Welcome to the Lightbridge Corporation 2015 Second Quarter Business Update Conference Call. My name is Christine and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to Mr. Gary Sharpe of Lightbridge you may begin.

Thank you, Christine, and good morning and welcome to the conference call for Lightbridge’s 2015 second quarter business update. Our news release was distributed after the market close on Wednesday and can be viewed on the Investor Relations page of the Lightbridge Web site at ltbridge.com. We also filed the company’s Form 10-Q with the Securities and Exchange Commission. Seth Grae, our CEO, will lead today’s call. In addition, the following executives are available to answer your questions, CFO, Linda Zwobota; and Andrey Mushakov, Lightbridge’s Executive Vice President for International Nuclear Operations. You know I must tell you that today's presentation includes forward-looking statements about the company’s competitive position and product and service offerings. During the course of today’s call, words such as expect, anticipate, believe, and intend will be used in our discussion goals or events in the future. The presentation is based on our current expectations and involves certain risks and uncertainties that may cause actual results to differ significantly from those estimates. These and other risks are discussed in more detail in our filings with the SEC. And of course Lightbridge does not assume any obligation to update or revise these forward-looking statements whether as a result of new developments or otherwise. You can participate in today's calls two ways. First, you may submit questions for management in writing to ir@ltbridge.com and if you have already submitted a question and we've got several, we thank you. You can submit them at anytime during the prepared remarks or during the Q&A period. After prepared remarks, telephones lines will be open for live questions. Now without anything further here is Lightbridge CEO, Seth Grae.

Thank you, Gary. Good morning, everyone. I'd like to take a moment to comment on how far we've come in a few short years in an industry where progress is typically measured in decades, not months or years, and yet we have demonstrated the nuclear fuel we have invented and patented is safer, increases power output, lowers cost, enhances economics and reduces waste without overhauling the existing industry infrastructure. In a nutshell we believe there is no reason why utilities will not adapt to our fuel. This is best evidenced by the fact that four of the leading North American utilities which collectively represent about 50% of all nuclear power production in the United States have publicly expressed interest in our technology, formally requesting the NRC to review our patented metallic fuel design. These four utilities represent about 50% of the U.S. nuclear market and even if we assume just 25% penetration of the U.S. market and if we completely exclude the global market potential, we could still generate $150 million to $200 million per year of revenue at 90% gross margin from licensing our patents. You can see why we are so excited about the market potential for this game changing technology. I'd also like to note that the EPA this month released its new rule called the clean power plant. I'll talk more about this later in the call, but suffice it to say, under the new rule increased nuclear power production from power uprates or capacity increases at existing plants will now account as zero carbon sources in meeting the stricter state requirements making such projects more valuable. The fact is the industry has just about maxed out capacity in its existing plants and short of building new reactors the only way to significantly increase nuclear power…

Thank you, Seth. The company's financial statement for quarter and six months ended June 30, 2015 are on filed with the SEC and are also available through the investor relations section of the Lightbridge website. In the interest of time I won't repeat all of these details now. However if you have questions about any aspect of our financial statement I would be happy to respond during the Q&A portion of the call. I want to highlight our progress and reducing general and administrative expenses in 2015. The Lightbridge team is carefully managing G&A expenses and reducing overhead where appropriate and we're also maintaining a solid balance sheet with no long term debt. Every facet of corporate operations has been examined and where possible renegotiated to trend expenses and increased efficiency. Year to date the company's cash flows used in operating activities were $1.8 million down approximately 33% from $2.6 million in the same period last year. Most of the reduction in our cash burn rate came from significant cost to our corporate overhead. The primary objective of the current expense management program is to free up cash for research and development activities and to further company's need to raise additional equity capital. We believe that our previously disclosed aftermarket sales program or ATM gives us flexibility to raise new capital opportunistically at a lower cost and reduce dilutions compared to registered direct offering. We have authorized sales of up to $0.5 million in shares depending on market condition. Year to date we have not sold any shares of Lightbridge common stock under the ATM which was put in place during the second quarter. We will provide regular quarterly update on the program going forward. The ATM program is just one element of our plan to secure new or additional sources of capital over the next 12 months. As Seth mentioned earlier our efforts are advancing on potential teaming agreement and other strategic transactions. This concludes my summary. I will be available for questions during the next segment of today's presentation. And Seth back to you.

