2025
Exhibit 99.1
Condensed Consolidated Interim Financial Statements
(Expressed in US dollars - unaudited)
Three months ended September 30, 2024 and 2023
STANDARD LITHIUM LTD.
Condensed Consolidated Interim Statements of Financial Position
As at September 30, 2024 and June 30, 2024
(Expressed in thousands of US dollars - unaudited)
| | | | | | | | | | | |
| September 30, 2024 | | | June 30, 2024 | | | July 1, 2023 | |
| | | | Currency remeasurement: Note 2 | | | Currency remeasurement: Note 2 | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash | $ | 28,906 | | | $ | 38,667 | | | $ | 44,975 | |
Restricted cash | | 345 | | | | 345 | | | | — | |
Receivables | | 101 | | | | 303 | | | | 353 | |
Prepaid expenses | | 943 | | | | 1,354 | | | | 1,489 | |
Receivables - unconsolidated affiliates (Note 9) | | 1,677 | | | | 848 | | | | — | |
| | 31,972 | | | | 41,517 | | | | 46,817 | |
| | | | | | | | |
Non-current assets | | | | | | | | |
Reclamation deposit | | 63 | | | | 63 | | | | 63 | |
Exploration and evaluation assets (Note 6) | | 46,023 | | | | 45,970 | | | | 75,410 | |
Intangible assets | | 980 | | | | 985 | | | | 1,080 | |
Right of use asset | | 599 | | | | 712 | | | | 930 | |
Property, plant and equipment | | 1,344 | | | | 1,514 | | | | 2,087 | |
Investment in Aqualung (Note 5) | | 2,521 | | | | 2,500 | | | | 2,500 | |
Investment in joint ventures (Note 4) | | 146,442 | | | | 146,865 | | | | — | |
Financial asset - FID (Note 12) | | 48,575 | | | | 47,086 | | | | — | |
Advances and deposits | | 79 | | | | 79 | | | | 2,013 | |
| | 246,626 | | | | 245,774 | | | | 84,083 | |
| | | | | | | | |
TOTAL ASSETS | $ | 278,598 | | | $ | 287,291 | | | $ | 130,900 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable and accrued liabilities | $ | 2,988 | | | $ | 8,217 | | | $ | 9,610 | |
Accounts payable - unconsolidated affiliates (Note 9) | | 4,000 | | | | 4,000 | | | | — | |
Lease liability - short-term | | 327 | | | | 381 | | | | 386 | |
| | 7,315 | | | | 12,598 | | | | 9,996 | |
Non-current liabilities | | | | | | | | |
Lease liabilities - long-term | | 273 | | | | 342 | | | | 558 | |
Deferred income tax liabilities | | 25,652 | | | | 25,870 | | | | — | |
Decommissioning provision | | 100 | | | | 100 | | | | 100 | |
| | 26,025 | | | | 26,312 | | | | 658 | |
| | | | | | | | |
TOTAL LIABILITIES | | 33,340 | | | | 38,910 | | | | 10,654 | |
| | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | |
Share capital (Note 8) | | 228,086 | | | | 227,292 | | | | 211,626 | |
Reserves (Note 8) | | 35,675 | | | | 34,781 | | | | 27,338 | |
Accumulated deficit | | (13,167 | ) | | | (8,338 | ) | | | (114,139 | ) |
Accumulated other comprehensive loss | | (5,336 | ) | | | (5,354 | ) | | | (4,579 | ) |
TOTAL SHAREHOLDERS’ EQUITY | | 245,258 | | | | 248,381 | | | | 120,246 | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 278,598 | | | $ | 287,291 | | | $ | 130,900 | |
Approved by the Board of Directors and authorized for issue on November 12, 2024.
| | |
"Robert Cross" | | "Claudia D’Orazio" |
Director | | Director |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STANDARD LITHIUM LTD.
Condensed Consolidated Interim Statements of Comprehensive Loss
For the three months ended September 30, 2024 and 2023
(Expressed in thousands of US dollars, except share and per share amounts - unaudited)
| | | | | | | | |
| | Three months ended September 30, | |
| | 2024 | | | 2023 | |
| | | | | Currency remeasurement: Note 2 | |
Expenses | | | | | | |
General and administrative | | $ | 2,811 | | | $ | 3,097 | |
Demonstration Plant operations (Note 7) | | | 1,039 | | | | 2,538 | |
Management and directors’ fees (Note 9) | | | 595 | | | | 442 | |
Share-based compensation (Note 8) | | | 894 | | | | 2,043 | |
Separation benefits (Note 9) | | | 748 | | | | — | |
Foreign exchange loss (gain) | | | 86 | | | | (450 | ) |
Loss from operations | | | 6,173 | | | | 7,670 | |
Interest and other income | | | 75 | | | | 431 | |
Fair value gain on financial asset - FID (Note 10) | | | 1,489 | | | | — | |
Investment loss from joint ventures (Note 4) | | | (423 | ) | | | — | |
Interest expense | | | (15 | ) | | | (18 | ) |
| | | | | | |
Net loss before income taxes | | | (5,047 | ) | | | (7,257 | ) |
Deferred income tax benefit | | | (218 | ) | | | — | |
Net loss | | | (4,829 | ) | | | (7,257 | ) |
Other comprehensive loss | | | | | | |
Item that may be reclassified subsequently to income or loss: | | | | | | |
Currency translation differences of foreign operations | | | 18 | | | | 740 | |
Total comprehensive loss | | $ | (4,811 | ) | | $ | (6,517 | ) |
| | | | | | |
Weighted average number of common shares outstanding – basic and diluted | | | 184,205,111 | | | | 172,785,164 | |
Basic and diluted loss per share | | $ | (0.03 | ) | | $ | (0.04 | ) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STANDARD LITHIUM LTD.
