Basis of Presentation Summary of Significant Accounting Policies and Nature of Operations (Policies)

3 Months Ended

Mar. 31, 2025

Basis of Presentation Summary of Significant Accounting Policies and Nature of Operations (Policies)

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

Accounting Standards Codification (ASC), Fair Value Measurement (ASC 820), established a fair value hierarchy that prioritizes the inputs used to measure fair value. Assets and liabilities measured at fair value were categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The categorization of financial instruments within the valuation hierarchy was based on the lowest level of input that is significant to the fair value measurement. At the end of the reporting period, the Company reviews U.S. treasury instruments held to determine whether the securities are of the most recent issuance of that security with the same maturity (referred to as “on-the-run”, which is the most liquid version of the maturity band). If a U.S. treasury instrument held at the end of the reporting period was from the most recent issuance it is classified as level 1, otherwise it is referred to as “off-the-run” and is classified as level 2. The three levels of the fair value hierarchy were as follows:

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

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

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

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

The Company’s financial instruments consisted principally of cash and cash equivalents, accounts payable and accrued liabilities. The carrying amounts of cash, accounts payable and accrued liabilities are considered to be Level 1 measurements, because of the short-term nature of those instruments. Cash equivalents are primarily composed of US Treasury instruments having maturity dates of 30 to 90 days. The Company purchased $37 million of US Treasury instruments for the three months ended March 31, 2025.

The following table summarized the valuation of the Company’s financial instruments that fell within the fair value hierarchy (in millions) at March 31, 2025:

	Level I		Level II		Level III
Cash and cash equivalents	$	19.9	$	37.0	$	—
Accounts payable and accrued liabilities	$	1.0	$	—	$	—

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

	Level I		Level II		Level III
Cash and cash equivalents	$	40.0	$	—	$	—
Accounts payable and accrued liabilities	$	0.4	$	—	$	—

Certain Risks and Uncertainties

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

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

The Company is engaged in significant research and development (R&D) activities to advance its nuclear fuel technology at Idaho National Laboratory (INL). For the three months ended March 31, 2025, R&D expenses associated with activities conducted at the INL accounted for approximately 47% of the Company’s total R&D expenditure. The Company currently relies on INL for developing, testing and evaluating its nuclear fuel. Any disruption in access to INL’s resources, including changes in government policies, facility downtime, regulatory constraints, or unforeseen operational challenges could have a material adverse effect on the Company’s current ability to advance its R&D activities.

Recent Adopted Pronouncements

ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, was issued by the FASB in December 2023. This guidance enhances income tax disclosure requirements by mandating the disclosure of (1) specific categories in the rate reconciliation, (2) income or loss from continuing operations before income taxes, disaggregated between domestic and foreign, and (3) income tax expense or benefit from continuing operations, disaggregated by federal, state, and foreign. The ASU also requires disclosure of income tax payments to federal, state, local, and foreign jurisdictions, among other changes. The standard is effective for annual periods beginning after December 15, 2024, and will be adopted by the Company as permitted. The Company will apply the guidance on a prospective basis and the adoption is not expected to have a material impact on its condensed consolidated financial statements or related disclosures.

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

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

LIGHTBRIDGE Corp 10-Q