Lightbridge Corp (LTBR) 2009 Q2 法說會逐字稿

Good morning. My name is Lynn, and I will be your conference operator today. At this time, I would like to welcome everyone to the Thorium Power second-quarter 2009 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions).

Thank you. I will now turn the conference over to Mr. David Waldman, with Crescendo Communications. Please go ahead, sir.

Good morning, everyone. This is David Waldman with Crescendo Communications, the Company's investor relations firm. I work with Peter Charles, who is on vacation today. If you have any questions after the call, feel free to contact us at 212-671-1021, or Peter directly tomorrow.

I would like to start by welcoming everyone to our second-quarter business update call for Thorium Power. On the call with us today are Seth Grae, CEO; Jim Guerra, COO; and Andrey Mushakov, Executive Vice President, International Nuclear Operations.

I would like to remind everyone that this conference call may include certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements may include the discretion of our plan and objectives for future operations, assumptions underlying such plans and objectives and forward-looking terminology, such as expects, believes, anticipates, intends, projects or similar terms, variations of such terms or the negative of such terms.

There are a number of risks and uncertainties that may cause actual results to differ materially from the forward-looking statements made herein. Such information is based upon various assumptions made by and expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to significant economic and competitive uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions which are subject to change. Accordingly, there can be no assurance that actual results will meet expectations, and actual results may vary materially from certain of the results anticipated herein.

With that, I will turn the call over to Seth Grae, Chief Executive Officer of Thorium Power. Please go ahead, Seth.

Well, thank you, David, and good morning, everyone. Thank you for joining us today. Before turning to the discussion of financial results for the second quarter, I would like to provide a brief commentary on our annual meeting, which was held on July 29, that many of you attended.

We were pleased with the turnout of the meeting and the fact that our shareholders tend to be passionate about our mission to commercialize our non-proliferative, low-waste nuclear fuel designs for the generation of electricity. The slide show presentation from the annual meeting is available on our website, and provides information on our progress regarding the development of these fuel designs.

Revenue for the second quarter of 2009 totaled $3.4 million as compared with $4.3 million for the second quarter of 2008. The decline in our revenue is attributable to the timing of revenue bookings that coincide with the completion of project phases within the context of contracts that typically last anywhere from one to five years.

In the case of the UAE, we are involved in two five-year projects that commenced last year. Our revenue is generated from our consulting services business, which we are looking to aggressively expand upon as a highly scalable and profitable business model.

Heading into the second half of 2009, our revenue may temporarily weaken due to variations in billable hours, coupled with recent changes in some of our billing rates. By lowering some of our rates, Thorium Power is well positioned to aggressively bid and win new business as the demand for nuclear-generated electricity accelerates in many countries.

There are a number of catalysts that point to this acceleration in demand, including the ever-greater need for electricity around the globe, especially in developing countries, as well as legislation that is being introduced to help facilitate the use of nuclear power.

On the legislative front, we believe there is solid support in Congress for the Reid-Hatch Thorium Energy Independence & Security Act, which we expect to be voted on later this year, and would authorize $250 million over five years to fund Thorium fuel research and development in the US Department of Energy and licensing activities at the US Nuclear Regulatory Commission.

Other legislative developments include passage of the American Clean Energy & Security Act by the US House of Representatives on June 26, 2009, which provides incentives for alternative energy sources, and includes provisions for nuclear power. Also, the Senate Energy & Natural Resources Committee recently amended the Energy Policy Act of 2005 to recognize the strategic importance of nuclear energy to America's supply of carbon-free electricity.

Lastly, the US House of Representatives Energy & Water Appropriations subcommittee approved a budget that allocates $812 million to nuclear research and development.

On the technology front, we continue to make progress regarding the development of our non-proliferative, low-waste nuclear fuel designs for both Russian-type VVER reactors and Western-type PWR reactors. We are now in the mid-phase of the fuel design process for VVER reactors and a little earlier along the curve for the PWR reactors.

We completed the conceptual design phase of our fuel designs for VVER reactors back in 2001, and by the end of 2008, our preliminary design phase was largely validated and is now near completion. Phase three is the next step along the way, and the goal is to create a final product design and to complete licensing documentation for regulatory approval. This entails developing a detailed fuel assembly design and conducting advanced testing and test facilities to validate detailed design parameters. This phase also involves developing a fabrication process for lead test assemblies and the fabrication of fuel samples and mockups for advanced testing in test facilities.

