Lightbridge Corp (LTBR) 2012 Q2 法說會逐字稿

Good morning, everyone, and welcome to the 2012 second-quarter business update for Lightbridge Corporation conference call. All participants will be in a listen-only mode. (Operator Instructions). Throughout today's presentation, you may submit written questions to ir@ltbridge.com. Again, that address is ir@ltbridge.com. Questions will be read aloud and answered during today's question-and-answer session. Please also note that today's event is being recorded.

At this time, I would like to turn the conference call over to Mr. Gary Sharpe, head of Investor Relations at Lightbridge. Mr. Gary Sharpe, please go ahead.

Thank you. Good morning, ladies and gentlemen, welcome to our conference call for the second quarter. The earnings release was distributed after the market closed yesterday and you can, of course, see that on our Investor Relations page at ltbridge.com.

Seth Grae, our President and Chief Executive Officer, will lead today's call and we also will be joined by Jim Guerra, our Chief Operating Officer and CFO; Jim Malone, the Company's Chief Nuclear Fuel Development Officer and Andrey Mushakov, Lightbridge's Executive VP for International Nuclear Operations.

I have to remind you about today's presentation which includes forward-looking statements about our competitive position and product and service offerings. During the course of today's call words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. These statements are based on our current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from those estimates. The risks include, but are not limited to, the degree of market adoption of the Company's product and service offerings; market competition; dependence on strategic partners and the Company's ability to manage its business effectively in a rapidly evolving market. Certain of these and other risks are set forth in more detail in our filings with the Securities and Exchange Commission, and you know where to find those. We do not assume any obligation to update or revise those forward-looking statements whether as a result of new developments or otherwise.

As our operator indicated, please submit your questions in writing to ir@ltbridge.com. Questions will be read aloud and answered by our senior team. If you have already submitted a question, we thank you. If not or if you have more questions, you can submit them at any time during the prepared remarks or during the Q&A period.

Now here is Seth Grae, President and CEO of Lightbridge. Seth?

Thank you, Gary. Good morning, everyone, and thank you for joining us for our 2012 second-quarter conference call. Lightbridge continues to log steady incremental progress toward bringing next-generation nuclear fuel designs to market. Demonstrations of our fuel technology support the indicated benefits of meaningful operates, longer fuel cycles and increased safety.

In addition, our advisory services division has been active in pursuit of new consulting opportunities as global interest ramps up in nuclear energy as a source of long-term, efficient baseload and carbon-free electric power.

Contract negotiations continue to advance with the Bochvar Institute in Moscow on fabrication of Lightbridge designs, metal fuel samples for irradiation in the MIR research reactor in Dimitrovgrad, Russia, and the advanced test reactor at Idaho National Laboratory. We remain on schedule to begin irradiation testing of fuel samples in 2013 in the MIR research reactor. Irradiated samples from this program will be used for additional out of reactor tests to demonstrate the metallic fuel's behavior during severe accident scenarios and to provide quantitative verification of the safety benefits of Lightbridge designed fuel.

We are also on track with our irradiation program at the advanced test reactor working in collaboration with Texas A&M University and Idaho National Laboratory. We continue to educate key stakeholders including nuclear utilities and our potential fuel vendor partners about the benefits of our next-generation nuclear fuel designs. We expect to enter into commercial arrangements with major nuclear fuel fabricator companies by 2015.

We anticipate that we will be able to begin lead test assembly operation and a full-sized commercial light water reactor by the end of 2017. This involves testing a limited number of our full scale fuel assemblies in the core of a commercial nuclear power plant over three 18-month cycles. These assemblies are approximately 12 to 14 feet long.

Lightbridge also has been pursuing advisory service contracts, primarily in Europe and the Middle East. Our focus is on consulting arrangements with governmental entities planning to create or expand nuclear generation. Since 2008, Lightbridge has served as an independent advisor to the Emirates' Nuclear Energy Corporation and the Federal Authority for Nuclear Regulation in the United Arab Emirates. We have also provided advisory services in Kuwait and to the Gulf Cooperation Council Member states.

