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March 26, 2009

Thorium Power Reports Fourth Quarter and Full Year 2008 Financial Results and Provides Business Update

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Achieves Full Year 2008 Adjusted Net Income of $3.7 million

MCLEAN, Va.--(BUSINESS WIRE)--Mar. 26, 2009-- Thorium Power, Ltd.(OTCBB:THPW), the leading developer of non-proliferative nuclear fuel technology and provider of comprehensive advisory services for emerging nuclear programs, today announced financial results for the fourth quarter and year ended December 31, 2008.

Revenue for the three months ended December 31, 2008 was $7.4 million. Operating loss for the three months ended December 31, 2008 was $2.4 million. Operating loss for the fourth quarter included approximately $2.0 million of non-cash items. Net loss for the three months ended December 31, 2008 was $1.9 million. Excluding the impact of non-cash items, adjusted net income for the three months ended December 31, 2008 would have been$0.1 million (see “About Non-GAAP Financial Measures” near the end of this release).

Revenue for the twelve months ended December 31, 2008 was $22.2 million. Operating loss for the twelve months ended December 31, 2008 was $3.0 million. Operating loss for the twelve months ended December 31, 2008included approximately $6.6 million of non-cash items. Net loss for the twelve months ended December 31, 2008 was $2.9 million. Excluding the impact of non-cash items, adjusted net income for the twelve months ended December 31, 2008 would have been $3.7 million (see “About Non-GAAP Financial Measures” near the end of this release).

As of December 31, 2008, the company had approximately $5.6 million of cash and cash equivalents and $6.8 million of working capital.

Seth Grae , Chief Executive Officer, commented: “It is clear to us that nuclear power is gaining favor globally as a viable, cost-effective, carbon-emissions-free alternative to fossil fuels. We have assembled an industry-leading team that includes the top talent from within the nuclear industry, and we look to play an important role as nuclear power is developed and deployed worldwide.”

“Since launching our nuclear advisory services in early 2008, the practice has provided over $22 million in revenues. Our proprietary, nuclear fuel designs are also progressing. We are moving forward with preparations of preliminary licensing documentation for our VVER fuel assembly design required for regulatory approval of our lead-test assembly testing in a VVER-1000 reactor. As part of these activities, we plan to conduct mechanical tests of certain key fuel assembly components as well as perform additional thermal-hydraulic experiments on a fuel assembly model. The critical technological activities now underway comprise key elements of the pre-commercialization, fuel qualification and verification process.”

Further, as we seek to expand the scope of our technology development towards western-style reactor fuel designs, we are encouraged by the positive developments regarding the use of thorium as the basis for non-proliferative, low-waste fuel designs both in the U.S. and abroad. In October 2008, Senator Orrin Hatch  (R-UT) and Senate Majority Leader  Harry Reid  (D-NV) introduced the ‘2008 Thorium Energy Independence and Security Act’ to strengthen the technical capability of the United States to assess thorium-based nuclear fuels for commercial purposes. The introduction of this legislation illustrates increased awareness of and growing support for thorium as an alternative to traditional nuclear fuel designs for the generation of electricity.”

Mr. Grae concluded: “From a strategic and long-term perspective, we believe the future of nuclear power lies in timely, essential and viable solutions. That is why we are playing a leading role in providing the world with an advanced blueprint for clean nuclear power generation as well as innovative nuclear fuel designs.”

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for earnings that exclude non-cash items. Net income excluding non-cash items is not a measure of performance calculated in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company believes the presentation of net income excluding non-cash expense is relevant and useful by enhancing the readers’ ability to understand the Company’s operating performance. The Company’s management utilizes net income excluding non-cash expense as a means to measure operating performance. The table below reconciles adjusted net income excluding non-cash expense, a non-GAAP measure, to GAAP net income for the three months and year ended December 31, 2008.