The last component in this phase involves a detailed design and fabrication process review. We expect to complete all facets of this phase in approximately four years.

We invite you to reference the presentation given in our recent investor meeting. The presentation gives in-depth review of the timelines associated with our fuel development programs, funding requirements and market potential. The presentation is available on our website, thoriumpower.com.

Turning back to our financials, gross margins for the second quarter declined to 44.9% for the three months ended June 30, 2009 versus 59.6% in the same period in 2008 because the advisory contracts changed from a retainer basis to time and materials.

Operating loss for the three months ended June 30, 2009 was approximately $1.4 million compared to an operating loss of $611,000 for the same period in 2008. Operating loss for the second quarter included approximately $1.3 million of non-cash items versus $1.4 million in the comparable period last year. Net loss for the three months ended June 30, 2009 was $1.3 million versus a loss of $997,000 for the second quarter of 2008.

Stock-based compensation is an important element in attracting and retaining top talent in the nuclear industry and is at the core of our recruiting effort. The second quarter of 2009, approximately $1.2 million of operating expense was attributable to stock-based compensation. Excluding these items, adjusted net loss for the three months ended June 30, 2009 would have been $93,786 compared to adjusted net income of $429,256 for the same period in 2008.

As of June 30, 2009, we had cash and cash equivalents of $4.9 million, total assets were approximately $10.6 million and total liabilities as of June 30, 2009 were approximately $3.6 million. We had a working capital surplus of approximately $6.5 million, and no long-term debt as of June 30, 2009.

In wrapping up, I can tell you that our discussions with foreign governments and other entities in the nuclear sector are moving forward. This is due to the team we have assembled, our reputation and our track record in providing gold standard services for prospective nuclear programs in the Middle East and elsewhere. This is evidenced by our long-term contracts in the UAE, the receptiveness of other governments and entities to our mission, and legislative trends that are emerging around the globe regarding nuclear power as a source of electricity.

We believe the Thorium-based nuclear fuels, with their unique attributes of nonproliferation and low waste, are best suited to address the world's increasing demand for electricity. We will bring you news on progress on the technology front and consulting business over the coming months as developments unfold.

Thank you for your support of our endeavors, and we look forward to speaking with you again next quarter. We will now open up the call to your questions.

(Operator Instructions) [Will Kohr], Highbridge Capital.

Seth, your revenues were $22 million last year, or roughly, and they are about $12 million this year for your consulting business. And I'm wondering, are most of those revenues on the front end or what do we -- what are like your projected revenues for this year or for other consulting arrangements going forward?

Well, we haven't put out guidance, Will, on the revenues going forward. And let me ask the CFO, Jim Guerra, to continue this answer also.

We haven't given guidance because a lot of the work that we do is what I will call ad hoc in nature, and just too hard to forecast. And so as a result, we just thought it would be more appropriate to do it in this particular fashion.

The -- I would just sort of comment is that I think Seth mentioned in his text is that the work that we do can sometimes vary. It is just -- it's not necessarily trend-related. It is just in response to the work that has lined up at a particular point in time.

And we're at a phase, for example, in the UAE where the technology selection is going forward; in the next few months, there will be a choice of vendors. And this is one of these phases where the workload changes, and, obviously, I think in their program, an increasing workload with the selection of the vendor. Did you have a follow-up to that, Will?

I guess my question is, are your revenues going to be scaling up through the life of this contract, or are they sort of flatlined to down? Because it seems like they are slightly -- are going to be slightly down to flat from last year.

Again, it is sort of hard to say, because there is not like what I will call a long lead time, where we go back out and work with the client and say, 10 months from now, this is what the amount of work we need to do. A lot of this is based upon what is needed in the particular point in time. And that timeframe doesn't go out in a long-term basis. So sometimes it is responding to more of what I will call immediate needs.

I think the important point is we that have a five-year contract, which I think should give confidence to our relationship with the client. And we intend to continue to help the client add value, and we also continue to try to seek opportunities outside this client with other governments and operations looking to implement nuclear power programs.

And I'll just say a couple more things, Will. The first is that these are five-year agreements, and this is, I think it's fair to say, the fastest-moving and fastest-growing nuclear program in the world.

Secondly, one way to look at this is that we have two operating units, one in nuclear fuel technology, one in the consulting business that you are talking about. And if you had to pick one premier client in the world for each of those divisions as a first paying client, I think we have, in the UAE and in Areva, the premier clients in the world have chosen us over all others for provision of these services.