Condensed Consolidated Interim Statements of Changes in Equity
For the three months ended September 30, 2024 and 2023
(Expressed in thousands of US dollars, except share amounts - unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of
shares | | | Share
capital | | | Reserves | | | Accumulated deficit | | | Accumulated other comprehensive loss | | | Total
equity | |
Balance, June 30, 2023 (Currency remeasurement: Note 2) | | | 172,752,197 | | | $ | 211,626 | | | $ | 27,338 | | | $ | (114,139 | ) | | $ | (4,579 | ) | | $ | 120,246 | |
Share-based compensation | | | — | | | | — | | | | 2,043 | | | | — | | | | — | | | | 2,043 | |
Share issuance costs | | | — | | | | (9 | ) | | | — | | | | — | | | | — | | | | (9 | ) |
Stock options exercised | | | 100,000 | | | | 196 | | | | (93 | ) | | | — | | | | — | | | | 103 | |
Net loss | | | — | | | | — | | | | — | | | | (7,257 | ) | | | — | | | | (7,257 | ) |
Currency translation differences for foreign operations | | | — | | | | — | | | | — | | | | — | | | | (740 | ) | | | (740 | ) |
Balance, September 30, 2023 (Currency remeasurement: Note 2) | | | 172,852,197 | | | $ | 211,813 | | | $ | 29,288 | | | $ | (121,396 | ) | | $ | (5,319 | ) | | $ | 114,386 | |
| | | | | | | | | | | | | | | | | | |
Balance, June 30, 2024 (Currency remeasurement: Note 2) | | | 183,915,256 | | | $ | 227,292 | | | $ | 34,781 | | | $ | (8,338 | ) | | $ | (5,354 | ) | | $ | 248,381 | |
Share-based compensation | | | — | | | | — | | | | 894 | | | | — | | | | — | | | | 894 | |
Shares issued in consideration for services | | | 666,667 | | | | 800 | | | | — | | | | — | | | | — | | | | 800 | |
Share issuance costs | | | | | | (6 | ) | | | — | | | | — | | | | — | | | | (6 | ) |
Net loss | | | — | | | | — | | | | — | | | | (4,829 | ) | | | — | | | | (4,829 | ) |
Currency translation differences of foreign operations | | | — | | | | — | | | | — | | | | — | | | | 18 | | | | 18 | |
Balance, September 30, 2024 | | | 184,581,923 | | | $ | 228,086 | | | $ | 35,675 | | | $ | (13,167 | ) | | $ | (5,336 | ) | | $ | 245,258 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STANDARD LITHIUM LTD.
Condensed Consolidated Interim Statements of Cash Flows
Three months ended September 30, 2024 and 2023
(Expressed in thousands of US dollars - unaudited)
| | | | | | | | |
| | For the three months ended September 30, | |
| | 2024 | | | 2023 | |
| | | | | Currency remeasurement: Note 2 | |
Operating activities | | | | | | |
Net loss | | $ | (4,829 | ) | | $ | (7,257 | ) |
Add items not affecting cash | | | | | | |
Share-based compensation | | | 894 | | | | 2,043 | |
Deferred income tax benefit | | | (218 | ) | | | — | |
Foreign exchange | | | (71 | ) | | | (373 | ) |
Investment loss from joint ventures (Note 4) | | | 423 | | | | — | |
Fair value gain on financial asset - FID (Note 10) | | | (1,489 | ) | | | — | |
Amortization | | | 314 | | | | 264 | |
Interest expense | | | 11 | | | | 18 | |
Net changes in non-cash working capital items: | | | | | | |
Receivables | | | 202 | | | | (5 | ) |
Prepaid expenses | | | 411 | | | | 752 | |
Advances and deposits | | | — | | | | 1,583 | |
Accounts payable and accrued liabilities | | | (2,400 | ) | | | (1,834 | ) |
Receivables – unconsolidated affiliates | | | (829 | ) | | | — | |
Net cash used in operating activities | | | (7,581 | ) | | | (4,809 | ) |
| | | | | | |
Investing activities | | | | | | |
Exploration and evaluation assets | | | (2,071 | ) | | | (11,687 | ) |
Purchase of property, plant and equipment | | | (10 | ) | | | (700 | ) |
Purchase of short-term investment | | | — | | | | (81 | ) |
Net cash used in investing activities | | | (2,081 | ) | | | (12,468 | ) |
| | | | | | |
Financing activities | | | | | | |
Exercise of options | | | — | | | | 103 | |
Lease payments | | | (143 | ) | | | (116 | ) |
Share issuance costs | | | (6 | ) | | | (9 | ) |
Net cash used in financing activities | | | (149 | ) | | | (22 | ) |
| | | | | | |
Effect of exchange rates on cash | | | 50 | | | | (295 | ) |
Net change in cash | | | (9,761 | ) | | | (17,594 | ) |
Cash, beginning of period | | | 38,667 | | | | 44,975 | |
Cash, end of period | | $ | 28,906 | | | $ | 27,381 | |
Supplemental cash flow information (Note 12) | |
| | | | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
Standard Lithium Ltd. was incorporated under the laws of the Province of British Columbia on August 14, 1998, and was continued under the Canadian Business Corporations Act on December 1, 2016. Standard Lithium Ltd. and its subsidiary entities' (collectively "Standard Lithium" or the "Company") principal operations are comprised of exploration for and development of lithium brine properties in the United States of America ("USA"). The Company also has significant investments in joint venture arrangements for the exploration and evaluation of lithium brine production facilities.
