Core Insights - SWA Lithium, a joint venture between Standard Lithium and Equinor, has successfully designed, built, and is now operating a pilot Direct Lithium Extraction (DLE) facility in Arkansas to confirm engineering designs for the South West Arkansas Project [1][2] - The pilot DLE plant is processing brine from the SWA Project to produce battery-quality lithium carbonate samples for qualification with potential off-take partners [1][2] Company Developments - The pilot DLE plant utilizes real-time brine from the IPC well, employing the same flowsheet as the planned commercial lithium facility [2] - Approximately 1,000 gallons (3,785 liters) of a 6% lithium chloride solution is expected to be produced, which will be sent to three vendors for conversion into battery-quality lithium carbonate [3][4] - The produced lithium carbonate will be used for initial qualification phases with potential off-take partners and to inform vendor selection for the commercial facility [3] Technology and Collaboration - The pilot plant employs KTS Li-Pro™ Lithium Selective Sorption technology, reflecting the collaboration with Koch Technology Solutions [3] - The ongoing operation of the pilot DLE plant is expected to continue until late January 2025, gathering sufficient operational experience and design data [3] Strategic Goals - The project aims to become the first new lithium-from-brine operation in North America in over 50 years, highlighting the commitment to local partnerships and community engagement [3] - The company is focused on sustainable, commercial-scale lithium production through a fully-integrated DLE and purification process [10]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a net loss of $4.8 million, or $0.03 per basic share, compared to a net loss of $7.3 million, or $0.04 per basic share in Q1 2024, indicating a reduction in net loss driven by operational efficiencies [19][20] - General and administrative expenses were reduced by approximately $0.2 million, despite an increase in back-office activities and a larger executive team [20] - Share-based compensation expenses decreased by approximately $1.1 million due to changes in compensation structures aimed at long-term value creation [21] Business Line Data and Key Metrics Changes - The company is focused on advancing its largest and highest-grade projects within the SMACOVER formation, with a key derisking event being the agreement with Koch Technology Solutions for the deployment of Li-Pro LSS technology [11][12] - The demonstration plant in Arkansas has run nearly 10,000 operational cycles, achieving lithium recoveries consistently exceeding 95% [13] Market Data and Key Metrics Changes - In East Texas, recent drill results yielded lithium concentrations up to 806 milligrams per liter, with an average concentration of 644 milligrams per liter, indicating significant resource potential [16] Company Strategy and Development Direction - The company aims to evolve from a developer to a producer, delivering a low-cost, environmentally-friendly domestic source of lithium to meet global energy transition needs [6][7] - The focus is on securing necessary funding through various means, including offtake agreements, low-cost project debt, and a conditional $225 million grant from the Department of Energy [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in securing a satisfactory resolution regarding the Arkansas royalty process by midyear, which should not impact project schedules [32] - The company remains focused on derisking and advancing its portfolio of projects despite uncertainties in lithium demand and pricing [26][28] Other Important Information - The company has converted its reporting currency from Canadian dollars to U.S. dollars to align with its U.S.-focused operations and improve comparability with peers [18] Q&A Session Summary Question: Next steps regarding the Arkansas royalty process - Management expressed disappointment over the initial application rejection but remains confident in a satisfactory resolution by midyear, which should not impact project schedules [32] Question: Update on the DOE award - Management indicated that finalizing the DOE grant is a high priority and both parties are motivated to complete it by year-end, with confidence in finalization by mid-January [33] Question: Insights on the royalty structure rejection - Management noted that the rejection was due to a need for more clarity on benchmarking against other jurisdictions and additional background information [37] Question: Structure and timing of the DOE grant - The DOE grant is a conditional award that does not require repayment, and management is currently negotiating terms and conditions [40] Question: Update on potential offtake customers - The company is engaged in informal discussions with potential offtakers and plans to initiate a more structured dialogue to establish firm offtake agreements [46] Question: Implications of potential future lithium price increases - Management expects that improved pricing would facilitate future capital raises but does not anticipate changes to capital costs or project cost structures [53]

