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Share Name | Share Symbol | Market | Type |
---|---|---|---|
5E Advanced Materials Inc | NASDAQ:FEAM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.15 | -9.37% | 1.45 | 1.45 | 1.68 | 1.62 | 1.45 | 1.62 | 87,041 | 01:00:00 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware |
87-3426517 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
19500 State Highway 249, Suite 125 Houston, |
77070 | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, $0.01 par value |
FEAM |
The NASDAQ Global Select Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Page |
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1 |
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PART I |
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Items 1 and 2. |
7 |
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7 |
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19 |
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Item 1A. |
30 |
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Item 1B. |
70 |
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Item 3. |
70 |
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Item 4. |
70 |
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PART II |
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Item 5. |
71 |
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Item 6. |
71 |
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Item 7. |
72 |
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Item 7A. |
76 |
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Item 8. |
77 |
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Item 9. |
97 |
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Item 9A. |
97 |
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Item 9B. |
97 |
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Item 9C. |
97 |
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PART III |
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Item 10. |
98 |
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Item 11. |
98 |
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Item 12. |
98 |
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Item 13. |
98 |
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Item 14. |
98 |
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PART IV |
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Item 15. |
98 |
• |
“ABR” refers to American Pacific Borates Limited, a company incorporated under the laws of Western Australia. |
• |
“ASX” refers to the Australian Securities Exchange.” |
• |
‘CDI” refers to a CHESS Depositary Interest. |
• |
“Company” refers to 5E Advanced Materials, Inc., a Delaware corporation. |
• |
“Corporations Act” refers to the Australian Corporations Act, 2001 (Cth). |
• |
“NASDAQ” refers to The NASDAQ Global Select Market. |
• |
“Reorganization” refers to the transactions pursuant to which, among other things, we issued (a) to eligible shareholders of ABR either one share of our Common Stock for every ten ordinary shares of ABR or one CDI over our Common Stock for every one ordinary share of ABR, in each case, as held on the Scheme record date and (b) to ineligible shareholders proceeds from the sale of the CDIs to which they would otherwise be entitled by a broker appointed by ABR, who sold the CDIs in accordance with the terms of a sale facility agreement and remitted the proceeds to ineligible shareholders, (ii) cancelled each of the outstanding options to acquire ordinary shares of ABR and issued replacement options representing the right to acquire shares of our Common Stock on the basis of a one replacement option for every ten existing ABR options held, (iii) maintained an ASX listing for its CDIs, with each CDI representing 1/10th of a share of Common Stock, (iv) delisted ABR’s ordinary shares from the ASX, and (v) became the parent company to ABR. |
• |
“Scheme” refers to a statutory Scheme of Arrangement under Australian law under Part 5.1 of the Corporations Act. |
• | The timing, completion and estimated production capacity of our proposed small-scale boron facility (“SSBF”) and proposed large-scale complex; |
• | The outputs from our proposed SSBF and their impact on future estimates and potential studies regarding our proposed large-scale complex; |
• | Unanticipated costs or delays associated with our proposed SSBF; |
• | Use of our injection-recovery wells for extraction once our proposed SSBF and large-scale complex is complete; |
• | Our ability to successfully and economically extract boron and lithium from colemanite; |
• | The quantities of resources we expect to be able to extract and our production capabilities; |
• | The timing of completing and the expected ability of our proposed SSBF facility to serve as a foundation for future design, engineering and cost optimization for our proposed large-scale complex; |
• | Our ability to secure the requisite funding for the successful engineering, development, construction, completion and operation of our proposed facilities; |
• | The timing and viability of achieving initial commercial production; |
• | Our ability to commercialize our output and to enter into commercial agreements; |
• | The total addressable market for materials we intend on producing and selling, including its current size, growth trajectory and the underlying factors that may drive growth in the overall market size; |
• | The cost and availability of natural gas and electricity; |
• | Our ability to timely and successfully reach anticipated full commercial production capacity; |
• | Our ability to achieve and maintain profitability and to develop and maintain positive cash flow from our proposed operating activities; |
• | Our ability to enter into and deliver product under binding supply agreements; |
• | Our ability to acquire and maintain the necessary mining licenses, permits and access rights; |
• | Our ability to acquire and maintain the necessary mineral property interests and related water rights; |
• | The demand for borates and lithium and the market for their end-use applications; and |
• | Our ability to develop downstream advanced materials capabilities. |
• | Our limited operating history in the borates and lithium industries and no revenue from our proposed extraction operations at our properties; |
• | Our need for substantial additional financing to execute our business plan and our ability to access capital and the financial markets; |
• | Our status as an exploration stage company dependent on a single project with no known mineral reserves and the inherent uncertainty in estimates of mineral resources; |
• | Our lack of history in mineral production and the significant risks associated with achieving our business strategies, including our downstream processing ambitions; |
• | We have incurred significant net operating losses to date and we anticipate incurring continued losses for the foreseeable future; |
