10-Q 1 pll-20240930.htm 10-Q pll-20240930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 10-Q
________________________________
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number 001-38427
___________________________________________________________
Piedmont_Logo_RGB_300dpi.jpg
Piedmont Lithium Inc.
(Exact name of Registrant as specified in its Charter)
_________________________________________________________________________________________
Delaware36-4996461
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
42 E Catawba Street
Belmont, North Carolina
28012
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (704) 461-8000

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $0.0001 par value per share PLL
The Nasdaq Capital Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒     No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Emerging growth company☐
Non-accelerated filer☐Smaller reporting company☐
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 07, 2024, there were 19,437,632 shares of the Registrant’s common stock outstanding.
1
GLOSSARY OF TERMS AND DEFINITIONS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
Annual ReportAnnual Report on Form 10-K
ASCAccounting Standards Codification
ASXAustralian Securities Exchange
Atlantic LithiumAtlantic Lithium Limited
Atlantic Lithium GhanaAtlantic Lithium’s Ghanaian-based lithium portfolio companies
ATM Programat-the-market issuance sales agreement
ATVMAdvanced Technology Vehicles Manufacturing
AuthierAuthier Lithium project
Carolina LithiumCarolina Lithium project
CODMChief Operating Decision Maker
Credit Facility$25.0 million working capital financing arrangement with a trading company partner based on committed volumes of spodumene concentrate signed September 11, 2024
DEMLRDepartment of Energy, Mineral and Land Resources
DFSdefinitive feasibility study
dmtdry metric ton
EwoyaaEwoyaa Lithium project
Exchange ActSecurities Exchange Act of 1934
FDICFederal Deposit Insurance Corporation
Killick Lithium
Killick Lithium Inc.
LG ChemLG Chem, Ltd.
Tennessee LithiumTennessee Lithium project
Li2O
lithium oxide
MIIFMinerals Income Investment Fund of Ghana
Milestone PRAsPRAs that could be earned based upon achievement of certain specified milestones
NALNorth American Lithium Inc.
NCDEQNorth Carolina Department of Environmental Quality
Piedmont AustraliaPiedmont Lithium Pty Ltd (formerly named Piedmont Lithium Limited)
PRAsperformance rights awards
RiccaRicca Resources Limited
RSUsrestricted stock units
Sayona MiningSayona Mining Limited
Sayona QuebecSayona Quebec Inc.
SECSecurities and Exchange Commission
SOFRsecured overnight financing rate
spodumene concentrate
spodumene concentrate or SC[X] where “X” represents the lithium content of the concentrate on an Li2O% basis
Stock Incentive PlanPiedmont Lithium Inc. Stock Incentive Plan adopted by our board in March 2021
TansimTansim Lithium project
TSR PRAs
PRAs related to market goals based on a comparison of Piedmont Lithium’s total shareholder return relative to the total shareholder return of a pre-determined set of peer group companies for the performance periods
U.S.United States of America
U.S. GAAPU.S. generally accepted accounting principles
Vinland LithiumVinland Lithium Inc.
2024 Cost Savings PlanBoard approved action to reduce cash operating costs, defer capital spending, and limit cash investments in and advances to affiliates in 2024
2
Table of Contents

Page
Glossary of Terms and Definitions
PART I - Financial Information
Item 1.
PART II - Other Information
Item 1A.
Item 4.
3
PART I - FINANCIAL INFORMATION
Item 1.    Financial Statements.
PIEDMONT LITHIUM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)


Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenue$27,663 $47,127 $54,291 $47,127 
Costs of sales25,010 23,363 50,321 23,363 
Gross profit2,653 23,764 3,970 23,764 
Operating expenses:
Exploration costs35 471 97 1,668 
Selling, general and administrative expenses9,466 11,185 26,576 31,793 
Total operating expenses9,501 11,656 26,673 33,461 
(Loss) income from equity method investments(3,514)3,852 (13,864)(1,565)
Restructuring and impairment charges(4,563)— (6,657)— 
(Loss) income from operations(14,925)15,960 (43,224)(11,262)
Other (expense) income:
Interest income806 1,031 2,286 2,959 
Interest expense(169)(8)(467)(34)
Gain (loss) on sale of equity method investments(1)
— 7,958 (13,886)15,208 
Other loss(2,399)(22)(1,434)(88)
Total other (expense) income(1,762)8,959 (13,501)18,045 
(Loss) income before taxes(16,687)24,919 (56,725)6,783 
Income tax expense (benefit) — 2,028 (3,095)3,170 
Net (loss) income$(16,687)$22,891 $(53,630)$3,613 
Earnings per share:
Basic$(0.86)$1.19 $(2.77)$0.19 
Diluted$(0.86)$1.19 $(2.77)$0.19 
Weighted-average shares outstanding:
Basic19,401 19,203 19,366 18,974 
Diluted 19,401 19,239 19,366 19,011 
__________________________
(1)Gain (loss) on sale of equity method investments includes a loss on the sale of shares in Sayona Mining of $17,215, partially offset by a gain on the sale of shares in Atlantic Lithium of $3,143 and a gain on dilution related to the issuance of additional shares of Atlantic Lithium of $186 for the nine months ended September 30, 2024. There was no gain (loss) on sale of equity method investments for the three months ended September 30, 2024. For the three and nine months ended September 30, 2023, we recognized a gain of $7,958 and $15,208, respectively, related to the dilution of our ownership interest with the issuance of additional shares of Sayona Mining and Atlantic Lithium. See Note 8—Equity Method Investments.
The accompanying notes are an integral part of these unaudited financial statements.
4
PIEDMONT LITHIUM INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands) (Unaudited)


Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net (loss) income$(16,687)$22,891 $(53,630)$3,613 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment of equity method investments(1)
927 (2,992)256 (4,084)
 Other comprehensive (loss) income, net of tax927 (2,992)256 (4,084)
Comprehensive (loss) income$(15,760)$19,899 $(53,374)$(471)
__________________________
(1)Foreign currency translation adjustment of equity method investments is presented net of tax (expense) benefit of $(223) for the nine months ended September 30, 2024 and $264 and $830 for the three and nine months ended September 30, 2023, respectively. There is no tax impact on foreign currency translation adjustment of equity method investments for the three months ended September 30, 2024.

The accompanying notes are an integral part of these unaudited financial statements.