During the quarter, our agreement with the Federal Authority for Nuclear Regulation in the United Arab Emirates was renewed and extended through 2014. We believe that in the second-half of 2012, we may obtain contracts from other governments interested in deploying nuclear power in their countries. The prospect for increased consulting revenues is real even though the sales cycles for these multimillion dollar contracts takes time.

Lightbridge progress during the second quarter comes at a time when electricity generation from nuclear power worldwide has reached a record level. The World Nuclear Association estimates that at least 73 gigawatts in net new capacity will be added by 2020, bringing global operating capacity to about 450 gigawatts, up from 372 gigawatts of electricity before the Fukushima incident.

Newly 18 months after damage to the Fukushima reactors caused by human error and earthquake and a tsunami, Japan has brought other nuclear reactors back online. The economies of long-term efficient baseload and carbon free electricity from nuclear power are compelling. The Japanese utility industry has incurred billions of dollars of losses from importing fossil fuels to keep the lights on.

According to the Nuclear Energy Agency, there are more nuclear reactors under construction now than before the Fukushima accident and hundreds more are planned to go into operation by 2035.

Today, there are approximately 435 active nuclear power reactors operating in 30 countries, based on data compiled by the World Nuclear Association. That number is expected to grow steadily with more than 80 reactors under construction or being upgraded around the world. China, Russia and South Korea have 26, 10 and 5 reactors under construction. respectively. Most of these are expected to be completed this year. In all, more than 150 new reactors will be completed by the end of 2016 with another 330 proposals pending approval, mostly in China and India.

In the United States, 20 proposals for reactors are pending and four are planned in the United Kingdom. The Czech Republic, Poland, Slovakia, Romania and Ukraine each have plans to build new reactors within the next decade. Finland and Sweden also plan to expand their existing nuclear generation capacity. Momentum is building globally throughout the commercial nuclear power market and Lightbridge is well-positioned to serve this growth with next-generation fuel designs and expert advisory services.

For any newcomers on today's call let me bring you up to speed on the indicated benefits of Lightbridge's nuclear fuel technologies.

First, our patented technologies can help nuclear utilities generate more electricity from the same power plants for longer periods before refueling. We believe that our fuel will allow currently operating and new build light water reactors to generate up to 17% and 30% of increased electricity output, respectively.

Next, our fuel can dramatically improve the life cycle economics to existing and newbuild nuclear power generation through power upgrades and extending operating cycles from 18 months to 24 months in existing plants. This means that the plants will be shut down for refueling less frequently. In addition, Lightbridge's fuel technology can reduce the volume of nuclear waste per unit of electricity generated.

Finally, we believe our fuel designs will enhance operating safety through improved heat transfer and structural integrity of the metallic fuel rods, as well as reduced operating temperatures. For example, the average operating temperature of Lightbridge designed metallic fuel rods in a 1,600 megawatt EPR reactor with a 30% power increase in electrical output would be approximately 380 degrees Celsius, newly 1,000 degrees cooler than the average operating temperature of conventional uranium oxide fuels.

We believe that the lower operating temperature for our metallic fuel will reduce the amounts of heat that must be dissipated into the coolant at reactor actor shut down, shortening the time for -- shortening the time acquired for shut down.

Our projected timeline for testing our fuel for Western pressurized water reactors has four primary components. First, irradiation testing in test reactors from 2013 to 2016. Second, additional testing on irradiated fuel samples in 2016 and 2017. Third, out of reactor testing from 2013 to 2015 and fourth, lead test assembly demonstration in a full size commercial pressurized water reactor beginning in 2017.