• | Risks and uncertainties relating to the development of Fort Cady (“Fort Cady” or the “Project”); |
• | Risks related to our ability to prepare and update further technical and economic analysis of Fort Cady, and the timing thereof; |
• | Our dependence on a single project; |
• | Risks related to our ability to achieve and maintain profitability and to develop positive cash flow from our operating activities; |
• | Risks, including changes in technology, that could adversely affect the demand for end use applications that require borates, lithium, and related minerals and compounds; |
• | Our long-term success is dependent on our ability to enter into and deliver product under supply agreements; |
• | Risks related to estimates of our total addressable market; |
• | The costs and availability of natural gas, electricity, and water; |
• | Uncertain global economic conditions and the impact this may have on our business and plans; |
• | Risks associated with our ongoing investment in Fort Cady; |
• | Risks associated with the required infrastructure at Fort Cady; |
• | Risks related to the titles of our mineral property interests and related water rights; |
• | Any restrictions on our ability to obtain, recycle, and dispose of water on site; |
• | Risks related to the portion of Fort Cady that we lease from a third party; |
• | Risks related to land use restrictions on our properties; |
• | Risks related to volatility in prices or demand for borates, lithium, and other minerals; |
• | Fluctuations in the U.S. dollar relative to other currencies; |
• | Risks related to mineral exploration and development; |
• | Risks related to equipment shortages and supply chain disruptions; |
• | Risks associated with any of our customers, suppliers, or any third parties not implementing ethical or legal business practices in compliance with applicable laws and regulations; |
• | Competition from new or current competitors in the mineral exploration and mining industry; |
• | Risks associated with consolidation in the markets in which we operate and expect to operate; |
• | Risks related to compliance with environmental and regulatory requirements, reclamation requirements, the potential generation and disposal of hazardous waste, climate change, and the proposed SEC rules on climate-related disclosures; |
• | Risks related to our ability to acquire and maintain necessary mining licenses, permits, or access rights; |
• | Litigation risk; |
• | Risks related to our main operations being located in California and our engagement with local communities; |
• | Risks relating to our investment in the Salt Wells North project area and the Salt Wells South project area (together, the “Salt Wells Projects”) located in Nevada; |
• | Our dependence on key management and third parties; |
• | Risks related to potential acquisitions, joint ventures, and other investments; |
• | Risks related to public health threats, including the novel coronavirus, that may continue to cause disruptions to our operations or may have a material adverse effect on our development plans and financial results; |
• | Information technology risks; |
• | Risks and costs relating to the Reorganization; |
• | Risks related to the possible dilution of our Common Stock; |
• | Risks related to our stock price and trading volume volatility; |
• | Risks relating to the development of an active trading market for our Common Stock; |
• | Risks related to our status as an emerging growth company; |
• | Risks related to technology systems and security breaches; |
• | A shortage of skilled technicians and engineers; |
• | Risks related to technology systems and security breaches; |
• | Our facilities of operations could be adversely affected by outside events outside of our control, such as natural disasters, climate change, wars, or health epidemics or pandemics; |
• | Risks and uncertainties related to the COVID-19 pandemic; |
• | Our increased costs as a result of being a U.S. listed public company; |
• | Strategic actions, including acquisitions and dispositions of investments, including but not limited to integrations of acquiring investments; and |
• | Risks associated with our convertible notes issued subsequent to June 30, 2022 |
• | Risk of insufficient cash flow to service the convertible notes |
• | Risk of foreclosure on our assets if we default on the convertible notes |
• | Risk of dilution of the ownership interest of our existing stockholders if the convertible notes are converted |
• | Risk of adverse impact on the price of our common stock if the convertible notes are converted |
• | Risks associated with limitations on our ability to raise money through equity offerings and to incur additional indebtedness imposed by the convertible notes agreement |
• | Any other risks described elsewhere in this Annual Report on Form 10-K or the documents incorporated herein by reference. |
Measured Mineral Resource (“Measured” or “Measured Mineral Resource”) |
that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve. |
Indicated Mineral Resource (“Indicated” or “Indicated Mineral Resource”) |
that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve. | |
Inferred Mineral Resource (“Inferred” or “Inferred Mineral Resource”) |
that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve. | |
Probable Mineral Reserve (“Probable” or “Probable Mineral Reserve”) |
the economically mineable part of an indicated and, in some cases, a measured mineral resource. that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve. | |
Proven Mineral Reserve (“Proven” or “Proven Mineral Reserve”) |
the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource. |
• | a focus on boron and lithium extraction (as opposed to boron and SOP under our previous plans); |
• | revisions to the proposed processing facility design (including a targeted increase of the overall long- term potential production capacity to approximately 500,000 tons pa of boric acid compared to approximately 450,000 tons pa of boric acid under our previous plans); and |
• | a modified sequencing of our project development timeline to include the initial SSBF followed by the development of our proposed large-scale complex (as opposed to only developing the large-scale complex under our previous plans), with the expectation that operating data to be obtained from the SSBF will be important in determining the future design, engineering and cost optimization for our large-scale complex, as well as the expected total capital expenditures and ongoing required operating expenditures related thereto. |
• | a focus on boron and lithium extraction (as opposed to boron and SOP under our previous plans); |
• | revisions to the proposed processing facility design (including a targeted increase of the overall long- term potential production capacity to approximately 500,000 tons pa of boric acid compared to approximately 450,000 tons pa of boric acid under our previous plans); and |