And in many ways, what we are doing here is tending to our garden, demonstrating that we can and do and are providing the best level of services in the world. And this is our greatest marketing effort, success with these efforts, both in expansion in these programs as well as with others. Let me leave it at that and go on to the next question.

Thank you.

[Thomas Turner], a private investor.

Good morning, guys. My question is what progress are you making towards the reverse split and name change that we talked about at the annual meeting? And has the Areva agreement made you think any differently about that, or does it have any input at all?

We have authority from the shareholders until December 12 of this year to conduct a reverse split. We are intending to go ahead with the NASDAQ listing. We had a tentative date of October 9 of this year for that listing. We tentatively plan to ring the end of the trading that day on the NASDAQ exchange, and to invite our shareholders to come to a meeting and an event on that day at the NASDAQ market site in Times Square in New York on October 9.

We do intend to have a reverse stock split before that date. We will only go forward with these plans, as we've said all along, if it makes sense in terms of market conditions, our stock price, the conditions that would be optimal for our shareholders.

The predominant reason for the reverse split is to list on the NASDAQ stock exchange. But for that desire, we would not be doing a reverse split. A lesser reason or maybe a benefit of doing the reverse split is to clean up a capital structure of approximately 300 million fully-diluted issued and outstanding shares of the Company, which seems to be too large a number. I mean, it is something that most companies our size you will see on the NASDAQ would have a smaller share count, so it lets us clean that up.

On the Areva deal, I don't view that as changing our plans; I view that as affirming our plans, that in the technology development area, we can work with and be hired by and paid by the premier entities in the world, and very much validating our technology and our people developing the technology.

One way to view the Areva transactions is that Thorium Power is a lot more than old patents and technologies that we are developing and commercializing. It is very vibrant, with the best of nuclear engineering, nuclear fuel engineering, and on a going-forward basis, selected over all others to do that at what is the largest company in the industry. If you had a follow-up on that, Tom.

[Sean Mulhern], Titan Mining Group.

Congratulations on all the recent stuff going on. This is just a -- it was a follow-up to the revenue projections. And I think a lot of people have wanted some clarity on this, and maybe you can answer and maybe you can't, but I'll just go for it.

It has been said that the UAE is going to be doing around $40 billion to $50 billion -- that's with a B -- over the next number of years building their nuclear programs. Some people have suggested that as a chief consultant to their programs, that they would be in line for 5%, 10% of that, or even 1% of that, which would be $500 million of revenues for Thorium Power.

With everything going forward and a green light for the UAE programs, is it realistic to anticipate anything in those numbers of revenues, or is that something that is just way out of whack?

As I said, we haven't put out guidance, Sean, on the numbers. And the UAE has not officially put out any numbers for guidance on their program either. So I would just leave it at that. And we are advisers to the program; we can't speak for the program, especially before they do, on putting out any numbers like officially the size of what their program is. I know there is a lot of speculation in the media.

Our work is based on time and materials paid for the work we are doing, and these are essential advisory roles. They are not based on a percentage of the cost of building a reactor or maintaining a reactor, but they are key and important roles.

Okay. Thank you, Seth.

[John Tracy], a private investor.

Good morning, Seth. How are you doing today? I want to congratulate you and the folks with the recent progress as well.

Thank you.

I would like to switch gears a little bit and focus on our efforts in India. And basically, if you look at the Punj Lloyd webpage, you still see the MOU up there with Thorium Power on the homepage. And we're just curious what the latest status and goals are with the joint venture with Punj Lloyd, and do we have any target dates that we can discuss?

We don't have any target dates to discuss, and one reason for this is that on the Indian government side, they have still not formally approved the 1,2,3 agreement for civil nuclear cooperation with the United States. It has been approved on the US side. It has been approved in the Congress and in the Administration. But on the Indian implementing side, it is not done, and it seems to increasingly be getting caught up in high politics over there and internationally.

India is a nuclear weapons possessing state, and as such, under the Nonproliferation Treaty we cannot engage in nuclear commerce with them. The exception would be created by this 1,2,3 agreement, which amends the Atomic Energy Act of 1954 and would allow it. But right now, it is not allowed, and I don't have a time frame on that.

So what we will do in India and when we will do it at this point I really can't say. I will say that India is a very exciting market. There is much going on there. We have many relationships there. We've engaged there over a period of many years, and we are working with some current and new partners that may be very engaged there. But at the moment, it is very much up to the politicians there to finish things on the cooperation agreement before we can finalize anything we will go forward with.