The address of the Company’s corporate office and principal place of business is Suite 1625, 1075 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3C9. The Company’s common shares are listed on the TSX Venture Exchange (the "TSXV") and NYSE American LLC under the symbol "SLI" and the Frankfurt Stock Exchange under the symbol "S5L".
Statement of compliance
The annual consolidated financial statements of the Company, including comparatives, have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting ("IAS 34").
Certain annual information, in particular the accompanying notes normally included in the condensed interim consolidated financial statements prepared in accordance with IFRS Accounting Standards, has been omitted or condensed. These condensed consolidated interim financial statements do not include all disclosures required under IFRS Accounting Standards and, accordingly, should be read in conjunction with the annual consolidated financial statements for the year ended June 30, 2024 and the notes thereto.
These condensed consolidated interim financial statements have been prepared on a going concern basis.
Basis of presentation
These condensed consolidated interim financial statements have been prepared on the historical cost basis except for financial assets classified as fair value through profit or loss, which are stated at fair value.
The condensed consolidated interim financial statements are presented in the United States dollar ("USD"), and all values are rounded to the nearest thousand except as otherwise indicated.
The functional currency of Standard Lithium Ltd. is the Canadian dollar ("CAD"). For this entity, all transactions not denominated in CAD functional currency are considered to be foreign currency transactions. Foreign currency denominated monetary assets and liabilities are translated using the rate of exchange prevailing at the reporting date. Gains or losses on translation of these items are included in earnings and reporting as Foreign exchange loss (gain). Foreign currency denominated non-monetary assets and liabilities, measured at historical cost, are translated at the rate of exchange at the transaction date.
The functional currency of all subsidiaries is the USD. For these entities, all transactions not denominated in USD functional currency are considered to be foreign currency transactions. Foreign currency denominated monetary assets and liabilities are translated using the rate of exchange prevailing at the reporting date. Gains or losses on translation of these items are included in earnings and reporting as Foreign exchange loss (gain). Foreign currency denominated non-monetary assets and liabilities, measured at historical cost, are translated at the rate of exchange at the transaction date.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
Change in presentation currency
Effective July 1, 2024, the Company changed its presentation currency from CAD to USD due to its most significant assets and liabilities being denominated in USD and for consistency with peer companies in the mining industry. This change has been applied retrospectively.
As at and for the year ended June 30, 2024 and all prior periods, the Company's reporting currency was CAD as described in the Company’s 2024 annual consolidated financial statements. The currency remeasurement of our results applied the International Accounting Standards ("IAS") transitional rules.
The amounts reported in these condensed consolidated interim financial statements as at June 30, 2024 and for the three months ended September 30, 2023 have been remeasured in USD based on the closing exchange rate on June 30, 2024 and the average rate for three months ended September 30, 2023, as listed below. The accounting policy used to translate equity items prior to June 30, 2024, was to use the historical rate for each equity transaction that occurred to recreate the historical amounts. For 2024, equity items were translated quarterly using the average exchange rate for each quarter.
The exchange rates used to reflect the change in presentation currency were as follows:
| | | | | | | | | | | | | | | |
CAD - USD exchange rate | Q1 2024 | | Q2 2024 | | Q3 2024 | | Q4 2024 | | Q4 2023 | |
Closing rate | | 0.7364 | | | 0.7547 | | | 0.7384 | | | 0.7310 | | | 0.7545 | |
Average rate | | 0.7455 | | | 0.7402 | | | 0.7407 | | | 0.7383 | | | 0.7466 | |
Critical accounting estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities and contingent liabilities as at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Information about critical judgments in applying accounting policies and assumptions and estimation uncertainties that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements are disclosed in Note 2 of the Company’s 2024 annual consolidated financial statements.