• | a modified sequencing of our project development timeline to include the initial SSBF followed by the development of our proposed large-scale complex (as opposed to only developing the large-scale complex under our previous plans), with the expectation that operating data to be obtained from the SSBF will be important in determining the future design, engineering and cost optimization for our large-scale complex, as well as the expected total capital expenditures and ongoing required operating expenditures related thereto. |
Measured Mineral Resources |
Horizon |
Tonnage (million tons or Mt) |
Boron Oxide (B 2 O3 )(weight %) |
Boric Acid (H 3 BO3 )(weight %) |
Lithium (Li) (ppm) |
Boron Oxide (B 2 O3 )(Mt) |
Boric Acid (H 3 BO3 )(mt) |
|||||||||||||||||||
FCCC Fee Lands |
UMH 1 |
0.03 | 5.73 | 10.17 | 259 | 0.00 | 0.00 | |||||||||||||||||||
MMH 2 |
7.01 | 6.31 | 11.20 | 317 | 0.44 | 0.79 | ||||||||||||||||||||
FCCC Fee Lands—Transmission Corridor |
MMH | 5.24 | 6.51 | 11.55 | 293 | 0.34 | 0.61 | |||||||||||||||||||
FCCC—Elementis Leased Lands |
UMH | 0.75 | 6.64 | 11.79 | 264 | 0.05 | 0.09 | |||||||||||||||||||
MMH | 18.59 | 6.74 | 11.98 | 349 | 1.25 | 2.23 | ||||||||||||||||||||
IMH 3 |
4.34 | 6.35 | 11.27 | 324 | 0.28 | 0.49 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Measured Mineral Resource |
35.96 |
6.57 |
11.67 |
330 |
2.36 |
4.20 |
Indicated Mineral Resources |
Horizon |
Tonnage (million tons or Mt) |
Boron Oxide (B 2 O3 )(weight %) |
Boric Acid (H 3 BO3 )(weight %) |
Lithium (Li) (ppm) |
Boron Oxide (B 2 O3 )(Mt) |
Boric Acid (H 3 BO3 )(mt) |
|||||||||||||||||||
FCCC Fee Lands |
UMH | 0.87 | 5.73 | 10.17 | 259 | 0.05 | 0.09 | |||||||||||||||||||
MMH | 29.00 | 6.47 | 11.50 | 329 | 1.88 | 3.33 | ||||||||||||||||||||
FCCC Fee Lands—Transmission Corridor |
MMH | 20.41 | 6.51 | 11.55 | 293 | 1.33 | 2.36 | |||||||||||||||||||
FCCC—Elementis Leased Lands |
UMH | 0.31 | 6.68 | 11.87 | 251 | 0.02 | 0.04 | |||||||||||||||||||
MMH | 7.70 | 6.74 | 11.98 | 349 | 0.52 | 0.92 | ||||||||||||||||||||
IMH | 3.29 | 6.40 | 11.37 | 324 | 0.21 | 0.37 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Indicated Mineral Resource |
61.59 |
6.51 |
11.55 |
318 |
4.01 |
7.12 |
||||||||||||||||||||
Total Measured + Indicated Mineral Resource |
97.55 |
6.53 |
11.61 |
324 |
6.37 |
11.31 |
Inferred Mineral Resources |
Horizon |
Tonnage (million tons or Mt) |
Boron Oxide (B 2 O3 )(weight %) |
Boric Acid (H 3 BO3 )(weight %) |
Lithium (Li) (ppm) |
Boron Oxide (B 2 O3 )(Mt) |
Boric Acid (H 3 BO3 )(mt) |
|||||||||||||||||||
FCCC Fee Lands |
UMH | 0.03 | 5.73 | 10.17 | 259 | 0.00 | 0.00 | |||||||||||||||||||
MMH | 6.46 | 6.55 | 11.42 | 334 | 0.42 | 0.75 | ||||||||||||||||||||
FCCC Fee Lands—Transmission Corridor |
MMH | 0.59 | 5.64 | 10.01 | 330 | 0.03 | 0.06 | |||||||||||||||||||
FCCC—Elementis Leased Lands |
UMH | 1.93 | 6.51 | 11.55 | 293 | 0.13 | 0.22 | |||||||||||||||||||
MMH | 0.27 | 6.74 | 11.98 | 349 | 0.02 | 0.03 | ||||||||||||||||||||
IMH | 2.14 | 6.32 | 10.48 | 330 | 0.14 | 0.24 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Inferrd Mineral Resource |
11.43 |
6.40 |
11.37 |
324 |
0.74 |
1.31 |
(1) |
“UMH” is Upper Mineralized Horizon |
(2) |
“MMH” is Major Mineralized Horizon |
(3) |
“IMH” is Lower Mineralized Horizon |
• | Additional delineation drilling of 15 drill holes to further refine resource classification and to further test resource potential on the southern land holdings; |
• | Standardizing sample lengths in future drilling to reduce sampling and analytical costs; |
• | Mineralogical testing to identify the source of lithium mineralization along with testing of pregnant leach solution to help determine recovery and what processes might be required to extract lithium and steps to produce lithium carbonate Li2CO3 and or lithium hydroxide LiOH(H2O)n and/or lithium hydroxide LiOH(H2O)n; |
• | Consider using seismic and electromagnetic surveying to assist in understanding structural setting a facies in the Fort Cady area; and |
• | Perform further analysis to determine if economics will support a lower cut-off grade for boron oxide B2O3. |
• | We have incurred significant net operating losses since our inception and we will incur continued losses for the foreseeable future; |
• | Our future performance is difficult to evaluate because we have no or only a limited operating history in the minerals industry and no revenue from our proposed extraction operations at our properties, which may negatively impact our ability to achieve our business objectives. |
• | If we do not obtain additional financing and maintain sufficient funds to continue our ongoing development and proposed operations, our proposed business may be at risk or the execution of our business plan may be delayed. |
• | Our inability to timely and successfully complete and operate the SSBF, and our inability to complete further technical and economic studies (including a bankable feasibility study) with respect to Fort Cady, may have a material adverse impact on Fort Cady. |
• | There are risks associated with our convertible notes issued subsequent to June 30, 2022 that could adversely affect our business and financial condition. |
• | Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt. |
• | Our obligations to the purchaser under the convertible notes, and any additional convertible notes, are secured by a security interest in substantially all of our assets, and if we default on those obligations, the purchaser could foreclose on our assets. |
• | We may not be able to compete the SSBF on our current targeted timeline which would impact the successful construction of our proposed large-scale complex and potential for initial commercial production targeted in 2025. |
• | We have invested and plan to continue to invest significant amounts of capital in Fort Cady on exploration and development activities, which involve many uncertainties and future operating risks that could prevent us from realizing profits. |
• | We have no history of mineral production and we may not be able to successfully achieve our business strategies, including our downstream processing ambitions. |
• | We may be unable to develop or acquire certain intellectual property required to implement our business strategy successfully. |
• | Third parties may claim that we infringe on their proprietary intellectual property rights, and resulting litigation may be costly, result in diversion of management’s time and efforts, require us to pay damages or prevent us from marketing our future products. |
• | All of our business activities are now in the exploration stage and there can be no assurance that our exploration efforts will result in commercial development. |
• | We are an exploration stage company with no known Proven or Probable Mineral Reserves, our estimates of resources and mineralized material are inherently uncertain and subject to change, and the volume and grade of ore actually recovered may vary from our estimates. |
