pll-20240630

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 June 30, 2024


☐			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 August 05, 2024, there were 19,371,416 shares of the Registrant’s common stock outstanding.

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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
Annual Report			Annual Report on Form 10-K
ASC			Accounting Standards Codification
ASX			Australian Securities Exchange
Atlantic Lithium			Atlantic Lithium Limited
Atlantic Lithium Ghana			Atlantic Lithium’s Ghanaian-based lithium portfolio companies
ATM Program			At the Market Issuance Sales Agreement
ATVM			Advanced Technology Vehicles Manufacturing
Authier			Authier Lithium project

Carolina Lithium			Carolina Lithium project



CODM			Chief Operating Decision Maker


DAP			Delivered at Place
DEMLR			Department of Energy, Mineral and Land Resources
DFS			definitive feasibility study
dmt			dry metric ton
DOE			U.S. Department of Energy




Ewoyaa			Ewoyaa Lithium project
Exchange Act			Securities Exchange Act of 1934

FDIC			Federal Deposit Insurance Corporation

FOB			Free on Board


Killick Lithium			Killick Lithium Inc.


LG Chem			LG Chem, Ltd.
Tennessee Lithium			Tennessee Lithium project
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.
Nasdaq			Nasdaq Capital Market
NCDEQ			North Carolina Department of Environmental Quality



Piedmont Australia			Piedmont Lithium Pty Ltd (formerly named Piedmont Lithium Limited)

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


spodumene concentrate			spodumene concentrate or SC[X] where “X” represents the lithium content of the concentrate on an Li2O% basis
Stock Incentive Plan			Piedmont Lithium Inc. Stock Incentive Plan adopted by our board in March 2021
Tansim			Tansim Lithium project

Title V Permit			Title V Prevention of Significant Deterioration Air Permit
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. GAAP			U.S. generally accepted accounting principles

Vinland Lithium			Vinland Lithium Inc.

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			Page
Glossary of Terms and Definitions			2
PART I - Financial Information
	Item 1.	Un audited F inancial Statements	4
		Consolidated Statements of Operations	4
		Consolidated Statements of Comprehensive 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	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	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	32
	Item 3.	Defaults Upon Senior Securities	32
	Item 4.	Mine Safety Disclosures	32
	Item 5.	Other Information	32
	Item 6.	Exhibits	33

Signatures			34

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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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	13,227	$	—	$	26,628	$	—
Costs of sales	12,601		—		25,311		—
Gross profit	626		—		1,317		—

Exploration costs	9		440		62		1,197
Selling, general and administrative expenses	9,330		11,987		19,204		20,608
Total operating expenses	9,339		12,427		19,266		21,805
Loss from equity method investments	(4,910)		(2,675)		(10,350)		(5,417)
Loss from operations	(13,623)		(15,102)		(28,299)		(27,222)

Interest income	653		1,165		1,480		1,928
Interest expense	(76)		(11)		(298)		(26)
Gain (loss) on sale of equity method investments(1)	—		3,975		(13,886)		7,250
Other (loss) gain	(288)		(17)		965		(66)
Total other income (loss)	289		5,112		(11,739)		9,086
Loss before taxes	(13,334)		(9,990)		(40,038)		(18,136)
Income tax (benefit) expense	(2)		649		(3,095)		1,142
Net loss	$	(13,332)	$	(10,639)	$	(36,943)	$	(19,278)


Basic and diluted net loss per weighted-average share	$	(0.69)	$	(0.55)	$	(1.91)	$	(1.02)


Basic and diluted weighted-average shares outstanding	19,370		19,187		19,348		18,857

__________________________

(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 six months ended June 30, 2024. There was no gain (loss) on sale of equity method investments for the three months ended June 30, 2024. For the three and six months ended June 30, 2023, we recognized a gain of $3,975 and $7,250, respectively, related to the dilution of our ownership interest with the issuance of additional shares of Sayona Mining. See Note 7—Equity Method Investments.