5
PIEDMONT LITHIUM INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts) (Unaudited)


AssetsSeptember 30,
2024		December 31,
2023
Cash and cash equivalents$64,358 $71,730 
Accounts receivable1,079 595 
Other current assets 8,217 3,829 
Total current assets73,654 76,154 
Property, plant and mine development, net 134,510 127,086 
Advances to affiliates39,208 28,189 
Other non-current assets 1,707 2,164 
Equity method investments80,148 147,662 
Total assets$329,227 $381,255 
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses$6,532 $11,580 
Payables to affiliates287 174 
Current debt obligations19,966 149 
Deferred revenue6,866 — 
Other current liabilities3,375 29,463 
Total current liabilities37,026 41,366 
Long-term debt, net of current portion 4,089 14 
Operating lease liabilities, net of current portion908 1,091 
Other non-current liabilities998 431 
Deferred tax liabilities— 6,023 
Total liabilities43,021 48,925 
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock; $0.0001 par value, 100,000 shares authorized; 19,429 and 19,272 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
2 2 
Additional paid-in capital470,149 462,899 
Accumulated deficit(180,474)(126,844)
Accumulated other comprehensive loss(3,471)(3,727)
Total stockholders’ equity286,206 332,330 
Total liabilities and stockholders’ equity$329,227 $381,255 
The accompanying notes are an integral part of these unaudited financial statements.
6
PIEDMONT LITHIUM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
Nine Months Ended
September 30,
Cash flows from operating activities:20242023
Net (loss) income$(53,630)$3,613 
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense6,869 7,378 
Loss from equity method investments13,864 1,565 
Loss (gain) on sale of equity method investments13,886 (15,208)
Loss on equity securities1,036 — 
Deferred taxes(6,246)3,170 
Depreciation and amortization221 174 
Noncash lease expense280 169 
Loss on sale of assets691 — 
Noncash impairment charges4,070 — 
Unrealized foreign currency translation (gains) losses(309)27 
Changes in assets and liabilities:
Accounts receivable(484)(23,281)
Other assets2,675 (1,633)
Operating lease liabilities(208)(148)
Other liabilities(25,372)7,751 
Payables to affiliates113 21,484 
Deferred revenue6,866 — 
Accounts payable and accrued expenses (799)342 
Net cash (used in) provided by operating activities(36,477)5,403 
Cash flows from investing activities:
Capital expenditures(10,578)(44,978)
Advances to affiliates(10,310)(6,828)
Proceeds from sale of marketable securities45 — 
Proceeds from sale of shares in equity method investments49,103 — 
Additions to equity method investments(14,982)(28,667)
Net cash provided by (used in) investing activities13,278 (80,473)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of issuance costs— 71,084 
Net proceeds from Credit Facility18,007 — 
Payments of debt obligations and insurance premiums financed(1,509)(344)
Payments to tax authorities for employee stock-based compensation(671)(422)
Net cash provided by financing activities15,827 70,318 
Net decrease in cash(7,372)(4,752)
Cash and cash equivalents at beginning of period71,730 99,247 
Cash and cash equivalents at end of period$64,358 $94,495 
Supplemental disclosure of cash flow information:
Noncash capital expenditures in accounts payable and accrued expenses$37 $5,114 
Noncash acquisitions of mining interests financed by sellers5,277 — 
Insurance premiums financed2,117 — 
Noncash investment in affiliates for issuance of company stock746 — 
The accompanying notes are an integral part of these unaudited financial statements.
7
PIEDMONT LITHIUM INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands) (Unaudited)

Common StockAdditional
Paid-In
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive Loss		Total
Stockholders’
Equity
SharesAmount
December 31, 202319,272 $2 $462,899 $(126,844)$(3,727)$332,330 
Issuance of common stock, net of issuance costs53 — 747 — — 747 
Stock-based compensation, net of forfeitures— — 2,106 — — 2,106 
Shares issued for exercise/vesting of stock-based compensation awards67 — — — — — 
Shares surrendered for tax obligations for stock-based transactions(27)— (592)— — (592)
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — 87 87 
Net loss— — — (23,611)— (23,611)
March 31, 202419,365 2 465,160 (150,455)(3,640)311,067 
Stock-based compensation, net of forfeitures— — 2,710 — — 2,710 
Shares issued for exercise/vesting of stock-based compensation awards10 — — — — — 
Shares surrendered for tax obligations for stock-based transactions(4)— (62)— — (62)
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — (758)(758)
Net loss— — — (13,332)— (13,332)
June 30, 202419,371 2 467,808 (163,787)(4,398)299,625 
Stock-based compensation, net of forfeitures— — 2,358 — — 2,358 
Shares issued for exercise/vesting of stock-based compensation awards60 — — — — — 
Shares surrendered for tax obligations for stock-based transactions(2)— (17)— — (17)
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — 927 927 
Net loss— — — (16,687)— (16,687)
September 30, 202419,429 $2 $470,149 $(180,474)$(3,471)$286,206 

The accompanying notes are an integral part of these unaudited financial statements.
8
PIEDMONT LITHIUM INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands) (Unaudited)

Common StockAdditional
Paid-In
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive Loss		Total
Stockholders’
Equity
SharesAmount
December 31, 202218,073 $2 $381,242 $(105,658)$(5,297)$270,289 
Issuance of common stock, net of issuance costs1,097 — 71,084 — — 71,084 
Stock-based compensation, net of forfeitures— — 1,166 — — 1,166 
Shares issued for exercise/vesting of stock-based compensation awards13 — — — — — 
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — (2,213)(2,213)
Net loss— — — (8,639)— (8,639)
March 31, 202319,183 2 453,492 (114,297)(7,510)331,687 
Stock-based compensation, net of forfeitures— — 3,266 — — 3,266 
Shares issued for exercise/vesting of stock-based compensation awards13 — — — — — 
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — 1,121 1,121 
Net loss— — — (10,639)— (10,639)
June 30, 202319,196 2 456,758 (124,936)(6,389)325,435 
Stock-based compensation, net of forfeitures— — 3,139 — — 3,139 
Shares issued for exercise/vesting of stock-based compensation awards24 — — — — — 
Shares surrendered for tax obligations for share-based transactions(11)— (422)— — (422)
Equity method investments adjustments in other comprehensive (loss) income, net of tax— — — — (2,992)(2,992)
Net Income— — — 22,891 — 22,891 
September 30, 202319,209 $2 $459,475 $(102,045)$(9,381)$348,051 
The accompanying notes are an integral part of these unaudited financial statements.

9
PIEDMONT LITHIUM INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.DESCRIPTION OF COMPANY
Nature of Business
Piedmont Lithium Inc. (“Piedmont Lithium,” “we,” “our,” “us,” or “Company”) is a U.S. based, development-stage, multi-asset, integrated lithium business in support of a clean energy economy and U.S. and global energy security. We plan to supply lithium hydroxide to the electric vehicle and battery manufacturing supply chains in North America by processing spodumene concentrate produced from assets we own or in which we have an economic interest.