• | Estimates relating to the development of Fort Cady and mine plan are uncertain and we may incur higher costs and lower economic returns than estimated. |
• | We depend on a single mining project. |
• | Our long-term success will depend ultimately on our ability to achieve and maintain profitability and to develop positive cash flow from our proposed operating activities. |
• | Our growth depends upon the continued growth in demand for end use and future facing applications that require borates, lithium, and related minerals and compounds we expect to produce |
• | Changes in technology or other developments could adversely affect demand for lithium compounds or result in preferences for substitute products. |
• | Our growth depends upon the continued growth in demand for electric vehicles with high performance lithium compounds. |
• | Our long-term success will depend on our ability to enter into and deliver product under supply agreements. |
• | If the estimates and assumptions we use to determine the size of our total addressable market are inaccurate, including its current size, growth trajectory, and the underlying factors that may drive future growth in overall market size, particularly for boron where there is limited third party published research and market forecasting, our future growth rate may be adversely affected, and the potential growth of our business may be limited. |
• | The cost and availability of electricity and natural gas are subject to volatile market conditions. |
• | Uncertain global economic conditions could have a material adverse effect on our business, financial condition, results of operations or prospects, including the pricing of our products. |
• | We are subject to anti-bribery, anti-corruption, and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could adversely affect our business, results of operations and financial condition. |
• | Inadequate infrastructure may constrain our future mining operations, including at Fort Cady. |
• | Title to mineral properties and related water rights is a complex process and we may suffer a material adverse effect in the event the Fort Cady property or other properties that we may acquire are determined to have title deficiencies. |
• | Restrictions on our ability to obtain, recycle and dispose of water may impact our ability to execute our development plans in a timely or cost-effective manner. |
• | The development, construction and proposed operation of our properties and projects is subject to various environmental and operational regulations, and risks relating to land use restrictions and potential opposition from landowners, environmental groups and other third parties, all of which could adversely affect or prevent our ability to grow. |
• | The mining industry is historically a cyclical industry and market fluctuations in the prices of borates, lithium, and lithium byproducts and other minerals could adversely affect our business. |
• | Fluctuations in the value of the United States dollar relative to other currencies may adversely affect our business. |
• | We face risks relating to mining, exploration, and mine construction, if warranted, on our properties. |
• | adverse economic conditions; |
• | adverse general capital market conditions; |
• | poor performance or cyclical decline of the borates, lithium, or mining industries in general; |
• | bankruptcy or financial distress of unrelated companies or marketers engaged in the borates or lithium industries; |
• | significant decrease in demand for borates or lithium; or |
• | adverse regulatory actions that affect our development and construction plans or the use of borates or lithium generally. |
• | a focus on boron and lithium extraction (as opposed to boron and SOP under our previous plans); |
• | revisions to the proposed processing facility design (including a targeted increase of the overall long- term potential production capacity to approximately 500,000 tons pa of boric acid compared to approximately 450,000 tons pa of boric acid under our previous plans); and |
• | a modified sequencing of our project development timeline to include the initial SSBF followed by the development of our proposed large-scale complex (as opposed to only developing the large-scale complex under our previous plans), with the expectation that operating data to be obtained from the SSBF will be important in determining the future design, engineering and cost optimization for our large-scale complex, as well as the expected total capital expenditures and ongoing required operating expenditures related thereto. |
• | changes in tonnage, grades and metallurgical characteristics of ore to be mined and processed; |
• | changes in input commodity and labor costs; |
• | the quality of the data on which engineering assumptions are made; |
• | adverse geotechnical conditions; |
• | availability of adequate and skilled labor force, adequate machinery and equipment; |
• | availability, supply and cost of water and power; |
• | fluctuations in inflation; |
• | availability and terms of financing; |
• | delays in obtaining environmental or other government permits or approvals or changes in the laws and regulations related to project development or operations; |
• | changes in tax laws, the laws and/or regulations around royalties and other taxes due to the local, state and federal governments and any royalty agreements; |
• | weather or severe climate impacts, including, without limitation, prolonged or unexpected precipitation, drought, forest fires and/or sub-zero temperatures; |
• | accidental fires, floods, earthquakes or other natural disasters; |
• | controlling water and other similar mining hazards; |
• | liability for pollution, other environmental damage, or harm to plants or animals, including endangered or protected species; |
• | potential delays and restrictions in connection with health and safety issues, including pandemics |
• | (such as COVID-19) and other infectious diseases; |
• | potential delays relating to social and community issues, including, without limitation, issues resulting in labor disputes, protests, road blockages or work stoppages; |
• | uncertainties regarding our ability to successfully implement downstream processing and reach full revenue potential; |
• | potential challenges to mining activities or to permits or other approvals or delays in development and construction based on claims of disturbance of cultural resources or the inability to secure consent for such disturbance; and |
• | other known and unknown risks involved in the conduct of exploration, development and the operation of mines. |
• | a significant, prolonged decrease in the market price of borates, lithium, and other minerals; |
• | difficulty in marketing and/or selling borates, lithium, and other minerals; |
