were subsequently transferred to the principal of the investment bank, entitling the holder to purchase 11,119 common shares in the Company at an exercise price of $18 per share, up to and including January 30, 2021. On February 6, 2017 the Company entered into an agreement with this investment bank. The agreement calls for monthly retainer payments of $15,000, which are credited against any transaction introductory fee earned by the investment bank. This agreement calls for a 7% transaction introductory fee and warrants equal to 5% of the total transaction amount, at a strike price equal to the offering price for a three-year term.
The holders of the Series B Preferred Stock have no voting rights. In addition, as long as the shares of Series B Preferred Stock are outstanding, the Company may not take certain actions without first having obtained the affirmative vote or waiver of the holders of a majority of the outstanding shares of Series B Preferred Stock. The Company has the option at any time after August 2, 2019 to redeem some or all of the outstanding Series B Preferred Stock for an amount in cash equal to the liquidation preference plus the amount of any accrued but unpaid dividends of the Series B Preferred Stock being redeemed. The holders of the Series B Preferred Stock do not have the ability to require the Company to redeem the Series B Preferred Stock. The Company has not redeemed any of the outstanding Series B Preferred Stock during the nine months ended September 30, 2020 and 2019 and from the date of issuance.
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The Company has the option of forcing the conversion of all or part of the Series B Preferred Stock if at any time the average closing price of the Company’s common stock for a thirty-trading day period is greater than $65.88 prior to August 2, 2019 or greater than $98.82 at any time. The Company can exercise this option only if it also requires the conversion of the Series A Preferred Stock in the same proportion as it is requiring of the Series B Preferred Stock. The Company did not force the conversion of any of the outstanding Series B Preferred Stock during the nine months ended September 30, 2020 and 2019 and from the date of issuance.
Of the $4.0 million proceeds, approximately $0.3 million was allocated to the warrants with the remaining $3.7 million allocated to the Series B Preferred Stock. The Series B Preferred Stock was initially convertible into 2,666,667 shares of common stock (now convertible into 222,222 shares of common stock when adjusted for the one-for-twelve reverse stock split on October 21, 2019). The average of the high and low market prices of the common stock on January 30, 2018, the date of the closing of the sale of the Series B Preferred Stock, was approximately $28.08 per share. At $28.08 per share the common stock into which the Series B Preferred Stock was initially convertible was valued at approximately $6.2 million. This amount was compared to the $3.7 million (rounded) of proceeds allocated to the Series B Preferred Stock to indicate that a beneficial conversion feature (“BCF”) of approximately $2.6 million existed at the date of issuance, which was immediately accreted as a deemed dividend because the conversion rights were immediately effective.
Additionally, comparison of the original $1.50 conversion price prior to the one-for-twelve reverse stock split on October 21, 2019 of the PIK dividends to the $2.34 commitment date fair value per share on January 30, 2018 indicates that each PIK dividend will accrete $0.84 of BCF as an additional deemed dividend for every $1.50 of PIK dividend accrued. Total deemed dividends for this PIK dividend for the three months ended September 30, 2020 and 2019 were approximately $46,000 and $43,000, respectively and for the nine months ended September 30, 2020 and 2019 were approximately $137,000 and $128,000, respectively.
The accumulated dividend (unpaid) at September 30, 2020 and December 31, 2019 was approximately $0.8 million and $0.6 million, respectively. The Series B Preferred Shares outstanding as of September 30, 2020 and December 31, 2019 was 2,666,667 shares with an aggregate liquidation preference of approximately $4.8 million and $4.6 million, including the accumulated dividends at September 30, 2020 and December 31, 2019, respectively.

Series A Preferred Stock - Securities Purchase Agreement

On August 2, 2016, the Company issued 1,020,000 shares of newly created Non-Voting Series A Convertible Preferred Stock (the ~~“Series~~"Series A Preferred ~~Stock”~~Stock") to General International Holdings, Inc. for $2.8 million or approximately $2.75 per share. Dividends accrue on the Series A Preferred Stock at the rate of 7% per year and will be paid in-kind through an increase in the liquidation preference per share. The liquidation preference, initially $2.7451 per share of Series A Preferred Stock, is the base that is also used to determine the number of common shares into which the Series A Preferred Stock will convert as well as the calculation of the 7% dividend. Each share of Series A Preferred Stock is convertible at the option of the holder into such number of shares of the ~~Company’s~~Company's common stock equal to the liquidation preference divided by the conversion price of $32.94 per share subject to adjustments in the case of stock splits and stock dividends.

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Holders of the Series A Preferred Stock are also entitled to participating dividends whenever dividends in cash, securities (other than shares of the ~~Company’s~~Company's common stock) or property are paid on common shares. The amount of the dividends is the amount to which the holder would be entitled if all shares of Series A Preferred Stock had been converted to common stock immediately prior to the record date.

The Company has the option of forcing the conversion of the Series A Preferred Stock if the trading price for the ~~Company’s~~Company's common stock is more than two times the applicable conversion price (approximately $32.94 per share) before August 2, 2019, or if the trading price is more than three times the applicable conversion ~~price (approximately $49.41 per share) at any time.~~price. The Company has not ~~redeemed~~forced the conversion of any of the outstanding Series A Preferred Stock during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 and from the date of issuance.
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The Series A Preferred Stock was initially convertible into 1,020,000 shares of common stock (now convertible into 85,000 common shares when adjusted for the one-for-twelve reverse stock split on October 21, 2019). The average of the high and low market prices of the common stock on August 6, 2016, the date of the closing of the sale of the Series A Preferred Stock, was approximately ~~$39.78~~39.78 per share. At $39.78 per share the common stock into which the Series A Preferred Stock was initially convertible was valued at approximately $3.4 million. This amount was compared to the $2.8 million of proceeds of the Series A Preferred Stock to indicate that a ~~BCF~~beneficial conversion feature ("BCF") of approximately $0.6 million existed at the date of issuance in 2016, which was immediately accreted as a deemed dividend because the conversion rights were immediately effective.

Additionally, comparison of the $2.7451, original conversion price of the PIK dividends prior to the one-for-twelve reverse stock split on October 21, 2019, to the $3.315 commitment date fair value per share indicates that each PIK dividend will accrete $0.5699 of BCF as an additional deemed dividend for every $2.7451 of PIK dividend accrued. Total deemed dividends for this PIK dividend for ~~each of~~ the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were approximately ~~$10,000~~$9,000 and for each of the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were approximately ~~$28,000.~~$19,000.

The holders of the Series A Preferred Stock have no voting rights. In addition, as long as 255,000 shares of Series A Preferred Stock are outstanding, the Company may not take certain actions without first having obtained the affirmative vote or waiver of the holders of a majority of the outstanding shares of Series A Preferred Stock. The Company has the option at any time after August 2, 2019 to redeem some or all of the outstanding Series A Preferred Stock for an amount in cash equal to the liquidation preference plus the amount of any accrued but unpaid dividends of the Series A Preferred Stock being redeemed. The holders of the Series A Preferred Stock do not have the ability to require the Company to redeem the Series A Preferred Stock. The Company has not redeemed any of the outstanding Series A Preferred Stock during the six months ended June 30, 2021 and 2020 and from the date of issuance.

On April ~~16, 2019,~~8, 2021, the holder of the Series A Preferred Shares converted ~~27,747~~16,026 preferred shares into ~~2,782~~1,846 common shares.
~~On October 8, 2019,~~ During the ~~holder of the Series A Preferred Shares converted 28,107 preferred shares into 2,922 common shares.~~
~~On February 10, 2020, the holder of the Series A Preferred Shares converted 11,875 preferred shares into 1,255 common shares.~~
~~On May 15, 2020, the holder of the Series A Preferred Shares converted 17,080 preferred shares into 1,847 common shares.~~
~~On August~~year ended December 31, 2020, the holder of the Series A Preferred Shares converted ~~16,689~~a total of 57,892 preferred shares into ~~1,846~~6,327 common shares.

~~As of September~~The accumulated PIK dividends at June 30, 2021 and December 31, 2020 ~~there were 712,126~~was approximately $0.8 million and $0.7 million, respectively. The Series A Preferred Shares outstanding as of June 30, 2021 and December 31, 2020 were 683,852 shares and 699,878 shares, respectively, with an aggregate liquidation preference of approximately $2.6 million and $2.6 million, including the accumulated dividends ~~while there~~at June 30, 2021 and December 31, 2020, respectively.
Series B Preferred Stock - Securities Purchase Agreement
On January 30, 2018, the Company issued 2,666,667 shares of newly created Non-Voting Series B Convertible Preferred Stock (the "Series B Preferred Stock") and associated warrants to purchase up to 55,555 shares of the Company's common stock to the several purchasers for approximately $4.0 million or approximately $1.50 per share of Series B Preferred Stock and associated warrant. Dividends accrue on the Series B Preferred Stock at the rate of 7% per year and will be paid in-kind through an increase in the liquidation preference per share. The liquidation preference, initially $1.50 per share of Series B Preferred Stock, is the base that is also used to determine the number of common shares into which the Series B Preferred Stock will convert as well as the calculation of the 7% dividend. Each share of Series B Preferred Stock is convertible at the option of the holder into such number of shares of the Company's common stock equal to the liquidation preference divided by the conversion price of $18 per share subject to adjustments in the case of stock splits and stock dividends.
Holders of the Series B Preferred Stock are also entitled to participating dividends whenever dividends in cash, securities (other than shares of the Company's common stock paid on shares of common stock) or property are paid on common shares or shares of Series A Preferred Stock (as defined below). The amount of the dividends will equal the amount to which the holder would be entitled if all shares of Series B Preferred Stock had been converted to common stock immediately prior to the record date.
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Table of Contents
The holders of the Series B Preferred Stock have no voting rights. In addition, as long as the shares of Series B Preferred Stock are outstanding, the Company may not take certain actions without first having obtained the affirmative vote or waiver of the holders of a majority of the outstanding shares of Series B Preferred Stock. The Company has the option at any time after August 2, 2019 to redeem some or all of the outstanding Series B Preferred Stock for an amount in cash equal to the liquidation preference plus the amount of any accrued but unpaid dividends of the Series B Preferred Stock being redeemed. The holders of the Series B Preferred Stock do not have the ability to require the Company to redeem the Series B Preferred Stock.
The Company has not redeemed any of the outstanding Series B Preferred Stock during the six months ended June 30, 2021 and 2020 and from the date of issuance.
The Company has the option of forcing the conversion of all or part of the Series B Preferred Stock if at any time the average closing price of the Company's common stock for a thirty-trading day period is greater than $65.88 prior to August 2, 2019 or greater than $98.82 at any time. The Company can exercise this option only if it also requires the conversion of the Series A Preferred Stock in the same proportion as it is requiring of the Series B Preferred Stock. The Company did not force the conversion of any of the outstanding Series B Preferred Stock during the six months ended June 30, 2021 and 2020.
Of the $4.0 million proceeds, approximately $0.3 million was allocated to the warrants with the remaining $3.7 million allocated to the Series B Preferred Stock. The Series B Preferred Stock was initially convertible into 2,666,667 shares of common stock (now convertible into 222,222 shares of common stock when adjusted for the one-for-twelve reverse stock split on October 21, 2019). The average of the high and low market prices of the common stock on January 30, 2018, the date of the closing of the sale of the preferred stock, was approximately $28.08 per share. At $28.08 per share the common stock into which the Series B Preferred Stock was initially convertible was valued at approximately $6.2 million. This amount was compared to the $3.7 million (rounded) of proceeds allocated to the Series B Preferred Stock to indicate that a BCF of approximately $2.6 million existed at the date of issuance, which was immediately accreted as a deemed dividend because the conversion rights were ~~757,770~~immediately effective.
Additionally, comparison of the original $1.50 conversion price prior to the one-for-twelve reverse stock split on October 21, 2019 of the PIK dividends to the $2.34 commitment date fair value per share on January 30, 2018 indicates that each PIK dividend will accrete 0.84 of BCF as an additional deemed dividend for every $1.50 of PIK dividend accrued. Total deemed dividends for this PIK dividend for the three months ended June 30, 2021 and 2020 were approximately $49,000 and $45,000, respectively and for the six months ended June 30, 2021 and 2020 were approximately $97,000 and $90,000, respectively.
The accumulated PIK dividends (unpaid) at June 30, 2021 and December 31, 2020 were approximately $1.1 million and $0.9 million, respectively. The Series AB Preferred Shares outstanding as of June 30, 2021 and December 31, ~~2019,~~2020 was 2,666,667 shares with an aggregate liquidation preference of approximately ~~$2.6~~$5.0 million and $4.9 million, including the accumulated ~~dividends.~~dividends at June 30, 2021 and December 31, 2020, respectively.
20
~~Table of Contents~~

Warrants

The ~~Company’s~~Company's outstanding warrants at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 are below. These warrants are classified within equity on the unaudited condensed consolidated balance sheets.