Okay. Do you have any idea or feeling on when the 1,2,3 may be completed from their end of it?

Last year was the commitment we last had. So no, I think that with the Singh government being in power, there is support at the top. But it seems to be quite complicated dealing with many levels of government, with the legislature, with other entities in the government. And I'm confident it will be worked out, but not yet.

Okay. Thank you very much, and good luck on the second half.

[Brian Rolston], a private investor.

Is Thorium Power actively involved with the Reid-Hatch Thorium Energy Security Act? And will it be introduced this year? Is there any significant opposition in Congress?

Thorium Power, yes, is very involved with the Reid-Hatch Thorium Energy Security Act. It is fair to say we are the lead entity involved with that, dominating over any others. And as you've probably seen this month, Senator Orrin Hatch was quoted in the Washington Post talking about our Company.

Yes, we do fully expect it to be formally introduced in the Congress this year. And no, we have not seen any significant opposition in Congress. In fact, I'll tell you that based on my experience on Capitol Hill on this, I have not encountered any opposition to it. Now, I haven't spoken to all 435 members of the House and 100 members of the Senate, but those that we have met with, which is in a bipartisan way, led by majority leader Harry Reid on the Democratic side and Senator Orrin Hatch on the Republican side, we haven't come across any opposition to it at this point. Brian, if you had a follow-up on that.

No, great. I love to hear it. Thank you very much.

[Linda Frye], a private investor.

Good morning, Seth. I have a question. Knowing what happened with Shell Oil Company, and the Russian government more or less said thank you very much for the help and you are out of here, do you have standing agreements in place with the Russian government regarding the nuclear fuel technology?

Yes. Well, Linda, first of all, I will say that we have been working in Russia since the early, mid 1990s, and it has been a very good experience for us. And unlike Shell Oil, it has been in areas that are of highest strategic importance to both governments, not purely a private-sector relationship in a sense on the nuclear arrangements between the US and Russia. As you know, our chairman, Tom Graham, was for 30 years the lead nuclear negotiator for the United States with Russia, and we have many relationships on both sides.

We have a series of agreements with Russia going back to 1994. We will be issuing an 8-K, I think today, announcing a new agreement relating to our technology and work in Russia. Unlike Shell Oil and some others, in a sense, Linda, we don't have assets in Russia. We have a very vibrant and growing office in Russia leading our technology development efforts. And we have in effect work for hire in Russia. But we don't own buildings. We don't have assets in Russia. We conduct work and as it's conducted, we are patenting and owning that intellectual property globally. I don't know if you have a follow-up on that, Linda.

I was just worried about their potential claims on the fuel design on the technology.

No, that is something we obviously pay very close attention to. We have some of the best patent lawyers, including patent litigators, in the world working with Thorium Power. And as I said, as we develop the technology, we file patents, we own it, we own it globally.

Okay.

[David Grunwald], a private investor.

I have really one question -- one statement, actually. The collaboration with Areva considered to be a very excellent move, looking forward to that. But can we expect same -- similar collaborations with, say, Westinghouse, GE and possibly others? And then what would be the long-term benefits that we could expect from some of these deals?

Well, first of all, the two largest entities in the world in producing and selling nuclear fuel are Areva and the Russian entities, Atomenergoprom and Atomstroyexport. And we work very closely with both of them now.

There are other companies in the industry, Westinghouse, GE. There are Korean and Japanese entities and smaller entities in India and elsewhere. And we have various relationships with those. With some of them, we are in discussions in various ways.

But for right now, Areva is our focus for the PWR Western fuel development and other Thorium-based nuclear fuel development that we are doing with Areva. The long-term benefits are the value of this company. Ultimately, the greatest value to our shareholders comes from Thorium Power being a licensing company that licenses our technology to the nuclear fuel fabricators and vendors that sell it to the reactors around the world, and we receive a royalty every time there is a fuel sale.

So the long-term benefit is that this, I think, validates our people's talents, our technology. Obviously helps brings it forward and helps fund bringing it forward, and leads to a commercialization effort with the largest and most successful company in the world doing it.

Okay. Thank you. Just a brief question to follow up with that. In any way does the Areva collaboration exclude Westinghouse or GE or others from developing fuels that are Thorium fuels that will fit their reactors?

