Management and Strategy - The management's discussion and analysis for the year ended December 31, 2023, is included in the Annual Report, providing insights into the company's performance and future prospects [503]. - The company aims to create a fully integrated and environmentally sustainable battery materials supply chain in North America, with over $2 billion secured in capital through 100+ transactions [509]. - The company is focused on marketing refined cobalt sulfate production to electric vehicle manufacturers and battery cell makers, with plans to expand to refine black mass from end-of-life lithium-ion batteries [515]. - The company is committed to becoming the leading North American refinery for electric vehicle battery materials, supported by a strategic investor relations program [519]. - The management team has extensive experience in the mining and natural resources sectors, with a focus on operational efficiency and project development [514]. - The company plans to leverage its expertise in capital markets and project development to drive growth in the battery materials sector [509]. - The company is actively pursuing sustainability initiatives and partnerships to enhance its environmental stewardship and governance strategies [512]. Executive Compensation - Directors' compensation for the financial year ending December 31, 2023, includes total compensation of $149,422 for John Pollesel and $132,873 for C.L. "Butch" Otter [522]. - Trent Mell, the President and CEO, received total compensation of $1,135,771 for the year 2023, including a base salary of $390,769 and non-equity incentives of $256,944 [527]. - The target bonus for Michael Insulan, Vice President, Commercial, is 40% of his base salary of $240,000, contingent upon achieving corporate objectives [534]. - Mark Trevisiol, Vice President, Project Development, has a target bonus of 50% of his base salary of $270,000, contingent upon achieving corporate objectives [535]. - Joe Racanelli, Vice President, Investor Relations, had a target bonus of 35% of his base salary of $215,000 before resigning on December 15, 2023 [536]. - The company signed a revised contract with Trent Mell in January 2023, outlining a bonus potential of up to 100% of his base salary based on corporate objectives [530]. - The company has established a Compensation, Governance, and Nominating Committee to oversee executive compensation matters and corporate governance principles [551]. Shareholder Information - NewGen Asset Management Limited owns 4,452,060 Common Shares, representing 7.78% of the outstanding shares [560]. - Whitebox Advisors LLC holds 5,900,164 Common Shares, accounting for 9.9% of the total shares [566]. - The total number of Common Shares reserved for the 2022 Amended and Restated LTIP is capped at 4,100,000 [568]. - Up to 350,000 Common Shares may be reserved for issuance upon conversion of RSUs and PSUs each, and 400,000 for DSUs [568]. - The maximum number of Common Shares that can be issued to any one person in a 12-month period is limited to 5% of the issued shares [568]. - The aggregate principal amount of 8.99% Convertible Senior Secured Notes due 2028 is $25,500,000, convertible into 10,281,957 Common Shares [566]. - The beneficial ownership limitations prevent holders from exceeding 9.9% of Common Shares outstanding upon conversion or exercise [566]. - All executive officers and directors as a group own 671,083 Common Shares, which is 1.03% of the total [560]. - The company had 72 record holders of Common Shares as of May 9, 2024, with 95.45% held in Canada [558]. - The company aims to align the interests of directors and key employees with those of shareholders through the 2022 Amended and Restated LTIP [564]. - The 2022 Amended and Restated LTIP does not provide financial assistance to participants [569]. Employee Share Purchase Plan (ESP Plan) - The Company has reserved a maximum of 1,000,000 Common Shares for issuance under the Employee Share Purchase Plan (ESP Plan), which cannot exceed 20% of the total issued and outstanding Common Shares [576]. - The Company aims to align employee interests with shareholders through the ESP Plan, allowing employees to contribute between 1% and 10% of their Base Annual Salary [578]. - The ESP Plan allows for notional grants of Common Shares based on employee contributions, credited at 100% of the contribution amount [578]. - The Board has the discretion to amend the ESP Plan without shareholder approval, except for certain significant changes [582]. Financial Performance and Liabilities - As of December 31, 2023, the Company has total contractual liabilities of $71,912,000, with $8,950,000 due within one year [642]. - The Company reported a significant decrease in accounts payable and accrued liabilities from $18,864,000 in 2022 to $8,828,000 in 2023 [642]. - The Company is currently facing liquidity risk, with insufficient financial resources to complete the construction and commissioning of the Refinery [642]. - The Company has convertible notes payable amounting to $67,453,000 due after two years as of December 31, 2023 [642]. - The Company has a contractual obligation to repay a long-term government loan of $4,299,000 after two years [642]. - The Company’s total liabilities decreased from $22,417,000 in 2022 to $8,950,000 in 2023, indicating improved financial management [642]. Foreign Currency and Financial Instruments - As of December 31, 2023, the company's maximum exposure to credit risk was the carrying value of cash and cash equivalents, restricted cash, and receivables [651]. - The company recognized a foreign exchange loss of $696 for the year ended December 31, 2023, compared to a loss of $1,019 in 2022 [653]. - A 10% depreciation or appreciation of the US Dollar against the Canadian Dollar would result in a $3,610 decrease or increase in the company's net income before tax as of December 31, 2023 [653]. - The company's total foreign currency exchange risk on monetary financial instruments as of December 31, 2023, amounted to $(49,418) when expressed in Canadian Dollars [652]. - The company does not have any financial instruments linked to LIBOR, SOFR, or any floating market interest rate as of December 31, 2023 [654].
Electra Battery Materials (ELBM) - 2023 Q4 - Annual Report