September 30,

December 31,

June 30,

December 31,

Outstanding Warrants

2020

2019

2021

2020

Issued to Investors on October 25, 2013, entitling the holders to purchase 20,833 common shares in the Company at an exercise price of $138.00 per common share up to and including April 24, 2021. In 2016, the warrant holders agreed to new warrant terms, which excluded any potential net cash settlement provisions in exchange for a reduced exercise price of $75.00 per share.

13,665

13,665

Issued to Investors on October 25, 2013, entitling the holders to purchase 20,833 common shares in the Company at an exercise price of $138.00 per common share up to and including April 24, 2021. In 2016, 4,954 of these warrants were exchanged for common stock, and all remaining warrant holders agreed to new warrant terms, which excluded any potential net cash settlement provisions in exchange for a reduced exercise price of $75.00 per share (warrants expired).

—

13,665

Issued to Investors on November 17, 2014, entitling the holders to purchase 45,577 common shares in the Company at an exercise price of $138.60 per common share up to and including May 16, 2022. On June 30, 2016, the warrant holders agreed to new warrant terms, which excluded any potential net cash settlement provisions in order to classify them as equity in exchange for a reduced exercise price of $75.00 per share.

45,577

45,577

45,577

45,577

Issued to an investment bank and subsequently transferred to a principal of the investment bank regarding the Series B Preferred Stock investment on January 30, 2018, entitling the holder to purchase 11,119 common shares in the Company at an exercise price of $18.00 per share, up to and including January 30, 2021.

11,119

11,119

Issued to an investment bank and subsequently transferred to a principal of the investment bank regarding the Series B Preferred Stock investment on January 30, 2018, entitling the holder to purchase 11,119 common shares in the Company at an exercise price of $18.00 per share, up to and including January 30, 2021 (warrants expired).

—

11,119

Total

70,361

70,361

45,577

70,361

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Table of Contents

Stock-based Compensation – Stock Options

Adoption of 2020 Stock Plan

On March 9, 2020, the Board of Directors adopted the ~~Company’s~~Company's 2020 ~~Equity~~Omnibus Incentive Plan (the ~~“2020 Plan”~~"2020 Plan"). On September 3, 2020, the shareholders approved the 2020 Plan to authorize grants of the following types of awards (a) Options, (b) Stock Appreciation Rights, (c) Restricted Stock and Restricted Stock Units ~~(“RSUs”~~("RSUs"), and ~~(e)~~(d) Other Stock-Based and Cash-Based Awards. ~~The~~On June 28, 2021, the Company's shareholders voted to amend the 2020 Plan to increase the number of shares available for award under the 2020 ~~plan authorized a total of 350,000~~Plan to 650,000 shares ~~to be available for grant. See Note 9, Subsequent Events, for additional information on RSU equity grants made under the 2020 Plan after September 30, 2020.~~
~~2015 Equity Incentive Plan~~
On March 25, 2015, the Compensation Committee and Board of Directors approved the Lightbridge Corporation 2015 Equity Incentive Plan (the “2015 Plan”) to authorize grants of (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, and (f) Performance Compensation Awards to the employees, consultants, and directors of the Company. The 2015 Plan initially authorized a total of 50,000 shares to be available for grant ~~under the 2015 Plan, of which the amount was increased to 116,667 shares in May 2016, 241,667 shares in May 2017, and 525,000 shares in May 2018.~~
~~Short-Term Non-Qualified Option Grants~~
On December 2, 2019, the Compensation Committee of the Board granted 86,982 short-term incentive stock options and non-qualified stock options under the 2015 Plan to employees, consultants, and directors of the Company. All of these stock options vested immediately, with a strike price of $3.82, which was the closing price of the Company’s stock on December 2, 2019. These options have a 10-year contractual term, with a fair market value of approximately $2.59 per option with an expected term of 5 years. During the year ended December 31, 2019, the Company issued 4,247 stock options to a consultant. The Company issued 7,634 stock options to a consultant during the nine months ended September 30, 2020.
21
~~Table of Contents~~
Total stock options outstanding at September 30, 2020 and December 31, 2019 under the 2006 Stock Plan and 2015 Plan were 515,985 and 518,551, of which 466,259 and 433,678 of these options were vested at September 30, 2020 and December 31, 2019, respectively.
The components of stock-based compensation expense (net of forfeitures of stock options) included in the Company’s condensed consolidated statements of operations for the three months and nine months ended September 30, 2020 and 2019 are as follows (rounded in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

Research and development expenses

—

$ —

—

$ 284,000

General and administrative expenses

$ (4,000 )

$ 20,000

$ 8,000

$ 308,000

Total stock-based compensation expense

$ (4,000 )

$ 20,000

$ 8,000

$ 592,000

~~Stock option transactions to the employees, directors and consultants are summarized as follows for the nine months ended September 30, 2020:~~

Options Outstanding

Weighted Average Exercise Price

Weighted Average Grant Date Fair Value

Beginning of the period – January 1, 2020

518,551

$ 21.99

$ 15.89

Granted

7,634

4.45

3.28

Exercised

(6,548 )

3.82

2.59

Forfeited

(1,844 )

10.80

8.33

Expired

(1,808 )

501.43

388.45

End of the period – September 30, 2020

515,985

$ 20.32

$ 14.60

Options exercisable

466,259

$ 21.45

$ 15.36

~~A summary of the status of the Company’s non-vested options as of September 30, 2020 and December 31, 2019, and changes during the nine months ended September 30, 2020, is presented below:~~

Shares

Weighted Average Exercise Price

Weighted Average Fair Value Grant Date

Non-vested – January 1, 2020

84,873

$ 10.73

$ 5.15

Granted

7,634

4.45

3.28

Vested

(41,552 )

10.80

8.29

Forfeited

(1,229 )

10.80

8.33

Non-vested – September 30, 2020

49,726

$ 9.71

$ 7.44

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~~Table of Contents~~
~~The above tables include options issued and outstanding as of September 30, 2020 as follows:~~
i)
A total of 393,130 incentive stock options and non-qualified 10-year options have been issued, and are outstanding, to the directors, officers, and employees at an exercise price range of $3.82 to $331.80 per share. From this total, 128,010 options are outstanding to the Chief Executive Officer, who is also a director, with remaining contractual lives of 0.5 years to 9.2 years. All other options issued to directors, officers, and employees have a remaining contractual life ranging from 0.5 years to 9.2 years.
~~ii)~~
~~A total of 122,855 non-qualified 10-year options have been issued, and are outstanding, to consultants at an exercise price range of $3.82 to $355.80 per share.~~
As of September 30, 2020, there was approximately $48,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the equity incentive plans. That cost is expected to be recognized over a weighted-average period of approximately 2.26 years. For stock options outstanding at September 30, 2020 and December 31, 2019, the intrinsic value was approximately $28,000 and $59,000, respectively.
~~The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at September 30, 2020:~~

Stock Options Outstanding

Stock Options Vested

Weighted

Weighted

Average

Average

Remaining

Weighted

Remaining

Weighted

Contractual

Number

Average

Contractual

Number

Average

Life

Of

Exercise

Life

of

Exercise

Exercise Prices

-Years

Awards

Price

-Years

Awards

Price

$
3.82-$12.48

8.41

225,179

$
8.04

8.46

176,332

$
7.60

$
12.49-$24.00

6.82

199,790

$
14.19

6.81

198,911

$
14.20

$
24.01-$72.00

5.14

65,333

$
55.07

5.14

65,333

$
55.07

$
72.01-$240.00

4.57

24,526

$
75.59

4.57

24,526

$
75.59

$
240.01-$355.80

0.43

1,157

$
332.91

0.43

1,157

$
332.91

Total

7.18

515,985

$
20.32

7.07

466,259

$
21.45

~~Note 8. Related Party Transactions~~
Enfission was inactive at September 30, 2020 and December 31, 2019. The Company did not invest in Enfission during the nine months ended September 30, 2020 and invested approximately $9.2 million in Enfission from ~~Enfission’s date of inception of January 24, 2018 to December 31, 2019.~~
The Company did not charge Enfission an administrative and management services fee for the three months and nine months ended September 30, 2020. The total administrative consulting services was $0.1 million and $0.3 million for the three months and nine months ended September 30, 2019, respectively. For the three months ended September 30, 2019, the $0.1 million amount charged was recorded as a $50,000 reduction of general and administrative expenses and a $50,000 reduction of research and development expenses. For the nine months ended September 30, 2019, the $0.3 million amount charged was recorded as a $150,000 reduction of general and administrative expenses and a $150,000 reduction of research and development expenses.
The Company did not provide Enfission with any research and development consulting services for the three months and nine months ended September 30, 2020. The Company provided research and development consulting services and management services to Enfission in 2019. The total consulting services income was $0.2 million and $0.9 million for the three months and nine months ended September 30, 2019, respectively, recorded under “Other income from joint venture” in the accompanying condensed consolidated statement of operations.
As of September 30, 2020, there was no receivable due from Enfission. At December 31, 2019, the total receivable due from Enfission was approximately $0.4 million, which represented management and administrative services Lightbridge charged to Enfission for the year ended December 31, 2019.
23
~~Table of Contents~~
~~Note 9. Subsequent Events~~
~~ATM~~
On October 9, 2020, the Company updated the aggregate amount that may be issued and sold under the 2019 ATM from $13.5 million to approximately $14.7 million by filing a prospectus supplement pursuant to which the Company registered an additional approximate $1.2 million of shares of common stock. As of the date of this filing, the Company has sold a total of $12.0 million of shares of common stock pursuant to the 2019 ATM sales agreement.
~~Sales under the 2019 ATM that were made from October 1, 2020 to November 5, 2020 were approximately 1.2 million shares that totaled net proceeds of approximately $4.7 million.~~
~~Equity Grants~~350,000 shares.

On October 28, 2020, the Compensation Committee of the Board granted from the 2020 Plan time-based RSUs to certain of the Company's executive officers, employees, and consultants. Each RSU represents a contingent right to receive, upon vesting, one share of the Company's Common Stock. The number of RSUs granted to executive officers, employees and consultants ~~totaled 243,800.~~totalled 243,800 shares. These RSU awards ~~granted~~ vest in three equal ~~installments~~instalments on each of the first three annual anniversaries of the grant date, on October 28, 2021, October 28, 2022 and October 28, 2023. These RSU awards were valued at approximately $656,000, based on the opening price of the Company's stock on October 28, 2020 at $2.69 per share.
On ~~the same date,~~October 28, 2020, the Compensation Committee of the Board approved a grant of a total of 21,200 shares of common stock to the ~~Company’s~~Company's four directors. The Company filed a Form S-8 with the SEC, to register the underlying shares of the 2020 Plan on March 25, 2021. All of these common shares ~~vest~~were issued on ~~November 10, 2020.~~March 31, 2021 and vested immediately upon issuance. During the six months ended June 30, 2021, the Company issued 52,903 stock options to consultants and 5,347 common shares were issued to our IR consultant.

