pll-20230930

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, 2023


☐			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 Lithium Inc.

(Exact name of Registrant as specified in its Charter)

_________________________________________________________________________________________


Delaware			36-4996461
(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 class

Trading Symbol

Name 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 (“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, 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 03, 2023, there were 19,209,327 shares of the Registrant’s common stock outstanding.

Table of Contents


			Page
Glossary of Terms and Definitions			3
PART I - Financial Information
	Item 1.	Financial Statements	4
		Consolidated Statements of Operations	4
		Consolidated Statements of Comprehensive Income (Loss)	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Cash Flows	7
		Consolidated Statements of Changes in Equity	8
		Notes to the Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4.	Controls and Procedures	31

PART II - Other Information
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
	Item 3.	Defaults Upon Senior Securities	33
	Item 4.	Mine Safety Disclosures	33
	Item 5.	Other Information	33
	Item 6.	Exhibits	34

Signatures			35

Table of Contents

GLOSSARY OF TERMS AND DEFINITIONS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:


Air Permit			Conditional Major Non-Title V Construction and Operating Air Permit
ASX			Australian Securities Exchange
Atlantic Lithium			Atlantic Lithium Limited
Atlantic Lithium Ghana			Atlantic Lithium’s Ghanaian-based lithium portfolio companies
ATVM			Advanced Technology Vehicles Manufacturing Loan Program
Benton Resources			Benton Resources Inc.
Carolina Lithium			The Carolina Lithium project is Piedmont Lithium’s planned, integrated spodumene-to-lithium hydroxide project located within the renowned Carolina Tin Spodumene Belt in Gaston County, North Carolina
CODM			Chief Operating Decision Maker
DEMLR			Department of Energy, Mineral and Land Resources
DFS			Definitive feasibility study
dmt			Dry metric ton
DOE			U.S. Department of Energy

Ewoyaa			The Ewoyaa Lithium Project is the flagship project of Atlantic Lithium Ghana located in the Cape Coast region of West Africa, Ghana
Exchange Act			Securities Exchange Act of 1934
FDIC			Federal Deposit Insurance Corporation

Incentive Plan			Piedmont Lithium Inc. Stock Incentive Plan

LG Chem			LG Chem, Ltd.
Li2O			Lithium oxide

MIIF			Minerals Income Investment Fund of Ghana
Milestone PRAs			PRAs that could be earned based upon achievement of certain specified milestones
NAL			North American Lithium Inc.
NCDEQ			North Carolina Department of Environmental Quality
Piedmont Lithium Inc.			“Piedmont Lithium,” “we,” “our,” “us,” or “Company”
PRAs			Performance rights awards
Ricca			Ricca Resources Limited
RSUs			Restricted stock units
Sayona Mining			Sayona Mining Limited
Sayona Quebec			Sayona Quebec Inc.
SEC			Securities and Exchange Commission
Sokoman Minerals			Sokoman Minerals Corp.
spodumene concentrate			Spodumene concentrate or SC[X] where “X” represents the lithium content of the concentrate on an Li2O% basis
TDEC			Tennessee Department of Environment and Conservation
Tennessee Lithium			The Tennessee Lithium project is Piedmont Lithium’s planned 30,000 tons per year lithium hydroxide conversion facility project located in Etowah, Tennessee
TSR PRAs			PRAs related to market goals based on a comparison of the Company'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. GAAP			U.S. Generally Accepted Accounting Principles
Vinland Lithium			Vinland Lithium Inc.

Table of Contents

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,
	2023		2022		2023		2022
Revenue	$	47,127	$	—	$	47,127	$	—
Costs of sales	23,363		—		23,363		—
Gross profit	23,764		—		23,764		—

Exploration and mine development costs	471		434		1,668		1,485
Selling, general, and administrative expenses	11,185		7,160		31,793		20,200
Total operating expenses	11,656		7,594		33,461		21,685
Income (loss) from equity method investments(1)	3,852		(2,003)		(1,565)		(6,547)
Income (loss) from operations	15,960		(9,597)		(11,262)		(28,232)

Interest income	1,031		373		2,959		373
Interest expense	(8)		(21)		(34)		(97)
Loss from foreign currency exchange	(22)		(35)		(88)		(60)
Gain on dilution of equity method investments(1)	7,958		29,367		15,208		29,367
Total other income	8,959		29,684		18,045		29,583
Income before taxes	24,919		20,087		6,783		1,351
Income tax expense	2,028		3,422		3,170		3,422
Net income (loss)	$	22,891	$	16,665	$	3,613	$	(2,071)

Earnings (loss) per share:
Basic	$	1.19	$	0.93	$	0.19	$	(0.12)
Diluted	$	1.19	$	0.92	$	0.19	$	(0.12)
Weighted-average shares outstanding
Basic	19,203		17,966		18,974		17,343
Diluted	19,239		18,081		19,011		17,343

__________________________

(1)Income (loss) from equity method investments and Gain on dilution of equity method investments are reported on a one-quarter lag.

The accompanying notes are an integral part of these unaudited financial statements.

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PIEDMONT LITHIUM INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net Income (loss)	$	22,891	$	16,665	$	3,613	$	(2,071)
Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment of equity method investments(1)	(2,992)		811		(4,084)		662
Other comprehensive income (loss), net of tax	(2,992)		811		(4,084)		662
Comprehensive income (loss)	$	19,899	$	17,476	$	(471)	$	(1,409)

__________________________

(1)Foreign currency translation adjustment of equity method investments is presented net of tax (expense) benefit of $264 and $(392) for the three months ended September 30, 2023, and 2022 respectively, and $830 and $(392) for the nine months ended September 30, 2023, and 2022 respectively.