3.Summary of Material Accounting Policies
The significant accounting policies as disclosed in the Company’s 2024 annual consolidated financial statements for the year ended June 30, 2024 have been applied consistently in the preparation of these condensed consolidated interim financial statements, with the exception of the change in presentation currency as discussed above.
Changes in accounting standards - New Standards issued but not yet effective
In July 2024, the International Accounting Standards Board ("IASB") issued amendments to multiple IFRS Accounting Standards, including IFRS Accounting Standard 1, 7, 9 and 10, and IAS 7 as a part of their annual improvements to IFRS Accounting Standards. The amendments are effective for annual reporting periods beginning on or after January 1, 2026 with early application permitted. The amendments are not anticipated to have an impact on the Company's condensed consolidated financial statements.
In April 2024, the IASB issued IFRS Accounting Standard 18 - Presentation and Disclosure in Financial Statements ("IFRS 18"). This standard aims to improve the consistency and clarity of financial statement presentation and disclosures by providing updated guidance on the structure and content of financial statements. Key changes include enhanced requirements for the presentation of financial performance, financial position, and cash flows, as well as additional disclosures to improve transparency and comparability. IFRS 18 is effective for annual reporting periods beginning on or
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
after January 1, 2027. The Company is currently assessing the impact that the adoption of IFRS 18 will have on its condensed consolidated financial statements.
Other Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates will either not be relevant to the Company after their effective date or are not expected to have a significant impact on the Company’s consolidated financial statements.
4.Equity Method Investment in Joint Ventures
On May 7, 2024, the Company and Equinor TDI Holdings LLC ("Equinor"), a Delaware limited liability company, entered into a membership interest purchase and sale agreement (the "Agreement"), in which Equinor acquired interests in two wholly-owned subsidiaries, one of which holds Standard Lithium’s South West Arkansas Project ("SWA Lithium") and the other holds the Company's East Texas properties ("Texas Lithium") (collectively, the "Joint Ventures").
The Company assessed the Agreement and determined its investments in SWA Lithium and Texas Lithium are joint ventures accounted for under the equity method. The Agreement indicates joint control over each joint venture as significant decisions regarding SWA Lithium and Texas Lithium require unanimous consent from both parties and both parties are required to act together to direct relevant activities. However, the Company has retained operatorship and manages day-to-day decision making.
Changes in the Company’s investment in joint ventures for the three months ended September 30, 2024 is summarized as follows:
| | | | | | | | | | | | |
| | SWA
Lithium | | | Texas
Lithium | | | Total | |
Balance, June 30, 2024 | | $ | 94,919 | | | $ | 51,946 | | | $ | 146,865 | |
Loss from investment in joint ventures | | | (345 | ) | | | (78 | ) | | | (423 | ) |
Balance, September 30, 2024 | | $ | 94,574 | | | $ | 51,868 | | | $ | 146,442 | |
Summarized financial information for the Company’s interest in the joint ventures on a 100% basis for the three months ended September 30, 2024 are:
| | | | | | | | | | | | |
| | SWA
Lithium | | | Texas
Lithium | | | Total | |
Net loss | | $ | 628 | | | $ | 142 | | | $ | 770 | |
Company’s share of net loss | | $ | 345 | | | $ | 78 | | | $ | 423 | |
| | | | | | | | | | | | |
| | SWA
Lithium | | | Texas
Lithium | | | Total | |
Current assets | | $ | 25,591 | | | $ | 16,000 | | | $ | 41,591 | |
Non-current assets | | | 38,072 | | | | 34,379 | | | | 72,451 | |
Total assets | | | 63,663 | | | | 50,379 | | | | 114,042 | |
Current liabilities | | | 3,323 | | | | 1,170 | | | | 4,493 | |
Total liabilities | | | 3,323 | | | | 1,170 | | | | 4,493 | |
Net assets | | $ | 60,340 | | | $ | 49,209 | | | $ | 109,549 | |
Company’s share of joint ventures | | | 33,187 | | | | 27,065 | | | | 60,252 | |
Adjustments to the Company’s share of net assets(1) | | | 61,387 | | | | 24,803 | | | | 86,190 | |
Carrying amount of investment in joint ventures | | $ | 94,574 | | | $ | 51,868 | | | $ | 146,442 | |
(1) Adjustments to the Company's share of net assets include the impact of the initial fair value measurement on May 7, 2024 and the impact of Equinor solely funding $31 million and $20 million of capital contributions in SWA Lithium and
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
Texas Lithium, respectively, through September 30, 2024. As at September 30, 2024 Equinor is committed to solely fund an additional $9 million in SWA Lithium, as discussed further in the Company’s 2024 annual consolidated financial statements.
On May 5, 2022, the Company purchased 179,175 common shares of Aqualung Carbon Capture AS ("Aqualung") for $2.5 million (Norwegian Krone ("NOK") 23.3 million), representing an approximate 4.55% ownership in Aqualung. Aqualung is engaged in the development of carbon capture technology and is based in Norway with operations in the U.S.
During the fiscal year 2023, Aqualung closed a private placement in which the Company did not participate. Subsequent to the private placement, the Company’s ownership of Aqualung changed from 4.55% to 4.4%.