Financial Performance - The company reported a net loss of $4,829,000 for the three months ended September 30, 2024, compared to a net loss of $7,257,000 for the same period in 2023, indicating an improvement of approximately 33%[10] - The total comprehensive loss for the quarter was $4,811,000, compared to $6,517,000 in the prior year, indicating a decrease of approximately 26%[10] - Net loss for the three months ended September 30, 2024, was $4,829,000, a decrease of 33.4% compared to a net loss of $7,257,000 in the same period of 2023[14] - Total compensation to key management for the three months ended September 30, 2024, was $2,030, a decrease from $2,343 in the same period of 2023[61] Assets and Liabilities - Total assets as of September 30, 2024, were $278,598,000, a decrease from $287,291,000 as of June 30, 2024, representing a decline of approximately 3%[6] - The company’s total liabilities decreased to $33,340,000 from $38,910,000, a reduction of approximately 14%[6] - As of September 30, 2024, the company reported working capital of $24,657,000, down from $28,919,000 as of June 30, 2024, indicating a decrease of approximately 14.5%[80] - The company had $28,900,000 of unrestricted cash on hand as of September 30, 2024[83] Cash Flow - Cash and cash equivalents decreased to $28,906,000 from $38,667,000 in the previous quarter, reflecting a decline of about 25%[4] - Cash used in operating activities increased to $7,581,000 in Q3 2024 from $4,809,000 in Q3 2023, representing a 57.8% increase[14] - Total cash used in investing activities was $2,081,000 in Q3 2024, significantly lower than $12,468,000 in Q3 2023, indicating a reduction of 83.3%[14] - Cash and cash equivalents at the end of the period were $28,906,000, compared to $27,381,000 at the end of Q3 2023, showing a 5.6% increase[14] Shareholder Equity - The weighted average number of common shares outstanding increased to 184,205,111 from 172,785,164, representing an increase of approximately 7%[9] - Share capital increased to $228,086,000 from $227,292,000, reflecting a growth of about 0.35%[12] - As of September 30, 2024, the company had no outstanding warrants, down from 3,462,502 warrants as of September 30, 2023[51] - The weighted average fair value of options granted during the three months ended September 30, 2024, was $0.85 per option, compared to $1.92 per option in the same period of 2023[53] Joint Ventures and Investments - The company has significant investments in joint ventures for lithium brine production facilities, including the South West Arkansas Project and East Texas properties[16] - As of September 30, 2024, the company's investment in joint ventures totaled $146,442,000, down from $146,865,000 as of June 30, 2024, reflecting a loss of $423,000 during the quarter[38] - The company's share of net assets in joint ventures was $86,190,000 as of September 30, 2024, compared to $94,574,000 for SWA Lithium and $51,868,000 for Texas Lithium[38] - The company reported a fair value gain on financial assets of $1,489,000, which was not present in the previous year’s results[10] Expenses - General and administrative expenses were $2,811,000, down from $3,097,000 in the previous quarter, a reduction of about 9%[10] - The company reported total costs for the Demonstration Plant operations of $1,039,000 for the three months ended September 30, 2024, a decrease from $2,538,000 in the same period of 2023[45] - The company reported a share-based compensation expense of $894,000 in Q3 2024, down 56.3% from $2,043,000 in Q3 2023[14] Strategic Developments - The company entered into a strategic partnership with Equinor, receiving an initial cash payment of $30,000,000 and a commitment for an additional $130,000,000 investment for a 45% interest in SWA Lithium and Texas Lithium[84] - The company announced a license agreement with Koch Technology Solutions LLC to deploy Li-ProTM Lithium Selective Sorption technology at SWA Lithium's commercial plant for the SWA Phase 1 Project[91] Currency and Risk Management - Standard Lithium changed its presentation currency from CAD to USD effective July 1, 2024, to align with its significant assets and liabilities denominated in USD[25] - A 10% fluctuation in the Canadian dollar relative to the US dollar would result in a change of approximately $431,000 to $588,000 in the company's comprehensive loss for the year to date[81] - The company does not use derivative instruments to mitigate foreign exchange risk, exposing it to potential fluctuations in value due to currency movements[81] - The company is currently in the exploration and development phase, with no exposure to commodity price risk affecting its financial instruments[86]

Financial Data and Key Metrics Changes - For Q4 and the full year ended June 30, 2024, the company reported net income before taxes of $212.8 million and $182.5 million respectively, translating to $0.97 and $0.83 per basic share, a significant improvement from net losses in the same periods of 2023 [14][15] - The net income was primarily driven by gains from the sale of minority interests in the South West Arkansas and East Texas projects to Equinor, retaining a 55% interest in both projects [14] Business Line Data and Key Metrics Changes - The South West Arkansas project has a reported resource of 1.8 million tons of lithium carbonate equivalent with an average lithium concentration of 437 milligrams per liter across approximately 30,000 acres [10] - The company plans to increase overall production to up to 45,000 tons per year of lithium carbonate, developed in two phases of 22,500 tons each [10][11] Market Data and Key Metrics Changes - The company noted a retreat in lithium pricing from all-time highs in 2022, impacting the sector sentiment, particularly in electric vehicles and energy transition [3][4] - Exploration results in East Texas showed lithium concentrations up to 806 milligrams per liter, with an average of 644 milligrams per liter, indicating high-quality resources [8] Company Strategy and Development Direction - The company is focused on de-risking its business and advancing lithium brine projects, particularly through strategic partnerships, such as the recent collaboration with Equinor [3][4] - The partnership with Equinor is expected to enhance project execution and management, leveraging