Newcomers on today's call should know that Lightbridge is a highly regarded advisor to commercial and governmental entities providing detailed counsel for safe, secure, efficient and cost-effective nuclear power. We engage only with enterprises and governments that are dedicated to safe, nonproliferative and transparent nuclear programs. We provide integrated strategic advice including regulatory development, nuclear reactor site selection, procurement and deployment, reactor and fuel technology, and international relations and regulatory affairs. Our pipeline of consulting opportunities includes proposals for entities in the early stages of adapting nuclear power programs.

Now let's move on to the Company's financial performance. Our financial results were summarized in the news release that was distributed after the market closed yesterday. The results are also posted on the Lightbridge website. I will not recite all the details now. At June 30, 2012, Lightbridge had $6.4 million in cash, cash equivalents and marketable securities. Working capital totaled $6.7 million with no long-term debt.

Now let's open the call to your questions. Remember, if you want to ask a question please submit it in writing now to ir@ltbridge.com. Gary Sharpe, who is in charge of Investor Relations, has been collecting several questions already and we will read the first question.

All right, we have a question here. Let me try to paraphrase it in case it is duplicative. Some of the wording is redundant. Are there any current plans for Lightbridge fuel testing at Idaho National Laboratory? And if not, why did that change and how much did it push back the commercialization timeline?

Well, there are. Let me turn to the leader of that effort at our Company, Jim Malone, our Chief Nuclear Fuel Development Officer. Jim?

Thanks, Seth. The response to the question is we have not changed our plans for irradiation of samples at the Idaho advanced test reactor. We are still on track to get that started, probably in 2014. In addition to that, we have made sure that due to the nature of the program at Idaho, we are prepared to provide samples that may be run in capsules or in the irradiation loops of that reactor. So we have covered our bets on both sides there.

As a backup to that, we also have an ongoing relationship where we will be irradiating fuel samples at the MIR test reactor as Seth pointed out in Russia at Dimitrovgrad and we will get very good results from that, which will be a loop test of our fuel samples. So we have an ongoing problem. We do not anticipate competition from other fuel technologies related to getting into the reactors and we expect that we will still remain on our current commercialization timeline.

Okay, let's move onto the next question. From the same shareholder, do you anticipate that Lightbridge's consulting business will supply the cash needed for all metal fuel testing for the foreseeable future?

Well, it depends on how long a future we are looking out to. Certainly for the immediate future and for this year and well into next year, beyond that, it will depend on the day revenues we are anticipating from potential new consulting clients. Some of these are with countries that have not yet officially made the determination to begin their nuclear power programs. We did list the countries during my earlier remarks, and there are several in which we seem to have very good prospects for new contracts.

Also as we have mentioned, we expect to enter into significant commercial arrangements in 2015 with major nuclear fuel fabricating companies, and we expect that those contracts would come with revenue to Lightbridge in the form of technology access fees. So, it won't only be from consulting revenues that will also be starting. We expect by 2015, revenue from the technology division of the Company.

That being said, if the revenues we are anticipating in new consulting agreements come a little later than we thought we might do a financial raise at some point but that is not in the foreseeable future.

And then the last asset of this investor's question relates to a recent announcement that Australia will provide uranium for reactors in the UAE. Does that suggest any near-term activity for the consulting unit?

Well, as we have mentioned we are very active in the UAE both at the Emirates Nuclear Energy Corporation and at the Federal Authority for Nuclear Regulation.

However, we are not involved with that agreement with Australia. So yes, we are quite active in the UAE and, as we mentioned recently, our contract with the Federal Authority for Nuclear Regulation was renewed and extended to expire at the end of 2014, and we expect it will be extended again.

But we are not involved with the Australian uranium supply directly. We do advise on these issues a bit.

There is a question that just came in. This investor wants to know why does it take so long to start and complete nuclear fuel tests so that you can begin selling fuel rods? What can be done to contract that time line?

Well, let me turn it to Jim Malone again, our Chief Nuclear Fuel Development Officer, for that answer.

Thanks, Seth. Gary, this is a common question and it is well-rooted in the investors' interest. However, the reason that things take time has got a couple of important points. First and foremost is that we must be in compliance with the regulations of the Nuclear Regulatory Commission to prove that the fuel can be operated safely under the conditions that we propose it be operated. That is first.