• | significantly higher than expected capital costs to construct Fort Cady; |
• | significantly higher than expected extraction costs; |
• | significantly lower than expected borates, lithium, and other minerals extraction; |
• | significant delays, reductions or stoppages of borates, lithium, and other minerals extraction activities; |
• | the introduction of significantly more stringent regulation affecting our activities; and |
• | global political, economic and market conditions, including political disturbances, war, terrorist attacks and changes in global trade policies. |
• | government regulations; |
• | tax and economic incentives; |
• | rates of consumer adoption; and |
• | competition. |
• | government regulations and automakers’ responses to those regulations; |
• | tax and economic incentives; |
• | rates of consumer adoption, which is driven in part by perceptions about electric vehicle features (including range per charge), quality, safety, performance, cost and charging infrastructure; |
• | competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles, and high fuel-economy internal combustion engine vehicles; |
• | volatility in the cost of battery materials, oil and gasoline; |
• | rates of customer adoption of higher performance lithium compounds; and |
• | rates of development and adoption of next generation high nickel battery technologies. |
• | the discovery of unusual or unexpected geological formations; |
• | accidental fires, floods, earthquakes, severe weather or other natural disasters; |
• | unplanned power outages and water shortages; |
• | construction delays and higher than expected capital costs due to, among other things, supply chain disruptions, higher transportation costs and inflation; |
• | controlling water and other similar mining hazards; |
• | explosions and mechanical failure of equipment; |
• | operating labor disruptions and labor disputes; |
• | the ability to obtain suitable or adequate machinery, equipment or labor; |
• | our liability for pollution or other hazards; and |
• | other unknown risks involved in the conduct of exploration and operation of mines. |
• | an attack on the computers which control our mining operations could cause a temporary interruption of our production; |
• | a cyber-attack on our accounting or accounts payable systems could expose us to liability to employees and third parties if their sensitive personal information is obtained; |
• | possible loss of material information, which in turn could delay productive processes and selling efforts, causing economic losses; or |
• | a cyber-attack on a service provider could result in supply chain disruptions, which could delay or halt our major development projects. |
• | actual or expected fluctuations in our prospects or operating results; |
• | changes in the demand for, or market prices for, borates, lithium, or lithium-ion batteries, and other minerals; |
• | additions or departures of our key personnel; |
• | changes or proposed changes in laws, regulations or tax policy; |
• | sales or perceived potential sales of our Common Stock by us or our directors, senior management or shareholders in the future; |
• | announcements or expectations concerning additional financing efforts; |
• | conditions in the U.S. and global financial markets, or in our industry in particular, or changes in general economic conditions; and |
• | the other factors described in this “Risk Factors” section and elsewhere in this Annual Report. |
• | the last day of the fiscal year during which we have total annual gross revenues of US$1,235,000,000 (as such amount is indexed for inflation every five years by the SEC) or more; |
• | the last day of our fiscal year following the fifth anniversary of the completion of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act; |
• | the date on which we have, during the previous three-year period, issued more than US$1,000,000,000 in non-convertible debt; or |
• | the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 of the Exchange Act, which would occur if the market value of our Common Stock that are held by non-affiliates exceeds US$700,000,000 as of the last day of our most recently completed second fiscal quarter. |
• | the ability of our Board of Directors to issue shares of Preferred Stock and to determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | allowing only our Board of Directors to fill director vacancies, which prevents shareholders from being able to fill vacancies on our Board of Directors; |
• | a prohibition on shareholders action by written consent, which forces shareholder action to be taken at an annual or special meeting of our shareholders; |
• | a requirement that special meetings of our shareholders may be called only by (i) our Board of Directors or (ii) our secretary, following receipt of one or more written demands to call a special meeting from shareholders of record who own, in the aggregate, at least 25% of the voting power of our outstanding shares then entitled to vote on the matter or matters to be brought before the proposed special meeting that complies with the procedures for calling a special meeting set forth in our Bylaws, which may inhibit the ability of an acquirer to require the convening of a special meeting of our shareholders; |
• | a requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the certain provisions of our Certificate of Incorporation or our Bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; |
• | the ability of our Board of Directors to amend our Bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; |
• | advance notice procedures with which shareholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a shareholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; and |
• | a prohibition of cumulative voting in the election of our Board of Directors, which would otherwise allow less than a majority of shareholders to elect director candidates. |
• | a limited availability of market quotations for our Common Stock; |
• | a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules, which could result in a reduced level of trading activity in the secondary trading market for our Common Stock; |
• | more limited news and analyst coverage for us; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | We may need to use a substantial portion of our cash flow from operations to pay interest and principal on the Convertible Notes, which would reduce funds available to us for other purposes such as working capital, capital expenditures, potential acquisitions, and other general corporate purposes; |
• | We may be unable to refinance our indebtedness under the Convertible Notes Purchase Agreement or to obtain additional financing for working capital, capital expenditures, acquisitions, or general corporate purposes; |