Our portfolio of projects includes our wholly-owned Carolina Lithium project, a proposed fully integrated spodumene ore-to-lithium hydroxide project and a second lithium hydroxide manufacturing train in Gaston County, North Carolina. The balance of our project portfolio includes strategic investments in lithium assets in Quebec, Canada, including the operating NAL mine; in Ghana, West Africa with Atlantic Lithium, including Ewoyaa; and in Newfoundland, Canada with Vinland Lithium.
We also had a proposed secondary merchant lithium hydroxide manufacturing plant as part of our Tennessee Lithium project. Planned capacity for the Tennessee plant was consolidated to Carolina Lithium in the third quarter of 2024 as part of a two-phased development plan.
Basis of Presentation
Our unaudited consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with U.S. GAAP and in conformity with the rules and regulations of the SEC. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Our reporting currency is U.S. dollars, and we operate on a calendar fiscal year. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. Therefore, these unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report for the year ended December 31, 2023. These unaudited consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are considered necessary for a fair statement of the results of operations, financial position, and cash flows for the periods presented. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the year ending December 31, 2024, for any other future interim periods, or for any other future fiscal year. Certain prior period amounts have been reclassified to be consistent with current period presentation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions, and allocations that affect amounts reported in the consolidated financial statements and related notes. Significant items that are subject to such estimates and assumptions include, but are not limited to, long-lived assets, fair value of stock-based compensation awards and marketable securities, income tax uncertainties, valuation of deferred tax assets, contingent assets and liabilities, legal claims, asset impairments, provisional revenue adjustments, collectability of receivables, and environmental remediation. Actual results could differ due to the uncertainty inherent in the nature of these estimates.
We base our estimates and assumptions on current facts, historical experience, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from our estimates. To the extent there are material differences between estimates and actual results, future results of operations will be affected.
Risk and Uncertainties
We are subject to a number of risks similar to those of other companies of similar size in our industry including, but not limited to, the success of our exploration and development activities, success of our equity method investments in international projects, permitting and construction delays, the need for additional capital or financing to fund operating losses and investments in our lithium projects
10
and affiliates in Quebec and Ghana, lithium price risk, competition from substitute products and services, protection of proprietary technology, litigation, and dependence on key individuals.
Since inception, we have devoted substantial effort and capital resources to our exploration and development activities, permitting activities, and construction activities, which includes such activities in international projects as part of our equity method investments. We have incurred net losses and negative cash flows from operations, including net losses of $53.6 million and $21.8 million in the nine months ended September 30, 2024 and the year ended December 31, 2023, respectively. We have accumulated deficits of $180.5 million and $126.8 million as of September 30, 2024 and December 31, 2023, respectively. The critical minerals value chain continues to experience headwinds, which have negatively impacted the prices of lithium we sell. As a development stage company, we expect to continue to recognize losses and generate negative cash flows from operations for the foreseeable future as we continue to fund our development and exploration activities.
In light of current market conditions, we implemented our 2024 Cost Savings Plan to reduce our operating expenses, delay capital expenditures into 2025 and beyond, and limit investments in our lithium projects and affiliates. We had available cash on hand of $64.4 million as of September 30, 2024. During the third quarter of 2024, we entered into a working capital facility whereby we may borrow up to $25.0 million based on the value of committed volumes of spodumene concentrate shipments occurring within the following twelve months. The Credit Facility contains a subjective acceleration clause that allows the lender to change the payment terms of the arrangement if there is a material change in our credit worthiness including acceleration of repayment up to the full amount of any outstanding borrowings. We had an outstanding balance on the Credit Facility of $18.0 million as of September 30, 2024. See Note 11—Debt Obligations.
Based on our operating plan, which includes our 2024 Cost Savings Plan and ongoing access to and utilization of the Credit Facility discussed above, we believe our cash on hand and the Credit Facility will be sufficient to fund our operations and meet our obligations as they come due for the twelve months following the date these unaudited consolidated financial statements are issued. However, we have based our estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors, including lithium pricing. As a result, we could deplete our capital resources sooner than we currently expect. No assurances can be given that any additional cost reduction strategies we undertake would be sufficient to meet our needs. We expect to finance our future cash needs through a combination of sales of non-core assets, equity offerings, debt financings, and strategic partnerships. If we are unable to obtain funding, we would be forced to delay, reduce, or eliminate some or all of our exploration and development activities and joint venture fundings, which could adversely affect our business prospects and ultimately our ability to operate.
Our long-term success is dependent upon our ability to successfully raise additional capital or financing or enter into strategic partnership opportunities. Our long-term success is also dependent upon our ability to obtain certain permits and approvals, develop our planned portfolio of projects, earn revenues, and achieve profitability. No assurances can be given that we will be able to successfully achieve these dependencies.
Significant Accounting Policies
There have been no significant changes to significant accounting policies described in Note 2—Summary of Significant Accounting Policies within Part II, Item 8 of our Annual Report for the year ended December 31, 2023.
Recently Issued Accounting Standards Not Yet Adopted
Income Taxes
In December 2023, the FASB issued amended guidance on income tax disclosures. The guidance is intended to provide additional disaggregation to the effective income tax rate reconciliation and income tax payment disclosures. The amended guidance is effective for annual periods beginning January 1, 2025 and should be applied on a prospective basis. Early adoption is permitted.
Segment Reporting
In November 2023, the FASB issued amended guidance for improvements to reportable segment disclosures. The revised guidance requires that a public entity disclose significant segment expenses regularly reviewed by the chief operating decision maker (CODM), including public entities with a single reportable segment. The amended guidance is effective for fiscal years beginning January 1, 2024 and interim periods beginning January 1, 2025 and should be applied on a retrospective basis. Early adoption is permitted.
Recently Issued and Adopted Accounting Pronouncements
We have considered the applicability and impact of all other recently issued accounting pronouncements and have determined that they were either not applicable or were not expected to have a material impact on our unaudited consolidated financial statements.
11
2.REVENUE
We recognize revenue from product sales at a point in time when performance obligations are satisfied under the terms of contracts with our customers. A performance obligation is deemed to be satisfied when control of the product is transferred to our customers, which is typically upon delivery to the shipping carrier. There are currently no contracts with multiple performance obligations. Revenue is measured as the amount of consideration expected to be received in exchange for transferring the goods. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 15 days to 75 days from shipment. Some contracts contain prepayment provisions which allow the customer to secure the right to receive their requested product volumes in a future period. Revenue from these contracts is initially deferred, thus creating a contract liability. Initial pricing is typically billed 5 days to 30 days after the departure of the shipment. Final pricing adjustments may take longer to resolve. When the final price has not been resolved by the end of a reporting period, we estimate the expected sales price based on the initial price, market pricing, and known quality measurements. Our sales based on a provisional price contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward price at the time of sale. The embedded derivative, which is not designated for hedge accounting, is recorded at fair value with any changes recognized as revenue each period prior to final settlement. We warrant to our customers that our products conform to mutually agreed product specifications.