The 2021 options issued for the consultants of the Company were assigned a fair value ranging from $2.08 per share to $2.80 per share (total fair value of $125,000). The value was determined using Black-Scholes pricing model. The following assumptions were used in the Black-Scholes pricing model:
Expected volatility
113.12% to 131.85
%
Risk free interest rate
0.06% to 0.16
%
Dividend yield rate
0
Weighted average years
1-2 years
Closing price per share – common stock
$
$4.55 to $6.51
The components of stock-based compensation expense included in the Company's unaudited condensed consolidated statements of operations for the three months and six months ended June 30, 2021 and 2020 are as follows:

Three Months Ended
June 30,

Six Months Ended
June 30,

2021

2020

2021

2020

General and administrative expenses

$ 186,335

$ 6,085

$ 246,403

$ 12,170

Total stock-based compensation expense

$ 186,335

$ 6,085

$ 246,403

$ 12,170

Stock option transactions to the employees, directors and consultants are summarized as follows for the six months ended June 30, 2021:

Options
Outstanding

Weighted Average Exercise Price

Weighted Average Grant Date
Fair Value

Beginning of the period – January 1, 2021

515,847

$ 20.23

$ 14.51

Granted

52,903

6.77

2.36

Exercised

—

—

—

Forfeited

(3,997 )

62.52

43.63

Expired

(1,019 )

329.81

291.73

End of the period – June 30, 2021

563,734

$ 18.11

$ 12.66

Options exercisable

514,008

$ 18.92

$ 13.17

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Table of Contents
A summary of the status of the Company's non-vested options as of June 30, 2021 and December 31, 2020, and changes during the year ended December 31, 2020 and the six months ended June 30, 2021, is presented below:

Shares

Weighted Average Exercise Price

Weighted Average Fair Value
Grant Date

Non-vested – December 31, 2019

84,873

10.73

5.15

Granted

7,634

4.45

3.28

Vested

(41,552 )

10.80

8.29

Forfeited

(1,229 )

10.80

8.33

Non-vested – December 31, 2020

49,726

9.71

7.44

Granted

52,903

6.77

2.36

Vested

(52,903 )

6.77

2.36

Forfeited

—

0

—

Non-vested – June 30, 2021

49,726

9.71

7.44

The above tables include options issued and outstanding as of June 30, 2021 as follows:
i. A total of 362,908 incentive stock options and non-qualified 10-year options have been issued, and are outstanding, to the directors, officers, and employees at exercise prices of $3.82 to $75.60 per share. From this total, 127,299 options are held by the Chief Executive Officer, who is also a director, with remaining contractual lives of 3.8 years to 8.4 years. All other options issued to directors, officers, and employees have a remaining contractual life ranging from 3.8 years to 8.4 years.
ii. A total of 200,826 non-qualified 1 to 10-year options have been issued, and are outstanding, to consultants at exercise prices of $3.82 to $75.60 per share and have a remaining contractual life ranging from 0.8 years to 9.2 years.
As of June 30, 2021, there was approximately $29,000 of total unrecognized compensation cost related to non-vested stock options granted under the plans. That cost is expected to be recognized over a weighted-average period of approximately 1.74 years. For stock options outstanding at June 30, 2021 and December 31, 2020, the intrinsic value was approximately $352,000 and $33,000, respectively. For those vested stock options at June 30, 2021 and December 31, 2020, the intrinsic value was approximately $330,000 and $33,000, respectively.
The following table provides certain information with respect to the above-referenced stock options that were outstanding and exercisable at June 30, 2021:

Stock Options Outstanding

Stock Options Vested

Weighted

Weighted

Average

Average

Remaining

Weighted

Remaining

Weighted

Contractual

Number

Average

Contractual

Number

Average

Life

of

Exercise

Life

of

Exercise

Exercise Prices

-Years

Awards

Price

-Years

Awards

Price

$ 3.82-$9.00

5.69

145,218

$ 5.06

5.44

134,753

$ 5.03

$ 9.01-$12.48

7.10

132,864

$ 10.80

7.10

94,482

$ 10.80

$ 12.49-$24.00

5.64

199,790

$ 14.19

5.63

198,911

$ 14.20

$ 24.01-$72.00

4.22

62,771

$ 55.07

4.22

62,771

$ 55.07

$ 72.01-$75.60

3.66

23,091

$ 75.59

3.66

23,091

$ 75.59

Total

5.76

563,734

$ 18.11

5.59

514,008

$ 18.92

~~Table of Contents~~17
Table of Contents
Restricted Stock Awards Outstanding
The following summarizes our RSUs activity:

Weighted

Average

Number of

Grant Date

Shares

Fair Value

Total awards outstanding at January 1, 2021

243,800

$ 2.69

Total shares granted

—

$ 0

Total shares vested

—

$ 0

Total shares forfeited

—

$ 0

Total unvested shares outstanding at June 30, 2021

243,800

$ 2.69

Scheduled vesting for outstanding RSUs awards at June 30, 2021 is as follows:

Year Ending December 31,

2021

2022

2023

Total

Scheduled vesting

81,268

81,267

81,265

243,800

At June 30, 2021, there was approximately $508,000 of net unrecognized compensation cost related to unvested RSUs compensation arrangements. This compensation is recognized on a straight-line basis resulting in approximately $219,000 of compensation expected to be expensed over the next twelve months, and the total unrecognized stock-based compensation expense having a weighted average recognition period of 2.32 years.

Note 7 – Subsequent Events
Mediation Settlement
On July 13, 2021 a mediation settlement was reached (see Note 4).
Cooperative Research and Development Agreement
On July 14, 2021 the Company executed a CRADA with the Battelle Memorial Institute, Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE. The project is anticipated to commence in the third quarter of 2021. The total project value is approximately $663,000, with three-quarters of this amount funded by DOE for the scope performed by PNNL.
18
Table of Contents
FORWARD-LOOKING STATEMENTS

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. We use words such as ~~“believe”~~"believe", ~~“expect”~~"expect", ~~“anticipate”~~"anticipate", ~~“project”~~"project", ~~“target”~~"target", ~~“plan”~~"plan", ~~“optimistic”~~"optimistic", ~~“intend”~~"intend", ~~“aim”~~"aim", ~~“will”~~"will", or similar expressions, which are intended to identify forward-looking statements. Such statements include, among others:

•·
those concerning market and business segment growth, demand, and acceptance of our nuclear fuel technology and other steps to commercialization of Lightbridge Fuel™;

•·
any projections of sales, earnings, revenue, margins, or other financial items;

•·
any statements of the plans, strategies, and objectives of management for future operations and the timing and outcome of the development of our nuclear fuel technology;

•·
any statements regarding future economic conditions or performance;

•·
uncertainties related to conducting business in foreign countries;

•·
any statements ~~relating to the outcome of the arbitration with Framatome;~~
about future financings and liquidity

•·
~~any statements about future financings and liquidity~~ the ~~Company’s~~Company's anticipated financial resources and position; and

•·
all assumptions, expectations, predictions, intentions, or beliefs about future events and other statements that are not historical ~~facts.~~
facts

You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, as well as assumptions that if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties, among others, include:

•·
our ability to commercialize our nuclear fuel technology, including risks related to the design and testing of nuclear fuel incorporating our ~~technology;~~technology and the degree of market adoption of the Company's product and service offerings;

•·
the dissolution of Enfission, LLC our joint venture with Framatome Inc., including associated costs and the timing of the dissolution, our ability to conduct research and development activities in the future within the scope of operations of the joint venture and our retention of certain intellectual property used in the joint venture;
dependence on strategic partners;

•·
our ability to ~~attract new customers;~~
fund general corporate overhead and outside research and development costs;

•·
the demand for fuel for nuclear reactors, including small modular reactors, and our ability to attract new customers;
·
our ability to manage the business effectively in a rapidly evolving market;
·
our ability to employ and retain qualified employees and consultants that have experience in the nuclear industry;

•·
competition and competitive factors in the markets in which we ~~compete;~~
compete, including from accident tolerant fuels;

•·
~~public perception~~the availability of nuclear ~~energy generally;~~
test reactors and the risks associated with unexpected changes in our nuclear fuel development timeline;

25
~~Table of Contents~~

•·
the increased costs associated with metallization of our nuclear fuel;
·
risks associated with the further spread and uncertainty of COVID-19, including the ultimate impact of COVID-19 on people, economies, our ability to access capital markets, the ~~Company’s~~Company's financial position, results of operations or liquidity;

•·
public perception of nuclear energy generally;
19
Table of Contents
·
changes in laws, rules, and regulations governing our business;

•·
~~development and utilization of, and challenges to, our intellectual property;~~
changes in the political environment;

•·
~~potential~~development and ~~contingent liabilities;~~utilization of, and
challenges to, our intellectual property;

•·
the risks associated with potential shareholder activism;
·
potential and contingent liabilities; and
·
the other risks identified in Item 1A. Risk Factors included ~~herein and~~ in our Annual ~~Report~~report on Form 10-K for the year ended December 31, ~~2019.~~
2020.

Most of these factors are beyond our ability to predict or control and you should not put undue reliance on any forward-looking statement. Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements. Forward-looking statements speak only as of the date on which they are made. The Company assumes no obligation and does not intend to update these forward-looking statements for any reason after the date of the filing of this report, to conform these statements to actual results or to changes in our expectations, except as required by law.

2620
Table of Contents

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is intended to help the reader understand Lightbridge Corporation, our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes thereto contained in Part I, Item 1 of this report.

This MD&A consists of the following sections:

•·
Overview of Our Business and recent developments — a general overview of our business and updates;

•·
Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical judgments and estimates;

•·
Operations Review — an analysis of our condensed consolidated results of operations for the periods presented in our condensed consolidated financial statements; and

•·
Liquidity, Capital Resources, and Financial Position — an analysis of our cash flows, and an overview of our financial position.

As discussed in more detail under ~~“Forward-Looking Statements”~~"Forward-Looking Statements" immediately preceding this MD&A, the following discussion contains forward-looking statements that involve risks, uncertainties, and assumptions such as statements of our plans, objectives, expectations, and intentions. Our actual results may differ materially from those discussed in these forward-looking statements because of the risks and uncertainties inherent in future events.

OVERVIEW OF OUR BUSINESS

When used in this Quarterly Report on Form 10-Q, the terms ~~“Lightbridge”~~"Lightbridge", the ~~“Company”~~"Company", ~~“we”~~"we", ~~“our”~~"our", and ~~“us”~~"us" refer to Lightbridge Corporation together with its wholly-owned subsidiaries Lightbridge International Holding LLC and Thorium Power Inc. Lightbridge's principal executive offices are located at 11710 Plaza America Drive, Suite 2000, Reston, Virginia 20190 USA.

Overview

WeAt Lightbridge we are ~~an innovative nuclear fuel technology company. Our goal is to develop and commercialize~~developing the next generation of nuclear fuel ~~that~~to impact in a meaningful way the world's climate and energy problems. Our nuclear fuel could significantly improve the economics, safety, and proliferation resistance of nuclear fuel in existing and new nuclear reactors, large and small, with a meaningful impact on addressing climate change, and air pollution, ~~and~~all while benefiting national security. We project that the ~~world’s~~world's energy and climate needs can only be met if nuclear ~~power’s~~power's share of the energy-generating mix grows ~~substantially.~~substantially in the coming decades. We are developing our nuclear fuel to enable that to happen. In particular, we are focusing on the potential for large numbers of small modular reactors (SMRs) that we believe can benefit from our fuel with improved economics and load following when included on an electric grid with renewables. Today, there are approximately 440 operable nuclear power reactors worldwide, of which about 400 are operating. We expect slow net growth in this number as old reactors close and fewer new large reactors are built, due to the inherent challenges facing new build large reactors, including regulatory and political challenges, financings, and the ability for large reactors to be profitable without running almost constantly.