• | We may be unable to comply with covenants in the Convertible Notes, which could result in an event of default that, if not cured or waived, may result in acceleration of the Convertible Notes and any additional convertible notes issued under the Convertible Notes Purchase Agreement. An event of default would have an adverse effect on our business and prospects and could force us into bankruptcy or liquidation; |
• | Our ability to pay interest and repay principal in shares of our common stock, if so elected by us, and conversion of the Convertible Notes and any additional convertible notes issued under the Convertible Notes Purchase Agreement could result in significant dilution of our common stock, which could result in significant dilution to our existing stockholders and cause the market price of our common stock to decline; and |
• | We may be more vulnerable to an economic downturn or recession and adverse developments in our business. |
(1) |
Shares issued for services |
(2) |
Shares issued upon option exercises |
Year Ended June 30 |
Change |
|||||||||||||||
2022 |
2021 |
$ |
% |
|||||||||||||
($ in thousands) |
||||||||||||||||
COSTS AND EXPENSES |
||||||||||||||||
Project expenses |
$ | 12,853 | $ | 5,966 | $ | 6,887 | 115 | % | ||||||||
General and administrative |
54,733 | 11,637 | 43,096 | * | ||||||||||||
Research and development |
133 | — | 133 | N/A | ||||||||||||
Depreciation and amortization expense |
112 | 31 | 81 | 261 | % | |||||||||||
Total costs and expenses |
67,831 | 17,634 | 50,197 | 285 | % | |||||||||||
LOSS FROM OPERATIONS |
(67,831 | ) | (17,634 | ) | (50,197 | ) | 285 | % | ||||||||
NON-OPERATING INCOME (EXPENSE) |
||||||||||||||||
Other income |
65 | 45 | 20 | 44 | % | |||||||||||
Interest income |
3 | 9 | (6 | ) | -67 | % | ||||||||||
Interest expense |
(6 | ) | (5 | ) | (1 | ) | 20 | % | ||||||||
Net foreign exchange gain (loss) |
1,056 | (1,668 | ) | 2,724 | -163 | % | ||||||||||
Total non-operating income (expense) |
1,118 | (1,619 | ) | 2,737 | -169 | % | ||||||||||
NET INCOME (LOSS) |
$ | (66,713 | ) | $ | (19,253 | ) | $ | (47,460 | ) | 247 | % | |||||
* | Represents a percentage change of greater than +/- 300% |
For the Year Ended June 30, |
||||||||||||
2022 |
2021 |
$ Change |
||||||||||
($ in thousands) |
||||||||||||
Net cash used by operating activities |
$ | (28,976 | ) | $ | (10,888 | ) | $ | (18,088 | ) | |||
Net cash used by investing activities |
(11,400 | ) | (12,958 | ) | 1,558 | |||||||
Net cash provided by financing activities |
30,622 | 37,770 | (7,148 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents |
$ | (9,754 | ) | $ | 13,924 | $ | (23,678 | ) | ||||
June 30, |
||||||||
2022 |
2021 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 31,057 | $ | 40,811 | ||||
Prepaid expenses and other current assets |
1,506 | 159 | ||||||
|
|
|
|
|||||
Total current assets |
32,563 | 40,970 | ||||||
Mineral rights and properties, net |
8,364 | 8,081 | ||||||
Construction in progress |
25,625 | 12,765 | ||||||
Properties, plant and equipment, net |
2,871 | 1,495 | ||||||
Reclamation bond deposit |
1,086 | 1,085 | ||||||
Right of use asset |
371 | 213 | ||||||
Other assets |
6 | — | ||||||
|
|
|
|
|||||
Total Assets |
$ | 70,886 | $ | 64,609 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 7,212 | $ | 1,594 | ||||
Lease liability, current |
164 | 91 | ||||||
|
|
|
|
|||||
Total current liabilities |
7,376 | 1,685 | ||||||
Long-term debt |
148 | 93 | ||||||
Lease liability |
211 | 125 | ||||||
Accrued reclamation liabilities |
489 | 377 | ||||||
|
|
|
|
|||||
Total liabilities |
8,224 | 2,280 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 13) |
||||||||
Stockholders’ Equity: |
||||||||
Common stock 43,305,315 and 38,391,412 shares outstanding at June 30, respectively |
433 | 384 | ||||||
Additional paid-in capital |
169,593 | 101,179 | ||||||
Accumulated other comprehensive income (loss) |
— | 1,417 | ||||||
Retained earnings (accumulated deficit) |
(107,364 | ) | (40,651 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
62,662 | 62,329 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | 70,886 | $ | 64,609 | ||||
|
|
|
|
For the Year Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Operating expenses: |
||||||||
Project expenses |
$ | 12,853 | $ | 5,966 | ||||
General and administrative |
54,733 | 11,637 | ||||||
Research and development |
133 | — | ||||||
Depreciation expense |
112 | 31 | ||||||
|
|
|
|
|||||
Total operating expenses |
67,831 | 17,634 | ||||||
|
|
|
|
|||||
Income (loss) from operations |
(67,831 | ) | (17,634 | ) | ||||
|
|
|
|
|||||
Non-operating income (expense) |
||||||||
Other income |
65 | 45 | ||||||
Interest income |
3 | 9 | ||||||
Interest expense |
(6 | ) | (5 | ) | ||||
Net foreign exchange gain (loss) |
1,056 | (1,668 | ) | |||||
|
|
|
|
|||||
Total non-operating income (expense) |
1,118 | (1,619 | ) | |||||
|
|
|
|
|||||
Income (loss) before income taxes |
(66,713 | ) | (19,253 | ) | ||||
|
|
|
|
|||||
Income tax provision (benefit) |
||||||||
Current |
— | — | ||||||
Deferred |
— | — | ||||||
|
|
|
|
|||||
Total income tax provision (benefit) |
— | — | ||||||
|
|
|
|
|||||
Net income (loss) |
$ | (66,713 | ) | $ | (19,253 | ) | ||
|
|
|
|
|||||
Net income (loss) per common share—basic and diluted |
$ | (1.63 | ) | $ | (0.56 | ) | ||
|
|
|
|
|||||
Weighted average common shares outstanding—basic and diluted |
40,807 | 34,175 | ||||||
|
|
|
|
|||||
Comprehensive income (loss): |
||||||||
Net income (loss) |
$ | (66,713 | ) | $ | (19,253 | ) | ||
Reporting currency translation gain (loss) |
(1,417 | ) | 1,916 | |||||
|
|
|
|
|||||
Comprehensive income (loss) |
$ | (68,130 | ) | $ | (17,337 | ) | ||
|
|
|
|
Common Stock |
Additional Paid-in Capital |
Accumulated Comprehensive Income (loss) |
Accumulated Deficit |
Total Stockholders’ Equity |
||||||||||||||||||||
Shares |
Amount |
|||||||||||||||||||||||
Balance at June 30, 2020 |
30,456 | $ | 305 | $ | 57,078 | $ | (499 | ) | $ | (21,398 | ) | $ | 35,486 | |||||||||||
Shares issued for: |
||||||||||||||||||||||||
Cash |
5,128 | 51 | 30,059 | — | — | 30,110 | ||||||||||||||||||
Exercise of stock options |
2,799 | 28 | 9,208 | — | — | 9,236 | ||||||||||||||||||
Consulting fees |
8 | — | 32 | — | — | 32 | ||||||||||||||||||
Share issuance costs |
— | — | (1,574 | ) | — | — | (1,574 | ) | ||||||||||||||||
Share based compensation |
— | — | 6,376 | — | — | 6,376 | ||||||||||||||||||
Net income (loss) |
— | — | — | — | (19,253 | ) | (19,253 | ) | ||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | 1,916 | — | 1,916 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2021 |
38,391 | 384 | 101,179 | 1,417 | (40,651 | ) | 62,329 | |||||||||||||||||
Shares issued for: |
||||||||||||||||||||||||
Cash |
1,760 | 18 | 26,291 | — | — | 26,309 | ||||||||||||||||||
Exercise of stock options |
1,904 | 19 | 5,203 | — | — | 5,222 | ||||||||||||||||||
Consulting fees |
1,250 | 12 | 31,021 | — | — | 31,033 | ||||||||||||||||||
Share issuance costs |
— | — | (797 | ) | — | — | (797 | ) | ||||||||||||||||
Share based compensation |