The Company’s investment in Aqualung was valued at $2,521 and $2,500 as of September 30, 2024 and June 30, 2024, respectively.
As at September 30, 2024, NOK amounts were converted at a rate of NOK 1.00 to USD 0.094. A 10% increase or decrease in NOK relative to the US dollar would result in a change of approximately $249 and $252, respectively, for the three months ended September 30, 2024 and September 30, 2023, in the Company’s comprehensive loss for the year to date.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
6.Exploration and Evaluation Assets
| | | | | | | | | | | | |
| | California Property | | | Commercial Plant Evaluation
(Lanxess 1A) | | | Total | |
Acquisition: | | | | | | | | | |
Balance, June 30, 2024 | | $ | 16,199 | | | $ | 6,000 | | | $ | 22,199 | |
Option payments | | | 41 | | | | — | | | | 41 | |
Balance, September 30, 2024 | | $ | 16,240 | | | $ | 6,000 | | | $ | 22,240 | |
| | | | | | | | | |
Exploration and Evaluation: | | | | | | | | | |
Balance, June 30, 2024 | | $ | 3,379 | | | $ | 20,392 | | | $ | 23,771 | |
Lanxess 1A evaluation costs | | | — | | | | 12 | | | | 12 | |
Balance, September 30, 2024 | | $ | 3,379 | | | $ | 20,404 | | | $ | 23,783 | |
| | | | | | | | | |
Balance, June 30, 2024 | | $ | 19,578 | | | $ | 26,392 | | | $ | 45,970 | |
Balance, September 30, 2024 | | $ | 19,619 | | | $ | 26,404 | | | $ | 46,023 | |
Demonstration Plant operations costs are comprised of the following:
| | | | | | | | | |
| | Three months ended September 30, | |
| | 2024 | | | 2023 | |
Personnel | | $ | 776 | | | | $ | 888 | |
Reagents | | | 21 | | | | | 469 | |
Repairs and maintenance | | | 31 | | | | | 252 | |
Supplies | | | 56 | | | | | 287 | |
Testwork | | | 59 | | | | | 586 | |
Office trailer | | | 70 | | | | | 26 | |
Other | | | 26 | | | | | 30 | |
Total costs | | $ | 1,039 | | | | $ | 2,538 | |
Authorized capital
The Company is authorized to issue an unlimited number of common voting shares without nominal or par value.
During the three months ended September 30, 2024 and 2023, the Company had the following equity transactions:
On July 23, 2024, the Company signed an agreement with an arms-length third-party advisor to settle a previously accrued fee of $800 in consideration via the issuance of 666,667 common shares at a deemed price of $1.20 per common share. The consultant was subsequently appointed as a member of executive management. Services provided prior to joining the executive management team were advisory in nature and did not include management responsibilities.
During the three months ended September 30, 2023, the Company issued a total of 100,000 common shares for the exercise of stock options. The Company received proceeds of $103 and reclassified $93 from reserve to share capital upon exercise. During the three months ended September 30, 2024, there were no such issuances.
On November 17, 2023, the Company announced the establishment of an at-the-market ("ATM") equity program allowing the Company to issue and sell, up to $50,000 of common shares from the treasury to the public. During the three months
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
ended September 30, 2024 and 2023, the Company did not issue any shares under the ATM program and as at September 30, 2024, the Company had issued $15,820 under the plan.
Warrants
As at September 30, 2023, the Company had 3,462,502 warrants outstanding with a weighted average exercise price of $1.74. On November 30, 2023, 336,877 warrants with an exercise price of $9.17 expired and on June 10, 2024 3,125,625 warrants with an exercise price of $0.94 expired. As at September 30, 2024, there are no warrants outstanding.
Options
The Company has a stock option plan in place under which it is authorized to grant options to officers, directors, consultants, management and company employees enabling them to cumulatively acquire up to 10% of the issued and outstanding common stock of the Company. Under the plan, the exercise price of each option shall not be less than the price permitted by the TSXV. The options can be granted for a maximum term of 10 years.