Thanks Linda. Let's open the call to everyone's questions now. In addition to asking live questions by telephone, you can also submit questions in writing to ir@ltbridge.com. We will pause while Christine reviews the procedures for asking live questions.

Thank you. [Operator Instruction]

And while we're waiting for any live questions by phone Gary Sharpe who is in charge of our Investor Relations will proceed with any questions coming in via e-mail again at ir@ltbridge.com, Gary.

Thanks, Seth, and there are numerous questions that have come in via the e-mail channel. First one we'll start with this one that comes from an investor in San Diego. He is asking with the current valuation of Lightbridge and its compelling technology, what is stopping its strategic investors from stepping up now? Do industry insiders and strategic really need to wait until 2017 for data from fabrication and irradiation operations?

Well, I think that more goes to the terms of what a deal would be. Once we have, starting in 2017, actual data of how Lightbridge fuel is performing under commercial operating condition in that reactor in Halden in Norway and we think we're going have a much more compelling case, as you know we are working with major strategic parties including four of the largest nuclear utilities in the United States already not as investors but as advising us and helping us in many ways including what the Nuclear Regulatory Commission as well as with the fuel design to making sure the design brings the benefits they need. So what we said earlier was that while we expect a strategic transaction in 2017 or 2018 it could come sooner which is what the caller is really pointing to, it depends on exactly what the terms are as we said these could include upfront technology access fees, milestone progress payments, ongoing royalty fees. So there is a lot that could happen quite a bit sooner than 2017 but we also think we’ll be in much stronger negotiating position than -- and it could be phased, you could have a deal earlier with one strategic partner and then lead to deals in other parts of the world or different types of reactors with others. Next question?

The follow up to that question is, would such a partnership or any partnership or any partnership be exclusive and would that or could that constrain your efforts to license your fuel for fabrication later?

No, we would not have a totally exclusively deal which will be like acquiring the company. If you see the company as really having its future value tied into our nuclear fuel technology IP. What we could have could be for limited times or limited geographies or limited types of reactors for certain periods to give a first mover advantage to someone. So you could see a country in some continent somewhere in the world for a certain period of time getting exclusivity, something like that. There are some markets that are dominated by a few players and if you don’t deal with them it’s hard to get into those in markets like Russia dominated by Russian government controlled companies, South Korea dominated by South Korean government controlled companies, France dominated by French government controlled companies and some others around the world, although for the most part it is free market in nuclear there are countries like that, different countries like that it would make sense to really penetrate those markets broadly to deal with those entities. But generally we’re looking to be a non-exclusive licensor for the world market. Okay, the next question?

Now, that you had time to study the EPA clean power plant, can you offer any additional insights or information in this initiative and how it helps or might hinder Lightbridge?

We like to think we follow pretty closely what’s happening in Washington but we had no idea what that clean power plant would say until it was published recently and it was a surprise. What was very interesting is that the plant basically takes existing non-CO2 emitting generation like nuclear reactors and hydroelectric dams and wind and solar and so okay, that’s where they are now and any new ones added or increased power to those will count for the states as new non-emitting generation. So the existing nuclear generation from 99 operating reactors in the country gets no credit under the plan which the nuclear industry didn’t like but in a sense makes sense if that’s your framework that you’re going for new electricity [new avenues] [ph] to be non-emitting. Now there are five new reactors under construction in the country and those specifically under the plan remain as the new rector that will count or those state Tennessee and South Carolina and Georgia for those state’s plans under the EPA’s clean power rule for non-emitting CO2. So those plants in a sense are more valuable than they were a month ago because now they get these carbon credits for the state in a sense. But the biggest part of the plant, the only other part of the plant relating to nuclear is that power output increases from reactors also count fully. So if you do a 10% power uprates you’re taking 1100 megawatt reactor and add 10% more electricity and other 110 megawatts of electricity coming out of that plant that counts fully under the plant. And because the reactors are pretty much done everything they can to squeeze more power out of them already everything they can do short of changing to a new fuel this has left Lightbridge as really the only game in town for how can you do a material uprate to the nations reactors and get credit for under the clean power plant. So when we first read the plan we were sort of jokingly at the office calling it the Lightbridge rules or the Lightbridge act and it’s incredible that it's so specifically targeted toward increasing power at existing plants and that’s what we designed our fuel to do, and we just don’t see any other way it can be done in any material way. So we’re very positive on the clean power plant. We also see it very much is in line what other countries around the world are doing and giving credit to power uprates for new reactors and I think it’s good for the nuclear power industry, I think it’s good for reducing CO2 emissions, but I think it’s mostly good for Lightbridge.