— | — | 6,696 | — | — | 6,696 | ||||||||||||||||||
Net income (loss) |
— | — | — | — | (66,713 | ) | (66,713 | ) | ||||||||||||||||
Other comprehensive income (loss), net of tax |
— | — | — | (1,417 | ) | — | (1,417 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2022 |
43,305 | $ | 433 | $ | 169,593 | $ | — | $ | (107,364 | ) | $ | 62,662 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Cash Flows From Operating Activities: |
||||||||
Net loss |
$ | (66,713 | ) | $ | (19,253 | ) | ||
Adjustments to reconcile net loss to net cash used by operating activities: |
||||||||
Depreciation and amortization |
112 | 31 | ||||||
Interest earned on reclamation bond |
(1 | ) | (3 | ) | ||||
Share based compensation |
6,696 | 6,376 | ||||||
Common stock issued for consulting fees |
31,033 | 32 | ||||||
Accretion of reclamation liability |
9 | — | ||||||
Amortization of right of use asset |
125 | — | ||||||
Net foreign exchange (gain) loss |
(1,056 | ) | 1,669 | |||||
Change in: |
||||||||
Prepaid expenses and other current assets |
(1,347 | ) | 16 | |||||
Accounts payable and accrued liabilities |
2,533 | 244 | ||||||
Other assets |
(6 | ) | — | |||||
|
|
|
|
|||||
Net cash used by operating activities |
(28,615 | ) | (10,888 | ) | ||||
|
|
|
|
|||||
Cash Flows From Investing Activities: |
||||||||
Construction in progress |
(9,994 | ) | (12,029 | ) | ||||
Mineral rights and properties |
(186 | ) | (113 | ) | ||||
Properties, plant and equipment |
(1,220 | ) | (39 | ) | ||||
Reclamation bonds |
— | (777 | ) | |||||
|
|
|
|
|||||
Net cash used by investing activities |
(11,400 | ) | (12,958 | ) | ||||
|
|
|
|
|||||
Cash Flows From Financing Activities: |
||||||||
Payments on note payable |
(112 | ) | (2 | ) | ||||
Proceeds from issuance of common stock |
26,309 | 30,110 | ||||||
Proceeds from exercise of stock options |
5,222 | 9,236 | ||||||
Share issuance costs |
(797 | ) | (1,574 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
30,622 | 37,770 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
(9,393 | ) | 13,924 | |||||
Effect of exchange rate fluctuation on cash |
(361 | ) | 247 | |||||
Cash and cash equivalents at beginning of period |
40,811 | 26,640 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 31,057 | $ | 40,811 | ||||
|
|
|
|
|||||
Supplemental Disclosure Of Cash Flow Information: |
||||||||
Interest paid in cash |
$ | 6 | $ | 3 | ||||
Noncash Investing And Financing Activities: |
||||||||
Accounts payable change related to construction in progress |
$ | 2,922 | $ | (1,404 | ) | |||
Construction in progress transferred to properties, plant and equipment |
55 | 798 | ||||||
Recognition of operating lease liability and right of use asset |
283 | 237 | ||||||
Notes payable issued for properties, plant and equipment |
206 | — | ||||||
Increase (decrease) in asset retirement costs |
103 | — |
• |
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of the reporting date; |
• |
Income and expenses for each statement of operations are translated at average exchange rates, unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions; and |
• |
All resulting exchange differences are recognized in other comprehensive income or loss. |
• | whether the drilling or development costs relate to a project that has been determined to be economically feasible, and a decision has been made to put the project into production; and |
• | whether, at the time the cost is incurred: (a) the expenditure embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows, (b) we can obtain the benefit and control others’ access to it, and (c) the transaction or event giving rise to our right to or control of the benefit has already occurred. |
2022 |
2021 |
|||||||
(in thousands) | ||||||||
Mineral properties—Fort Cady |
$ | 6,733 | $ | 6,733 | ||||
Hydrology wells |
547 | 547 | ||||||
Mineral interest—Elementis lease |
908 | 722 | ||||||
Asset retirement cost, net of accumulated amortization of $6 and $0 at June 30, 2022 and 2021, respectively (1) |
176 | 79 | ||||||
|
|
|
|
|||||
$ | 8,364 | $ | 8,081 | |||||
|
|
|
|
(1) |
Asset retirement costs represent the carrying value of capitalized costs associated with asset retirement obligations discussed in Note 5. |
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Engineering services |
$ | 9,073 | $ | 3,825 | ||||
Equipment |
13,131 | 8,940 | ||||||
Injection and recovery wells |
3,421 | — | ||||||
|
|
|
|
|||||
$ | 25,625 | $ | 12,765 | |||||
|
|
|
|
Asset category |
Depreciation method |
Estimated useful life (in years) |
2022 |
2021 |
||||||||||||
(in thousands) | ||||||||||||||||
Land |
N/A | — | $ | 1,533 | $ | 658 | ||||||||||
Buildings |
Straight-line |
7-15 |
873 | 717 | ||||||||||||
Vehicles |
Straight-line | 5 | 276 | 73 | ||||||||||||
Plant and equipment |
Straight-line | 5-10 |
340 | 92 | ||||||||||||
|
|
|
|
|||||||||||||
3,022 | 1,540 | |||||||||||||||
Less accumulated depreciation |
(151 | ) | (45 | ) | ||||||||||||
|
|
|
|
|||||||||||||
Properties, plant and equipment, net |
$ | 2,871 | $ | 1,495 | ||||||||||||
|
|
|
|
2022 |
2021 |
|||||||
(in thousands) | ||||||||
Asset retirement obligation—beginning of period |
$ | 79 | $ | — | ||||
Obligation incurred during the period |
106 | 79 | ||||||
Revisions to previous estimates |
(3 | ) | — | |||||
Accretion |
9 | — | ||||||
|
|
|
|
|||||
Asset retirement obligation—end of period |
191 | 79 | ||||||
Accrued reclamation costs |
298 | 298 | ||||||
|
|
|
|
|||||
Total accrued reclamation liabilities |
$ | 489 | $ | 377 | ||||
|
|
|
|
Lease inception |
Weighted average remaining lease term (in years) |
Weighted average discount rate |
Cash Paid for Rent |
Rent Expense |
||||||||||||||||||||||||
Years ended |
||||||||||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||||||||||||
Operating Leases |
(in thousands) |
|||||||||||||||||||||||||||
Office space |
2021 - 2022 |
2.4 | 1.6 | % | $ | 92 | $ | 22 | $ | 93 | $ | 24 | ||||||||||||||||
Other operating leases |
2021 | 0.3 | 0.1 | % | 32 | 2 | 32 | 2 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating leases |
124 | 24 | 125 | 26 | ||||||||||||||||||||||||
Short term leases |
N/A | N/A | N/A | 57 | 55 | 57 | 55 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total for all leases |
$ | 181 | $ | 79 | $ | 182 | $ | 81 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Accounts payable—trade |
$ | 3,459 | $ | 1,188 | ||||
Accrued expenses |
2,935 | 265 | ||||||
Accrued payroll |
780 | 141 | ||||||
Current portion of debt |
38 | — | ||||||
|
|
|
|
|||||
Accounts payable and accrued liabilities |
$ | 7,212 | $ | 1,594 | ||||
|
|
|
|
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Note payable for land |
$ | — | $ | 93 | ||||
Vehicle notes payable |
186 | — | ||||||
|
|
|
|
|||||
Total debt |
186 | 93 | ||||||
Current portion of debt |
38 | — | ||||||
|
|
|
|
|||||
Long-term debt |
$ | 148 | $ | 93 | ||||
|
|
|
|
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Share based compensation expense—service based |