Four customers accounted for 100% of total revenue for the three and nine months ended September 30, 2024 and 2023, respectively. All sales related to these four customers originated in North America. We evaluate the collectability of our accounts receivable on an individual customer basis. Our reserve for credit losses was nil as of September 30, 2024.
We may be subject to provisional revenue adjustments associated with commodity price fluctuations for our spodumene concentrate sales. In some cases, these adjustments are unknown until final settlement. As of September 30, 2024, approximately 1,800 dmt with an average provisional price of $610 per dmt will be subject to final pricing over the next several months.
Revenue and provisional adjustments are reflected in the following table:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Spodumene concentrate sales$27,663 $47,127 $54,053 $47,127 
Provisional revenue adjustments— — 238 — 
Revenue$27,663 $47,127 $54,291 $47,127 
Contract Liabilities
Contract liabilities represent payments received from customers in advance of the satisfaction of performance obligations. As of September 30, 2024, we had $6.9 million of contract liabilities reported as “Deferred revenue” in our consolidated balance sheets. We anticipate all such payments will be earned and recognized as revenue within the next twelve months. We had no contract liabilities as of December 31, 2023.
3.STOCK-BASED COMPENSATION
Stock Incentive Plan
Under our Stock Incentive Plan, we are authorized to grant 3,000,000 shares, or share equivalents, of stock options, stock appreciation rights, restricted stock units, and restricted stock, any of which may be performance based. Our Leadership and Compensation Committee determines the exercise price for stock options and the base price of stock appreciation rights, which may not be less than the fair market value of our common stock on the date of grant. Generally, stock options and stock appreciation rights fully vest after three years of service and expire at the end of ten years. PRAs vest upon achievement of certain pre-established performance targets that are based on specified performance criteria over a performance period. As of September 30, 2024, 1,340,034 shares of common stock were available for issuance under our Stock Incentive Plan.
12
We include the expense related to stock-based compensation in the same financial statement line item as cash compensation paid to the same employee. As of September 30, 2024, we had remaining unvested stock-based compensation expense of $10.1 million to be recognized through December 31, 2026. Additionally, and if applicable, we capitalize personnel expenses, including stock-based compensation expenses, attributable to the development of our mine and construction of our plants. We recognize share-based award forfeitures as they occur.
The components and presentation of stock-based compensation are presented in the following table:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Components of stock-based compensation:
Stock-based compensation$2,417 $3,139 $7,283 $7,576 
Forfeitures(59)— (109)(5)
Stock-based compensation, net of forfeitures
$2,358 $3,139 $7,174 $7,571 
Presentation of stock-based compensation in the
 unaudited consolidated financial statements:
Exploration costs$— $57 $8 $128 
Selling, general and administrative expenses2,229 3,010 6,861 7,250 
Stock-based compensation expense, net of forfeitures(1)
2,229 3,067 6,869 7,378 
Capitalized stock-based compensation(2)
129 72 305 193 
Stock-based compensation, net of forfeitures
$2,358 $3,139 $7,174 $7,571 
__________________________
(1)We did not reflect a tax benefit associated with stock-based compensation expense in our consolidated statements of operations because we had a full tax valuation allowance during these periods. As as result, the table above does not reflect the tax impacts of stock-based compensation expense.
(2)These costs relate to direct labor costs associated with our lithium projects and are included in “Property, plant and mine development, net” in our consolidated balance sheets.
Stock Option Awards
Stock options may be granted to employees, officers, non-employee directors, and other service providers. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes valuation model, and the expense is recognized over the option vesting period.
The following assumptions were used to estimate the fair value of stock options granted during the periods presented below:
Nine Months Ended
September 30,
20242023
Expected life of options (in years)
6.3 - 6.4
6.2 - 6.4
Risk-free interest rate
4.2% - 4.3%
3.9% - 4.2%
Assumed volatility
35% - 40%
40%
Expected dividend rate——
There were no stock options granted during the three months ended September 30, 2024 and 2023.
Restricted Stock Unit Awards
RSUs may be granted to employees and non-employee directors and recognized as stock-based compensation expense over the vesting period, subject to the passage of time and continued service during the vesting period, based on the market price of our common stock on the grant date. In some instances, awards may vest concurrently with or following an employee’s termination.
13
Performance Rights Awards
As of September 30, 2024, there were 20,162 unvested Milestone PRAs and 280,256 unvested TSR PRAs. The awards become eligible to vest only if certain goals are achieved and will vest only if the grantee remains employed by the Company through each applicable vesting date, subject to certain accelerated vesting terms for qualified terminations. Each performance right converts into one share of common stock upon vesting of the performance right.
We determined the fair value of Milestone PRAs based upon the market price of our common stock on the grant date. Milestone PRAs are subject to certain milestones related to construction, feasibility studies, and offtake agreements, which must be satisfied in order for PRAs to vest.
We estimated the fair value of the TSR PRAs at the grant date using a Monte Carlo simulation. The Monte Carlo simulation fair value model requires the use of highly subjective and complex assumptions, including price volatility of the underlying stock to simulate a range of possible future stock prices for the Company and each member of the peer group over the performance periods to determine the grant date fair value. Compensation expense is recognized based upon the assumption of 100% achievement of the TSR goal and is reflected over the service period of the award. Compensation expense will not be reversed even if the threshold level of TSR is never achieved. The number of shares that may vest ranges from 0% to 200% of the target amount and is based on actual performance at the end of each performance period ranging from 1 year to 3 years.
The following assumptions were used in the Monte Carlo simulation for TSR PRAs granted during periods presented below:
Nine Months Ended
September 30,
20242023
Expected term (in years)
1 -3
1 - 3
Risk-free interest rate
4.7% - 4.8%
4.9%
Assumed volatility50%60%
Expected dividend yield——
There were no TSR PRAs granted during the three months ended September 30, 2024 and 2023.