Okay. The next question on the queue, it says Lightbridge metallic fuel has been -- you framed it as the only meaningful way for utilities to achieve uprates in their reactors. Can you elaborate on the competition, the other methods, and why they don’t meet the Lightbridge test?

Utilities have upgraded all sorts of power plants forever, hydroelectric dam get a little more efficient by tweaking turbines, some of which are almost 100 years old, coal plants have gotten more efficient at burning coal, natural gas plants have -- and most of these are done in the same way that they've done for reactors which is outside the fuel, outside what's called a nuclear island, a coal plant and nuclear plant are very similar. The heating up of water and making steam, spinning the turbine and its making that stuff outside the nuclear area more efficient. So, reactors have been upgrading their turbines, upgrading their steam generators, improving the efficiency of the steam path this sort of thing and they're basically tapped out on the ability to do that, virtually anything that could be done has been done and anything less to do is kind of expensive given the benefit you get of a power uprate, so I'm sure you'll see some 1%, 2% maybe 3% power uprates at some reactors with some stuff left to do sort of incrementally more expensive to get that last 1%, 2% or 3% efficiency squeezed out of operating the turbine or something, but with Lightbridge's fuel just by changing the fuel, in addition to the safety and all the other benefits, you can get a 10% power uprate and again also increase from an 18 months fuel cycle to a 24 month fuel cycle. So the reactor is selling electricity more days per year on top of the 10% power uprate or we can do a 17% power uprate at existing reactors without lengthening the fuel cycle, but keeping it at the current 18 months, 17% or for new build reactors where you are building with a bigger turbine, bigger steam generator et cetera to match the bigger power output. We can do over a 30% power uprate, so you can build three reactors and get the power for -- so these are massive, huge power uprates at a 10% power uprate which is what [seen in the] study -- studied in the report on our website on the Lightbridge value proposition, think of it as you can upgrade 10 reactors in the U.S. by 10% [each] and get the equivalent of a whole new reactor and because the capital cost of doing that is so low, it's why we say the incremental cost of adding all that electricity with Lightbridge fuel turns out to be much less than if you add in natural gas or built in a new gas plant or a coal plant, it the lowest cost way to do it, because nothing can match our power uprates for reactors.

All right. The next question, how does the current status of the 123 agreement with Norway affect Lightbridge?

The Atomic Energy Act of 1954 as amended here in the United States is a pretty long act, to give you a sense of how long it is, we're dealing with exception 123 of that act which deals with cooperation in civil nuclear power with other countries. And under section 123 of the Atomic Energy Act of 1954 to these certain types of activities in other countries, there has to be an agreement in place pursuant to this section, they are [indiscernible] known in the industry as 123 agreements or nuclear cooperation agreements. The United States has these agreements with every country in the world in which we collaborating in civil nuclear, they generally last about 30 years, they vary a bit and when they expire new ones get negotiated that for the most part tend not to be controversial and go through pretty quickly because they intend to be pretty similar terms to what's already been agreed to an acted on by both countries for decades. So, the one with Norway has recently expired the new version has been agreed to we understand by both countries will be submitted to Congress later this year or early next year, Congress does not have to vote to approve it but to kill it will take a vote by both houses of Congress to disapprove it, that the President would veto and there -- the Congress could override the veto, but the fact is that out of 435 members of the house and 100 members of the senate, they are none of them who say that they'll oppose the Norway 123 agreement. So this is about a sure thing as ever happened in Washington. To give you an idea, the 123 agreement with China recently went through Congress through being in force…

So I hear the follow up question that relates to our earlier discussion of potential teaming arrangements or partnerships asking would a teaming agreement preclude the need for additional Lightbridge equity issuances?