We intend to be able to go forward in ways that could fuel all of the dominating light water reactors in the world, particularly the PWRs and the VVERs. Whether -- what we might do with other companies, we are not going to address at this time. But we are very excited and pleased with the progress with Areva, and it's a company we might also grow with.

Okay, good. Thank you.

(Operator Instructions) Michael Wood, Oppenheimer.

My questions were answered. But while I have you here, one of my thoughts is that obviously giving revenue guidance would be probably more difficult than creating nuclear fuel. So that is not what I'm looking for.

What I am trying to better understand is that when you develop a relationship like the one you've worked on with Areva, is there a potential to do that same type of work with other companies? Or if you do work with Areva, is it sort of exclusive and it doesn't allow you to work with these other companies?

Well, first of all, as I've said, we do work with Russian companies. So we do work with others already in Russia.

Secondly, while our work with Areva is focused on PWR fuel, and we're also working on other types of fuel with Areva, it does not focus on boiling water reactor fuel. And there are other companies in that area that perhaps we might work with. So yes, there are possibilities on working with others, and we already do, particularly in Russia.

Thank you very much.

[Nick Washinko], a private investor.

Here's my question. You can't read the papers today without hearing about every -- virtually every country saying, look, we want to move to nuclear power. My question is how do you go about the sales process? Do you actually have people actively out thee developing new clients? Do they have to come to you?

And let's suppose you get somewhat successful with this. How easy or difficult is it going to be to find the quality nuclear engineers? Because virtually nothing has been done at universities for years in that area.

Well, first of all, there are RFPs put out by some countries, and we do respond to those requests for proposals in certain areas. And we have some that we are responding to right now in certain countries. And some of them could be through joint venture, as well, with other bidders, where we have part of the bid on the RFP and other companies that work in other areas can work in other areas. And some of those companies and/or we have connections, relationships into those countries and those efforts.

The nuclear power industry tends to be a small industry. The number of countries looking to explore nuclear power for the first time is at about 60 that are working with the International Atomic Energy Agency and are expressing interest. And we are selecting, among those, those that we think are the most likely to go forward that can afford it, that can meet our corporate culture and goals in nonproliferation and safety and transparency.

But we do have a business development effort. We do have people working in that, including in partnering with some other companies and bigger companies that are looking into opportunities around the world and see the benefit of working with Thorium Power who do not have the skills we have in deploying new nuclear programs.

On nuclear engineers, I think it is fair to say we have the most talented group in the world, particularly in nuclear fuel engineering. And we are certainly doing the most cutting-edge work of anybody on developing new nuclear fuels, on commercializing them and on leading advice and deploying new nuclear programs.

And while I keep reading the same press that you do about how hard it is to attract new nuclear engineers, we receive resumes every day at Thorium Power from some of the leading people in the world and leading entities in the world, looking to become part of our effort. And we have been very selective, and we have large numbers of applicants, many of them very much unsolicited, for every position that we fill.

That's good news. Thank you.

Walter Ramsley, Walrus Partners.

I had a question about the commercialization of that Russian facility. Are you still planning to install Thorium fuel rods there?

Yes, and as I said a bit earlier in answering Linda's question, we will also be issuing, probably today, an 8-K along with some of these lines. And Andrey Mushakov, who is our Executive Vice President for International Nuclear Operations and spends a great deal of his time in our Moscow office handling these matters, is on the call. Let me -- I'll ask Andrey first to start answering your question.

Basically, we are still moving forward with our plans with respect to our VVER 1000 fuel assembly design. We are moving forward with the (inaudible) as well as preparation of regulatory licensing documentation that we need to get reviewed by an expert review committee.

And basically, as far as our plans with respect to what is called the lead test assembly design, as we put out during our shareholder meeting a couple of months ago in our presentation, we do expect to start the lead test assembly and [irrigation] based in operating VVER 1000 Russian nuclear power plant within about the 2013 timeline. So as far as that date, we still feel comfortable with that start date.

So the idea is to start it in 2013?

Correct, yes. At least at this point, that is our plan, and we are moving forward towards that goal.

And what kind of progress have you achieved up to this point? How much more actual work needs to be done, do you think?

Well, as Seth pointed out in his presentation today, we are pretty much done with Phase Two, which is the preliminary design for our fuel assembly, as well as fuel fabrication process. We are moving to what is called Phase Three, which is a detailed design phase.

And if you look at our presentation, that phase entails a number of major activities, including a detailed fuel assembly design, licensing detailed fuel fabrication process design, fabrication of scaled-up fuel samples and mockups for both in-reactor and out-of-reactor (inaudible), etc. And that is what needs to be done.