A summary of activity related to our share-based awards is presented in the following table:
20242023
(in thousands)Stock Option AwardsRestricted Stock UnitsPerformance Rights AwardsStock Option AwardsRestricted Stock UnitsPerformance Rights Awards
Share balance at January 1295 80 86 265 36 44 
Granted155 200 123 42 40 42 
Exercised, surrendered or vested— (35)(32)— (13)— 
Forfeited or expired— (2)— — (1)— 
Share balance at March 31450 243 177 307 62 86 
Granted170 117 129 30 31 27 
Exercised, surrendered or vested— (5)(5)— (12)— 
Forfeited or expired— (2)— — — — 
Share balance at June 30620 353 301 337 81 113 
Exercised, surrendered or vested— (60)— (2)— (22)
Forfeited or expired— (8)— — — — 
Balance at September 30620 285 301 335 81 91 
14
4.RESTRUCTURING AND IMPAIRMENT
During the first quarter of 2024, our board of directors approved the 2024 Cost Savings Plan in response to the lithium market downturn. As part of our 2024 Cost Savings Plan, we targeted a $10 million annual reduction in operating costs mainly within corporate overhead, a deferral of capital spending to 2025 and beyond, and limiting cash investments in and advances to affiliates. We achieved our $10 million target reduction in annual operating costs in the second quarter of 2024 primarily through actions taken to reduce our workforce by 28% in the first quarter of 2024 and lower third-party spending consisting primarily of professional fees and other operating costs. We expect to recognize the majority of our annual operating cost savings in 2024. As a result of our reduction in workforce, we recorded $1.8 million in severance and employee benefits costs in the three months ended March 31, 2024.
In August 2024, we announced plans to streamline our U.S. lithium hydroxide production plans in favor of shifting our proposed Tennessee Lithium conversion capacity to Carolina Lithium in a phased approach, thereby allowing us to deploy capital and technical resources more efficiently. In connection with this shift, we recorded restructuring and impairment charges associated with Tennessee Lithium totaling $4.4 million in the three months ended September 30, 2024 which includes $0.3 million in charges to continue operating the monofill operations which we plan to sell or decommission in the near future.
The following table presents the components of restructuring and impairment charges associated with our 2024 Cost Savings Plan for the three and nine months ended September 30, 2024:
(in thousands)Three Months Ended
September 30, 2024		Nine Months Ended
September 30, 2024
Severance and employee benefits costs(1)
$10 $1,294 
Stock compensation expense(2)
— 554 
Exit costs(3)
453 601 
Other restructuring related expenses(4)
30 138 
Total restructuring charges493 2,587 
Impairment charges(5)
4,070 4,070 
Total restructuring and impairment charges$4,563 $6,657 
__________________________
(1)    Severance costs primarily relate to cash severance and employee benefits costs.
(2)    Non-cash stock compensation expense related to accelerated vesting of certain stock-based compensation awards in connection with our reduction in force.
(3)    Exit costs relate to the consolidation of our corporate office to a single location in Belmont, North Carolina, and operational costs of our monofill disposal facility in Tennessee.
(4)    Other restructuring charges include contract termination costs as part of our 2024 Cost Savings Plan.
(5)    Impairment charges relate to land, capitalized construction and development costs, and other fixed assets related to the conversion of our legacy Tennessee Lithium project to Carolina Lithium.
15
The following table presents the summary of activity in our restructuring accrual:
(in thousands)Severance CostsFacility Exit CostsOther RestructuringTotal
Accrual at December 31, 2023$— $— $— $— 
Restructuring charges1,780 — — 1,780 
Cash payments and settlements(757)— — (757)
Stock-based compensation(554)— — (554)
Accrual at March 31, 2024469 — — 469 
Restructuring charges58 148 108 314 
Cash payments and settlements(495)(148)(58)(701)
Accrual at June 30, 202432 — 50 82 
Restructuring charges10 453 30 493 
Cash payments and settlements(16)(200)(16)(232)
Accrual at September 30, 2024$26 $253 $64 $343 
Accrued restructuring is included in “Accounts payable and other accrued expenses” in our consolidated balance sheets. Due to the prolonged lithium market downturn, we expanded our 2024 Cost Savings Plan and further reduced our workforce, including operational and corporate staff, by 32% in October 2024 and expect to achieve an additional $4 million in annual savings for a total of $14 million in annual cost savings. We expect to record restructuring charges in the fourth quarter of 2024 associated with this further reduction in workforce of approximately $0.6 million, which consists of $0.5 million in cash severance and employee benefits and $0.1 million in non-cash stock compensation expense. As part of our 2024 Cost Savings Plan, we reduced our total workforce by 48% between February 2024 through October 2024. We expect to complete our 2024 Cost Savings Plan during the fourth quarter of 2024. The vast majority of cash charges will be paid in 2024.
5.OTHER LOSS
The following table reflects the components of other loss as reported in our consolidated statements of operations:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Loss on equity securities$(2,630)$— $(1,036)$— 
Loss on sale of assets(35)— (691)— 
Gain (loss) from foreign currency exchange266 (22)293 (88)
Other loss$(2,399)$(22)$(1,434)$(88)
The loss on equity securities relates to realized and unrealized gains (losses) of our investments in marketable and equity securities. Loss on sale of assets primarily relates to our sale or disposal of property, plant and mine development assets. Foreign currency exchange gain (loss) primarily relates to our foreign bank accounts denominated in Canadian dollars and Australian dollars and marketable securities denominated in Australian dollars.
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6.EARNINGS PER SHARE
We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted-average number of common shares outstanding for the periods presented. Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding options, RSUs, and PRAs based on the treasury stock method. In computing diluted earnings per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options. Diluted earnings per share excludes all potentially dilutive shares if their effect is anti-dilutive.
Basic and diluted net (loss) income per share is reflected in the following table:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Net (loss) income$(16,687)$22,891 $(53,630)$3,613 
Weighted-average number of common shares used in calculating basic earnings per share
19,401 19,203 19,366 18,974 
Effect of potentially dilutive equity awards— 36 — 37 
Weighted-average number of common shares used in calculating basic and dilutive loss per share
19,401 19,239 19,366 19,011 
Basic net (loss) income per weighted-average share$(0.86)$1.19 $(2.77)$0.19 
Diluted net (loss) income per weighted-average share$(0.86)$1.19 $(2.77)$0.19 
Potentially dilutive shares were not included in the calculation of diluted net loss per share because their effect would have been anti-dilutive in those periods. PRAs were not included as their performance obligations had not been met as of the end of the reporting period. The potentially dilutive and anti-dilutive shares not included in diluted net loss per share are presented in the following table:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Stock options620 294 620 71 
RSUs285 3 285 10 
PRAs301 94 301 88 
Total potentially dilutive shares1,206 391 1,206 169 
7.INCOME TAXES
We recorded no income tax provision on a loss before taxes of $16.7 million and a provision of $2.0 million on income before taxes of $24.9 million in the three months ended September 30, 2024 and 2023, respectively. We recorded an income tax benefit of $3.1 million on a loss before taxes of $56.7 million and a provision of $3.2 million on income before taxes of $6.8 million in the nine months ended September 30, 2024 and 2023, respectively. The effective tax rates were 0.0% and 8.1% in the three months ended September 30, 2024 and 2023, respectively, and 5.5% and 46.7% in the nine months ended September 30, 2024 and 2023, respectively.