In order to prove that, we have to go through the steps that we are going through at the test reactor stage to irradiate samples that may be subsequently tested to prove that the anticipated performance that is calculated is matched by the actual performance in the reactor. So we have to get that step done and, unfortunately, these things take time. We have to burn the fuel to an equivalent number of burn up days that we would see in a power reactor and that simply takes time. We cannot accelerate the pace at which neutrons are impinging on the fuel in these test reactors. There is a finite number and that is the best we can do.

We are going as quickly as we can, keeping in mind that the Nuclear Regulatory Commission is also preparing to understand, based on our experimental results, the differences between the oxide fuel, as it is common for them to look at now, and our fuel which has some different performance parameters.

So in a nutshell basically, that is why it takes longer or it takes some time to complete the development and commercialization of a new nuclear fuel product.

Okay, next question. We have gotten this question a few times also. Does the currently cheap price of natural gas represent a long-term threat to Lightbridge's fuel technology?

Well, again, let me start with Jim Malone on that and then some of us may add to that as well. Why don't you start, Jim?

Okay, sure. The decision as to which fuel to select for a power plant to be built is complex, and looking at the very near-term market conditions for a particular fuel may not be representative of the long-term prospects for a nuclear power plant. If you look at the power plant being built today around the world they are looking at a typical 60-year life and perhaps as long as 80 years, and I don't believe anyone would suspect that the low natural gas prices that we see currently in North America will sustain for an extended period of time. It's much more reasonable to expect that the market price for natural gas will kind of rationalize around the world.

Just ask yourself for example, if I had a lot of natural gas to sell, I might want to sell it in Japan where I can get $18 per million BTU versus selling it in the US at $2.

So by taking rational thinking into the market, we will see that prices probably will moderate in Japan and in East Asia, and they will increase somewhat in North America. Therefore, the comparative price of fuel in the long term would favor the stability of nuclear fuel. As a matter of fact, the people at Southern Company in Georgia at the new construction at Vogel and in South Carolina at BT Summer, have pointed out that the decision on a nuclear power plant is a 60- to 80-year decision and the daily fluctuations in the market price of natural gas are irrelevant to that decision-making process.

Okay, here is another question that just came in. Outside of the Middle East and Asia or Europe, the Middle East and Asia, where are you looking at other consulting opportunities? Does it include India or South Africa because these seem to be potential short-term opportunities in this investor?

Well, if we take out Europe and Asia and the Middle East, we are taking out a lot of the biggest markets that we are going after right now. I will say that we are pursuing some opportunities in Africa, that the clients want to maintain confidentiality right now and not have us accidentally announce certain programs for them. So I will leave it at that.

India is on the Asian continent. We are not pursuing consulting work in India now. India has expertise at deploying and operating reactors and at regulating reactors. But we are talking with fuel fabricators about potentially supplying fuel to India at some point.

We are also pursuing some consulting opportunities in some other regions of the world, including some smaller contracts here in the United States with some people who need some help.

Okay, here is a question that came in last week. It is an involved question. It says, in September at the IAEA meeting, the Department of Energy and ROSATOM, the Russian agency, are going to sign agreements for the exchange of nuclear information between US and Russia. What are the benefits of this for Lightbridge and what is the timing for executing these benefits?

Andrey has been working on these issues, our Executive Vice President for International Nuclear Operations. Andrey?

Yes, [fill in] entry into one to -- 123 agreement some peaceful nuclear cooperation between the United States and Russia in January of last year, the US Department of Energy and the Russian State Corporation, ROSATOM, have already taken important steps to shore their commercial and nuclear co-operation between the two nations. In particular in September of 2011, the Department of Energy, the US Department of Energy and ROSATOM, signed a joint statement from strategic directions of US Russian nuclear co-operation.