And Walter, I'll just mention, that, as Andrey said, if you go to thoriumpower.com and look at the PowerPoint we presented at the annual meeting, it goes through quite some detail on the steps and timeframes on deploying the fuel.

I understand. Okay, thanks very much. Appreciate the chance to talk to you again.

[William Pike], Pine Street Securities.

This is just a technical question. I have gone to your website. I am trying -- I'm on the phone now, but I am trying to listen to it on the Internet and I cannot find out where to do it.

I wanted some other people to listen to this, and all I get is the right to download Windows Media Player or RealPlayer, but I can't -- I already have those in my computer. I can't find the button to press. Am I missing something or does this not get on or what?

Well, it sounds like good marketing by Microsoft. David, do you want to take that question?

I'll say that it should be available on the Investor Relations part of the site, and it is certainly downloadable after the call is done. I haven't heard from any others having problems online listening to the call. We will certainly look into that.

We will make sure when the call is over with that you're able to --.

I don't want to waste your time. I'm on the Investor Relations site, and I've got to the point that it said click for the shareholder -- and then when I get there, "event detail is time-based," and then it says, "download Media Player or RealPlayer to get the webcast." I can find no button to actually get it. And -- okay, I won't waste your time now. But I sure would like to --

We will certainly check on that. We -- I have heard on previous calls from people that have been able to listen online. So we will check on that. Thank you. Thank you for pointing it out, William.

Thank you.

Ladies and gentlemen, the streaming is being fixed at this time and it shall proceed shortly. I do apologize for any interruptions. [Ken Young], a private investor.

Hello, gentlemen. I have not been an investor for quite -- for much time, and this is the first time I've tried calling in. I actually had three things. I don't know if you can go through them all or not.

The first one is, I wasn't aware of this Reid-Hatch Thorium Act that apparently is going through Congress. Would that be in jeopardy at all if -- because I understand that Reid is having a little difficulty in getting reelected. It's a little bit iffy whether he will get reelected or not. Would that in any way jeopardize this Act?

Well, first of all, we believe that it will be introduced and passed this year. Secondly, we don't --

Well, their election is early November.

Well, yes, the new people come in to office in January of the following year. But we don't comment on whether people will be reelected or not.

I will say that this is a bipartisan effort, and Senator Orrin Hatch has also been a key part of it, and Senator Harry Reid has certainly been a crucial part of it and we very much appreciate his support. And we will continue to work with him this year and perhaps beyond. But no, I see no danger to the legislation based on any election results.

Okay. The next question is if you go through with the reverse split, do you have a number for that?

The authority that has been granted by the shareholders of the Company is up to 50-to-1. So anywhere from zero to 50 is the ratio range. We have not yet finalized it. Again, it will be based on share price and market condition, the news that we are putting out at the time.

But we are well advised on this. We are going to be very careful about it. We will only do it if it is right. I don't have the exact number between zero and 50 at this time.

Okay.

It depends on market conditions and when we get very close to actually executing the split. So it is always a balance between what I will call liquidity and the shares, making sure that we got the right market price, and then managing the listing requirements. It's all those three things all put together.

Well, if it were to happen now, for example, a 1-for-10 would put you around $3.00 a share. My understanding is to be on NASDAQ, you have to be over $1.00 a share. Would that be enough for you, or would you feel you needed more of a margin of safety than that?

I would say given how the market is run and the volatility, we probably would aim something for a little bit higher than that.

I see. Okay. My last question is really more of a philosophical one. I have been listening this morning to all of the activities that you have going on. But -- and this is something in general and maybe more specifically for Thorium Power. I don't really feel a great deal of an urgency out there in the media or the public or anything else like that for any number of things that seem to need to be done in order to improve our whole energy structure. And everything seems to be moving very slowly and very tentatively.

Do you feel the same way, or do you think things are accelerating, that there is more enthusiasm right now than perhaps there had been in the past and that that might increase?

Well, first of all, Ken, we operate very globally, in particular, right now in the UAE and in Moscow and in the United States and operations in London. And what we are seeing is very global, and I can tell you in a lot of the world, including most of the developing world, there is very much aggressiveness to addressing energy needs. And even in the Middle East, among oil-producing countries, there is an aggressiveness to pursue new energy-generating methods and prepare for what might be a post-oil world and economy.