The effective tax rate in the three and nine months ended September 30, 2024 and 2023 differs from the U.S. federal statutory rate due to the valuation allowance against our U.S. deferred tax assets and income or loss in foreign jurisdictions that is taxed at different rates than the U.S. statutory tax rate. The decrease in income tax expense for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 was primarily due to the Australian tax effects of our gain on sale of shares in Sayona Mining in the nine months ended September 30, 2024.
The sale of Sayona Mining shares in the nine months ended September 30, 2024 resulted in a book loss of $17.2 million, primarily due to the previously recorded non-cash gains on dilution of $46.3 million over the life of our investment. The deferred tax on the investment of $6.0 million was reversed for a deferred tax benefit, offset by a $3.2 million tax payable on the total taxable gain of $22.0 million. The tax payable of $3.2 million is recorded in “Other current liabilities” in our consolidated balance sheets.
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8.EQUITY METHOD INVESTMENTS
We apply the equity method to investments when we have the ability to exercise significant influence over the operational decision-making authority and financial policies of the investee.
The following tables summarize the carrying amounts, including changes therein, of our equity method investments:
Three Months Ended September 30, 2024
(in thousands)Sayona QuebecVinland LithiumTotal
Balance at June 30, 2024$81,105 $1,614 $82,719 
Additional investments— 16 16 
Loss from equity method investments(3,425)(89)(3,514)
Foreign currency translation adjustments of equity method investments909 18 927 
Balance at September 30, 2024$78,589 $1,559 $80,148 

Nine Months Ended September 30, 2024
(in thousands)
Sayona Mining(2)
Sayona Quebec
Atlantic Lithium(3)
Vinland LithiumTotal
Balance at December 31, 2023$59,494 $76,552 $9,825 $1,791 $147,662 
Additional investments— 14,961 — 21 14,982 
Gain on dilution of equity method investments(1)
— — 186 — 186 
Loss from equity method investments(2,094)(11,358)(198)(214)(13,864)
Foreign currency translation adjustments of equity method investments1,228 (1,566)856 (39)479 
Net proceeds from sale of shares(41,413)— (7,690)— (49,103)
(Loss) gain on sale of shares of equity method investments(4)
(17,215)— 3,143 — (14,072)
Transfer to investments in marketable securities— — (6,122)— (6,122)
Balance at September 30, 2024$— $78,589 $— $1,559 $80,148 
__________________________
(1)Gain on dilution of equity method investments relates to the exercise of stock options and share grants which resulted in a reduction of our ownership in Atlantic Lithium and is included in “Gain (loss) on sale of equity method investments” in our consolidated statements of operations.
(2)As of March 31, 2024, Sayona Mining is no longer accounted for as an equity method investment. During the three months ended March 31, 2024, we sold 1,249,806,231 shares of Sayona Mining for an average of $0.03 per share. The shares sold represented our entire holding in Sayona Mining and approximately 12% of Sayona Mining’s outstanding shares and resulted in net proceeds of $41.4 million. The sale of these shares has no impact on our joint venture or offtake rights with Sayona Quebec.
(3)As of March 31, 2024, Atlantic Lithium is no longer accounted for as an equity method investment. During the three months ended March 31, 2024, we sold 24,479,868 shares of Atlantic Lithium for an average $0.32 per share. The shares sold represented approximately 4% of Atlantic Lithium’s outstanding shares and resulted in net proceeds of $7.7 million. In connection with the sale of the shares, we no longer hold a board seat with Atlantic Lithium and therefore do not exercise significant influence. Our remaining investment in Atlantic Lithium of approximately 5% is accounted for as an investment in marketable securities and presented at fair value at each reporting date based on the closing price of Atlantic Lithium’s share price on the ASX. See Note 10—Other Assets and Liabilities. Our reduced ownership in Atlantic Lithium has no impact on our earn-in or offtake rights with Atlantic Lithium and the Ewoyaa project.
(4)Amounts reclassified out of accumulated other comprehensive loss into net income related to the sale of shares of equity method investments were $3.0 million and $0.6 million, net of tax, for Sayona Mining and Atlantic Lithium, respectively.
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Three Months Ended September 30, 2023
(in thousands)
Sayona Mining
Sayona QuebecAtlantic LithiumTotal
Balance at June 30, 2023$47,283 $66,546 $10,211 $124,040 
Additional investments450 — — 450 
Gain on dilution of equity method investments(1)
7,894 — 64 7,958 
Income (loss) from equity method investments1,076 3,552 (776)3,852 
Foreign currency translation adjustments of equity method investments(1,394)(1,618)(244)(3,256)
Balance at September 30, 2023$55,309 $68,480 $9,255 $133,044 
__________________________
(1)Gain on dilution of equity method investments relates to issuances of additional shares of Sayona Mining and Atlantic Lithium, which reduced our ownership interest in both Sayona Mining and Atlantic Lithium and is included in “Gain (loss) on sale of equity method investments” in our consolidated statements of operations.
Nine Months Ended September 30, 2023
(in thousands)Sayona MiningSayona QuebecAtlantic LithiumTotal
Balance at December 31, 2022$44,620 $39,763 $11,265 $95,648 
Additional investments550 28,076 41 28,667 
Gain on dilution of equity method investments(1)
15,144 — 64 15,208 
(Loss) income from equity method investments(978)948 (1,535)(1,565)
Foreign currency translation adjustments of equity method investments(4,027)(307)(580)(4,914)
Balance at September 30, 2023$55,309 $68,480 $9,255 $133,044 
__________________________
(1)Gain on dilution of equity method investments relates to issuances of additional shares of Sayona Mining and Atlantic Lithium, which reduced our ownership interest in both Sayona Mining and Atlantic Lithium and is included in “Gain (loss) on sale of equity method investments” in our consolidated statements of operations.
Our share of (loss) income from equity method investments is recorded on a one-quarter lag in “(Loss) income from equity method investments” within “(Loss) income from operations” in our consolidated statements of operations. At each reporting period, we assess whether there are any indicators of other-than-temporary impairment of our equity investments. No other-than-temporary impairment was recorded for the three and nine months ended September 30, 2024 and 2023.
As of September 30, 2024, our equity method investments consisted of Sayona Quebec and Vinland Lithium.