           
(in thousands)          
   

Year Ended
December 31,
2008

   

Three Months
Ended
December 31,
2008

       
       
GAAP Net loss   $ (2,859 )     $ (1,927 )
Adjustments:          
Cost of Sales – non-cash employee compensation     856         548  
Operating Expenses – non-cash employee compensation     5,690         1,498  
Adjusted Net Income   $ 3,687       $ 119  
                   

About Thorium Power, Ltd.

Thorium Power is a pioneering U.S. nuclear energy company based in McLean, VA. The Company develops non-proliferative nuclear fuel technology and provides comprehensive advisory services for emerging nuclear programs based on a philosophy of transparency, non-proliferation, safety and operational excellence. Thorium Power’s technologies, which are aimed at both existing and future reactors, include nuclear fuel designs optimized to address key concerns regarding traditional nuclear power, including proliferation of weapons usable nuclear materials and reduction of nuclear waste. The Company maintains a seasoned team with unparalleled experience from the nuclear energy industry, regulatory and government affairs, non-proliferation and diplomacy. It leverages those broad and integrated capabilities by offering consulting and strategic advisory services to commercial entities and governments with a need to establish or expand nuclear industry capabilities and infrastructure. Thorium Power also maintains long-standing relationships with leading Russian nuclear entities, providing expert resources and facilities for its nuclear fuel development activities. The Company seeks and forms partnerships with participants in the global nuclear industry, allowing it to address a wide range of international opportunities.

DISCLAIMER

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These forward-looking statements may include the description of our plans and objectives for future operations, assumptions underlying such plans and objectives, statements regarding revenues in the range of $22 million to $27 million and other statements identified by forward-looking terminology such as "may," "expects," "believes," "anticipates," "intends," "expects," "projects" or similar terms, variations of such terms or the negative of such terms. There are a number of risks and uncertainties that could 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 of such assumptions are inherently subject to significant economic and competitive uncertainties and contingencies beyond our control and upon assumptions with respect to the 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 (perhaps materially) from certain of the results anticipated herein. Reference is made to the risk factors contained in our latest annual report as filed with the Securities and Exchange Commission. These factors may cause actual results to vary from the forward-looking statements contained in this release.

Further information is available on Thorium Power, Ltd.'s website athttp://www.thoriumpower.com

Thorium Power Ltd.
Condensed Consolidated Balance Sheets

 

    December 31
    2008       2007  
ASSETS          
           
Current Assets          
Cash and cash equivalents $ 5,580,244     $ 9,907,691  
Restricted cash   650,000       0  
Accounts receivable - project revenue and reimbursable project costs   5,357,804       0  
Prepaid expenses & other current assets   394,315       204,035  
Deferred project costs   0       371,631  
Total Current Assets   11,982,363       10,483,357  
           
Property Plant and Equipment -net   108,121       30,676  
           
Other Assets          
Patent costs - net   217,875       217,875  
Security deposits   138,418       2,049  
Total Other Assets   356,293       219,924  
           
Total Assets $ 12,446,777     $ 10,733,957  
           
LIABILITIES AND STOCKHOLDERS EQUITY          
           
Current Liabilities          
Accounts payable and accrued liabilities $ 5,138,979     $ 2,122,649  
Current portion long term debt   0       4,651  
Customer deposit   0       1,206,875  
Deferred revenue   0       3,793,125  
Total Current Liabilities   5,138,979       7,127,300  
           
Notes Payable - long term   0       5,782  
           
Total Liabilities   5,138,979       7,133,082  
           
Commitments and contingencies          
           
Stockholders' Equity          
Preferred stock, $0.001 par value, 50,000,000 authorized shares, no shares issued and outstanding   -       -  

Common stock, $0.001 par value, 500,000,000 authorized, 301,493,084 shares issued and outstanding at December 31, 2008 and 299,014,182 shares issued and outstanding at December 31, 2007

  301,493       299,014  
Additional paid in capital - stock and stock equivalents   48,607,451       41,791,735  
Deficit   (41,489,974 )     (38,630,572 )
Common stock reserved for issuance, 484,055 shares and 2,000,000 shares at December 31, 2008 and 2007, respectively   114,787       590,000  
Accumulated other comprehensive income   0       30,143  
Deferred stock compensation   (225,959 )     (479,445 )
Total Stockholders' Equity   7,307,798       3,600,875  
           
Total Liabilities and Stockholders' Equity $ 12,446,777     $ 10,733,957  

Thorium Power Ltd.