Equinor's expertise in subsurface operations and large-scale project management [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a complex economic environment and emphasized the importance of strategic partnerships and government grants for future growth [3][5] - The company aims to prioritize low-cost capital options for financing the next phase of growth, with a focus on advancing projects in a timely manner [17][18] Other Important Information - The company received a $225 million conditional grant from the U.S. Department of Energy, one of the largest ever for a U.S. critical minerals project, which will support American energy and supply chain security [5][10] - The demonstration plant in Arkansas has successfully processed over 21 million gallons of brine, achieving lithium recoveries exceeding 95% [13] Q&A Session Summary Question: Could you provide some color on the proposed plan to produce lithium carbonate rather than hydroxide? - The decision to switch to lithium carbonate was based on feedback from the offtake community, indicating a preference for carbonate products for the anticipated timeline of commercial production [19] Question: Could a potential administration change in the U.S. put the receipt of the DOE award at risk? - The DOE grant has been allocated, but if terms are not finalized before a change in administration, there is a theoretical risk. However, the DOE is working to complete these grants by the end of December [20] Question: How does the collaboration with the Equinor team work in practical terms? - The collaboration is structured as a true joint venture with integrated project management teams from both companies, facilitating deep collaboration and data sharing [23] Question: What is the focus of the additional sampling and drilling? - The focus is on confirmatory drilling in South West Arkansas to ensure the accuracy of the production model and exploratory drilling in East Texas to define geographic resources and rock properties [25][26] Question: Is the license process for the demonstration project complete? - The licensing process is nearing completion, with expectations to finalize it soon [27]

Funding and Partnerships - Standard Lithium secured a conditional $225 million grant from the U.S. Department of Energy for the South West Arkansas Project, one of the largest grants awarded to a U.S. critical minerals project[4] - The company established a strategic partnership with Equinor, with Equinor acquiring a 45% interest in the South West Arkansas and East Texas projects for a gross investment of up to $160 million[5] Lithium Extraction and Resources - The direct lithium extraction process achieved an average lithium recovery of 97.3%, with key contaminant rejection exceeding 99% and boron rejection greater than 95%[5] - The South West Arkansas Project reported an Upper Smackover Indicated resource of 1.4 million tonnes and a Middle Smackover Inferred resource of 0.4 million tonnes lithium carbonate equivalent, with an average lithium concentration of 437 mg/L[6] - In East Texas, confirmed lithium concentrations reached up to 806 mg/L, with an average concentration of 644 mg/L in the drilled area, representing the highest-ever reported lithium brine concentrations in North America[6] Production Plans - The Preliminary Feasibility Study for the South West Arkansas Project targets an average annual production of 45,000 tonnes of lithium carbonate, developed in two phases of 22,500 tonnes each, beginning in 2027[6] - The Definitive Feasibility Study for the Phase 1A project at LANXESS South Plant assumes an average annual production of 5,400 tonnes of lithium carbonate over a 25-year operating life starting in 2026[6] Financial Position - Cash and working capital as of June 30, 2024, were C$52.9 million and C$39.6 million, respectively, with no term or revolving debt obligations[5] - The company raised net proceeds of C$2.8 million and US$13.3 million from the issuance of shares during the fiscal year, with no issuances completed under the ATM Program since April 10, 2024[6] Management Changes - The company appointed David Park as CEO, who has extensive experience in the energy sector, and strengthened its management team with key executive appointments[4][5]

Financial Data and Key Metrics Changes - For the fiscal third quarter, the company reported a net loss of $10.4 million, or $0.06 per share, and for the nine months ended, a net loss of $30.3 million, or $0.17 per share, primarily driven by expenses at the demonstration plant [57][39][76] - The cash balance remained flat from the second to the third quarter, with positive working capital and no term or revolving debt obligations [76] Business Line Data and Key Metrics Changes - The company successfully commissioned the first commercial-scale Direct Lithium Extraction (DLE) column at its demonstration plant, which is expected to enhance project economics [49][45] - Lithium recoveries at the demonstration plant averaged over 97%, with impurity rejection greater than 99%, indicating strong operational performance [52] Market Data and Key Metrics Changes - The lithium industry is experiencing challenges, including rising project costs and difficulties in accessing capital, but there are signs of stability returning to the sector with increasing pricing and investor interest [41][39] - The company noted that the lithium grade in brine is the most significant factor influencing project economics, with higher grades leading to lower extraction costs [73][74] Company Strategy and Development Direction - The partnership with Equinor is seen as a strategic move to enhance project development capabilities and secure necessary funding for the Southwest Arkansas and East