Sayona Quebec
We own an equity interest of 25% in Sayona Quebec for the purpose of furthering our investment and strategic partnership in Quebec, Canada. The remaining 75% equity interest is held by Sayona Mining. Sayona Quebec holds a 100% interest in NAL, which consists of a surface mine and a concentrator plant, as well as Authier and Tansim.
We hold a life-of-mine offtake agreement with Sayona Quebec for the greater of 113,000 dmt or 50% of spodumene concentrate production per year. Our purchases of spodumene concentrate from Sayona Quebec are subject to market pricing with a price floor of $500 per dmt and a price ceiling of $900 per dmt for 6.0% spodumene concentrate.
In addition to lithium mining and concentrate production, NAL owns a partially completed lithium carbonate plant, which was developed by a prior operator of NAL. Sayona Quebec completed a preliminary technical study for the completion and restart of the NAL carbonate plant during the quarter ended June 30, 2023. If we decide to construct and operate a lithium conversion plant with Sayona Mining through our joint venture, Sayona Quebec, then spodumene concentrate produced from NAL would be preferentially delivered to that conversion plant upon commencement of conversion operations. Any remaining spodumene concentrate not delivered to the conversion plant would first be sold to us up to our offtake right and then to third-parties. Any decision to construct jointly-owned lithium conversion capacity must be agreed upon by both parties.
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In the three months ended September 30, 2024, NAL produced approximately 52,100 dmt of spodumene concentrate and shipped approximately 49,000 dmt, of which approximately 31,500 dmt were sold to Piedmont Lithium. We sold approximately 31,500 dmt of spodumene concentrate and recognized $27.7 million in revenue with a realized sales price of $878 per dmt and a realized cost of sales of $794 per dmt, in the three months ended September 30, 2024.
In the nine months ended September 30, 2024, NAL produced approximately 142,200 dmt of spodumene concentrate and shipped approximately 134,700 dmt, of which approximately 61,000 dmt were sold to Piedmont Lithium. We sold approximately 61,000 dmt of spodumene concentrate and recognized $54.3 million in revenue with a realized sales price of $890 per dmt and a realized cost of sales of $825 per dmt, in the nine months ended September 30, 2024.
Realized cost of sales is the average cost of sales based on our offtake pricing agreement with Sayona Quebec for the purchase of spodumene concentrate at a market price subject to a floor of $500 per dmt and a ceiling of $900 per dmt, with adjustments for product grade, freight, and insurance.
We had payables to NAL totaling $0.3 million and $0.2 million as of September 30, 2024 and December 31, 2023, respectively. Payables to NAL are reported as “Payables to affiliates” in our consolidated balance sheets.
Vinland Lithium
We own an equity interest of approximately 20% in Vinland Lithium, a Canadian-based entity jointly owned with Sokoman Minerals and Benton Resources. Vinland Lithium currently owns Killick Lithium, a large exploration property prospective for lithium located in southern Newfoundland, Canada. We have entered into an earn-in agreement with Vinland Lithium to acquire up to a 62.5% equity interest in Killick Lithium through current and future phased investments.
Summarized Financial Information
The following table presents summarized financial information included in our share of (loss) income from equity method investments noted above for our significant equity investment Sayona Quebec. The balances below were compiled from information provided to us by Sayona Quebec and is presented in accordance with U.S. GAAP:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Revenue$16,524 $— $73,506 $— 
Gross profit (loss)(12,434)— (45,031)— 
Net loss from operations(13,588)14,210 (47,702)3,792 
Net loss(13,700)14,210 (45,429)3,792 
9.ADVANCES TO AFFILIATES
Advances to affiliates consisted of the following:
(in thousands)September 30,
2024		December 31,
2023
Ewoyaa$36,425 $26,378 
Killick Lithium2,783 1,811 
Total advances to affiliates$39,208 $28,189 
Advances to affiliates relate to staged investments for future planned lithium projects. We have a strategic partnership with Atlantic Lithium that includes Atlantic Lithium Ghana’s flagship Ewoyaa project. Under our partnership, we entered into a project agreement to acquire a 50% equity interest in Atlantic Lithium Ghana in two phases, with each phase requiring us to make future staged investments in Ewoyaa over a period of time in order to earn our additional interest. We have an earn-in agreement with Vinland Lithium to acquire up to a 62.5% equity interest in Killick Lithium.
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Our maximum exposure to a loss as a result of our involvement in Ewoyaa and Killick Lithium is limited to the total amount funded by Piedmont Lithium to Atlantic Lithium and Vinland Lithium. As of September 30, 2024, we did not own an equity interest in Atlantic Lithium Ghana or Killick Lithium. We have made advances to Atlantic Lithium for Ewoyaa totaling $2.1 million and $2.1 million in the three months ended September 30, 2024 and 2023, respectively, and $10.0 million and $6.9 million in the nine months ended September 30, 2024 and 2023, respectively. We have made advances to Vinland Lithium for Killick Lithium totaling nil and $1.0 million in the three and nine months ended September 30, 2024, respectively.
Ewoyaa
We completed Phase 1 of our investment in mid-2023, which allowed us to acquire a 22.5% equity interest in Atlantic Lithium Ghana, by funding Ewoyaa’s exploration activities and DFS costs and notifying Atlantic Lithium of our intention to proceed with additional funding contemplated under Phase 2, which mainly consists of construction and development activities for Ewoyaa. Atlantic Lithium issued their DFS for Ewoyaa in June 2023. In August 2023, we supplied Atlantic Lithium with notification of our intent to proceed with additional funding for Phase 2. Our future equity interest ownership under Phase 1 remains subject to government approvals. Phase 2 allows us to acquire an additional 27.5% equity interest in Atlantic Lithium Ghana upon completion of funding $70 million for capital costs associated with the development of Ewoyaa. Upon issuance of our equity interest associated with Phase 1 and completion and issuance of our equity interested associated with Phase 2, we expect to have a total equity interest of 50% in Atlantic Lithium Ghana. Atlantic Lithium Ghana, in turn, will hold an 81% interest in the Ewoyaa project net of the interests that will be held by the Ghanaian government and MIIF, resulting in an effective ownership interest of 40.5% in Ewoyaa, by Piedmont Lithium.
Killick Lithium
In October 2023, we entered into an earn-in agreement with Vinland Lithium to acquire up to a 62.5% equity interest in Killick Lithium through current and future phased investments. As part of our investment, we entered into a marketing agreement with Killick Lithium for 100% marketing rights and right of first refusal to purchase 100% of all lithium products produced by Killick Lithium on a life-of-mine basis at competitive commercial rates.