This statement outlines four key areas of mutual interest for collaboration, including the research and development for innovative nuclear energy technology options which is relevant to our collaboration with ROSATOM and its subsidiary companies. The anticipating signing of a new agreement relating to an exchange of nuclear information between the United States and Russia, of course, is a welcome step forward that we believe will further facilitate research and development collaboration in the field of nuclear energy. And of course, it is going to make it easier for our own collaborative projects that we are planning going forward over the next few years with Russian impetus, including ROSATOM subsidiary companies will make it easier to transfer information back and forth and, hopefully, will expedite a lot of that process.

Andrey, has that 123 agreement been signed by the Russian agency yet?

Yes, the 123 Agreement on peaceful nuclear cooperation between the United States and Russia was approved and signed and entered into force as of January of 2011. So, it has been in force for over a year now and they have taken a couple of steps and they have signed a couple of additional follow-on agreements that fall under the framework of the 123 Agreement outlined in specific areas of nuclear cooperation that the United States Department of Energy and ROSATOM think are of mutual interest. And as I mentioned one of them includes cooperation in the area of research and development for innovative nuclear energy technology options, which deals with what we are doing.

Okay, here is another question about Lightbridge and the NRC, Nuclear Regulatory Commission. It refers to a recent meeting. What is happening between the NRC and Lightbridge as a result of that meeting?

And Jim Malone has been leading those efforts, so Jim, why don't you take that?

Happy to take it, Seth. Response really is that part of our fuel commercialization program is to identify current NRC regulations that are not relevant for the metallic fuel. The reason is that some of the current regulations are specifically written for conventional oxide fuels, and others refer to fuel phenomenon that do not occur in our fuel. So we are working with the NRC and the nuclear industry around the world to create regulations for the metallic fuel that will assure that we meet the highest standards of nuclear safety.

To paraphrase what the NRC referred back to us from their perspective, as long as we are going down this path and we check off each of the items required, there are no showstoppers in their eyes that would say that this fuel could not receive an operation -- a license to be operated in the United States.

In addition to the work with the NRC we have formed as many of you may be aware the Nuclear Utility Fuel Advisory Board, and we are working with that Board of utilities that has basically representatives from Exelon, Duke Energy, Dominion and Southern Company to look over our shoulder and make sure that we are not missing something that they see is obvious with respect to developing a new fuel. And the gentlemen that are on that Board are all very much aware of what is required to get a license to operate a new fuel from the NRC. So, in addition to the NRC, we are working with the industry to make sure that we satisfy the regulations that will be put into place for our fuel.

All right, another question. Is there any update on when to expect the peer reviewed article on Lightbridge fuel technology?

Yes, Andrey?

Yes, as previously communicated in the last quarter of last year of 2011, we submitted a technical overview article for publication in a peer-reviewed journal. This is the first in a series of technical articles we plan to publish within the next one to three years. In the first quarter of this year, we were notified by the Journal that the peer review process had been completed and that the article had been accepted for publication and they gave us a date of publication no later than March of 2013, so March of next year.

We are seeking a near-term publication date but. at this point, the final decision is in the hands of the Journal and we have no influence over that process. So, our hope is to have that article published before the end of this year but, at the latest, as they mentioned before March of 2013. We will provide an update once we know or have been notified by the Journal of the specific publication date. And sometimes those articles become available online sooner than in printed form. So, as soon as we know once it is available online we will provide an update at that point.

All right, here's a question that came in a few minutes ago. It says, does Lightbridge have any plans to advertise its fuel technology in order to make the American general public aware during the election campaign?

We don't have any plans to advertise or to be involved in the election campaign in any way. We do participate in industry conferences. We do publish in journals. We do participate actively, in both US and international nuclear organizations. Our fuel will be licensed to major corporations that fabricate fuel for reactors and will be sold to utilities that operate reactors, not to the general public.

That said, as this process goes forward and we have the independent peer review published, we have the fuel manufactured for these tests in Idaho and in Russia and we have data from those tests and as it is coming out publicly with the independent validation, we do anticipate making that more widely known publicly. But that will not be much during the election cycle between now and November.