Consolidated Statements of Operations and Comprehensive Loss

 

         
   

For the Years Ended
December 31,

   
    2008       2007  
Revenue:          
Consulting revenue $ 22,219,905     $ 0  
Total Revenue   22,219,905       0  
           
Cost of Consulting Services Provided   11,088,723       0  
           
Gross Margin   11,131,182       0  
           
Operating Expenses          
General and administrative   6,958,165       6,259,317  
Research and development expenses   1,565,594       756,755  
Stock-based compensation   5,649,835       4,745,098  
Total Operating Expenses   14,173,594       11,761,170  
           
Operating loss   (3,042,412 )     (11,761,170 )
           
Other Income and (Expenses)          
Interest income   162,893       367,187  
Other income and expenses   30,143       (58,600 )
Total Other Income and Expenses   193,036       308,587  
           
Net loss before income taxes   (2,849,376 )     (11,452,583 )
           
Income taxes   10,026       0  
           
Net loss   (2,859,402 )     (11,452,583 )
           
Other Comprehensive Income (Loss)          
Unrealized gain on marketable securities   0       11,282  
           
Total Comprehensive Loss $ (2,859,402 )   $ (11,441,301 )
           
Net Loss Per Common Share, Basic and diluted $ (0.01 )   $ (0.04 )
Weighted Average Number of shares outstanding for the period used to compute per share data   300,070,925       296,666,502  

Thorium Power Ltd.
Consolidated Statements of Cash Flows

           
   

For the Years Ended
December 31,

   
    2008       2007  
Operating Activities:          
Net Loss $ (2,859,402 )   $ (11,452,583 )
Adjustments to reconcile net loss from operations to net cash used in operating activities:          
Stock based compensation   6,546,493       4,978,981  
Depreciation and amortization   24,668       8,582  
Realized gain on sale of securities   (30,143 )     0  
Settlement Expense   0       58,601  
Changes in non-cash operating working capital items:          

Accounts receivable - fees and reimbursable project costs

  (5,357,804 )     0  
Prepaid expenses and other current assets   (190,280 )     321,966  
Security deposits   (136,369 )     0  
Accounts payable, accrued liabilities and other current liabilities   1,809,455       1,293,951  
Deferred revenue   (3,793,125 )     3,793,125  
Deferred project costs - net   371,631       0  
Net Cash Used In Operating Activities   (3,614,876 )     (997,377 )
           
Investing Activities:          
Purchase of office equipment   (102,113 )     (17,968 )
Net Cash Used In Investing Activities   (102,113 )     (17,968 )
           
Financing Activities:          
Proceeds from issue of common shares   49,975       0  
Payments on notes payable and other   (10,433 )     (4,739 )
Restricted cash   (650,000 )     0  
Net Cash Used In Financing Activities   (610,458 )     (4,739 )
           
Net Decrease In Cash and Cash Equivalents   (4,327,447 )     (1,020,084 )
           
Cash and Cash Equivalents, Beginning of Year   9,907,691       10,927,775  
           
Cash and Cash Equivalents, End of Year $ 5,580,244     $ 9,907,691  
           
Supplemental Disclosure of Cash Flow Information          
Cash paid during the year:          
Interest paid $ 0     $ 876  
Income taxes paid $ 10,026     $ 0  
Non-cash transactions          
Conversion of liabilities to equity $ 0     $ 278,441  

 

 

Source: Thorium Power, Ltd.

Thorium Power, Ltd.
Peter Charles, 571-730-1200
pcharles@thoriumpower.com

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