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

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PIEDMONT LITHIUM INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands) (Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(13,332)	$	(10,639)	$	(36,943)	$	(19,278)
Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment of equity method investments(1)	(758)		1,121		(671)		(1,092)
Other comprehensive income (loss), net of tax	(758)		1,121		(671)		(1,092)
Comprehensive loss	$	(14,090)	$	(9,518)	$	(37,614)	$	(20,370)

__________________________

(1)Foreign currency translation adjustment of equity method investments is presented net of tax (expense) benefit of $(223) for the six months ended June 30, 2024 and $(97) and $566 for the three and six months ended June 30, 2023, respectively. There is no tax impact on foreign currency translation adjustment of equity method investments for the three months ended June 30, 2024.

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

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PIEDMONT LITHIUM INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts) (Unaudited)


Assets	June 30, 2024		December 31, 2023

Cash and cash equivalents	$	58,978	$	71,730
Accounts receivable	13,320		595


Other current assets	11,395		3,829
Total current assets	83,693		76,154
Property, plant and mine development, net	134,270		127,086

Advances to affiliates	37,093		28,189
Other non-current assets	1,865		2,164
Equity method investments	82,719		147,662
Total assets	$	339,640	$	381,255

Liabilities and Stockholders’ Equity


Accounts payable and accrued expenses	$	5,894	$	11,580
Payables to affiliates	81		174
Current portion of long-term debt	642		149
Deferred revenue	24,347		—
Other current liabilities	5,053		29,463
Total current liabilities	36,017		41,366
Long-term debt, net of current portion	2,067		14
Operating lease liabilities, net of current portion	951		1,091
Other non-current liabilities	980		431
Deferred tax liabilities	—		6,023
Total liabilities	40,015		48,925
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock; $0.0001 par value, 100,000 shares authorized; 19,371 and 19,272 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	2		2
Additional paid-in capital	467,808		462,899
Accumulated deficit	(163,787)		(126,844)
Accumulated other comprehensive loss	(4,398)		(3,727)
Total stockholders’ equity	299,625		332,330
Total liabilities and stockholders’ equity	$	339,640	$	381,255

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)


	Six Months Ended June 30,
Cash flows from operating activities:	2024		2023
Net loss	$	(36,943)	$	(19,278)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	4,640		4,311
Loss from equity method investments	10,350		5,417
Loss (gain) on sale of equity method investments	13,886		(7,250)
Gain on equity securities	(1,594)		—
Deferred taxes	(6,246)		1,142
Depreciation and amortization	156		106
Noncash lease expense	532		96
Loss on sale of assets	656		—
Unrealized foreign currency translation (gains) losses	(36)		13
Changes in assets and liabilities:
Accounts receivable	(12,725)		—

Other assets	1,950		(2,019)
Operating lease liabilities	(472)		(80)
Accounts payable	(25)		(1,072)
Payables to affiliates	(93)		—
Deferred revenue	24,347		—
Accrued expenses and other liabilities	(27,164)		(1,072)
Net cash used in operating activities	(28,781)		(19,686)
Cash flows from investing activities:

Capital expenditures	(8,622)		(28,696)
Advances to affiliates	(8,226)		(4,742)
Proceeds from sale of marketable securities	45		—
Proceeds from sale of shares in equity method investments	49,103		—
Additions to equity method investments	(14,966)		(28,218)
Net cash provided by (used in) investing activities	17,334		(61,656)
Cash flows from financing activities:
Proceeds from issuances of common stock, net of issuance costs	—		71,084

Payments of long-term debt and insurance premiums financed	(651)		(239)
Payments to tax authorities for employee stock-based compensation	(654)		—
Net cash (used in) provided by financing activities	(1,305)		70,845
Net decrease in cash	(12,752)		(10,497)
Cash and cash equivalents at beginning of period	71,730		99,247

Cash and cash equivalents at end of period	$	58,978	$	88,750

Supplemental disclosure of cash flow information:
Insurance premiums financed	$	2,117	$	—
Noncash capital expenditures in accounts payable and accrued expenses	221		6,773
Noncash investment in affiliates for issuance of company stock	746		—
Noncash acquisitions of mining interests financed by sellers	2,668		—
Cash paid for interest	287		26