The weighted average fair value of options granted during the three months ended September 30, 2024 and 2023 was $0.85 and $1.92 per option, respectively. The fair value was determined using the Black-Scholes option-pricing model using the following weighted average assumptions:
| | | | | | | | |
| Three months ended September 30, | |
| | 2024 | | | 2023 | |
Expected stock price volatility | | | 88 | % | | | 78 | % |
Risk-free interest rate | | | 2.86 | % | | | 4.37 | % |
Dividend yield | | | — | | | | — | |
Expected life of options | | 5 years | | | 5 years | |
Stock price on date of grant | | $ | 1.24 | | | $ | 2.84 | |
Forfeiture rate | | | — | | | | — | |
The following table summarizes the stock option activity for the three months ended September 30, 2024:
| | | | | | | | |
| | Number
of options | | | Weighted average exercise price | |
Balance at June 30, 2024 | | | 9,070,000 | | | $ | 3.36 | |
Options granted | | | 1,063,394 | | | | 1.15 | |
Options modified(1) | | | 1,000,000 | | | | 1.36 | |
Balance at September 30, 2024 | | | 11,133,394 | | | $ | 2.81 | |
(1) On September 1, 2024, 2,000,000 stock options were granted to a corporation controlled by an officer of the Company, with an exercise price of $1.36 for a period of 5 years. 666,666 options vested on September 1, 2024, 666,666 options will vest on September 1, 2025, and 666,668 options will vest on September 1, 2026. These stock options were designated as a replacement for 1,000,000 options with an exercise price of $2.96 previously granted on September 25, 2023. The previous and newly issued options are treated as a modification of the original option. The Company will recognize share based compensation expense for any incremental fair value in addition to the grant-date fair value of the original award.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
The following table summarizes stock options outstanding and exercisable at September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | |
| | | Options Outstanding | | | Options Exercisable | |
Exercise
Price | | | Number of Shares | | | Weighted Average Remaining Contractual Life | | | Weighted Average Exercise Price | | | Number Exercisable | | | Weighted Average Exercise Price | |
$ | 1.04 | | | | 900,000 | | | | — | | | $ | 1.04 | | | | 900,000 | | | $ | 1.04 | |
$ | 5.58 | | | | 500,000 | | | | 0.37 | | | $ | 5.58 | | | | 500,000 | | | $ | 5.58 | |
$ | 2.51 | | | | 1,200,000 | | | | 1.30 | | | $ | 2.51 | | | | 1,200,000 | | | $ | 2.51 | |
$ | 4.50 | | | | 200,000 | | | | 1.80 | | | $ | 4.50 | | | | 200,000 | | | $ | 4.50 | |
$ | 4.67 | | | | 200,000 | | | | 2.43 | | | $ | 4.67 | | | | 200,000 | | | $ | 4.67 | |
$ | 6.10 | | | | 170,000 | | | | 2.46 | | | $ | 6.10 | | | | 170,000 | | | $ | 6.10 | |
$ | 6.95 | | | | 100,000 | | | | 2.53 | | | $ | 6.95 | | | | 100,000 | | | $ | 6.95 | |
$ | 3.76 | | | | 3,750,000 | | | | 3.53 | | | $ | 3.76 | | | | 3,750,000 | | | $ | 3.76 | |
$ | 3.87 | | | | 200,000 | | | | 3.64 | | | $ | 3.87 | | | | 200,000 | | | $ | 3.87 | |
$ | 2.96 | | | | 750,000 | | | | 3.98 | | | $ | 2.96 | | | | 333,333 | | | $ | 2.96 | |
$ | 1.09 | | | | 100,000 | | | | 4.55 | | | $ | 1.09 | | | | — | | | $ | 1.09 | |
$ | 1.15 | | | | 1,063,394 | | | | 4.86 | | | $ | 1.15 | | | | — | | | $ | 1.15 | |
$ | 1.36 | | | | 2,000,000 | | | | 4.92 | | | $ | 1.36 | | | | 666,667 | | | $ | 1.36 | |
| | | | 11,133,394 | | | | 2.32 | | | $ | 2.81 | | | | 8,220,000 | | | $ | 3.29 | |
Long-term Incentive Plan
The Company has an equity incentive plan ("Plan") in accordance with the policies of the TSXV whereby, from time to time at the discretion of the Board of Directors, eligible directors, officers and employees are awarded restricted share units ("RSUs"). The RSUs that are subject to, among other things, the recipient’s deferral right in accordance with the Income Tax Act (Canada) convert automatically into common shares upon vesting. In addition, the Company may issue deferred share units ("DSUs"). DSUs may be redeemed upon retirement or termination from the Company. In accordance with the Plan, the aggregate number of common shares to be issued shall not exceed 10% of the Company’s issued and outstanding common shares at any given time when combined with the aggregate number of options, RSUs and DSUs.
The following table summarizes the RSU activity for the three months ended September 30, 2024:
| | | | | | | | |
| | Number
of RSUs | | | Weighted average grant date fair value | |
Balance at June 30, 2024 | | | — | | | $ | — | |
Granted | | | 1,357,289 | | | | 1.15 | |
Balance at September 30, 2024 | | | 1,357,289 | | | $ | 1.15 | |
The following table summarizes the DSU activity for the three months ended September 30, 2024:
| | | | | | | | |
| | Number
of DSUs | | | Weighted average grant date fair value | |
Balance at June 30, 2024 | | | 1,991,004 | | | $ | 3.76 | |
Granted | | | 441,935 | | | | 1.15 | |
Balance at September 30, 2024 | | | 2,432,939 | | | $ | 3.28 | |
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
Share-based compensation expense
Share-based compensation recorded for each type of award is as follows:
| | | | | | | | |
| Three months ended September 30, | |
| | 2024 | | | 2023 | |
Stock options | | $ | 673 | | | $ | 142 | |
Restricted share units | | | 149 | | | | — | |
Deferred share units | | | 72 | | | | 1,901 | |
Total | | $ | 894 | | | $ | 2,043 | |
The share-based compensation during the three months ended September 30, 2024 was $894 as compared to $2,043 recognized in three months ended September 30, 2023.