Texas projects [42][79] - The company aims to maintain majority control over its projects while leveraging Equinor's expertise in project finance and development [15][68] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex economic environment, including inflation and rising interest rates, but expressed confidence in the partnership with Equinor to navigate these challenges [44][39] - The company believes that having high-quality assets will position it favorably against competitors, regardless of market fluctuations [47] Other Important Information - The company has engaged in a definitive feasibility study and front-end engineering design work for the Southwest Arkansas project, indicating progress towards project milestones [40][54] - The partnership with Equinor provides an immediate liquidity injection of $30 million and alleviates $60 million in near-term capital requirements for the projects [76][78] Q&A Session Summary Question: Can you provide an overview of financing for the Phase 1A Lanxess project? - The company indicated that the critical path items include negotiating the brine fee with Lanxess and establishing a royalty rate in Arkansas [80] Question: Have you received the $30 million from Equinor? - The company confirmed that it has received the funds [82] Question: How did you structure the Equinor deal? - The company emphasized the importance of retaining ownership while balancing the expertise and resources that Equinor brings to the partnership [83][102] Question: What is the timeline for the final investment decision for SWA? - The company is comfortable providing a 2025 timeline for the final investment decision, with significant work to be completed before then [104] Question: Can you elaborate on the DLE column at the demonstration plant? - The company highlighted that the same column design will be used in commercial plants, with extensive operational data gathered to optimize the process [90][106]

Financial Performance - The company experienced a net loss of CAD 30,289,000 for the nine months ended March 31, 2024, compared to a net loss of CAD 15,539,000 for the same period in 2023, representing a 95% increase in losses[4] - The company reported a total comprehensive loss of CAD 27,959,000 for the nine months ended March 31, 2024, compared to CAD 13,050,000 for the same period in 2023, representing a 115% increase in comprehensive losses[4] - The total operations costs for the demonstration plant were $7,085 million for the nine months ended March 31, 2024, down from $10,403 million in the same period of 2023, showing a decrease of approximately 32%[17] Assets and Liabilities - As of March 31, 2024, Standard Lithium Ltd. reported total assets of CAD 171,086,000, a decrease from CAD 173,497,000 as of June 30, 2023[2] - The company reported total liabilities of CAD 11,799,000 as of March 31, 2024, down from CAD 14,121,000 as of June 30, 2023, indicating a reduction of approximately 16%[2] - Total equity as of March 31, 2024, was CAD 159,287,000, slightly down from CAD 159,376,000 as of June 30, 2023[2] Cash and Cash Equivalents - Cash reserves decreased significantly to CAD 15,716,000 as of March 31, 2024, down from CAD 59,612,000 at the end of June 2023, indicating a cash reduction of approximately 74%[2][6] - As of March 31, 2024, the company has a working capital of CAD 7,670, a decrease from CAD 48,800 as of June 30, 2023[35] Shareholder Equity and Stock Options - The weighted average number of common shares outstanding increased to 178,223,074 for the three months ended March 31, 2024, compared to 168,790,419 for the same period in 2023[4] - The company has authorized a stock option plan allowing for the grant of options to acquire up to 10% of the issued and outstanding common stock[21] - The company has a total of 9,820,000 stock options outstanding with a weighted average exercise price of CAD 4.38 as of March 31, 2024[8] Investments and Assets Valuation - Exploration and evaluation assets increased to CAD 143,210,000 as of March 31, 2024, up from CAD 99,952,000 as of June 30, 2023, reflecting a growth of approximately 43%[2] - The net book value of property, plant, and equipment increased from $2,765 million on June 30, 2023, to $3,180 million by March 31, 2024, representing a rise of 15%[14] - The carrying value of intangible assets decreased from $1,432 million on June 30, 2023, to $1,368 million by March 31, 2024, reflecting a reduction of 4.5%[16] - The company's investment in Aqualung increased from $3,314 million on June 30, 2023, to $3,386 million by March 31, 2024, reflecting a fair value change of $72 million[13] Share-Based Payments - Share-based payments for the nine months ended March 31, 2024, totaled CAD 9,971,000, a significant increase from CAD 1,135,000 for the same period in 2023[4] - The company recorded share-based payment expenses of CAD 9,282 for key management compensation during the nine months ended March 31, 2024, compared to CAD 1,579 in the same period of 2023[26] - The company has recorded CAD 4,929 in share-based payment expense related to the DSU grant during the nine-month period ended March 31, 2024[24] Other Financial Activities - Standard Lithium Ltd. raised CAD 19,263,000 through the issuance of shares under its at-the-market offering during the nine months ended March 31, 2024[6] - The company issued 9,320,559 common shares for proceeds of $19,263 million under the ATM offering during the nine months ended March 31, 2024, compared to $0 in the same period of the previous year[20] - The company issued 1,292,500 common shares for proceeds of CAD 2,046 net of transaction costs of CAD 103 under its ATM offering subsequent to March 31, 2024[38] Legal and Regulatory Matters - The company has not recorded any provision for the ongoing securities class action lawsuit as the outcome is undeterminable at this time[37] Currency Exposure - The company is exposed to a potential change of approximately CAD 620 in comprehensive loss due to a 10% fluctuation in the US dollar relative to the Canadian dollar as of March 31, 2024[36]