Here in the United States, we have some very good people who have been put into some positions in government that are now handling energy issues, and I think we will start to see some developments coming out of that. And we do have with the Reid-Hatch bill and other legislation I mentioned some real traction relating to nuclear power and in particular Thorium-based nuclear power and what we are doing.

I think that our Company is incredibly well-positioned in the energy space, something that the world is going to need massive amounts of new energy within the energy space to be a non-proliferative, low-waste nuclear fuel, and the advice in how to deploy nuclear in a non-proliferative and safe way in new countries positions us extremely well.

And as I said, in both of those areas, we have what is probably the most premier client we could have in the world as our lead clients. So while we would always like to see more enthusiasm and aggressiveness in the media and in government in energy areas, we are seeing quite a bit of it around the world. And recently, with the rather lengthy Washington Post article about us, last year's very lengthy Financial Times article about us, some of the top numbers of the U.S. Senate personally spending a lot of time with us, and Senator Hatch being interviewed by the Washington Post this month about us, I would say that we are very well-positioned and certainly, I think, dealing with a lot of people in government and the media that do get it and are being aggressive and enthusiastic, although it would always be good to see more.

Thank you. Thank you for the answers.

[Mark Loeb], private investor.

Thank you for taking my call. My question actually segues nicely from your last question. I've been an investor for a couple years now, and the stock price certainly fluctuates with levels of exposure that your Company has had within the media. And understanding that the reverse split is coming and you want to diminish your multiple of the split, is -- this can either go either -- I guess would have gone to Peter Charles or maybe to Crescendo or you, Seth -- but are there specific plans on direct to investor or to media outlet or other large or varied exposures within the next month to try and increase that price per share price point before the reverse split?

There are plans and activities for direct to investor, particularly institutional investors. As we are heading to become a NASDAQ company, we are acting like a NASDAQ company, in our Sarbanes-Oxley level of compliance and in everything that we do, including wanting to build our institutional investor base and all investors. So we do have aggressive plans. We are acting on them. We've been participating in conferences. There will be more of that. There are one-on-one is meetings with investors, with institutional investors, and there is more of that coming. Listing on the NASDAQ is a process that we are carrying out on the IR and PR fronts, and that will continue after listing, as well.

I would point out also that in our last investor meeting, we put out a presentation that totally detailed all the timelines associated and the funding requirements associated with our fuel development program. We intend to use that going forward as sort of what I will call the baseline to update the investor population on our progress in a more consistent fashion.

So I would invite everybody, if you've got any more questions or you want to take a deeper look into the fuel development program, is to go to the website and pull up that presentation, for those of you who weren't able to attend the meeting.

If I could be more specific, I was actually an owner of a company that became public and ended up listing on the American Stock Exchange, and we went through similar mechanisms that you are going through now. But the large-scale or large money investors, whether it be groups or funds and such, will come after the price point changes into the several dollar range. But getting to the reverse split at this price point of $0.30 or $0.40 would entail -- I believe would entail exposure to the smaller investor.

And those come, again my experience, just being with the company for a few years now and my initial introduction, through other media outlets, whether it be the Fortune or Forbes articles or the Washington Post magazine article and that type of exposure. So my question had been, to again, either Crescendo, maybe to you, is are there other vehicles -- because there is only a month left -- to try and gain exposure to the general public that would then show an interest in purchasing the shares to increase your share price prior to the reverse split?

Well, first of all, I think that this Washington Post article, which is getting a lot of traction and pickup around the world, and we get contacted on it every day by many people, is an example of general information out to the general public government about the Company, where we are heading.

We are meeting, as I said, with the institutions. But there is also the individual investors that we stay in contact with and more that we are seeing, including those that get to know us through conferences and other [forums that we are] participating in. So I will leave it at that. And Mark, if you had any more follow-up questions.

[Edward Sherman, VSW Associates.]

A lot of my questions were answered. I just had a couple. One, another person asked this question, but regarding your recent revenue, you know the oldest saying, "watch what they do, not what they say." It is hard for us, I think, investors to figure out where your consulting business is going, when we look at the last two quarters and the revenue stream appears to be going down, not up. That is [deaccelerating], not accelerating. And I don't believe you adequately answered that. Could you try that again?

First of all, in the UAE, we are dealing with a program that has variances in how much work is needed at various times. And it is heading toward selecting prime contractors and deploying the reactors; that phase has not started yet. And in terms of watch what they do, not what they say, on these small variances in revenue by quarter, of course over time, we want to see those increase, increase substantially and have multiple clients, and we are very confident of that.