We believe our metallic fuel ~~offers~~will offer significant economic and safety benefits over traditional fuel, primarily because of the superior heat transfer properties of all-metal fuel and the resulting lower operating temperature of the fuel. We also believe that uprating a reactor with Lightbridge Fuel™ will add incremental electricity at a lower levelized cost than any other means of generating baseload electric power, including any renewable, fossil, or hydroelectric energy source, or ~~with~~ any ~~other~~traditional nuclear fuel.
Emerging nuclear technologies that many in the industry believe have the potential to generate significant amounts of power include SMRs, which are now in the development and licensing phases. We expect that Lightbridge Fuel™ can provide SMRs with all the benefits our technology brings to large reactors, with the benefits being more meaningful to the economic case for deployment of SMRs. Lightbridge Fuel™ is expected to generate more power in SMRs than traditional nuclear fuels, which will help decarbonize sectors that are now powered by fossil fuels. We also plan to explore using Lightbridge Fuel™ in new SMRs to produce hydrogen for liquid non-carbon fuels for use in hard-to-decarbonize sectors such as aviation and shipping. Our ongoing research and development (R&D) initiatives are entirely compatible with Lightbridge Fuel™ powering SMRs for multiple purposes. The first SMRs that could use our fuel are expected to begin operations in 2029.
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We have built a significant portfolio of patents reflecting years of ~~research and development,~~R&D, and we anticipate ~~substantial completion of our research efforts in the coming years and the~~ testing of our fuel through third party vendors and others, including the United States Department of Energy ~~National Laboratories.~~
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~~Our Nuclear Fuel~~
Since 2008, we have been engaged in the design and development of proprietary, innovative nuclear fuels to improve the cost competitiveness, safety, proliferation resistance and performance of nuclear power generation. In 2010, we announced the concept of all-metal fuel (i.e., non-oxide fuel) for currently operating as well as new-build reactors. Our focus on metallic fuel is based on listening to the voices of prospective customers, as nuclear utilities have expressed interest in the improved economics and enhanced safety that we believe metallic fuel will provide.
The fuel in a nuclear reactor generates heat energy. That heat is then converted through steam into electricity that is sold. We have designed our innovative, proprietary metallic fuels to be capable of significantly higher burnup and power density compared to conventional oxide nuclear fuels. Burnup is the total amount of electricity generated per unit mass of nuclear fuel and is a function of the power density of a nuclear fuel and the amount of time the fuel operates in the reactor. Power density is the amount of heat power generated per unit volume of nuclear fuel. Conventional oxide fuel used in existing commercial reactors is nearing the limit of its burnup and power density capability. As a result, further optimization to increase power output from the same core size and improve the economics and safety of nuclear power generation using conventional oxide fuel technologies is limited. A new fuel is needed to bring enhanced performance to reactors;(DOE) national laboratories. Currently, we are ~~developing that new fuel.~~
Asdoing all of our R&D activities with the ~~nuclear industry prepares to meet the increasing global demand~~U.S. national laboratories, and are planning contracts for ~~electricity production, longer operating cycles and higher reactor power outputs have become a much sought-after solution for the current and~~additional future ~~reactor fleet. We believe our proprietary nuclear fuel designs have the potential to improve the nuclear power industry’s economics by:~~
•
providing an increase in power output of potentially up to 10% while simultaneously extending the operating cycle length from 18 to 24 months in existing pressurized water reactors (PWRs), including in Westinghouse-type four-loop PWR plants which are currently constrained to an 18-month operating cycle by oxide fuel enriched up to 5%, or increasing the power potentially up to 17% while retaining an 18-month operating cycle; and
•
~~enabling increased reactor power output via a power uprate (potentially up to a 30% increase) or a longer operating cycle (instead of a power uprate) without changing the core size in new build PWRs.~~
We believe our fuel designs will allow current and new build nuclear reactors to safely increase power production and reduce operations and maintenance costs on a per kilowatt-hour basis. New build nuclear reactors could also benefit from the reduced upfront capital investment per kilowattscopes of generating capacity in the case of implementing a power uprate. In addition to projected electricity production cost savings, we believe our technology can result in utilities or countries needing to deploy fewer new reactors to generate the same amount of electricity (in the case of a power uprate), resulting in significant capital cost savings. For utilities or countries that already have operating reactors, our technology could be utilized to both increase the power output of those reactors as well as enable them to load follow with electric grid demands, which have become increasingly variable with large additions of intermittent renewable generation.
~~Nuclear Power as Clean and Low Carbon Emissions Energy Source~~
Nuclear power provides clean, reliable baseload electricity. According to the World Nuclear Association (WNA), nuclear power plants produce no greenhouse gas emissions during operation, and over the course of its lifecycle, nuclear produces about the same amount of CO2 equivalent emissions per unit of electricity as wind. The WNA further notes that almost all proposed pathways to achieving significant decarbonization suggest an increased role for nuclear power, including those published by the International Energy Agency, Massachusetts Institute of Technology Energy Initiative, US Energy Information Administration, and World Energy Council.
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We believe that deep cuts to CO2 emissions are only possible with electrification of most of the transportation and industrial sectors globally and powering them and the current electricity needs of the world with non-emitting or low-emitting power. We believe this can be done only with a large increase in nuclear power, several times the amount that is generated globally today. We believe that our nuclear fuel technology will be an essential element of reaching this goal.work.

Development of Lightbridge Fuel™

Recent Developments

Entered into a Cooperative Research and Development Agreement (CRADA) on April 22, 2020 with Battelle Energy Alliance, LLC, the operating contractor of INL, in collaboration with DOE. Signing the CRADA was the last step in the contracting process to formalize a voucher award from the U.S. Department of Energy’s (DOE) Gateway for Accelerated Innovation in Nuclear (GAIN) program. The scope of the project includes experiment design for irradiation of Lightbridge metallic fuel material samples in the Advanced Test Reactor (ATR) at INL. The project has commenced in the second quarter of 2020. The total project value is approximately $846,000, with three-quarters of this amount funded by DOE for the scope performed by INL.
~~Future Steps Toward the Development and Sale of Nuclear Fuel Assemblies~~
~~We anticipate near-term fuel development milestones for Lightbridge Fuel™ over the next 12-24 months will consist of the following:~~

•·
~~Complete~~On May 11, 2021, we announced successful demonstration of the ~~scope~~manufacturing process for three-lobe, six-foot rods using surrogate materials. This demonstration of ~~work relating~~Lightbridge's proprietary manufacturing process uses an internally developed and patented high-temperature coextrusion process. The six-foot length of the surrogate rods is the typical length of the fuel rods used by many small modular reactors (SMRs) now in development and licensing. Future fabrication of high-assay low-enriched uranium (HALEU) rodlets for loop irradiation testing in the Advanced Test Reactor, and ultimately commercial length HALEU fuel rods, will use similar processing techniques to ~~the recent GAIN Voucher award in collaboration~~create Lightbridge Fuel™. Performing fabrication development activities with ~~Idaho National Laboratory;~~
surrogate materials allows Lightbridge to use a broader range of suppliers and is a cost-effective approach as it does not require uranium material.

•·
~~Enter into an agreement~~On March 25, 2021, the Company was awarded a second voucher from the DOE's GAIN program to ~~manufacture our~~support development of Lightbridge Fuel™ in collaboration with the Pacific Northwest National Laboratory (PNNL). The scope of the project is to demonstrate Lightbridge's nuclear fuel ~~material samples~~casting process using depleted uranium, a key step in the manufacture of Lightbridge Fuel™. On July 14, 2021 executed a Cooperative Research and Development Agreement (CRADA) with the Battelle Memorial Institute, Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE. The project is anticipated to commence in the third quarter of 2021. The total project value is approximately $663,000, with three-quarters of this amount funded by DOE for ~~test reactor irradiation; and~~
the scope performed by PNNL.

•·
We were awarded a GAIN voucher by the DOE in 2019 for the experiment design for irradiation of material samples of Lightbridge Fuel™ in the Advanced Test Reactor (ATR) at Idaho National Laboratory (INL). On April 22, 2020, we entered into a CRADA with Battelle Energy Alliance, LLC (BEA), the DOE's operating contractor at INL. The project commenced in the second quarter of 2020 and was originally expected to be completed in the second quarter of 2021. However, because of project staffing issues at INL related to the laboratory's COVID-19 restrictions and U.S. export control matters, the project is currently expected to be completed by the end of the third quarter of 2021.
~~Begin~~
·
We expanded our patent portfolio by successfully obtaining three new patents in 2021, in the ~~initial demonstration~~United States and other key foreign countries. The new patents will help safeguard the Company's intellectual property, which is an integral component of ~~our manufacturing technology using depleted or natural uranium.~~
the Company's plans to monetize the Lightbridge Fuel™ technology.

The long-term milestones towards development and sale of nuclear fuel assemblies include, among other things, irradiating material samples and/or prototype fuel rods in test reactors, conducting post-irradiation examination of irradiated material samples and/or prototype fuel rods, performing thermal-hydraulic experiments, performing seismic and other out-of-reactor experiments, entering into a lead test rod/assembly agreement with a host reactor, demonstrating the production of lead test rods and/or lead test assemblies at a pilot-scale fuel fabrication facility and demonstrating the operation of lead test rods and/or lead test assemblies in commercial reactors. There are inherent uncertainties in the cost and outcomes of the many steps needed for successful deployment of
Information regarding our fuel development strategy and timelines is included in ~~commercial nuclear reactors, which makes it difficult to predict the timing~~Part II. Item 7. Management Discussion and Analysis of ~~the commercialization~~Financial Condition and Results of Operations, on our ~~nuclear fuel technology with any accuracy. We will continue to seek development funding contributions or other financing arrangements with utilities and the DOE.~~2020 Annual Report on Form 10-K.

Impact of COVID-19 to our Business

The recent COVID-19 pandemic has impacted our business operations and results of operations for the ~~first nine~~six months ofended June 30, 2021 and year ended December 31, 2020, resulting in the reduction of our ~~research and development~~R&D expenses and an increase in our general and administrative expenses due to severance payments made to former ~~employees, as described in more detail under “Results of Operations”, below.~~employees. The future impacts of the ~~global~~COVID-19 pandemic, including the emergence and spread of ~~COVID-19~~variant strains of the virus, on our financial position, results of operations and future liquidity and capital resources availability is unknown and uncertain.
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In an effort to protect the health and safety of our employees, we took proactive, aggressive action from the earliest signs of the outbreak in China, including working from home and suspending employee travel. In an effort to contain COVID-19 or slow its spread, governments around the world have also enacted various measures, including orders to close all businesses not deemed ~~“essential,”~~"essential," isolate residents to their homes or places of residence, and practice social distancing when engaging in essential activities. However, the effects of the pandemic are fluid and changing rapidly, including with respect to vaccine and treatment developments and deployment and potential mutations of COVID-19.
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We will continue to actively monitor the COVID-19 situation and may take further actions altering our business operations that we determine are in the best interests of our employees and stakeholders, or as required by federal, state, or local authorities. It is not clear what the potential effects any such alterations or modifications may have on our financial position, results of operations or liquidity, including the effects on our employees and future prospects, including our ~~research and development~~R&D activities for ~~the remainder of~~ fiscal ~~2020~~2021 and beyond.

~~Filing~~Future Potential Collaborations and Other Opportunities
In the ordinary course of business, we engage in periodic reviews of opportunities to invest in or acquire companies or units within companies to leverage operational synergies and establish new streams of revenue. We will be opportunistic in this regard and may also partner or contract with entities in nuclear that could be synergistic to our fuel business or present an attractive growth opportunity in the clean technology space.
Settlement of Arbitration

On February ~~7, 2020, we~~11, 2021, the Company entered into a settlement agreement (the "Settlement Agreement") with Framatome SAS and Framatome Inc. (together, "Framatome"), resolving the pending claims and counterclaims between the parties in arbitration and judicial proceedings related to the parties' inactive joint venture, Enfission, LLC. Under the terms of the Settlement Agreement, all joint venture agreements were terminated and the joint venture was dissolved on March 23, 2021. Lightbridge paid Framatome on March 15, 2021 approximately $4.2 million for outstanding invoices for work performed by Framatome and other expenses incurred by Framatome.
Mediation Settlement
A former Chief Financial Officer of the Company filed a ~~request~~complaint against the Company with the US Occupational Safety and Health Administration ("OSHA") on March 9, 2015. The complaint was mediated on May 13, 2021 and the parties subsequently reached an agreement to resolve all claims for ~~arbitration (the “Arbitration Request”)~~the total monetary sum of approximately $675,000 in ~~the International Court of Arbitration~~exchange for a dismissal of the ~~International Chamber~~pending litigation, full release of ~~Commerce~~all claims against ~~Framatome, seeking to obtain, inter alia, a declaration that~~ the ~~R&D Services Agreement, dated November 14, 2017,~~Company, and other conditions. On July 13, the settlement agreement was finalized by ~~and among Framatome, Enfission,~~both parties and the Company ~~(as amended~~applied for court approval by ~~Amendment Number One, dated January 25, 2018,~~the administrative law judge (OALJ) assigned to this matter. The settlement was approved by the OALJ on July 22, 2021. The Company will issue the settlement payment and ~~Amendment Number Two, dated June 20, 2018,~~ the ~~“RDSA”) was validly terminated and is no longer in force, and to obtain compensation~~insurers will reimburse the Company for the ~~damages incurred. Our legal costs have increased in 2020 due to this legal action.~~
~~See Part II. Item 1. Legal Proceedings, for more information.~~$675,000 settlement payment. The settlement sum was authorized and approved by the Company's insurers.