10.OTHER ASSETS AND LIABILITIES
Other current assets consisted of the following:
(in thousands)September 30,
2024		December 31,
2023
Marketable securities$5,627 $— 
Prepaid and other current assets2,344 3,345 
Equity securities246 484 
Total other current assets$8,217 $3,829 
Our investments in marketable securities consisted of common shares in Atlantic Lithium, a publicly traded company on the ASX. During the three and nine months ended September 30, 2024, we recognized losses of $2.6 million and $0.8 million, respectively, based on changes to fair value of the marketable securities. Prior to March 31, 2024, we accounted for Atlantic Lithium under the equity method of accounting. See Note 8—Equity Method Investments.
Our investment in equity securities consisted of common shares in Ricca, a private company focused on gold exploration in Africa. We recognized losses of $0.2 million on the equity securities based on changes in observable market data during the nine months ended September 30, 2024, respectively.
We had no changes to fair value of equity securities in the three months ended September 30, 2024 or marketable and equity securities in the three and nine months ended September 30, 2023.
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Other non-current assets consisted of the following:
(in thousands)September 30,
2024		December 31,
2023
Operating lease right-of-use assets$1,030 $1,371 
Asset retirement obligation, net393 414 
Other non-current assets284 379 
Total other non-current assets$1,707 $2,164 
Asset retirement obligation is net of accumulated amortization of $28 thousand, and $7 thousand as of September 30, 2024 and December 31, 2023, respectively.
Other current liabilities consisted of the following:
(in thousands)September 30,
2024		December 31,
2023
Current tax payable (Note 7)$3,151 $— 
Operating lease liabilities163 312 
Interest payable61 — 
Accrued provisional revenue adjustment— 29,151 
Total other current liabilities$3,375 $29,463 
We recognize revenue from product sales at a point in time when performance obligations are satisfied under the terms of contracts with our customers. When the final price has not been resolved by the end of a reporting period, we estimate the expected sales price based on the initial price, market pricing, and known quality measurements. Differences between payments received and the estimated sales price, which resulted in a liability, are recorded as accrued provisional revenue adjustments. We had no outstanding liability for accrued provisional revenue adjustments as of September 30, 2024.
11.DEBT OBLIGATIONS
Our debt obligations consisted of the following:
(in thousands)Interest RateSeptember 30,
2024		December 31,
2023
Credit Facility
 SOFR + 2.4%
$18,007 $— 
Mining interests financed by sellers
9.5% - 13.0%
5,125 163 
Insurance premium financing loan8.2%923 — 
Total debt obligations24,055 163 
Current debt obligations(19,966)(149)
Long-term debt, net of current portion$4,089 $14 
Mining Interests Financed by Sellers
We have entered into long-term debt agreements to purchase surface properties and the associated mineral rights from landowners that form part of mining interests reported within “Property, plant and mine development, net” in our consolidated balance sheets. These purchases were fully or partly financed by the seller of each of the surface properties. Payment terms range from 2 years to 5 years with the majority of payments due in monthly installments ranging from approximately $4,000 to approximately $30,000. Long-term debt agreements are secured by the respective real property.
Credit Facility
On September 11, 2024, we entered into a working capital facility, whereby we may borrow up to $25.0 million based on the value of committed volumes of spodumene concentrate occurring within the following twelve months. Borrowings, are credited against the outstanding balance at the time the vessel has completed loading. Interest is payable quarterly at the rate of SOFR plus 2.4%. The lender has the right to modify the payment terms of the Credit Facility in the event the Company experiences a material change in
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creditworthiness. The Credit Facility expires on December 31, 2027 but may be extended by mutual agreement through December 31, 2028.
We may borrow up to 40% of the value of committed volumes of spodumene concentrate unless we elect to enter into a fixed-price arrangement with the lender that would allow us to increase borrowing up to 75% of the value of future, committed volumes of spodumene concentrate through December 31, 2027. We determined the fixed-price arrangement to be an embedded derivative that must be bifurcated from the Credit Facility. The fair value of the embedded derivative was immaterial as of September 30, 2024. We re-evaluate the fair value of the fixed-price arrangement at the end of each reporting period.
Insurance Premium Financing Loan
On May 23, 2024, we entered into a financing agreement through our insurance broker to spread the payment of our annual directors and officers insurance premium over an nine-month period. Insurance premiums financed totaled $2.1 million and are payable between May 2024 and January 2025 at an interest rate of 8.2%.
Interest Expense
Interest expense and cash paid for interest are reflected in the following table:
Three Months Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Interest expense$169 $8 $467 $34 
Cash paid for interest expense119 8 406 34 
12.EQUITY
We are authorized to issue up to 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. We have no outstanding shares of preferred stock.
In May 2024, we entered into an ATM Program with B. Riley Securities, Inc., whereby we may from time to time, at our discretion, issue and sell up to $50 million of our Class A common stock through any method deemed to be an at-the-market offering, as defined in Rule 415 of the Exchange Act, or any method specified in the ATM Program.
We have not issued any shares under the ATM Program through September 30, 2024.
In February 2024, we issued a total of 52,701 shares of our common stock at an issue price of $14.17 per share as an advance of our funding obligations to Killick Lithium. There were no share issuance costs associated with the issuance and the value of the shares were treated as an advance within our earn-in agreement with Vinland Lithium to acquire up to a 62.5% equity interest in Killick Lithium through staged investments.
In February 2023, we received $75 million from LG Chem in exchange for 1,096,535 shares of our common stock at a price of $68.40 per share and in conjunction with a multi-year spodumene concentrate offtake agreement. Share issuance costs associated with the issuance totaled $3.9 million and were accounted for as a reduction in the proceeds from share issuances in our consolidated balance sheets.
As of September 30, 2024, $500 million of securities were available under our shelf registration statement, which expires on September 26, 2027.
13.SEGMENT REPORTING
We report our segment information in the same way management internally organizes the business in assessing performance and making decisions regarding allocation of resources in accordance with ASC Topic 280, “Segment Reporting.” We have a single reportable operating segment that operates as a single business platform. In reaching this conclusion, management considered the definition of the CODM, how the business is defined by the CODM, the nature of the information provided to the CODM, how the CODM uses such information to make operating decisions, and how resources and performance are assessed. The results of operations provided to and analyzed by the CODM are at the consolidated level, and accordingly, key resource decisions and assessment of
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performance are performed at the consolidated level. We have a single, common management team and our cash flows are reported and reviewed at the consolidated level only with no distinct cash flows at an individual business level.
14.FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
We follow ASC Topic 820, “Fair Value Measurement and Disclosure,” which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:
Level 1:Quoted prices (unadjusted) for identical assets or liabilities