It could, as you know we've been very careful with equity issuances in dilutions for the history of the company. Since we became publicly traded in 2006 and enlisted on the NASDAQ in 2009 we've only had three registered directs spaced years apart. We never had debt and we brought in over half of our operating capital through margins on our own consulting work. The three registered directs add up to about $20 million in equity funding that we brought in since after becoming public in 2006 and we've made about $56 million of consulting revenue and more than 40% gross margin overall. So it's almost like having a debt equity ratio when a company never has had debt and still doesn’t. So we've raised since less than half the equity funding you might expect a company like ours to need to. We've also undergone a really substantive attack on all cost in the company in holding down all cost. And as Linda said, we have an ATM arrangement in phase and at the market arrangement where we could sell stock out into the market, we have not used it, we might at times. We haven’t yet, we have the ability to raise capital that way one if we want to, but one balance and maybe entering into a teaming arrangement or a partnership early would be not necessarily cash, cash is always good. But in kind what a partner would do and pay for meaning that we won't have to, which in a sense is better than cash if you have a major global company doing work itself in cooperation for Lightbridge. So we'll see how that goes. As we said we're definitely planning on having at least one major teaming arrangement or partnership with a major global company in 2017 or 2018. But based on discussions we're having that could end up being quite a bit sooner.

We’ve got a question regarding the ATM initiative, the question is asking do the terms of the ATM means that the company would have multiple issuances of up to $0.5 million or that the entire ATM program is kept at $0.5 million in sale of shares?

Under NASDAQ and SAC limits were capped at a $0.5 million until December 1 of this year, upon which we can raise under the ATM. So if we were to use it at a time or times between now and December 1st which we're not doing today, we're not doing tomorrow and we haven’t yet. But if we were, we could use it as many times as we wanted. As long as in the aggregate we did not sell more than $0.5 million worth of stock, I think the actual number is $478,000 which meant is not a year. And as of December 1st those limits go up quite a bit under the NASDAQ limits. So the short answer is capped at that dollar amount collectively until December 1st and then we could continue issue stop periodically after that at much higher levels in the millions of dollars per year if we wanted to and if the market conditions were right.

Next question Saudi Arabia has agreed with the French to build four nuclear power stations in the near future, have you contacted either party to see sale incorporate your fuel design in their reactors?

Well news reports may have said that Saudi Arabia has contracted with the French to build four reactors but Saudi Arabia has not in fact contracted with the French to build four reactors and is not in fact contract with anyone to build reactors. There are periodic reports for many countries of rumors of building reactors in Saudi Arabia and none of which is actually been ordered, although there is a lot of talk and I believe Saudi Arabia is very serious and will go forward with a larger reactor or there could be large numbers of reactors perhaps much larger than four from one vendor or perhaps orders from several vendors of smaller numbers from each vendor, perhaps at different sites around the country. The French are actively involved as one of the major nuclear reactor countries of the world, the second largest fleet of reactors after the United States in the French are very active around Europe and UK and in China and around the world building reactors, so I’m sure France definitely is very active in Saudi Arabia but they don’t have it in order. The question that we have in contact with Saudi Arabia and we’ve been in contact with the French yes, we’ve been in contact with both.

[Operator Instructions]

Linda, Andrey just so you know that I have not received any additional email questions.

Okay. Let’s ask Christine, do you have any additional questions by phone?

I’m showing no questions at this time.

Okay. Thank you very much. I want to thank everybody for joining us on the call. It’s a very exciting time for Lightbridge. We hope you share optimism for Lightbridge’s improving position and expanding global nuclear power market and the opportunities to serve that market with our fuel. As always until the next conference call our lines are always open at IR at ltbridge.com and 1571-730-1213. Thank you for your questions. And thank you for your interest, and good bye.

Thank you. And thank you ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.