Here is another question they came in from a long-term individual investor. Seth, perhaps you could talk about this. He says, in today's investment environment when a long-term investment is considered to be one year, why should investors tie up capital in Lightbridge with timelines through commercialization running five to seven years? Perhaps you could talk about how we intend to add value sooner than that?

Well, I can tell you that I certainly have done that as has every member of management, and our Board, and many people involved with the Company and sophisticated investors, we obviously develop the business plan, the strategy, execute on it, make that information available and investors make their own decision. We are very confident in the value of this technology and that that value will be recognized as this project moves forward. We have put out some major milestones we are expecting to hit starting this year with independent peer review, with agreements to fabricate and then actually fabricate fuel for the testing in the large test reactors in the US and Russia, fabricating full-sized fuel samples, all sorts of out of reactor testing, in addition to internal reactor testing leading up to commercial arrangements with major nuclear fuel fabricator and vendor companies over the next three years.

So I think that as we hit these major milestones and investors will be making their decisions and that will be reflected in the stock price. I can tell you also many people at the Company choose to take parts of our compensation in equity and not cash, because of our belief now and not just for the distant future.

All right. Here is another fresh question, a follow-up question from an earlier questioner. It says, how sensitive is Lightbridge's development timeline to political developments in the wake of recent rancor at the NRC?

Well, I don't think that affects Lightbridge's timeline at all. In terms of the recent rancor at the NRC, the Chairman of the NRC, Gregory Jaczko, did resign and he left the Commission, and the other four commissioners stayed. A new commissioner, Allison Macfarlane, was nominating by President Obama and confirmed by the Senate and has taken the position and is now the Chair of the NRC.

As has been publicly disclosed Allison Mcfarlane actually has worked as a contractor for Lightbridge in the past and our work in the Middle East and we do know the Commissioners and many other staff members of the NRC. And as we have discussed in the past many of Lightbridge's most senior experts do come from top leadership positions at the NRC before they joined Lightbridge.

But mostly, the NRC consists of over 4,000 expert regulators and five Commissioners. One of those Commissioners has recently changed in a way that I think makes the NRC, if anything, operate better. And Jim, as our leader of the effort with the NIC, I will just see if you have anything to add to that.

No, I really don't, Seth. I think you summed it up quite well. Chairman Jaczko was not very collegial apparently with the other four Commissioners and that is where the activity that gained a lot of publicity has occurred. But it has not had any impact on the Commission's ability to continue with their regulatory responsibilities. They delivered that quite capably.

Yes, I will just end by saying as someone who works with -- in our work around the world with many regulatory agencies I firmly believe the NRC is the finest nuclear regulator in the world with the highest safety standards and most qualified experts in the world. We have seen nothing that reduces data at all. If anything I think recent actions strengthen it. Gary, any other questions?

One more question at the moment. It came in just a few minutes ago from a buy-side analyst who is asking what are we doing to enhance the Company's profile? He recognizes that we have presented the Company's prospects at a number of investment conferences. Are there any new conferences on the horizon and are there plans to get sell-side analyst coverage for Lightbridge?

Well, I will turn this over to Jim Malone to answer as well. But I will start by saying that Jim is the Chairman of the nuclear fuel technology working group at the World Nuclear Association and will be cheering that group at their annual symposium in London next month, where we will be interacting with people from around the industry. There are other conferences coming up we will be presenting at. I have been invited and have accepted to present at a major European nuclear conference in Warsaw later this year and others in the Company are writing articles and presenting at conferences as well.

We are having many meetings with the US government, as well as other governments around the world, relating to the nuclear fuel technology as well as our advisory services business. So we are quite active even if it is not all very public.

And Jim, let me just see what you would like to add to that.