~~Certain Challenges~~Availability of Suitable test Loops in the ATR

~~Please see Part I, Item 1, “Description~~After the Halden research reactor was shut down in 2018, we embarked on a global search for an alternative for loop irradiation testing of ~~Business—Certain Challenges”~~our metallic fuel rods. Ultimately, we settled on the ATR at INL and applied to DOE for and won a GAIN Voucher in December 2019 to kick off our initial collaboration with the U.S. national laboratory complex. Our initial understanding was that we would have access to a government-funded PWR water test loop in the ~~Annual Report on Form 10-K~~ATR to generate sufficient data to support our lead test assembly (LTA) testing and ~~Item 1A. Risk Factors~~potentially eliminate the need for lead test rod (LTR) testing in ~~this report~~a large commercial reactor. However, the ATR currently has only one such test loop available, limiting how much fuel can be tested in the reactor concurrently. We believe that INL could add two additional test loops, which we have determined to be an unmanageable cost for Lightbridge. We plan to work with the government and industry to increase the ~~Annual Report on Form 10-K~~ATR's test loops capacity without Lightbridge paying for ~~a discussion~~them. We believe we have strong arguments for the government to pay most of ~~certain risks and challenges that may delay or impair~~ the ~~development of Lightbridge Fuel™ including without limitation~~cost for the ~~availability of financing, events related~~additional test loops.
If new test loops are not added to the ~~dissolution~~ATR, loop irradiation testing in the ATR may not provide sufficient data to justify regulatory approval for LTA testing in a large commercial PWR in a commercially feasible timeframe. This would likely necessitate an extra fuel development step of LTR testing in a large commercial PWR in addition to the ATR loop testing before LTA testing could commence. As a result, our ~~joint venture with Framatome, and~~fuel development timelines would be extended to 15-20 years before securing our first orders for batch reloads in large commercial PWRs. Consequently, the ~~many risks inherent in developing a new type of nuclear fuel.~~projected fuel development costs would increase substantially, making it unfeasible for Lightbridge to fund this fuel development effort on our own.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. For a discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our financial statements, please see ~~“Critical~~"Critical Accounting Policies and ~~Estimates”~~Estimates" under Item 7, ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of ~~Operations”~~Operations" in our Annual Report on Form 10-K filed on March ~~18, 2020.~~25, 2021. There have been no significant changes in our critical accounting policies and estimates during the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021.

Our management expects to make judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operations and/or financial condition.

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~~Recent~~Recent Accounting Standards and Pronouncements

Refer to Note 1 to our unaudited condensed consolidated financial statements for a discussion of recent accounting standards and pronouncements.

OPERATIONS REVIEW

Financial information is included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Our goal is to develop and commercialize innovative, proprietary nuclear fuel designs, which we expect will significantly enhance the nuclear power industry’s economics due to higher power output and improved safety margins.
Our metallic fuel can be used in different types of water-cooled commercial power reactors, such as pressurized water reactors, boiling water reactors, Russian-type VVER reactors, CANDU heavy water reactors, water-cooled small modular reactors, as well as water-cooled research reactors.
We have obtained patent validation in key countries and will continue to seek patent validation in key countries that either currently operate or are expected to build and operate a large number of suitable nuclear power reactors.
We currently expect to invest a total of $2.0 million to $3.0 million in the development of our nuclear fuel products, including corporate research and development expenditures, over the next 12 to 15 months.
Condensed Consolidated Results of Operations – Three Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following table presents our historical operating results and the increase (decrease) in amounts for the periods indicated:

Three Months Ended

Increase

Increase

September 30,

(Decrease)

(Decrease)

2020

2019

Change $

Change %

Operating Expenses

General and administrative

$ 2,835,471

$ 1,463,568

$ 1,371,903

94 %
Research and development expenses

$ 261,898

$ 751,473

$ (489,575 )

-65 %
Total Operating Expenses

$ 3,097,369

$ 2,215,041

$ 882,328

40 %

Other Operating Income and (Loss)

Grant income

$ 29,662

$ —

$ 29,662

100 %
Other income from joint venture

$ —

$ 247,568

$ (247,568 )

-100 %
Equity in loss from joint venture

$ —

$ (555,113 )

$ 555,113

-100 %
Total Other Operating Income (Loss)

$ 29,662

$ (307,545 )

$ 337,207

-110 %

Total Operating Loss

$ (3,067,707 )

$ (2,522,586 )

$ 545,121

22 %

Other Income

$ 4,645

$ 81,172

$ (76,527 )

-94 %

Net loss before Income Taxes

$ (3,063,062 )

$ (2,441,414 )

$ 621,648

25 %

Net Loss

$ (3,063,062 )

$ (2,441,414 )

$ 621,648

25 %
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Three months Ended

Increase

Increase

June 30,

(Decrease)

(Decrease)

2021

2020

Change $

Change %

Operating Expenses

General and administrative

$ 1,515,899

$ 2,028,667

$ (512,768 )

(25 )%
Research and development

$ 273,314

$ 115,776

$ 157,538

136 %
Total Operating Expenses

$ 1,789,213

$ 2,144,443

$ (355,230 )

(17 )%

Other Operating Income

Distribution from joint venture

$ 110,000

$ —

$ 110,000

—
%
Grant income

$ 67,794

$ —

$ 67,794

—
%
Total Other Operating Income

$ 177,794

$ —

$ 177,794

—
%

Total Operating Loss

$ (1,611,419 )

$ (2,144,443 )

$ (533,024 )

(25 )%

Other Income

$ 1,322

$ 12,337

$ (11,015 )

(89 )%

Net loss before Income Taxes

$ (1,610,097 )

$ (2,132,106 )

$ (522,009 )

(24 )%

Net Loss

$ (1,610,097 )

$ (2,132,106 )

$ (522,009 )

(24 )%

Operating Expenses

General and Administrative Expenses

General and administrative expenses consist mostly of compensation and related costs for personnel and facilities, stock-based compensation, finance, human resources, information technology, and fees for consulting and other professional services. Professional services are principally comprised of legal, audit, strategic advisory services, and outsourcing services.

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Total general and administrative expenses ~~increased~~decreased by approximately ~~$1.4~~$0.5 million for the three months ended ~~September~~June 30, ~~2020,~~2021, as compared to the three months ended ~~September~~June 30, ~~2019.~~2020. There was ~~an increase~~a decrease in professional fees of approximately ~~$1.3~~$0.3 million primarily due to a decrease in the legal and professional fees relating to the Framatome arbitration, a decrease in patent expense of approximately $0.1 million and a ~~net increase~~decrease in employee compensation and employee benefits of approximately $0.3 million. These decreases were offset by an increase of approximately $0.1 ~~million.~~
~~See Note 7, Stockholders’ Equity~~million in insurance expense and ~~Stock-Based Compensation,~~an increase of ~~the Notes to our unaudited condensed consolidated financial statements included~~approximately $0.1 million in ~~this Quarterly Report on Form 10-Q for more information regarding our stock-based compensation.~~consulting fees.

Research and Development

Research and development expenses ~~in 2020 and 2019~~ consist primarily of ~~employee~~ compensation and related fringe benefits including stock-based compensation and ~~consulting fees,~~related allocable overhead costs for the research and development of our fuel, including work ~~performed and billed to our Enfission joint venture in 2019.~~performed.

Total research and development expenses ~~decreased~~increased by approximately ~~$0.5~~$0.2 million for the three months ended ~~September~~June 30, ~~2020,~~2021, as compared to the three months ended ~~September~~June 30, ~~2019,~~2020, due to an increase of approximately $0.1 million in outside research and development work with the ~~transitioning from~~DOE's National Laboratories related to the GAIN voucher and an increase of approximately $0.1 million in various other R&D expenses. All other R&D expenses for the three months ended June 30, 2021 and the three months ended June 30, 2020 were consistent period over period. For the three months and six months ended June 30, 2021, we continue our work ~~relating~~ to ~~Enfission to developing a new~~develop our fuel development strategy ~~with U.S. Department of Energy national laboratories. There was a decrease in allocated employee compensation~~ and ~~employee benefits of approximately $0.4 million and a decrease in consulting fees of $0.1 million.~~
transition our fuel development work to the DOE's National Laboratories. Due to the nature of our ~~research and development~~R&D expenditures, cost and schedule estimates are inherently uncertain and can vary significantly as new information and the outcome of these ~~research and development~~R&D activities become available. During the first nine months of 2020, we had a significant decrease in research and development expense compared to 2019, also partially due to the uncertainty of COVID-19 on our future business operations, resulting inWe have budgetary constraints due primarily to ~~current market conditions and~~ the uncertainty of future liquidity and capital resources available to us to conduct our future ~~research and development~~R&D activities.

Other Operating Income ~~and (Loss)~~

~~Reported~~There was an increase in ~~other operating income and (loss) is other income for activities performed by~~the anticipated distribution from our ~~employees and consultants billed to the Enfission~~dissolved joint venture ~~for research and development work and our share~~ of the allocated loss in Enfission. Enfission was inactive at September 30, 2020 and December 31, 2019 and no consulting services were performed on behalf of Enfission for the three months ended September 30, 2020. Therefore, no amounts related to the equity method investment in Enfission have been recorded on the condensed consolidated statements of operations for the three months ending September 30, 2020. As such, total other operating loss decreased by approximately ~~$0.3~~$0.1 million for the three months ended ~~September~~June 30, ~~2020,~~2021, as compared to the three months ended ~~September~~June 30, ~~2019.~~
~~Other income~~2020. This increase is due to an anticipated final distribution from the Enfission joint venture decreased by approximately $0.2 million for the three months ended September 30, 2020 as compared to the three months ended 2019. Equity in loss from the Enfission joint venture decreased by approximately $0.5 million for the three months ended September 30, 2020 as compared to the three months ended 2019, which consists of our share of the allocated loss in Enfission in 2019.
During the three months ended September 30, 2020, the Company did not provide additional equity contributions or share in any loss in Enfission. The Company had not separately guaranteed any obligations of Enfission at September 30, 2020 and December 31, 2019 and does not believe that it is obligated under the joint venture ~~operating agreement to fund its deficit capital account balance in Enfission to pay for any liabilities incurred by Enfission~~after the dissolution and ~~therefore did not record its share~~wind-down of ~~losses in Enfission at September 30, 2020 and December 31, 2019.~~the affairs of the joint venture.
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There was an increase in grant income of approximately ~~$30,000~~$0.1 million for the three months ended ~~September~~June 30, 2021, as compared to the three months ended June 30, 2020, with a ~~charge to research and development expenses and a~~ corresponding amount charged to ~~other income.~~R&D expenses. There was no grant income ~~in 2019.~~for the three months ended June 30, 2020.

Other Income

There was a decrease in other income ~~of approximately $0.1 million~~ due to a decrease in interest income generated from the interest earned from the purchase of treasury bills and from our bank savings account for the three months ended ~~September~~June 30, ~~2020,~~2021, as compared to the three months ended ~~September~~June 30, ~~2019.~~2020.

25
~~Provision for Income Taxes~~
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the NOL carryback provision of the CARES Act would result in a material cash benefit to us. We incurred a pre-tax net loss for both 2020 and 2019. We reviewed all sources of income for purposes of recognizing the deferred tax assets and concluded a full valuation allowance for 2020 and 2019 was necessary. Therefore, we did not have a provision for taxes for the three months and nine months ended September 30, 2020 and 2019.
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Condensed Consolidated Results of Operations – ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following table presents our historical operating results and the increase (decrease) in amounts for the periods indicated:

Nine Months Ended

Increase

Increase

September 30,

(Decrease)

(Decrease)

2020

2019

Change $

Change %

Operating Expenses

General and administrative

$ 6,800,892

$ 4,051,484

$ 2,749,408

68 %
Research and development expenses

$ 767,498

$ 2,218,826

$ (1,451,328 )

-65 %
Total Operating Expenses

$ 7,568,390

$ 6,270,310

$ 1,298,080

21 %

Other Operating Income and (Loss)

Grant income

$ 29,662

$ —

$ 29,662

100 %
Other income from joint venture

$ —

$ 908,224

$ (908,224 )

-100 %
Equity in loss from joint venture

$ —

$ (3,812,463 )

$ 3,812,463

-100 %
Total Other Operating Income (Loss)

$ 29,662

$ (2,904,239 )

$ 2,933,901

-101 %

Total Operating Loss

$ (7,538,728 )

$ (9,174,549 )

$ (1,635,821 )

-18 %

Other Income

$ 79,474

$ 315,691

$ (236,217 )

-75 %

Net loss before Income Taxes

$ (7,459,254 )

$ (8,858,858 )

$ (1,399,604 )

-16 %

Net Loss

$ (7,459,254 )

$ (8,858,858 )

$ (1,399,604 )

-16 %
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Six months Ended

Increase

Increase

June 30,

(Decrease)

(Decrease)

2021

2020

Change $

Change %

Operating Expenses

General and administrative

$ 3,298,759

$ 3,965,421

$ (666,662 )

(17 )%
Research and development

$ 642,764

$ 505,600

$ 137,164

27 %
Total Operating Expenses

$ 3,941,523

$ 4,471,021

$ (529,498 )