9.Related Party Transactions
Key management personnel are persons responsible for planning, directing and controlling the activities of the entity, which are the directors and officers of the Company.
Compensation to key management is comprised of the following:
| | | | | | | | |
| Three months ended September 30, | |
| | 2024 | | | 2023 | |
Management and director fees(1) | | $ | 595 | | | $ | 442 | |
Separation benefits(2) | | | 748 | | | | — | |
Share-based compensation | | | 687 | | | | 1,901 | |
| | $ | 2,030 | | | $ | 2,343 | |
(1)Management and director fees are comprised of salaries, bonuses, benefits and directors' fees included on the Company's interim condensed consolidated statement of comprehensive loss.
(2)Separation benefits during the three months ended September 30, 2024 include severance payments to a former executive officer and a former member of the Company's board of directors.
As at September 30, 2024 and June 30, 2024, there is $168 and $472, respectively, in Accounts payable and accrued liabilities owing to officers of the Company. As at September 30, 2024, Accounts payable and accrued liabilities also included $772 owing to a former executive officer and a former member of the Company's board of directors. Amounts due to/from the key management personnel are non-interest bearing, unsecured and have no fixed terms of repayment.
On June 17, 2022, the Company entered into the MSA with Telescope, a related party of the Company. Robert Mintak, the former Chief Executive Officer of the Company and Dr. Andy Robinson, President and Chief Operating Officer of the Company are independent directors of Telescope. Under the MSA, Telescope would provide various research and development ("R&D") services for the purpose of developing new technologies. The Company would fund an initial project for one year under the MSA, which would aim to evaluate the use of captured CO2 in the Company’s various chemical processes, as well as investigate the potential for permanent geological sequestration of CO2 within the lithium brine extraction and reinjection processes contemplated by the Company. Other R&D projects may be performed for the Company by Telescope, as required. The Company incurred $130 and $434 of costs related to this agreement during the three months ended September 30, 2024 and 2023, respectively.
As at September 30, 2024 and June 30, 2024, there is $77 and $147, respectively, in accounts payable and accrued liabilities owing to Telescope. Amounts due to Telescope are non-interest bearing, unsecured and have no fixed terms of repayment.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
The balances of receivables and payables with the Company’s joint ventures as of the periods indicated, are as follows:
| | | | | | | | |
| | September 30, 2024 | | | June 30, 2024 | |
Accounts receivable – unconsolidated affiliates | | $ | 1,677 | | | $ | 848 | |
Accounts payable – unconsolidated affiliates | | $ | 4,000 | | | $ | 4,000 | |
As of September 30, 2024 and June 30, 2024, Accounts receivable – unconsolidated affiliates represents receivables from the entities holding the South West Arkansas Project and the East Texas Properties for reimbursement of costs paid by the Company on behalf of these entities.
As of September 30, 2024 and June 30, 2024, Accounts payable – unconsolidated affiliates represents cash received from the entities holding the South West Arkansas Project and the East Texas Properties and is held by the Company in a separate account and designated for working capital needs. The maturity of this liability balance is May 7, 2025.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
10.Financial Instruments and Financial Risk Management
The Company’s financial instruments consist of cash, restricted cash, receivables, long-term investments, financial assets, accounts payable and accrued liabilities. A fair value hierarchy establishes three levels to classify the inputs of valuation technique used to measure fair value of financial instruments’ recorded on the consolidated statements of financial position. The lowest level of significant input is used to determine the instruments’ classification within the hierarchy.
The three levels of the fair value hierarchy are described below:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly for similar items in active markets. The Company maximizes the use of observable market data and relies on entity-specific estimates at least possible; and
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Company’s policy is to recognize transfers into and out of fair value hierarchy levels at the end of the reporting period.
There were no transfers between Levels 1, 2 or 3 during the periods ended September 30, 2024 and June 30, 2024.
The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy:
| | | | | | | | | | | | | | | | |
September 30, 2024 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Financial asset – FID(1) | | $ | — | | | $ | — | | | $ | 48,575 | | | $ | 48,575 | |
Investment in Aqualung | | | — | | | | — | | | | 2,521 | | | | 2,521 | |
(1)Includes $28,678 and $19,897 related to SWA Lithium and Texas Lithium, respectively.
| | | | | | | | | | | | | | | | |
June 30, 2024 | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Financial asset – FID(1) | | $ | — | | | $ | — | | | $ | 47,086 | | | $ | 47,086 | |
Investment in Aqualung | | | — | | | | — | | | | 2,500 | | | | 2,500 | |
(1)Includes $27,943 and $19,143 related to SWA Lithium and Texas Lithium, respectively.
The Financial asset - FID is measured at fair value. The fair value of the financial asset was determined using a probability weighted discounted cash flow methodology which uses the S&P corporate bond yield curve based on the credit rating of the counterparty and considers the probability of the occurrence of reaching a positive final investment decision in either of the Company's Joint Ventures. During the three months ended September 30, 2024, the Company recorded a fair value gain on financial asset – FID of $1,489. The increase in fair value is primarily attributable to the passage of time. There were no such costs recorded during the three months ended September 30, 2023.