Thanks, Seth. I think it is important to recognize that the World Nuclear Association fuel technology working group efforts do get a lot of attention within the fuel industry worldwide. We have experts from virtually every country that has a significant nuclear power program participating in that working group. And it does give Lightbridge a fair amount of visibility with people who are the key decision-makers with go, no go approach to new technologies as they evolve.

So I am very pleased and honored actually that the WMA asked me to share that group.

As Seth has pointed out, we pick and choose our spots to participate in conferences. Most recently, I was able to make a presentation on our fuel technology at the Platts European Nuclear Conference held in London in July. And that was a very gratifying experience also because, again, we had people who are influential and who are on both sides of the industry basically asking questions and getting more updates to what they already knew about our fuel.

We also had an opportunity back in April where I was in Scandinavia and met with the Chief Nuclear Officer of Finland [Oikiluoto], who is now responsible for building the sixth nuclear plant in Finland and had an opportunity meet with him again at the London conference and answer some of his questions. And after our discussion he was quite comfortable with the concept of metallic fuel replacing the oxide fuel in the potential power plant that he is getting ready to construct.

So I think we are using our Lightbridge resources of time and finance quite logically and reasonably to get the word out to those people who are most important in the decision-making process within the industry.

Now, with respect to the analyst's inquiry about sell-side covering for Lightbridge, I mean, we do what we can to communicate regularly with sell-side investment brokerages. However their decisions to cover us, initiate coverage are really out of our control. We tried to keep the doors open and the lines open so that anybody who has questions knows we are available and ready to talk, but again there are some things that are out of our direct control.

All right, last couple of questions it looks like. Can Lightbridge fuel be used in integral fast reactors in small modular reactors? There has been quite a bit of news coverage about those alternative approaches to nuclear power. What is the answer, Jim?

Well, the metal fuel is adaptable especially for all water-cooled reactors and the reference to water-cooled is important because the integral fast reactor is not water-cooled; it is typically a liquid metal-cooled reactor which is a very different operating environment. With respect to small modular reactors those which are water-cooled would again be easily adaptable to our fuel technologies.

So, understanding that difference between the nature of the coolant in the integral goal fast reactor and the small reactors that are also fast spectrum would separate them from the water=cooled, and our focus right now is on water-cooled reactors.

And let me just add that the focus is on water-cooled reactors because that is the global market. There actually are no integral fast reactors putting electricity out onto the grid anywhere in the world. There are some experimental ones being designed and built but if and when they ever have any commercial significance it would be many, many decades from now in terms of any significant share of global nuclear power. Whereas the water-cooled reactors, our fuels are being designed for are essentially the entire nuclear power market that exists in the world and the new reactors that are being built and planned.

Okay, here is the last question, gentlemen. Is Lightbridge's competitive position threatened by proposals to use spent conventional fuel in integrated fast reactors?

Let me start again and then turn it over to Jim, which is that, because we don't see any integral fast reactors being used commercially in any significant way for a very long time, the answer is no. Our competitive position is not threatened by that. But Jim, let me ask you to add to that.

Sure. As Seth pointed out in his previous response, the integral fast reactors are not going to be ready today or tomorrow. They are going to be ready in a few decades. And when they become ready, they are not going to magically appear in large numbers, they are going to take time to build in, so that the light water reactors that we are focusing on right now will continue to have a large demand for fuel. And the fact that the IFR may use some of that spent fuel does not have any real impact on our technology being used in the light water units, because the light water units are going to be operating for a very long time into the future. And we see stuff being built today and we saw some of the numbers of reactors that are being built going forward, they are all going to be operating and many, many of them are going to be candidates to use our fuel.

So I don't see our competitive position being threatened by the proposals to use spent conventional fuels in IFR at all.

Okay, that is the last question in the queue. Seth, do you have any final remarks?

Well, yes. I want to thank everybody for joining us on this conference call. We will look forward to speaking with you on our third-quarter business update call as well. And we will be of course putting out any new news in the interim. And thank you again.

Ladies and gentlemen, we thank you for joining today's conference call. It has now concluded. You may now disconnect your telephone lines.