But in terms of what they do, what we have done is been the lead advisers to what has been called by the current and last President of the United States, the gold standard for the world that should be followed by other countries. And that has been picked up by the major media, other political entities around the world. And we are seeing in our clients' fantastic work and tremendous success in a program that a year ago, a lot of people either didn't think would happen or might be a bad idea. And now the consensus in the world seems to be that it is the best one on the planet.

And as I said earlier in the call, I think that our work there is, as I call it, tending to our garden, is not just for building our work there and our mainstay for these five-year agreements and hopefully beyond, but really is what is our greatest marketing tool for other clients, as well, on how well the UAE program is doing. And we are very happy to be such an important part of it.

So I am confident in our future revenues. As I said in the beginning of the call, we are dealing partly with timing of booking revenues, and we are dealing partly with timing of when the client needs certain amounts of work done. But overall, we think this is a very solid, at least five-year job for us, and probably well beyond that, and we think will lead to work in other countries as well.

I would just like to say, I've seen what people have said about your work and I applaud you for it. And if you were a nonprofit organization, I would support you as a candidate for Director of the Nuclear Regulatory Commission.

However, you are a for-profit Company, and it is just a little disconcerting when you see that revenue stream go as it is -- I understand the variances -- but then you come out in the same statement and actually warn about the second-half revenue as being down from the first-half revenue. And then also say that billable hours, the rate for billable hours will have to be cut to become more competitive, making it even more strange, that given the quality of your work that you would have to cut your rate in order to become more competitive.

It just seems odd, given all the applause that you have received and the client itself being one of the wealthiest clients you can imagine.

Well, we cut some of the rates, not all of them. And we cut them to be competitive, not just there, but in other countries where we are bidding. And they do tend to talk to each other in some places about what the rates are.

Also remember, we have multiple clients. Even within the UAE, take the two biggest clients -- FANR, the Federal Authority for Nuclear Regulation, and ENEC, the Emirates Nuclear Energy Corporation -- we are advising both. And for example, FANR, the regulatory authority that we helped stand up, doesn't yet have a reactor choice, a reactor program to regulate. I think that their work will be picking up rather substantially once they have the reactor choice and then reactors being built to regulate. And ENEC will actually be owning, operating, deploying those reactors.

So in the phase of work that we are in, we are doing what the client needs. The client is doing extremely well. And we are very confident in building our work there and in other places.

This will be my last comment or question. I think it would be very helpful to investors to analyze your Company as a consulting group, like as opposed to the technology part of the Company. If you outlined what it is exactly you did -- it's not really quite clear whether you provide scientific guidance or technical guidance or whether you are more of an administrative consulting group, setting up the basic bureaucratic framework for the oversight of the nuclear power program. Do you understand what I'm saying?

And I think if we understood exactly what it is you do, then we would be able to better analyze that part of your Company, and maybe perhaps you would get a better valuation than you receive now.

Well, let me just say that what we have done is we have taken something from a blank sheet of paper to providing advice that brought it to be in the fastest-moving and most exciting nuclear program in the world. We wrote the roadmap, the architecture, for the entire program, for the life of the program, going out decades. From initial looks at technology to deploying reactors and operating them, both from the deployment side, which is ENEC, as well as the regulatory side, which is FANR.

We are at a very high level of the work we do. There is nothing bureaucratic about it. We operate at the highest level in advice, guidance and helping to advise the direction of the program.

And we do this based on the highest standards of safety, of nonproliferation, of transparency and security, meeting or exceeding what has been done elsewhere, which is what leads to the comment of what our clients have done as being the model for the world, and really being a shining star in how to deploy nuclear programs so well and responsibly.

And this is not something that is completely divorced from our technology side. We are the leading nuclear engineers in the understanding of reactors, of fuels, of deployment of them, of operating them. When you talk about operating a reactor in a non-proliferative way, in a safe way, this comes down to nuclear engineering knowledge. I assure you, Ed, there is nothing bureaucratic or administrative about what we are doing.

There are no further questions at this time. Presenters, are there any closing remarks?

Well, we will just say we want to thank everybody for participating in the call. I think these have been excellent questions, and we look forward to continuing the dialogue. We will have another call next quarter; we will be putting out more information. This is a very exciting time in our industry and in our Company, and we look forward to sharing these developments with you.

Thank you. That does conclude today's conference call. You may now disconnect.