||||||||
Employee share option plan |
$ | 5,812 | $ | 4,653 | ||||
2022 Equity compensation plan—RSU’s |
646 | — | ||||||
|
|
|
|
|||||
Total service based compensation |
6,458 | 4,653 | ||||||
Options issued to suppliers |
238 | 1,723 | ||||||
Consulting stock awards |
31,033 | — | ||||||
|
|
|
|
|||||
Total share based compensation |
$ | 37,729 | $ | 6,376 | ||||
|
|
|
|
2022 |
2021 | |||
Exercise price |
$14.62 - $18.27 |
$6.58 - $18.27 | ||
Share price |
$9.87 - $12.35 |
$4.20 - $14.76 | ||
Volatility |
69% - 85% |
73% - 110% | ||
Expected term in years |
0.9 to 3.9 | 1 to 4 | ||
Risk free interest rate |
0.10% - 1.5% |
0.75% | ||
Dividend rate |
Nil | Nil |
Year ended June 30 |
||||||||||||||||
2022 |
2021 |
|||||||||||||||
Number of Options |
Weighted Average Exercise Price |
Number of Options |
Weighted Average Exercise Price |
|||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Outstanding at beginning of the period |
5,554 | $ | 5.19 | 6,742 | $ | 3.36 | ||||||||||
Granted |
1,700 | 15.39 | 1,700 | 9.21 | ||||||||||||
Exercised |
(1,904 | ) | 2.75 | (2,799 | ) | 3.22 | ||||||||||
Expired/forfeited |
(476 | ) | 5.48 | (89 | ) | 7.09 | ||||||||||
|
|
|
|
|||||||||||||
Outstanding at end of the period |
4,874 | 9.67 | 5,554 | 5.19 | ||||||||||||
|
|
|
|
|||||||||||||
Vested at the end of the period |
3,367 | $ | 7.30 | 5,284 | $ | 4.75 |
Number of Options |
Weighted Average Grant Date Fair Value per share |
Number of Options |
Weighted Average Grant Date Fair Value per share |
|||||||||||||
Unvested options at beginning of the period |
270 |
$ |
5.79 |
335 |
$ |
1.20 |
||||||||||
Granted |
1,700 |
6.26 |
1,700 |
4.65 |
||||||||||||
Vested |
(463 |
) |
4.65 |
(1,676 |
) |
3.79 |
||||||||||
Expired/forfeited |
— |
— |
(89 |
) |
4.35 |
|||||||||||
|
|
|
|
|||||||||||||
Unvested options at end of the period |
1,507 |
6.05 |
270 |
5.79 |
||||||||||||
|
|
|
|
Number of Shares |
Weighted Average Exercise Price per Share |
Weighted Average Remaining Contractual Life |
Aggregate Intrinsic Value |
|||||||||||||
(In thousands) |
(In years) |
(In thousands) |
||||||||||||||
Outstanding and exercisable at: |
||||||||||||||||
June 30, 2022 |
3,367 | $ | 7.30 | 1.1 | $ | 24,568 | ||||||||||
June 30, 2021 |
5,284 | 4.75 | 1.8 | 21,200 |
Serviced- based Shares |
Weighted Average Grant Date Fair Value per Share |
Performance- Based Shares |
Weighted Average Grant Date Fair Value per Share |
Total Shares |
||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Non-vested shares/units outstanding at July 1, 2021 |
— | $ | — | — | $ | — | — | |||||||||||||
Granted |
48.8 | (1) |
18.03 | 19.2 | (2) |
— | 68.0 | |||||||||||||
Forfeited |
— | — | — | — | — | |||||||||||||||
Vested |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Non-vested shares/units outstanding at June 30, 2022 |
48.8 | 19.2 | 68.0 | |||||||||||||||||
|
|
|
|
|
|
(1) |
Includes approximately 29.6 thousand restricted share units issued to our directors. |
(2) |
On June 29, 2022, we granted approximately 19.2 thousand performance share units, which based on the achievement of certain revenue targets, could vest within a range of 0% to 150%. |
Hurdle stock price |
$ | 21.94 | $ | 29.25 | $ | 36.57 | $ | 43.88 | ||||||||
Volatility |
76.82 | % | 76.82 | % | 76.82 | % | 76.82 | % | ||||||||
Expected term in years |
1.12 | 1.12 | 1.12 | 1.12 | ||||||||||||
Risk-free interest rate |
0.22 | % | 0.22 | % | 0.22 | % | 0.22 | % | ||||||||
Expected dividend yield |
0 | % | 0 | % | 0 | % | 0 | % | ||||||||
Estimated fair value per share |
$ | 10.68 | $ | 9.01 | $ | 6.63 | $ | 4.88 |
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Australia |
$ |
15,479 |
$ |
11,214 |
||||
United States |
51,234 |
8,039 |
||||||
Total net loss |
$ |
66,713 |
$ |
19,253 |
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Loss before income taxes |
$ |
66,713 |
$ |
19,253 |
||||
Statutory income tax rate |
21 |
% |
21 |
% | ||||
Income tax benefit at statutory tax rates |
14,010 |
4,043 |
||||||
State income tax benefit |
2,801 |
561 |
||||||
Foreign rate differential |
822 |
379 |
||||||
Share based compensation |
(751 |
) |
(1,376 |
) | ||||
Disallowed exploration costs |
(861 | ) | — | |||||
Other |
97 |
(97 |
) | |||||
Change in valuation allowance |
(16,118 |
) |
(3,510 |
) | ||||
Income tax benefit |
$ |
— |
$ |
— |
||||
2022 |
2021 |
|||||||
Deferred tax assets: |
(in thousands) |
|||||||
Net operating loss carryforward |
$ |
14,282 |
$ |
4,352 |
||||
Amortization of exploration expenditures |
6,423 |
3,225 |
||||||
Unrealized loss - translation |
308 |
447 |
||||||
Share based compensation |
1,946 |
— |
||||||
Other deferred tax assets |
867 |
429 |
||||||
Total deferred tax assets |
23,826 |
8,453 |
||||||
Less: valuation allowance |
(23,671 |
) |
(7,941 |
) | ||||
Deferred tax assets, net of valuation allowance to offset |
155 |
512 |
||||||
Deferred tax liabilities: |
||||||||
Unrealized gain - translation |
— |
(425 |
) | |||||
Other |
(102 |
) |
(60 |
) | ||||
Depreciation |
(53 |
) |
(27 |
) | ||||
Net deferred tax assets |
$ |
— |
$ |
— |
||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Valuation allowance |
$ |
15,730 |
$ |
2,883 |
Exhibit Number |
Exhibit Title | |
2.1# |
||
3.1 |
||
3.2 |
||
4.1** |
||
10.1+ |
||
10.2 |
Exhibit Number |
Exhibit Title | |
10.3 |
||
10.4 |
||
10.5#+* |
||
10.6#+* |
||
10.7#+* |
||
10.8+* |
||
10.9* |
||
10.10+* |
||
10.11+* |
||
10.12+* |
||
10.13+* |
||
10.14** |
||
10.15 |
||
21.1 |
||
23.1** |
||
31.1** |
||
31.2** |
||
32.1** |
||
32.2** |
||
96.1 |
||
101.INS* |
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* |
Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
# |
Schedules have been omitted pursuant to Items 601(a)(5) and 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. The Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules so furnished. |
+ |
Management contract or compensatory plan, contract or arrangement. |
* |
Previously filed. |
** |
Furnished herewith |
5E ADVANCED MATERIALS, INC. | ||
By: |
/s/ Paul Weibel | |
Paul Weibel | ||
Chief Financial Officer (Principal Financial Officer) |
Signature |
Capacity |
Date | ||
/s/ Henri Tausch Henri Tausch |
Chief Executive Officer and Director (Principal Executive Officer) |
September 28, 2022 | ||
/s/ Paul Weibel Paul Weibel |
Chief Financial Officer (Principal Financial Officer) |
September 28, 2022 | ||
/s/ George W. Fairchild Jr. George W. Fairchild Jr. |
Chief Accounting Officer - (Principal Accounting Officer) |
September 28, 2022 | ||
/s/ David Salisbury David Salisbury |
Chairman of the Board |
September 28, 2022 | ||
/s/ Stephen Hunt Stephen Hunt |
Director |
September 28, 2022 | ||
/s/ Sen Ming Lim Sen Ming Lim |
Director |
September 28, 2022 | ||
/s/ Palvi Mehta Palvi Mehta |
Director |
September 28, 2022 |
1 Year 5E Advanced Materials Chart |
1 Month 5E Advanced Materials Chart |
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