(12 )%

Other Operating Income

Distribution from joint venture

$ 110,000

$ —

$ 110,000

—
%
Grant income

$ 171,113

$ —

$ 171,113

—
%
Total Other Operating Income

$ 281,113

$ —

$ 281,113

—
%

Total Operating Loss

$ (3,660,410 )

$ (4,471,021 )

$ (810,611 )

(18 )%

Other Income

$ 38,325

$ 74,829

$ (36,504 )

(49 )%

Net loss before Income Taxes

$ (3,622,085 )

$ (4,396,192 )

$ (774,107 )

(18 )%

Net Loss

$ (3,622,085 )

$ (4,396,192 )

$ (774,107 )

(18 )%

Operating Expenses

General and Administrative Expenses

General and administrative expenses consist mostly of compensation and related costs for personnel and facilities, stock-based compensation, finance, human resources, information technology, and fees for consulting and other professional services. Professional services are principally comprised of legal, audit, strategic advisory services, and outsourcing services.
Total general and administrative expenses ~~increased~~decreased by approximately ~~$2.7~~$0.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. There was ~~an increase in~~a decrease professional fees of approximately ~~$1.9~~$0.5 million primarily due to a decrease in the legal and professional fees relating to the Framatome arbitration, court filing fees, professional fees and insurance expense, an increase of patent write off of $0.1 million due to certain patent expiration dates, an increase in total employee compensation and employee benefits of approximately $1.0 million, which costs included a decrease in ~~management and administrative service fees charged to Enfission~~patent expense of ~~$0.2 million, an increase in accrued bonuses of $0.3~~approximately $0.1 million and an increase in employee payroll expenses of $0.3 million. In addition, there were severance payments made of approximately $0.2 million, for employee layoffs partially due to the uncertainty of COVID-19 on our future business operations and the cessation of the Enfission joint venture, as discussed above. These increases were offset by a decrease in ~~stock-based~~employee compensation due to employee severance payments of approximately $0.3 million ~~due to the decrease~~made in ~~stock option~~2020. These decreases were offset by an increase of approximately $0.1 million in insurance expense ~~for prior stock option awards that have become fully vested~~and an increase of approximately $0.1 million in prior reporting periods. Total stock-based compensation included in general and administrative expenses was approximately $0 and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively.
See Note 7, Stockholders’ Equity and Stock-Based Compensation of the Notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information regarding our stock-based compensation.consulting fees.

Research and Development

~~Research and development~~Total R&D expenses in 2020 and 2019 consist primarily of employee compensation and related fringe benefits including stock-based compensation, and consulting fees, including work performed and billed to our Enfission joint venture in 2019.
~~Total research and development expenses decreased~~for the six months ended June 30, 2021 increased by approximately ~~$1.4~~$0.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019, due~~2020. There was an increase of approximately $0.3 million in outside research and development work with the DOE's National Laboratories related to the ~~transitioning from work relating to Enfission to developing a new fuel development strategy with U.S. Department~~GAIN voucher and an increase of ~~Energy national laboratories. There was~~approximately $0.1 million in patent expense. These increases were offset by a decrease in employee compensation and employee benefits working on research projects of approximately $0.7 million, which costs included a decrease in allocated accrued bonuses and payroll expenses of approximately $0.9 million, offset by a decrease in management and administrative service fees charged to Enfission of approximately $0.2 million. In addition, there was a decrease in professional fees of approximately $0.2 million, decrease in consulting fees of approximately $0.2 million, and a decrease in stock-based compensation of approximately $0.3 ~~million, due to the decrease in stock option expense for prior stock option awards that had vested. Total stock-based compensation included in research and development~~million. All other R&D expenses ~~was approximately $0 and $0.3 million~~ for the ~~nine~~six months ended ~~September~~June 30, 2021 and the six months ended June 30, 2020 ~~and 2019, respectively.~~were consistent period over period.

Due to the nature of our ~~research and development~~R&D expenditures, cost and schedule estimates are inherently uncertain and can vary significantly as new information and the outcome of these ~~research and development~~R&D activities become available. For 2020, we anticipate a significant decrease in research and development expense compared to 2019, partially due to the uncertainty of COVID-19 on our future business operations, resulting in budgetary constraints due primarily to current market conditions and the uncertainty of future liquidity and capital resources available to us to conduct our future research and development activities.
34
~~Table of Contents~~

Other Operating Income ~~and (Loss)~~

~~Reported~~There was an increase in ~~other operating income and (loss) is other income for activities performed by~~the anticipated distribution from our ~~employees and consultants billed to the Enfission~~dissolved joint venture ~~for research and development work and our share~~ of the allocated loss in Enfission. Enfission was inactive at September 30, 2020 and December 31, 2019 and no consulting services were performed on behalf of Enfission for the nine months ended September 30, 2020. Therefore, no amounts related to the equity method investment in Enfission have been recorded on the condensed consolidated statements of operations for the nine months ending September 30, 2020. As such, total other operating (loss) decreased by approximately ~~$2.9~~$0.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~
~~Other income~~2020. This increase is due to an anticipated final distribution from the Enfission joint venture decreased by approximately $0.9 million for the nine months ended September 30, 2020 as compared to the nine months ended 2019. Equity in loss from the Enfission joint venture decreased by approximately $3.8 million for the nine months ended September 30, 2020 as compared to the nine months ended 2019, which consisted of our share of the allocated loss in Enfission in 2019.
During the nine months ended September 30, 2020, the Company did not provide additional equity contributions or share any loss in Enfission. The Company had not separately guaranteed any obligations of Enfission at September 30, 2020 and December 31, 2019 and does not believe that it is obligated under the joint venture ~~operating agreement to fund its deficit capital account balance in Enfission to pay for any liabilities incurred by Enfission~~after the dissolution and ~~therefore did not record its share~~wind-down of ~~losses in Enfission at September 30, 2020 and December 31, 2019.~~the affairs of the joint venture.

There was an increase in grant income of approximately ~~$30,000~~$0.2 million for the ~~nine~~six months ended ~~September~~June 30, 2021, as compared to the six months ended June 30, 2020, with a ~~charge to research and development expenses and a~~ corresponding amount charged to ~~other income.~~R&D expenses. There was no grant income ~~in 2019.~~for the six months ended June 30, 2020.
26
Table of Contents

Other Income

There was a ~~net~~ decrease in other income ~~of approximately $0.2 million~~ due to a decrease in interest income generated from the interest earned from the purchase of treasury bills and from our bank savings account for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~
~~Provision for Income Taxes~~
~~On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)~~2020. This decrease was ~~enacted in response~~offset by a foreign currency transaction gain recorded relating to the ~~COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks~~settlement payment to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the NOL carryback provision of the CARES Act would result in a material cash benefit to us. We incurred a pre-tax net loss for both 2020 and 2019. We reviewed all sources of income for purposes of recognizing the deferred tax assets and concluded a full valuation allowance for 2020 and 2019 was necessary. Therefore, we did not have a provision for taxes for the nine months ended September 30, 2020 and 2019.Framatome.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

Liquidity ~~outlook~~Outlook

~~We believe we will have adequate liquidity over~~Our cash requirements for the ~~next 12 months~~future planned operations to ~~operate~~commercialize our ~~business and meet~~nuclear fuel, including any additional expenditures that may result from unexpected developments, requires us to raise significant additional capital, including receiving government support. Our cash balance at June 30, 2021 does not exceed our current cash requirements. We reduced our 2020 and 2021 operating budgets for discretionary spending, other than for legal expenses, including revising our research and development strategy to reduce current R&D costs and reduced payroll and payroll related benefit costsanticipated expenditures through ~~employee layoffs,~~ the ~~transition~~second quarter of our Executive Chairman of the Board of Directors to a non-executive role, and the conversion of some employees to consultants. While the impact and duration of COVID-19 on our business activities in the future is currently uncertain, the situation required us to reduce our operating budgets.2022.
35
~~Table of Contents~~

At ~~September~~June 30, ~~2020,~~2021, we had cash and cash equivalents of approximately ~~$17.4~~$13.8 million, as compared to approximately ~~$18.0~~$21.5 million at December 31, ~~2019,~~2020, a decrease of approximately ~~$0.6~~$7.7 million. A cash inflow of approximately $5.1 million resulted from net proceeds from the sale of approximately 1.1 million shares of common stock during the nine months ended September 30, 2020. This cash inflow was offset byThe Company's net cash used in operating activities offor the six months ended June 30, 2021 was approximately ~~$5.6~~$7.7 million, and ~~$0.1 million in investing activities associated with incurring patent legal and filing costs.~~current projections indicate that the Company will have continued negative operating cash flows until the commercialization of its nuclear fuel.

We have approximately $13.5 million of total working capital as of the date of this filing. We currently project a negative cash flow from our current operations averaging approximately ~~$1.0~~$0.8 million per month for our general and administrative and ~~research and development~~total R&D expenses, for total expected expenditures of approximately ~~$12~~$9 million to $10 million for the next 12 to 15 months. We believe however that our ~~cash at September 30, 2020 exceeds~~actual expenditures will exceed our ~~revised budgeted expenditures~~current available working capital through the ~~third~~second quarter of ~~2021. However, there~~2022. There are inherent uncertainties in forecasting future required R&D expenditures, ~~especially forecasting for~~as we are currently working on establishing our fuel development agreements with the DOE's National Laboratories. Once many of these agreements are finalized and the future R&D costs are known, we expect to forecast a significantly ~~revised~~higher level of ~~operations~~future required R&D expenses and ~~with uncertainties such as~~higher negative monthly cash flows from operations.
If sufficient funding becomes available to ~~how~~us, our R&D activities may significantly increase in the future. This funding is needed to continue our fuel development project and to achieve our future R&D milestones. COVID-19 may also affect costs and ~~operations.~~operations by potentially delaying our future work at the DOE's National Laboratories. The actual amount of cash we will need to operate is subject to many factors, including, but not limited to, the timing, design and conduct of the R&D work at the DOE's National Laboratories for our fuel along with cost to commercialize our nuclear fuel. Accordingly, ~~the~~there is high potential for budget variances in the ~~projection~~current cost projections and fuel development timelines of ~~the Company’s~~our current planned operations ~~plus any~~over the fuel development period.
We will also need to receive substantial U.S. government support throughout our nuclear fuel R&D period in order to fund our R&D efforts in the future. If we are unable to obtain this government funding that meets our future R&D cash requirements, we will need to seek other funding, if available. This will result in dilution to our existing stockholders. If we can raise additional ~~expenditures~~funds through the issuance of preferred stock, other equity or convertible securities, these securities could have rights or preferences senior to those of our common stock and could contain covenants that ~~may result from unexpected developments, such as~~restrict our operations in the future. There can be no assurance that we will be able to obtain additional ~~expenditures that might result from additional legal~~equity or debt financing on terms acceptable to us, if at all.
Considering the above-mentioned uncertainties and lack of financial resources to fund our current and long-term fuel development costs and ~~unexpected fees relating to our arbitration matter. Taking into account these above uncertainties, it raises~~corporate overhead expenses, substantial doubt exists about the ~~Company’s~~Company's ability to continue as a going concern for the 12 months following the date of this filing.
We can provide no assurances about meeting our budgeted expenditures regarding our future research and development efforts beyond the next 12 months, as well as predicting future market trends in nuclear power that can affect the future sale of our nuclear fuel. Furthermore, any negative results from our research and development may require us to increase our research and development spending to achieve our desired milestones in developing our nuclear fuel. There can be no assurance that the Enfission arbitration will not affect our ability to continue to advance our research and development efforts. These additional capital needs relate to the development, manufacturing, and commercialization of our nuclear fuel assemblies. We have the ability to delay or reduce ~~incurring~~ certain operating expenses, including ~~research and development~~R&D expenses in the next 12 to 15 months, which could reduce our cash flow ~~shortfall, if needed.~~shortfall. However, this delay would also extend our projected fuel development timeline discussed above.