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, 2023	19,272	$	2	$	462,899	$	(126,844)	$	(3,727)	$	332,330
Issuance of common stock, net of issuance costs	53	—		747		—		—		747
Stock-based compensation, net of forfeitures	—	—		2,106		—		—		2,106
Shares issued for exercise/vesting of stock-based compensation awards	67	—		—		—		—		—
Shares surrendered for tax obligations for stock-based transactions	(27)	—		(592)		—		—		(592)

Equity method investments adjustments in other comprehensive income (loss), net of tax	—	—		—		—		87		87
Net loss	—	—		—		(23,611)		—		(23,611)
March 31, 2024	19,365	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 awards	10	—		—		—		—		—
Shares surrendered for tax obligations for stock-based transactions	(4)	—		(62)		—		—		(62)
Equity method investments adjustments in other comprehensive income (loss), net of tax	—	—		—		—		(758)		(758)
Net loss	—	—		—		(13,332)		—		(13,332)
June 30, 2024	19,371	$	2	$	467,808	$	(163,787)	$	(4,398)	$	299,625


	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 of issuance costs	1,097	—		71,084		—		—		71,084
Stock-based compensation, net of forfeitures	—	—		1,166		—		—		1,166
Shares issued for exercise/vesting of stock-based compensation awards	13	—		—		—		—		—
Equity method investments adjustments in other comprehensive income (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 stock-based compensation awards	13	—		—		—		—		—
Equity method investments adjustments in other comprehensive income (loss), net of tax	—	—		—		—		1,122		1,122
Net loss	—	—		—		(10,639)		—		(10,639)
June 30, 2023	19,196	$	2	$	456,758	$	(124,936)	$	(6,388)	$	325,436

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

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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 include 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. Tennessee Lithium was a proposed secondary merchant lithium hydroxide manufacturing plant. 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. 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.

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. Certain prior period amounts have been reclassified to be consistent with current period presentation. 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.

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 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.

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Since inception, we have devoted substantial effort and capital resources to our exploration and development activities, permitting activities, 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 $36.9 million and $21.8 million during the six months ended June 30, 2024 and the year ended December 31, 2023, respectively. We have accumulated deficits of $163.8 million and $126.8 million as of June 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 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 have introduced additional cost reduction plans to further reduce our operating expenses and investments in our lithium projects and affiliates. We had available cash on hand of $59.0 million as of June 30, 2024. Based on our operating plan, which includes cost reduction plans discussed above, we believe our cash on hand 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 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 and Adopted Accounting Pronouncements

We have considered the applicability and impact of all 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.

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. We warrant to our customers that our products conform to mutually agreed product specifications.

Three customers accounted for 100% of total revenue for the periods presented below. All of the sales related to these three customers originated in North America. We evaluate the collectability of our accounts receivable on an individual customer basis. We had no reserve for uncollectible accounts as of June 30, 2024.

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We may be subject to provisional revenue adjustments associated with commodity price fluctuations for our spodumene concentrate sales. These adjustments are unknown until final settlement. Revenue and provisional adjustments are reflected in the following table:


(in thousands)	Three Months Ended June 30, 2024		Six Months Ended June 30, 2024

Spodumene concentrate sales	$	13,320		$	26,390
Provisional revenue adjustments	(93)			238
Revenue	$	13,227		$	26,628

Sales of spodumene concentrate commenced in the second half of 2023. As such, we did not record revenue during the three and six months ended June 30, 2023.

Contract Liabilities

Contract liabilities represent payments received from customers in advance of the satisfaction of performance obligations. As of June 30, 2024, we had $24.4 million of contract liabilities included in “Deferred revenue” in the consolidated balance sheets. We anticipate all such payments will be earned and recognized as revenue over the next twelve months. We had no contract liabilities as of December 31, 2023.

3.STOCK-BASED COMPENSATION

Stock Incentive Plans

Under our Stock In

SEC Form 10-Q filed by Piedmont Lithium Inc.