The accompanying notes are an integral part of these unaudited financial statements.

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PIEDMONT LITHIUM INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)


	(Unaudited)
	September 30, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	94,495	$	99,247
Accounts receivable	23,281		—

Other current assets	4,374		2,612
Total current assets	122,150		101,859
Property, plant and mine development, net	116,422		71,541

Other non-current assets	25,734		18,873
Equity method investments	133,044		95,648
Total assets	$	397,350	$	287,921

Liabilities and Stockholders’ Equity


Accounts payable and accrued expenses	$	34,607	$	12,862
Current portion of long-term debt	201		425
Other current liabilities	8,052		124
Total current liabilities	42,860		13,411
Long-term debt, net of current portion	44		163
Operating lease liabilities, net of current portion	1,174		1,177
Deferred tax liabilities	5,221		2,881
Total liabilities	49,299		17,632
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock; $0.0001 par value, 100,000 shares authorized; 19,209 and 18,073 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	2		2
Additional paid-in capital	459,475		381,242
Accumulated deficit	(102,045)		(105,658)
Accumulated other comprehensive loss	(9,381)		(5,297)
Total stockholders’ equity	348,051		270,289
Total liabilities and stockholders’ equity	$	397,350	$	287,921

The accompanying notes are an integral part of these unaudited financial statements.

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PIEDMONT LITHIUM INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net Income (loss)	$	3,613	$	(2,071)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation expense	7,378		2,643
Loss from equity method investments	1,565		6,547
Gain on dilution of equity method investments	(15,208)		(29,367)
Deferred taxes	3,170		3,422
Depreciation	174		32
Noncash lease expense	169		72
Loss on sale of property, plant and mine development	—		12
Unrealized loss on investment	27		54
Changes in operating assets and liabilities:
Accounts receivable	(23,281)		—

Other assets	(1,633)		(959)
Operating lease liabilities	(148)		(69)
Accounts payable	21,865		270
Accrued expenses and other current liabilities	7,712		(2,627)
Net cash provided by (used in) operating activities	5,403		(22,041)
Cash flows from investing activities:

Capital expenditures	(44,978)		(21,892)
Advances to affiliates	(6,828)		(9,815)
Investments in equity method investments	(28,667)		(14,087)
Net cash used in investing activities	(80,473)		(45,794)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of issuance costs	71,084		122,059
Proceeds from exercise of stock options	—		93
Principal payments on long-term debt	(344)		(973)
Payments to tax authorities for employee stock-based compensation	(422)		—
Net cash provided by financing activities	70,318		121,179
Net (decrease) increase in cash	(4,752)		53,344
Cash and cash equivalents at beginning of period	99,247		64,245

Cash and cash equivalents at end of period	$	94,495	$	117,589

Supplemental disclosure of cash flow information:
Noncash capital expenditures in accounts payable and accrued expenses	$	5,114	$	2,227

Cash paid for interest	34		97
Capitalized stock-based compensation	193		213

The accompanying notes are an integral part of these unaudited financial statements.

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PIEDMONT LITHIUM INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands) (Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
December 31, 2022	18,073	$	2	$	381,242	$	(105,658)	$	(5,297)	$	270,289
Issuance of common stock, net	1,097	—		71,084		—		—		71,084
Stock-based compensation, net of forfeitures	—	—		1,166		—		—		1,166
Shares issued for exercise/vesting of share-based compensation awards	13	—		—		—		—		—


Equity method investment adjustments in other comprehensive loss, net of tax	—	—		—		—		(2,213)		(2,213)
Net loss	—	—		—		(8,639)		—		(8,639)
March 31, 2023	19,183	$	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 share-based compensation awards	13	—		—		—		—		—


Equity method investment adjustments in other comprehensive income, net of tax	—	—		—		—		1,121		1,121
Net loss	—	—		—		(10,639)		—		(10,639)
June 30, 2023	19,196	$	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 share-based compensation awards	24	—		—		—		—		—
Shares surrendered for tax obligations for share-based transactions	(11)	—		(422)		—		—		(422)

Equity method investment adjustments in other comprehensive income (loss), net of tax	—	—		—		—		(2,992)		(2,992)
Net income	—	—		—		22,891		—		22,891
September 30, 2023	19,209	$	2	$	459,475	$	(102,045)	$	(9,381)	$	348,051

The accompanying notes are an integral part of these unaudited financial statements.

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PIEDMONT LITHIUM INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands)(Unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
	Shares	Amount
December 31, 2021	15,894	$	2	$	255,132	$	(92,683)	$	(666)	$	161,785
Issuance of common stock, net	2,013	—		122,059		—		—		122,059
Stock-based compensation, net of forfeitures	—	—		(86)		—		—		(86)
Shares issued for exercise/vesting of share-based compensation awards	23	—		—		—		—		—


Equity method investment adjustments in other comprehensive income, net of tax	—	—		—		—		194		194
Net loss	—	—		—		(9,155)		—		(9,155)
March 31, 2022	17,930	$	2	$	377,105	$	(101,838)	$	(472)