Equity Transactions

From October 1, 2017 to November 14, 2017, we received additional gross proceeds of approximately $0.2 million under the equity line agreement with Aspire Capital from the sale of approximately 0.2 million shares of our common stock.

Short-Term Option Grants

On October 26, 2017, the Compensation Committee of the Board of Directors granted short-term incentive stock options and non-qualified stock options relating to approximately 0.5 million shares under the 2015 Equity Incentive Plan to employees and consultants of the Company. All of these stock options will vest immediately, with a strike price of $1.05, which was the closing price of the Company’s stock on October 26, 2017. These options have a 10 year contractual term, with a fair market value of approximately $0.70 per option with an expected term of 5 years.

Long-Term Non-Qualified Option Grants

On October 26, 2017 the Compensation Committee of the Board of Directors granted performance-based long-term non-qualified stock options relating to approximately 1.3 million shares to employees, consultants and directors of the Company. Out of this total, approximately 1.1 million stock options were issued to employees and consultants as performance-based options. These performance-based stock options vest only upon the applicable performance conditions being satisfied by certain milestone dates, based on either a graded vesting schedule for each milestone or an accelerated vesting schedule. The graded vesting schedule is based on the achievement of milestones related to the formation of the joint venture with Areva NP SAS and the development milestones for the fuel. Accelerated vesting of all option grants would occur upon achievement of one or both of the following performance-based milestones:

The remaining approximate 0.2 million stock options were issued to the directors of the Company and vest over a one year period on the anniversary date of the grant. These stock options have a strike price of $1.05, which was the closing price of the Company’s stock on October 26, 2017. All options granted have a 10 year contractual term.

All such long-term non-qualified stock options issued in excess of the 2.9 million shares authorized under the 2015 Equity Stock Plan (which total approximately 0.5 million out of the total approximate 1.3 million options granted) were issued contingent upon shareholder approval of an increase in the number of shares available under the 2015 Equity Stock Plan (with such number of contingent options to be granted is granted pro-rata among the grantees).

Areva NP SAS Agreements

On November 14, 2017, the Company entered into three binding agreements with AREVA NP SAS: (1) A Research and Development Services Agreement (RDSA), (2) A Co-Ownership Agreement (COA), and (3) An Intellectual Property Annex (IP Annex). These agreements govern joint research and development activities relating to the Lightbridge-designed metallic fuel and treatment of all existing and future intellectual property related thereto. The signed agreements form the foundation for, are an integral part of, the proposed joint venture arrangement between the Company and AREVA, Inc., a US wholly-owned subsidiary of AREVA NP SAS.

The RDSA defines the terms and conditions for joint R&D activities between AREVA NP SAS (“ANP”) and Lightbridge (“LTBR”) initially (and the JV once it is formed) and joint generation of Foreground Intellectual Property (IP) based on a combination of Background IP contributed by ANP and LTBR.

In connection with the RDSA, the Company is committed to purchase minimum amounts of R&D services from ANP of approximately $3.3 million for the period up through December 31, 2018.

The COA defines terms and conditions for treatment of Background and Foreground IP between ANP and LTBR within the Domain and outside the Domain during and beyond the life of the JV. The COA will survive the life of the JV. Key terms and conditions of the COA include:

The IP Annex is a higher-level reference document that will be attached to the JV Operating Agreement, and summarizes the parties’ understanding regarding IP matters based on detailed terms and conditions contained in the RDSA and COA. The IP Annex will be executed by ANP and LTBR as a standalone document and will remain in force only during the life of the JV.