Financial Data and Key Metrics Changes - For the fiscal second quarter, the company reported a net loss of $10.2 million, or $0.06 per share, and a net loss of $19.9 million, or $0.12 per share for the six months ended December 31, 2023 [31] - The company experienced negative free cash flow of approximately $23.6 million, primarily due to the completion of the East Texas drilling program and the definitive feasibility study on Phase 1A [66] Business Line Data and Key Metrics Changes - The company highlighted the successful completion of the definitive feasibility study for the Phase 1A project and the preliminary feasibility study for the South West Arkansas project, indicating high-quality resources available [69] - The East Texas expansion has uncovered the highest lithium brine values ever reported in North America, emphasizing the potential value of this strategy [50] Market Data and Key Metrics Changes - The lithium market has seen an 80% reduction in prices from their all-time highs in 2023, impacting the entire industry [60] - Despite the current pricing environment, the long-term prospects for lithium remain strong, with expectations of higher prices when the company begins production [104] Company Strategy and Development Direction - The company aims to build a significant lithium-producing business in North America, focusing on high-quality resources, proven extraction technology, and community support [55] - The strategic approach includes engaging with strong partners for financing and offtake agreements to advance projects in a non-dilutive manner [93] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the project's attractiveness due to favorable permitting, infrastructure, and stakeholder support, despite the challenging market conditions [88] - The company is actively pursuing federal grant packages to improve returns for shareholders, which could significantly enhance project funding [79] Other Important Information - The company has established an at-the-market offering program to provide liquidity for project advancement while minimizing dilution [67] - The relationship with Lanxess is crucial for leveraging operations and infrastructure to advance the direct lithium extraction process [115] Q&A Session All Questions and Answers Question: What is left to be done before breaking ground on construction for Phase 1A? - The company is continuing discussions with the Arkansas Oil and Gas Commission for further clarification and is confident that their proposal will be well received [83] Question: What are the most important points of negotiation with potential partners? - Key negotiations focus on securing strong partners with financial and technical capabilities, long-term offtake agreements, and alignment on project value [92][94] Question: When can the company expect to hear from the DOD and DOE on grant money requests? - The company is active in several programs with the DOE and is hopeful for positive outcomes, although there is uncertainty in the process [106] Question: Can you describe the upcoming event in Little Rock and its importance for Standard Lithium? - The event will feature key stakeholders and is expected to garner significant media attention, highlighting the company's efforts in building a lithium industry in Arkansas [133]

[Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Interim Statements of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) The company's financial position weakened as total assets and equity declined, driven by a significant decrease in cash Statement of Financial Position Highlights (in thousands of CAD) | Account | Dec 31, 2023 | June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$160,337** | **$173,497** | **-$13,160** | | Cash | $15,831 | $59,612 | -$43,781 | | Exploration and evaluation assets | $134,168 | $99,952 | +$34,216 | | **Total Liabilities** | **$11,948** | **$14,121** | **-$2,173** | | **Total Equity** | **$148,389** | **$159,376** | **-$10,987** | [Condensed Consolidated Interim Statements of Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company's net loss more than doubled year-over-year, primarily due to a substantial increase in share-based payments Comprehensive Income (Loss) Summary (in thousands of CAD, except per share amounts) | Metric | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Share-based payments | $6,357 | $1,092 | | Demonstration plant operations | $5,202 | $5,975 | | Loss from operations | ($20,779) | ($9,941) | | **Net loss for the period** | **($19,931)** | **($8,439)** | | **Basic and diluted loss per share** | **($0.12)** | **($0.05)** | [Condensed Consolidated Interim Statements of Changes in Equity](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Equity) Total equity declined by $11 million, as the period's net loss outpaced capital raised from share issuances Equity Reconciliation for Six Months Ended Dec 31, 2023 (in thousands of CAD) | Description | Amount | | :--- | :--- | | **Balance, June 30, 2023** | **$159,376** | | Net loss for the period | ($19,931) | | Share-based payment | $6,357 | | Shares issues under ATM offering | $4,177 | | Share issuance costs | ($902) | | Stock options exercised | $140 | | Currency translation differences | ($828) | | **Balance, December 31, 2023** | **$148,389** | [Condensed Consolidated Interim Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) The company experienced a net cash decrease of $43.8 million, driven by operating and investing activities Cash Flow Summary (in thousands of CAD) | Activity | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,151) | ($11,873) | | Net cash used in investing activities | ($33,458) | ($13,356) | | Net cash from financing activities | $3,104 | $16 | | **Net change in cash** | **($43,781)** | **($21,696)** | | **Cash, end of period** | **$15,831** | **$107,369** | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1. Nature of Operations](index=6&type=section&id=1.