The current primary sources of cash available to us for the next 12 months are potential funding from equity ~~investments,~~issuances, including potential future at-the-market financing under our ~~ATM financing arrangement.~~at-the-market equity offering sales agreement, as amended, with Stifel, Nicolaus & Company, Incorporated, and U.S. government support. The Company has an effective ~~shelf registration statement on~~ Form S-3 ~~(File No. 333-223674)~~that was filed with the SEC on March ~~15, 2018~~25, 2021 registering the sale of up to $75 million of the Company's securities and declared effective ~~March 23, 2018 that will expire~~ on ~~March 23,~~April 5, 2021. Due to the offering limitations currently applicable under General Instruction I.B.6. of Form S-3 and the market valuation of our current public float, we ~~may be~~are currently limited on the amount of funding available under ~~our existing shelf registration statement or~~ a new shelf registration ~~statement.~~statement, as further described in Note 6 to our unaudited condensed consolidated financial statements. We have no debt or ~~debt~~lines of credit ~~lines~~ and we have financed our operations to date through ~~our prior years’ consulting revenue margins and~~ the sale of our preferred stock and common stock. Management believes that public or private equity investments ~~will~~may be available in the future, however adverse market conditions in our common stock price and trading volume, as well as other factors like COVID-19 could substantially impair our ability to raise capital in the ~~future. On October 9, 2020, we updated~~future and to continue the aggregate amount that may be issued and sold under the 2019 ATM from $13.5 million to $14.7 million by filing a prospectus supplement pursuant to which we registered an additional $1.1 million of shares of common stock. As of the date of this filing, we have approximately $2.6 million of shares of common stock available to be sold under the 2019 ATM.nuclear fuel development project.

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Table of Contents

Short-Term and Long-Term Liquidity Sources

As discussed above, we ~~may~~will seek new financing bringing us additional sources of capital, depending on the capital market conditions of our common ~~stock, over the next 12 months.~~stock. There can be no assurance that these additional sources of capital will be made available to us. The primary potential sources of cash that may be available to us are as follows:

•·
Equity or debt investment from third party investors in Lightbridge; ~~and~~

·
Collaboration with potential industry partners; and

•·
Strategic investment and U.S. government funding to support the remaining ~~research and development~~R&D activities required to ~~further enhance and complete~~continue the development of our fuel products and move them to a commercial stage.

In support of our long-term business with respect to our fuel technology business, we ~~endeavour~~endeavor to create strategic alliances with other parties, ~~during the next three years,~~ to support the remaining ~~research and development~~R&D activities that is required to further enhance and complete the development of our fuel products to a commercial stage. We may be unable to form such strategic alliances on terms acceptable to us or at all.

See Note ~~7, Stockholders’~~6. Stockholders' Equity and Stock-Based Compensation of the Notes to our unaudited condensed consolidated financial statements included in Part I. Item 1. Financial Statements, of ~~this~~ this Quarterly Report on Form 10-Q for information regarding our prior equity financings.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the ~~Company’s~~Company's management, the ~~Company’s~~Company's principal executive officer and principal financial officer have concluded that the ~~Company’s~~Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of ~~September~~June 30, ~~2020~~2021 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the ~~Company’s~~Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the ~~Company’s~~Company's internal control over financial reporting during the ~~third~~second quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the ~~Company’s~~Company's internal control over financial reporting.

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Table of Contents

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. For a description of legal proceedings involving the Company, see the information set forth below and under ~~Litigation~~Contingency in Note 5,4. Commitments and Contingencies of the Notes to our condensed consolidated financial statements in Part I. Item 1. Financial Statements and Supplementary Data, of this Quarterly Report on Form 10-Q.

~~Filing of Arbitration~~
On February 7, 2020, we filed a request for arbitration (the “Arbitration Request”) in the International Court of Arbitration of the International Chamber of Commerce against Framatome, seeking to obtain, inter alia, a declaration that the R&D Services Agreement, dated November 14, 2017, by and among Framatome, Enfission, and the Company (as amended by Amendment Number One, dated January 25, 2018, and Amendment Number Two, dated June 20, 2018, the “RDSA”) was validly terminated and is no longer in force, and to obtain compensation for the damages incurred.
On April 3, 2020, Framatome submitted its answer to the Arbitration Request, disputing the Company’s claims, setting out its own counterclaims against the Company and its request for relief sought from the International Court of Arbitration. The Company believes it has meritorious claims in the arbitration and intends to pursue its interests vigorously.
ITEM 1A. RISK FACTORS
~~COVID-19 OUTBREAK COULD ADVERSELY AFFECT OUR BUSINESS~~
The recent outbreak of COVID-19 in the United States and globally has resulted in the United States and other countries halting or sharply curtailing the movement of people, goods and services. All of this has caused extended shutdowns of businesses and the prolonged economic impact remains uncertain. At this point, we have experienced and may continue to experience a reduction of our research and development expenses and an increase in our general and administrative expenses. Other than such changes, we believe the conditions will have not a material adverse effect on our business, but given the rapidly changing developments we cannot accurately predict what effects these conditions will have on our financial position, results of operations and liquidity, including our research and development activities, which will depend on, among other factors, the ultimate geographic spread of the virus, the duration of the outbreak and travel restrictions and business closures imposed by the United States and various other governments. The coronavirus may have a material adverse effect on our ability to obtain financing, which is needed to generate sufficient cash flows to conduct our businesses activities in the future.

There have been no other material changes to our risk factors from the risk factors previously disclosed in the ~~2019~~2020 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES OR USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
~~Not Applicable~~
38
~~Table of Contents~~
~~ITEM 4. MINE SAFETY DISCLOSURES~~

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5. OTHER INFORMATION

~~None~~ On August 4, 2021, Ms. Kathleen Kennedy Townsend notified the Company's Board of Directors of her decision to resign as a director, effective August 30, 2021. Ms. Townsend's resignation was not in connection with any disagreement with the Company or any matter relating to the Company's operations, policies or practices.
29
Table of Contents

ITEM 6. EXHIBITS

EXHIBIT INDEX –

Exhibit Number

Description
3.1
Articles of Incorporation of the Company, as amended through July 26, 2021

10.1

Amended Lightbridge Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement filed on ~~July 27, 2020).~~April 7, 2021)

31.1

Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Accounting Officer

32

Section 1350 Certifications

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)


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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LIGHTBRIDGE CORPORATION

Date: ~~November 5, 2020~~August 9, 2021
By:
/s/ Seth Grae

Name:
Seth Grae

Title:
President, Chief Executive Officer and
Director

(Principal Executive Officer)

By:
/s/ Larry Goldman

Name:
Larry Goldman

Title:
Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

~~Accounting Officer)~~

4031

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Revenue	$	0		$	0		$	0		$	0

Operating Expenses
General and administrative		1,515,899			2,028,667			3,298,759			3,965,421
Research and development		273,314			115,776			642,764			505,600
Total Operating Expenses		1,789,213			2,144,443			3,941,523			4,471,021

Other Operating Income
Distribution from joint venture		110,000			0			110,000			0
Grant income		67,794			0			171,113			0
Total Other Operating Income		177,794			0			281,113			0
Operating Loss		(1,611,419	)		(2,144,443	)		(3,660,410	)		(4,471,021	)

Other Income
Interest income		1,322			12,337			4,631			74,829
Foreign currency transaction gain		0			0			33,694			0
Total Other Income		1,322			12,337			38,325			74,829

Net Loss Before Income Taxes		(1,610,097	)		(2,132,106	)		(3,622,085	)		(4,396,192	)
Income taxes		0			0			0			0
Net Loss	$	(1,610,097	)	$	(2,132,106	)	$	(3,622,085	)	$	(4,396,192	)

Accumulated preferred stock dividend		(133,313	)		(128,238	)		(264,747	)		(254,149	)
Deemed additional dividend on preferred stock dividend due to the beneficial conversion feature		(58,408	)		(55,294	)		(115,897	)		(109,611	)

Net loss attributable to common stockholders	$	(1,801,818	)	$	(2,315,638	)	$	(4,002,729	)	$	(4,759,952	)

Net Loss Per Common Share, Basic and Diluted	$	(0.27	)	$	(0.66	)	$	(0.61	)	$	(1.40	)
Weighted Average Number of Common Shares Outstanding		6,595,483			3,486,566			6,592,454			3,390,782

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
Revenue	$	—		$	—		$	—		$	—

Operating Expenses
General and administrative		2,835,471			1,463,568			6,800,892			4,051,484
Research and development		261,898			751,473			767,498			2,218,826
Total Operating Expenses		3,097,369			2,215,041			7,568,390			6,270,310

Other Operating Income and (Loss)
Grant income		29,662			—			29,662			—
Other income from joint venture		—			247,568			—			908,224
Equity in loss from joint venture		—			(555,113	)		—			(3,812,463	)
Total Other Operating Income and (Loss)		29,662			(307,545	)		29,662			(2,904,239	)
Operating Loss		(3,067,707	)		(2,522,586	)		(7,538,728	)		(9,174,549	)

Other Income
Interest income		4,645			81,172			79,474			315,691
Total Other Income		4,645			81,172			79,474			315,691

Loss before income taxes		(3,063,062	)		(2,441,414	)		(7,459,254	)		(8,858,858	)
Income taxes		—			—			—			—
Net Loss	$	(3,063,062	)	$	(2,441,414	)	$	(7,459,254	)	$	(8,858,858	)

Accumulated preferred stock dividend		(128,937	)		(123,455	)		(383,086	)		(365,973	)
Deemed additional dividend on preferred stock dividend due the beneficial conversion feature		(55,940	)		(53,047	)		(165,551	)		(156,232	)
Net loss attributable to common stockholders	$	(3,247,939	)	$	(2,617,916	)	$	(8,007,891	)	$	(9,381,063	)

Net Loss Per Common Share
Basic and Diluted	$	(0.80	)	$	(0.81	)	$	(2.22	)	$	(3.07	)
Weighted Average Number of Common Shares Outstanding		4,053,644			3,222,226			3,613,349			3,058,797

	Series A						Series B								Additional
	Preferred Stock						Preferred Stock				Common Stock				Paid-in		Accumulated			Total
	Shares			Amount			Shares		Amount		Shares		Amount		Capital		Deficit			Equity

Balance – January 1, 2019		813,624		$	813			2,666,667	$	2,667		2,738,508	$	2,738	$	129,359,799	$	(103,497,622	)	$	25,868,395

Shares issued - registered offerings – net of offering costs		—			—			—		—		273,936		274		1,986,211		—			1,986,485
Stock-based compensation		—			—			—		—		—		—		335,013		—			335,013
Net loss for the three months ended March 31, 2019		—			—			—		—		—		—		—		(3,110,527	)		(3,110,527	)
Balance – March 31, 2019		813,624		$	813			2,666,667	$	2,667		3,012,444	$	3,012	$	131,681,023	$	(106,608,149	)	$	25,079,366

Conversion of 27,747 Preferred Shares to 2,782 common shares		(27,747	)		(28	)		—		—		2,782		3		25		—			—
Shares issued - registered offerings – net of offering costs		—			—			—		—		118,600		119		929,795		—			929,914
Stock-based compensation		—			—			—		—		—		—		237,272		—			237,272
Net loss for the three months ended June 30, 2019		—			—			—		—		—		—		—		(3,306,917	)		(3,306,917	)
Balance – June 30, 2019		785,877		$	785			2,666,667	$	2,667		3,133,826	$	3,134	$	132,848,116	$	(109,915,066	)	$	22,939,635

Shares issued - registered offerings – net of offering costs		—			—			—		—		115,527		115		833,940		—			834,055
Stock-based compensation		—			—			—		—		—		—		19,378		—			19,378
Net loss for the three months ended September 30, 2019		—			—			—		—		—		—		—		(2,441,414	)		(2,441,414	)
Balance – September 30, 2019		785,877		$	785			2,666,667	$	2,667		3,249,353	$	3,249	$	133,701,433	$	(112,356,480	)	$	21,351,654

	Three and Six Months Ended
	June 30,
	2021		2020
Warrants outstanding		45,577		70,361
Stock options outstanding		563,734		508,762
RSUs outstanding		243,800		0
Series A convertible preferred stock to common shares		80,235		79,744
Series B convertible preferred stock to common shares		281,690		262,805
Total		1,215,036		921,672

	September 30, 2020			December 31, 2019
Assets
Cash	$	0.2		$	1.0
Other current assets		—			—
Total assets	$	0.2		$	1.0

Liabilities and equity
Total liabilities	$	1.3		$	2.1
Equity (Deficit)		(1.1	)		(1.1	)
Total liabilities and equity	$	0.2		$	1.0

	For the Nine Months Ended September 30,
	2020		2019
Revenue	$	—	$	—
Research and development costs		—		4.4
Administrative expenses		0.1		1.0
Total Operating Loss	$	0.1	$	5.4
Loss from operations	$	0.1	$	5.4
Net loss	$	0.1	$	5.4

	Three Months Ended September 30,					Nine Months Ended September 30,
	2020			2019		2020		2019

Research and development expenses		—		$	—		—	$	284,000
General and administrative expenses	$	(4,000	)	$	20,000	$	8,000	$	308,000
Total stock-based compensation expense	$	(4,000	)	$	20,000	$	8,000	$	592,000

	Options Outstanding			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value

Beginning of the period – January 1, 2020		518,551		$	21.99	$	15.89
Granted		7,634			4.45		3.28
Exercised		(6,548	)		3.82		2.59
Forfeited		(1,844	)		10.80		8.33
Expired		(1,808	)		501.43		388.45
End of the period – September 30, 2020		515,985		$	20.32	$	14.60

Options exercisable		466,259		$	21.45	$	15.36

	Shares			Weighted Average Exercise Price		Weighted Average Fair Value Grant Date

Non-vested – January 1, 2020		84,873		$	10.73	$	5.15

Granted		7,634			4.45		3.28
Vested		(41,552	)		10.80		8.29
Forfeited		(1,229	)		10.80		8.33
Non-vested – September 30, 2020		49,726		$	9.71	$	7.44

i)	A total of 393,130 incentive stock options and non-qualified 10-year options have been issued, and are outstanding, to the directors, officers, and employees at an exercise price range of $3.82 to $331.80 per share. From this total, 128,010 options are outstanding to the Chief Executive Officer, who is also a director, with remaining contractual lives of 0.5 years to 9.2 years. All other options issued to directors, officers, and employees have a remaining contractual life ranging from 0.5 years to 9.2 years.

