Piedmont Lithium (PLL) - 2025 Q1 - Quarterly Report

PART I - Financial Information Financial Statements Piedmont Lithium reported increased Q1 2025 revenue to $20.0 million, but gross profit declined to $0.1 million, leading to a $15.6 million net loss Consolidated Statements of Operations Q1 2025 revenue increased to $20.0 million, but gross profit declined to $0.13 million, while net loss narrowed to $15.6 million due to lower operating expenses Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $19,996 | $13,401 | | Costs of sales | $19,862 | $12,710 | | Gross profit | $134 | $691 | | Selling, general and administrative expenses | $6,771 | $8,094 | | Loss from equity method investments | ($4,935) | ($5,440) | | Loss from operations | ($11,855) | ($14,676) | | Net loss | ($15,631) | ($23,611) | | Net loss per share (Basic and diluted) | ($0.71) | ($1.22) | Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $327.0 million, primarily due to lower cash, while total liabilities and stockholders' equity also declined Consolidated Balance Sheet Highlights | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $65,390 | $87,840 | | Total current assets | $82,480 | $102,639 | | Total assets | $326,989 | $349,885 | | Total current liabilities | $38,427 | $46,106 | | Total liabilities | $43,698 | $51,638 | | Total stockholders' equity | $283,291 | $298,247 | Consolidated Statements of Cash Flows Net cash used in operating activities improved to $19.2 million, while investing activities shifted to a $2.3 million use, resulting in a $22.5 million decrease in cash Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($19,155) | ($28,322) | | Net cash (used in) provided by investing activities | ($2,311) | $28,695 | | Net cash used in financing activities | ($984) | ($659) | | Net decrease in cash | ($22,450) | ($286) | | Cash and cash equivalents at end of period | $65,390 | $71,444 | Notes to the Consolidated Financial Statements The notes detail accounting policies and key disclosures, including the Sayona Mining merger, cost savings plan, revenue recognition, equity investment changes, and debt obligations - The company is a development-stage, multi-asset, integrated lithium business planning to supply lithium hydroxide to the North American electric vehicle and battery manufacturing supply chains[32] - On November 18, 2024, the company entered into a Merger Agreement with Sayona Mining, expected to close in mid-2025, subject to shareholder approvals[43][44] - As of March 31, 2025, approximately 15,700 dmt of spodumene concentrate sales with an average provisional price of $644 per dmt were subject to final pricing adjustments[52] - In Q1 2024, the company initiated a Cost Savings Plan, reducing its workforce by 28% and incurring $1.8 million in severance and benefits costs[65] - During Q1 2024, the company sold its entire holding in Sayona Mining for net proceeds of $41.4 million and sold a portion of its Atlantic Lithium shares for $7.7 million. As a result, neither are accounted for as equity method investments as of March 31, 2024[80][81] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategy to become a key U.S. lithium hydroxide supplier, the Sayona Mining merger, Q1 2025 financial results, and liquidity management Executive Overview & Strategy Piedmont's strategy focuses on becoming a key U.S. lithium hydroxide supplier through its multi-asset portfolio, including Carolina Lithium, NAL, and Ewoyaa projects - The company's strategy is to become an integrated lithium business to support the clean energy economy and U.S. energy security[133] - Piedmont's portfolio includes Carolina Lithium (North Carolina), an interest in Sayona Quebec's NAL (Canada), and Atlantic Lithium's Ewoyaa project (Ghana)[135] - The company plans to produce an estimated 60,000 metric tons per year of domestic lithium hydroxide, supported by offtake rights to approximately 525,000 metric tons of spodumene concentrate annually[136] Proposed Merger with Sayona Mining Piedmont entered a stock-for-stock merger agreement with Sayona Mining, expected to close mid-2025, which will rename the combined entity Elevra Lithium Limited - A merger agreement was signed with Sayona Mining for a stock-for-stock combination, expected to close in mid-2025[139][142] - The exchange ratio will be 3.5133 Sayona shares per Piedmont share if Sayona completes a 1-for-150 reverse stock split, or 527 Sayona shares otherwise[141] - The combined company is proposed to be renamed Elevra Lithium Limited, with a board composed of four nominees from each of the existing boards[146] Results of Operations Q1 2025 revenue increased by 49.2% to $20.0 million due to higher sales volume, but gross profit fell 80.6% to $0.1 million, while net loss improved to $15.6 million Q1 2025 vs Q1 2024 Performance | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $19,996 | $13,401 | 49.2% | | Gross Profit | $134 | $691 | (80.6)% | | SG&A Expenses | $6,771 | $8,094 | (16.3)% | | Loss from Operations | ($11,855) | ($14,676) | (19.2)% | | Net Loss | ($15,631) | ($23,611) | (33.8)% | - Revenue growth was driven by a 74.2% increase in spodumene concentrate sales volume to ~27,000 dmt in Q1 2025 from ~15,500 dmt in Q1 2024[168] - The average realized price per dmt of spodumene concentrate fell 14.3% from $865 in Q1 2024 to $741 in Q1 2025, negatively impacting gross profit[170] Liquidity and Capital Resources Piedmont had $65.4 million in cash and a $25.0 million credit facility as of March 31, 2025, deemed sufficient for the next twelve months, with long-term project financing pursued - Principal sources of liquidity as of March 31, 2025, were $65.4 million in cash and a fully-utilized $25.0 million Credit Facility[181] - The company believes its cash on hand and credit facility are sufficient to fund operations for the next twelve months[188] - Full-year 2025 outlook includes spodumene concentrate shipments of 113,000-130,000 dmt, capital expenditures of $4.0-$6.0 million, and investments in affiliates of $7.0-$13.0 million[186] - Long-term funding strategies for Carolina Lithium include a potential ATVM loan from the DOE and strategic partnerships. Ewoyaa funding may involve offering a long-term offtake agreement[189] Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk factors were reported from the Annual Report for the year ended December 31, 2024 - There have been no material changes in risk factors from those disclosed in the Annual Report for the year ended December 31, 2024[200] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting identified - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[201] - No changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were identified during the quarter ended March 31, 2025[202] PART II - Other Information Legal Proceedings Several past legal proceedings, including a securities class action, two shareholder derivative lawsuits, and an SEC investigation, have been dismissed or concluded without enforcement action - A securities class action lawsuit filed in July 2021 was dismissed by the Court on January 18, 2024, and the deadline to appeal has expired[125] - Two shareholder derivative lawsuits (Thomascik and Varbaro) were dismissed with prejudice in March 2024[128] - An SEC investigation related to mining investments outside the U.S. was concluded on November 20, 2024, with the SEC not intending to recommend enforcement action[129] Risk Factors A new risk factor identifies potential adverse impacts from U.S. tariffs on Canadian critical minerals, including a 10% tariff on lithium, affecting NAL spodumene concentrate imports - A new risk factor has been identified regarding tariffs and changes in international trade policy[205] - Effective March 4, 2025, the U.S. imposed tariffs on Canadian goods, including a 10% tariff on critical minerals such as lithium, which could impact spodumene concentrate imported from NAL[205] - No other material changes to risk factors were reported from the company's 2024 Annual Report[206] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None[207] Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during the quarter ended March 31, 2025[210]