%20Nature%20of%20Operations) The company focuses on developing lithium brine properties in the USA and is publicly listed on multiple exchanges - The company's primary business is the exploration and development of lithium brine properties in Arkansas and Texas, USA[7](index=7&type=chunk) - The company's shares are publicly traded on the TSX Venture Exchange and NYSE American under the symbol **"SLI"**, and on the Frankfurt Exchange as **"S5L"**[8](index=8&type=chunk) [Note 2. Basis of Presentation](index=6&type=section&id=2.%20Basis%20of%20Presentation) These unaudited interim financial statements were prepared in accordance with IFRS Accounting Standards under IAS 34 - The financial statements adhere to IFRS Accounting Standards applicable to interim financial statements under IAS 34[9](index=9&type=chunk) - These statements are condensed and should be read alongside the Company's annual consolidated financial statements for the year ended June 30, 2023[10](index=10&type=chunk) [Note 4. Property, Plant and Equipment](index=7&type=section&id=4.%20Property,%20Plant%20and%20Equipment) The net book value of property, plant, and equipment increased due to additions for a carbon capture plant and land purchase Net Book Value of Property, Plant and Equipment (in thousands of CAD) | Asset Category | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Demonstration plant | $795 | $795 | | Aqualung Carbon Capture pilot plant | $1,445 | $1,778 | | Land for future South West Arkansas Project plant | $939 | $0 | | Other | $187 | $192 | | **Total** | **$3,366** | **$2,765** | [Note 5. Exploration and Evaluation Assets](index=8&type=section&id=5.%20Exploration%20and%20Evaluation%20Assets) Exploration and evaluation assets grew by $34.2 million, driven by significant investments in Texas and Arkansas projects Exploration and Evaluation Asset Growth (in thousands of CAD) | Project | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | South West Arkansas Project | $36,675 | $29,731 | | Commercial Plant Evaluation (Lanxess 1A) | $35,363 | $25,356 | | Texas Properties | $36,205 | $19,060 | | California Property | $25,925 | $25,805 | | **Total** | **$134,168** | **$99,952** | - On October 31, 2023, the Company exercised its option with TETRA Technologies, Inc to acquire brine productions rights for the South West Arkansas Project at **no additional cost**[14](index=14&type=chunk) [Note 7. Demonstration Plant Operations](index=9&type=section&id=7.%20Demonstration%20Plant%20Operations) Operating costs for the demonstration plant decreased year-over-year due to lower supply and personnel expenses Demonstration Plant Operating Costs (in thousands of CAD) | Cost Category | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Personnel | $2,626 | $3,042 | | Testwork | $1,049 | $561 | | Reagents | $566 | $584 | | Supplies | $488 | $1,682 | | **Total** | **$5,202** | **$5,975** | [Note 8. Share Capital](index=10&type=section&id=8.%20Share%20Capital) The company engaged in significant share capital activities, including ATM offerings, option exercises, and incentive plan grants [Share Issuances](index=10&type=section&id=8.1%20Share%20Issuances) Capital was raised through an At-The-Market offering and the exercise of stock options - Issued **1,426,359 common shares** under the ATM offering for net proceeds of **$4,177 thousand** during the six months ended Dec 31, 2023[19](index=19&type=chunk) - Issued **100,000 common shares** from the exercise of stock options for proceeds of **$140 thousand**[18](index=18&type=chunk) [Options](index=10&type=section&id=8.2%20Options) The company granted 1.75 million new stock options, increasing the total outstanding options to 9.82 million Stock Option Transactions | Transaction | Number of options | Weighted average exercise price | | :--- | :--- | :--- | | **Balance at June 30, 2023** | **8,170,000** | **$4.43** | | Options exercised | (100,000) | $1.40 | | Options granted | 1,750,000 | $4.00 | | **Balance at December 31, 2023** | **9,820,000** | **$4.38** | [Long-term Incentive Plan](index=11&type=section&id=8.3%20Long-term%20Incentive%20Plan) A grant of nearly 2 million DSUs to the Board and Management resulted in a $4.9 million share-based payment expense - Granted **1,991,004 Deferred Share Units (DSUs)** to the Board of Directors and Management[23](index=23&type=chunk) - Recorded **$4,929 thousand** in share-based payment expense related to the DSU grant during the six-month period[23](index=23&type=chunk) [Note 9. Related Party Transactions](index=12&type=section&id=9.%20Related%20Party%20Transactions) Key management compensation increased sharply due to share-based payments, and services were procured from a related entity Key Management Compensation (in thousands of CAD) | Component | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Management and director fees | $1,314 | $1,024 | | Share-based payments | $4,929 | $0 | | **Total** | **$6,255** | **$1,024** | - The company incurred **$760 thousand** in R&D costs from Telescope Innovations Corp, a related party, under a Master Services Agreement[26](index=26&type=chunk) [Note 10. Financial Instruments and Financial Risk Management](index=13&type=section&id=10.