~~ii)~~	~~A total of 122,855 non-qualified 10-year options have been issued, and are outstanding, to consultants at an exercise price range of $3.82 to $355.80 per share.~~

		Stock Options Outstanding						Stock Options Vested
		Weighted						Weighted
		Average						Average
		Remaining				Weighted		Remaining				Weighted
		Contractual		Number		Average		Contractual		Number		Average
		Life		Of		Exercise		Life		of		Exercise
Exercise Prices		-Years		Awards		Price		-Years		Awards		Price

$	3.82-$12.48		8.41		225,179	$	8.04		8.46		176,332	$	7.60
$	12.49-$24.00		6.82		199,790	$	14.19		6.81		198,911	$	14.20
$	24.01-$72.00		5.14		65,333	$	55.07		5.14		65,333	$	55.07
$	72.01-$240.00		4.57		24,526	$	75.59		4.57		24,526	$	75.59
$	240.01-$355.80		0.43		1,157	$	332.91		0.43		1,157	$	332.91
	Total		7.18		515,985	$	20.32		7.07		466,259	$	21.45

Expected volatility	113.12% to 131.85		%
Risk free interest rate	0.06% to 0.16		%
Dividend yield rate		0
Weighted average years	1-2 years
Closing price per share – common stock	$	$4.55 to $6.51

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

General and administrative expenses	$	186,335	$	6,085	$	246,403	$	12,170
Total stock-based compensation expense	$	186,335	$	6,085	$	246,403	$	12,170

	Options Outstanding			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Beginning of the period – January 1, 2021		515,847		$	20.23	$	14.51
Granted		52,903			6.77		2.36
Exercised		—			—		—
Forfeited		(3,997	)		62.52		43.63
Expired		(1,019	)		329.81		291.73
End of the period – June 30, 2021		563,734		$	18.11	$	12.66

Options exercisable		514,008		$	18.92	$	13.17

	Shares			Weighted Average Exercise Price		Weighted Average Fair Value Grant Date

Non-vested – December 31, 2019		84,873			10.73		5.15

Granted		7,634			4.45		3.28
Vested		(41,552	)		10.80		8.29
Forfeited		(1,229	)		10.80		8.33
Non-vested – December 31, 2020		49,726			9.71		7.44

Granted		52,903			6.77		2.36
Vested		(52,903	)		6.77		2.36
Forfeited		—			0		—
Non-vested – June 30, 2021		49,726			9.71		7.44

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Total awards outstanding at January 1, 2021		243,800	$	2.69
Total shares granted		—	$	0
Total shares vested		—	$	0
Total shares forfeited		—	$	0
Total unvested shares outstanding at June 30, 2021		243,800	$	2.69

	Year Ending December 31,
	2021		2022		2023		Total
Scheduled vesting		81,268		81,267		81,265		243,800

	•·	those concerning market and business segment growth, demand, and acceptance of our nuclear fuel technology and other steps to commercialization of Lightbridge Fuel™;

	•·	any projections of sales, earnings, revenue, margins, or other financial items;

	•·	any statements of the plans, strategies, and objectives of management for future operations and the timing and outcome of the development of our nuclear fuel technology;

	•·	any statements regarding future economic conditions or performance;

	•·	uncertainties related to conducting business in foreign countries;

	•·	any statements ~~relating to the outcome of the arbitration with Framatome;~~ about future financings and liquidity

	•·	~~any statements about future financings and liquidity~~ the ~~Company’s~~Company's anticipated financial resources and position; and

	•·	all assumptions, expectations, predictions, intentions, or beliefs about future events and other statements that are not historical ~~facts.~~ facts

	•·	our ability to commercialize our nuclear fuel technology, including risks related to the design and testing of nuclear fuel incorporating our ~~technology;~~technology and the degree of market adoption of the Company's product and service offerings;

	•·	the dissolution of Enfission, LLC our joint venture with Framatome Inc., including associated costs and the timing of the dissolution, our ability to conduct research and development activities in the future within the scope of operations of the joint venture and our retention of certain intellectual property used in the joint venture; dependence on strategic partners;

	•·	our ability to ~~attract new customers;~~ fund general corporate overhead and outside research and development costs;

	•·	the demand for fuel for nuclear reactors, including small modular reactors, and our ability to attract new customers;

	·	our ability to manage the business effectively in a rapidly evolving market;

	·	our ability to employ and retain qualified employees and consultants that have experience in the nuclear industry;

	•·	competition and competitive factors in the markets in which we ~~compete;~~ compete, including from accident tolerant fuels;

	•·	~~public perception~~the availability of nuclear ~~energy generally;~~ test reactors and the risks associated with unexpected changes in our nuclear fuel development timeline;

	•·	the increased costs associated with metallization of our nuclear fuel;

	·	risks associated with the further spread and uncertainty of COVID-19, including the ultimate impact of COVID-19 on people, economies, our ability to access capital markets, the ~~Company’s~~Company's financial position, results of operations or liquidity;

	•·	public perception of nuclear energy generally;

	·	changes in laws, rules, and regulations governing our business;

	•·	~~development and utilization of, and challenges to, our intellectual property;~~ changes in the political environment;

	•·	~~potential~~development and ~~contingent liabilities;~~utilization of, and challenges to, our intellectual property;

	•·	the risks associated with potential shareholder activism;

	·	potential and contingent liabilities; and

	·	the other risks identified in Item 1A. Risk Factors included ~~herein and~~ in our Annual ~~Report~~report on Form 10-K for the year ended December 31, ~~2019.~~ 2020.

	•·	Overview of Our Business and recent developments — a general overview of our business and updates;

	•·	Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical judgments and estimates;

	•·	Operations Review — an analysis of our condensed consolidated results of operations for the periods presented in our condensed consolidated financial statements; and

	•·	Liquidity, Capital Resources, and Financial Position — an analysis of our cash flows, and an overview of our financial position.

	•	providing an increase in power output of potentially up to 10% while simultaneously extending the operating cycle length from 18 to 24 months in existing pressurized water reactors (PWRs), including in Westinghouse-type four-loop PWR plants which are currently constrained to an 18-month operating cycle by oxide fuel enriched up to 5%, or increasing the power potentially up to 17% while retaining an 18-month operating cycle; and

	•	~~enabling increased reactor power output via a power uprate (potentially up to a 30% increase) or a longer operating cycle (instead of a power uprate) without changing the core size in new build PWRs.~~

	•·	~~Complete~~On May 11, 2021, we announced successful demonstration of the ~~scope~~manufacturing process for three-lobe, six-foot rods using surrogate materials. This demonstration of ~~work relating~~Lightbridge's proprietary manufacturing process uses an internally developed and patented high-temperature coextrusion process. The six-foot length of the surrogate rods is the typical length of the fuel rods used by many small modular reactors (SMRs) now in development and licensing. Future fabrication of high-assay low-enriched uranium (HALEU) rodlets for loop irradiation testing in the Advanced Test Reactor, and ultimately commercial length HALEU fuel rods, will use similar processing techniques to ~~the recent GAIN Voucher award in collaboration~~create Lightbridge Fuel™. Performing fabrication development activities with ~~Idaho National Laboratory;~~ surrogate materials allows Lightbridge to use a broader range of suppliers and is a cost-effective approach as it does not require uranium material.

	•·	~~Enter into an agreement~~On March 25, 2021, the Company was awarded a second voucher from the DOE's GAIN program to ~~manufacture our~~support development of Lightbridge Fuel™ in collaboration with the Pacific Northwest National Laboratory (PNNL). The scope of the project is to demonstrate Lightbridge's nuclear fuel ~~material samples~~casting process using depleted uranium, a key step in the manufacture of Lightbridge Fuel™. On July 14, 2021 executed a Cooperative Research and Development Agreement (CRADA) with the Battelle Memorial Institute, Pacific Northwest Division, the operating contractor of the PNNL, in collaboration with the DOE. The project is anticipated to commence in the third quarter of 2021. The total project value is approximately $663,000, with three-quarters of this amount funded by DOE for ~~test reactor irradiation; and~~ the scope performed by PNNL.

	•·	We were awarded a GAIN voucher by the DOE in 2019 for the experiment design for irradiation of material samples of Lightbridge Fuel™ in the Advanced Test Reactor (ATR) at Idaho National Laboratory (INL). On April 22, 2020, we entered into a CRADA with Battelle Energy Alliance, LLC (BEA), the DOE's operating contractor at INL. The project commenced in the second quarter of 2020 and was originally expected to be completed in the second quarter of 2021. However, because of project staffing issues at INL related to the laboratory's COVID-19 restrictions and U.S. export control matters, the project is currently expected to be completed by the end of the third quarter of 2021.
	~~Begin~~
	·	We expanded our patent portfolio by successfully obtaining three new patents in 2021, in the ~~initial demonstration~~United States and other key foreign countries. The new patents will help safeguard the Company's intellectual property, which is an integral component of ~~our manufacturing technology using depleted or natural uranium.~~ the Company's plans to monetize the Lightbridge Fuel™ technology.

	Three Months Ended						Increase			Increase
	September 30,						(Decrease)			(Decrease)
	2020			2019			Change $			Change %

Operating Expenses
General and administrative	$	2,835,471		$	1,463,568		$	1,371,903			94	%
Research and development expenses	$	261,898		$	751,473		$	(489,575	)		-65	%
Total Operating Expenses	$	3,097,369		$	2,215,041		$	882,328			40	%

Other Operating Income and (Loss)
Grant income	$	29,662		$	—		$	29,662			100	%
Other income from joint venture	$	—		$	247,568		$	(247,568	)		-100	%
Equity in loss from joint venture	$	—		$	(555,113	)	$	555,113			-100	%
Total Other Operating Income (Loss)	$	29,662		$	(307,545	)	$	337,207			-110	%

Total Operating Loss	$	(3,067,707	)	$	(2,522,586	)	$	545,121			22	%

Other Income	$	4,645		$	81,172		$	(76,527	)		-94	%

Net loss before Income Taxes	$	(3,063,062	)	$	(2,441,414	)	$	621,648			25	%

Net Loss	$	(3,063,062	)	$	(2,441,414	)	$	621,648			25	%

	•·	Equity or debt investment from third party investors in Lightbridge; ~~and~~
	·	Collaboration with potential industry partners; and
	•·	Strategic investment and U.S. government funding to support the remaining ~~research and development~~R&D activities required to ~~further enhance and complete~~continue the development of our fuel products and move them to a commercial stage.

Exhibit Number		Description
3.1		Articles of Incorporation of the Company, as amended through July 26, 2021

10.1		Amended Lightbridge Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement filed on ~~July 27, 2020).~~April 7, 2021)

31.1		Rule 13a-14(a)/15d-14(a) Certification - Principal Executive Officer

31.2		Rule 13a-14(a)/15d-14(a) Certification - Principal Financial Accounting Officer

32		Section 1350 Certifications

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

	LIGHTBRIDGE CORPORATION

Date: ~~November 5, 2020~~August 9, 2021	By:	/s/ Seth Grae
	Name:	Seth Grae
	Title:	President, Chief Executive Officer and
		Director
		(Principal Executive Officer)

	By:	/s/ Larry Goldman
	Name:	Larry Goldman
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)
		~~Accounting Officer)~~