The Company’s investment in Aqualung is measured at fair value on a recurring basis. Information relating to Aqualung is considered when determining its fair value. In addition to company-specific information, the Company takes into account trends in general market conditions and the share performance of comparable publicly-traded companies when valuing privately-held investments.
The Company’s Board of Directors has the overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and in response to the Company’s activities. Management regularly monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
The Company is exposed to various risks such as interest rate, credit, and liquidity risk. To manage these risks, management determines what activities must be undertaken to minimize potential exposure to risks. The objectives of the Company in managing risk are as follows:
•maintaining sound financial condition;
•financing operations; and
•ensuring liquidity to all operations.
In order to satisfy these objectives, the Company has adopted the following policies:
Credit risk is the risk of loss if counterparties do not fulfill their contractual obligations and arises principally from cash deposits. The maximum credit risk is the total of our financial assets, including cash. The Company maintains substantially all of its cash with two financial institutions. The majority of cash held with these institutions exceeds the amount of insurance provided on such deposits.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital (current assets less current liabilities) to try to ensure its expenditures will not exceed available resources. At September 30, 2024 and June 30, 2024, the Company has working capital of $24,657 and $28,919, respectively.
(iii)Foreign exchange risk
Foreign exchange risk is the risk that the Company's financial instruments will fluctuate in value as a result of movement in foreign exchange rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company is exposed to currency risk through the following assets and liabilities denominated in USD:
| | | | | | | | |
| | September 30, 2024 | | | June 30, 2024 | |
Cash | | $ | 4,314 | | | $ | 5,879 | |
Accounts payable | | | — | | | | 4 | |
At September 30, 2024, USD amounts were converted at a rate of USD 1.00 to CAD 1.3521. A 10% increase or decrease in the Canadian dollar relative to the US dollar would result in a change of approximately $431 and $588, respectively, in the Company’s comprehensive loss for the year to date.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
The Company had $28.9 million of unrestricted cash on hand as of September 30, 2024.
The Company, on May 7, 2024 entered into strategic partnerships with Equinor, in which the Company received an initial cash payment of $30 million and a commitment by Equinor to invest an additional gross $130 million in exchange for a 45% interest in SWA Lithium and Texas Lithium. Additional capital expenditures will be funded on a pro-rata basis.
The Company’s objectives when managing capital are to safeguard the Company’s ability to pursue the exploration and development of its projects and to maintain a flexible capital structure. The Company’s current capital structure is made up of common equity, with no long term debt or revolving credit facility obligations.
As the Company is currently in the exploration and development phase, none of its financial instruments are exposed to commodity price risk; however, the Company’s ability to obtain long-term financing and its economic viability may be affected by commodity price volatility.
The Company manages its capital structure and may adjust it in light of changes in economic conditions and the risk characteristics of the underlying assets.
In order to carry out planned exploration and development of its projects and pay for administrative costs, the Company plans to spend its existing working capital balance and may utilize other forms of financing.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
12.Supplemental Cash Flow Information
| | | | | | | | |
| | Three months ended September 30, | |
Non-cash Financing and Investing Activities | | 2024 | | | 2023 | |
Exploration and evaluation expenditures included in accounts payable | | $ | — | | | $ | 2,974 | |
Aqualung expenditure included in accounts payable | | | 2 | | | | — | |
On January 27, 2022, a putative securities class action lawsuit was filed against the Company, and certain former and current executives of the Company, in the United States District Court for the Eastern District of New York, captioned Gloster v. Standard Lithium Ltd., et al., 22-cv-0507 (E.D.N.Y.) (the "Action"). The complaint seeks to certify a class of investors who purchased or otherwise acquired the Company’s publicly traded securities between May 19, 2020, and November 17, 2021, and asserts violations of Section 10(b) of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") against all defendants and Section 20(a) of the Exchange Act against the individually named defendants. The complaint alleges, among other things, that during the proposed class period, defendants misrepresented and/or failed to disclose certain facts regarding the Company’s LiSTR DLE technology and "final product lithium recovery percentage" at the Demonstration Plant. The plaintiff seeks various forms of relief, including monetary damages in an unspecified amount. The Company filed a motion to dismiss the complaint on August 10, 2022, which became fully briefed on September 28, 2022. The Company intends to vigorously defend against the Action. As at September 30, 2024, the Company has not recorded any provision associated with this matter, as the outcome is undeterminable at this time.
On October 1, 2024, the Company issued 450,000 common shares upon exercise of stock options for proceeds of $466.
STANDARD LITHIUM LTD.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Expressed in thousands of US Dollars, except where indicated and share and per share amounts)
On October 28, 2024, the Company announced that SWA Lithium has entered into a license agreement with Koch Technology Solutions LLC ("KTS") to deploy and use KTS’ Li-ProTM Lithium Selective Sorption ("Li-Pro LSS") technology at SWA Lithium's commercial plant for the SWA Phase 1 Project.