%20Financial%20Instruments%20and%20Financial%20Risk%20Management) The company faces significant liquidity risk due to a sharp decline in working capital and manages foreign exchange risk [Risk Management](index=14&type=section&id=10.1%20Risk%20Management) The company faces significant liquidity risk with a sharp drop in working capital and is exposed to foreign currency fluctuations - The company faces liquidity risk as working capital has decreased significantly to **$5,668 thousand** at Dec 31, 2023, from **$48,800 thousand** at June 30, 2023[34](index=34&type=chunk) - The company is exposed to foreign currency risk through its US dollar-denominated cash and accounts payable; a **10% change** in the USD/CAD rate would change comprehensive loss by approximately **$316 thousand**[35](index=35&type=chunk) [Note 11. Contingencies](index=15&type=section&id=11.%20Contingencies) The company is defending against a securities class action lawsuit alleging misrepresentation of its DLE technology - A securities class action lawsuit was filed against the company and certain officers, alleging misrepresentations about its LiSTR DLE technology and recovery percentages between May 2020 and February 2022[36](index=36&type=chunk) - The company is vigorously defending against the action and has not recorded any provision as the outcome is undeterminable[36](index=36&type=chunk) [Note 12. Subsequent Event](index=15&type=section&id=12.%20Subsequent%20Event) The company continued its ATM offering after the period end, raising an additional $7.2 million in net proceeds - After December 31, 2023, the company issued **3,218,200 common shares** under its ATM offering, raising proceeds of **$7,157 thousand** net of transaction costs[37](index=37&type=chunk)

[Condensed Consolidated Interim Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) [Statements of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) Standard Lithium's total assets slightly decreased to $170.9 million as of September 30, 2023, driven by lower cash partially offset by higher exploration assets | | September 30, 2023 (in thousands CAD) | June 30, 2023 (in thousands CAD) | | :--- | :--- | :--- | | **Total Current Assets** | $38,606 | $62,049 | | **Total Non-current Assets** | $132,269 | $111,448 | | **TOTAL ASSETS** | **$170,875** | **$173,497** | | **Total Current Liabilities** | $14,761 | $13,249 | | **Total Non-current Liabilities** | $789 | $872 | | **TOTAL LIABILITIES** | **$15,550** | **$14,121** | | **TOTAL EQUITY** | **$155,325** | **$159,376** | - Cash decreased significantly by **37.6%** from **$59.6 million** to **$37.2 million** during the quarter[2](index=2&type=chunk) - Exploration and evaluation assets increased by **22.2%** from **$99.9 million** to **$122.1 million**[2](index=2&type=chunk) [Statements of Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The company reported a net loss of **$9.7 million** for the three months ended September 30, 2023, a substantial increase from the prior year, driven by higher operating and share-based payment expenses | Metric (in thousands CAD) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Demonstration plant operations | $3,383 | $2,876 | | Share-based payments | $2,740 | $790 | | Consulting fees | $1,151 | $501 | | **Loss from operations** | **($10,288)** | **($2,113)** | | **Net loss for the period** | **($9,734)** | **($1,558)** | | **Total comprehensive (loss) income** | **($6,918)** | **$2,058** | - Basic and diluted loss per share was **($0.06)** for the quarter, compared to **($0.01)** for the same period in the prior year[3](index=3&type=chunk) [Statements of Changes in Equity](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Equity) Total equity decreased by **$4.1 million** to **$155.3 million** at September 30, 2023, primarily due to the net loss, partially offset by share-based payments and currency translation adjustments | Equity Component (in thousands CAD) | Balance, June 30, 2023 | Changes in Q1 2024 | Balance, Sep 30, 2023 | | :--- | :--- | :--- | :--- | | Share capital | $272,419 | $253 | $272,672 | | Reserves | $35,888 | $2,614 | $38,502 | | Deficit | ($148,707) | ($9,734) | ($158,441) | | Accumulated other comprehensive loss/income | ($224) | $2,816 | $2,592 | | **Total Equity** | **$159,376** | **($4,051)** | **$155,325** | [Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) The company experienced a net decrease in cash of **$22.4 million** during the quarter, primarily due to significant cash usage in investing and operating activities | Cash Flow Activity (in thousands CAD) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($6,442) | ($6,849) | | Net cash used in investing activities | ($16,725) | ($4,581) | | Net cash from (used in) financing activities | ($29) | $69 | | **Net change in cash** | **($22,429)** | **($4,995)** | | **Cash, end of period** | **$37,183** | **$124,070** | - Cash used in investing activities increased significantly year-over-year, driven by a **$15.7 million** investment in exploration and evaluation assets[5](index=5&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1: Nature of Operations](index=6&type=section&id=1.%20Nature%20of%20Operations) Standard Lithium Ltd. is a Canadian company focused on the exploration and development of lithium brine properties in the United States - The Company's principal operations involve the exploration and development of lithium brine properties in the USA[6](index=6&type=chunk) [Note 5: Exploration and Evaluation Assets](index=8&type=section&id=5.%20Exploration%20and%20Evaluation%20Assets) The company's exploration and evaluation assets grew to **$122.1 million** as of September 30, 2023, primarily due to significant investments in Texas Properties and the South West Arkansas Project | Project (in thousands CAD) | Balance, June 30, 2023 | Balance, Sep 30, 2023 | Change | | :--- | :--- | :--- | :--- | | California Property | $25,805 | $26,562 | $757 | | South West Arkansas Project | $29,731 | $33,365 | $3,634 | | Commercial Plant Evaluation (Lanxess 1A) | $25,356 | $30,285 | $4,929 | | Texas Properties | $19,060 | $31,907 | $12,847 | | **Total** | **$99,952** | **$122,119** | **$22,167** | [Note 7: Demonstration Plant](index=9&type=section&id=7.%20Demonstration%20Plant%20%28formerly%20Pilot%20Plant%29) Operating costs for the demonstration plant totaled **$3.4 million** for the quarter, an increase from the prior year, primarily driven by personnel, testwork, and reagents | Cost Component (in thousands CAD) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | | :--- | :--- | :--- | | Personnel | $1,190 | $1,309 | | Testwork | $785 | $322 | | Reagents | $629 | $435 | | Supplies | $385 | $751 | | Repairs and maintenance | $338 | $7 | | **Total Costs** | **$3,383** | **$2,876** | [Note 8: Share Capital](index=9&type=section&id=8.%20Share%20Capital) This section details the company's equity structure, including stock options and long-term incentive plans, with new grants and a **$2.5 million** share-based payment expense recorded [Stock Options](index=9&type=section&id=8.b%20Options) During the quarter, **1.75 million** new stock options were granted and **100,000** exercised, resulting in **9.82 million** options outstanding at quarter-end | Stock Option Transactions | Number of options | Weighted average exercise price | | :--- | :--- | :--- | | Balance at June 30, 2023 | 8,170,000 | $4.43 | | Options exercised | (100,000) | $1.40 | | Options granted | 1,750,000 | $4.00 | | **Balance at Sep 30, 2023** | **9,820,000** | **$4.38** | - Of the **9.82 million** options outstanding at September 30, 2023, a total of **8.07 million** were exercisable[19](index=19&type=chunk) [Long-term Incentive Plan](index=11&type=section&id=8.c%20Long-term%20Incentive%20Plan) The company recorded a **$2.5 million** share-based payment expense related to **1,991,004** DSUs granted to the Board and Management under its equity incentive plan - The company granted **1,991,004** DSUs to its Board and Management, which vest on April 11, 2024[20](index=20&type=chunk) - A share-based payment expense of **$2,549 thousand** was recorded in the three-month period related to this DSU grant[20](index=20&type=chunk) [Note 9: Related Party Transactions](index=12&type=section&id=9.%20Related%20Party%20Transactions) Compensation to key management totaled **$3.1 million** for the quarter, largely non-cash share-based payments, with additional R&D costs incurred from a related party | Compensation to Key Management (in thousands CAD) | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | Management and director fees | $586 | $514 | | Share-based payments | $2,549 | — | | **Total** | **$3,142** | **$514** | - The company has a Master Services Agreement with Telescope Innovations Corp., a related party, for R&D services, incurring **$583 thousand** in costs during the period[23](index=23&type=chunk) [Note 10: Financial Instruments and Financial Risk Management](index=12&type=section&id=10.%20Financial%20Instruments%20and%20Financial%20Risk%20Management) The company actively manages financial risks, including liquidity and foreign exchange, with working capital decreasing to **$23.8 million** and exposure to USD/CAD exchange rate fluctuations [Liquidity Risk](index=14&type=section&id=10.ii%20Liquidity%20risk) The company's working capital significantly decreased to **$23.8 million** at September 30, 2023, from **$48.8 million** at June 30, 2023, indicating reduced liquidity - At September 30, 2023, the Company has working capital of **$23,845 thousand**, a significant decrease from the June 30, 2023 balance of **$48,800 thousand**[29](index=29&type=chunk) [Foreign Exchange Risk](index=14&type=section&id=10.iii%20Foreign%20exchange%20risk) The company is exposed to foreign exchange risk from U.S. dollar-denominated assets and liabilities, with a 10% USD/CAD rate change impacting comprehensive loss by approximately **$1.4 million** | USD Denominated Items (in thousands CAD) | Sep 30, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Cash | $23,472 | $42,745 | | Accounts payable | ($9,223) | ($5,926) | - A **10%** fluctuation in the USD/CAD exchange rate would impact the comprehensive loss by approximately **$1,425 thousand**[30](index=30&type=chunk) [Note 11: Contingencies](index=14&type=section&id=11.%20Contingencies) Standard Lithium is defending a securities class action lawsuit alleging misrepresentations regarding its DLE technology and lithium recovery rates, with no provision recorded as the outcome is undeterminable - A securities class action lawsuit was filed against the Company in January 2022, alleging violations of the U.S. Securities Exchange Act[31](index=31&type=chunk) - The complaint alleges misrepresentation regarding the Company's LiSTR DLE technology and lithium recovery percentages at its Demonstration Plant[31](index=31&type=chunk) - The company has not recorded any provision for this lawsuit as the outcome is currently undeterminable[31](index=31&type=chunk) [Note 12: Subsequent Event](index=14&type=section&id=12.%20Subsequent%20Event) Subsequent to the reporting period, on October 31, 2023, the company exercised its option with TETRA Technologies, Inc. to secure brine production rights for the South West Arkansas Project - On October 31, 2023, the Company exercised its option agreement with TETRA Technologies, Inc. to acquire brine production rights for the South West Arkansas Project[32](index=32&type=chunk)