The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in our Quarterly Report. References in this Form 10-Q to our Form 10-K refer to our Form 10-K, filed on
March 1, 2023, as amended on April 24, 2023. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in our Quarterly Report and those in the sections of our Annual Report for the year ended December 31, 2022entitled "Risk Factors," "Cautionary Note Regarding Forward-Looking Statements," and "Cautionary Note Regarding Disclosure of Mineral Properties." This management's discussion and analysis is a supplement to our financial statements, including notes, referenced elsewhere in our Quarterly Report and is provided to enhance your understanding of our operations and financial condition. This discussion is presented in millions, and due to rounding, may not sum or calculate precisely to the totals and percentages provided in the tables.
Executive Overview & Strategy
Piedmont Lithiumis a U.S.development-stage company with the aim of becoming one of the leading producers of lithium hydroxide in North America. As the world, the American government, and industries mobilize to support global decarbonization through the electrification of transportation, we are poised to become a critical contributor to the U.S.electric vehicle and battery manufacturing supply chains. Since 2021, electric vehicle and battery companies have announced significant commitments to build new or expanded manufacturing operations across the U.S., which is expected to exponentially and rapidly drive the domestic demand for lithium over the next decade, far beyond current or projected capacity. Piedmont Lithium, as a U.S.based company, is well positioned to benefit from federal policies and funding established to facilitate the expedited development of a robust domestic supply chain and clean energy economy, while strengthening national and global energy security. A challenge faced by the industry is that while manufacturing facilities for electric vehicles, batteries, and related components typically can be constructed in two to three years, the development of lithium resources from exploration to production requires a much longer time-frame. We believe that time, specifically this development timeline disparity, is the greatest risk to the emerging electrification industry, but also represents opportunities for lithium producers. To support growing U.S.lithium demand, we have spent the past six years developing a portfolio of four projects, including wholly-owned TennesseeLithium and Carolina Lithium, and strategic investments in Quebecwith Sayona Mining and Sayona Quebec, and in Ghanawith Atlantic Lithium. Our strategic investments in Sayona Mining and Sayona Quebec offer the potential for near-term supply of spodumene concentrate to the market with first shipments to customers from NAL expected in the third quarter of 2023. Our investment in Atlantic Lithium's Ewoyaa Projectis anticipated to produce spodumene concentrate in 2025 and we anticipate that spodumene concentrate from Ghanaand Quebecwill serve as the primary feedstock for Tennessee Lithium. Our operation in Tennesseeis being designed to produce 30,000 metric tons annually of lithium hydroxide with planned production expected to commence in 2026. Carolina Lithium is located within a world-class, historic lithium belt in North Carolina. This integrated spodumene-to-hydroxide project is being developed to produce 30,000 metric tons annually of lithium hydroxide and is expected to begin production in 2027. Piedmont Lithiumis currently positioning to produce an estimated 60,000 metric tons per year of domestic lithium hydroxide, which would be significantly accretive to today's total estimated U.S.annual production capacity of just 17,000 metric tons per year. The Company's lithium hydroxide capacity and revenue generation is expected to be supported by production of, or offtake rights to, approximately 500,000 metric tons annually of spodumene concentrate. Our projects and strategic investments are being developed on a measured timeline to provide the potential for near-term cash flow and long-term value maximization, with the timelines described above being subject to the supply chain as well as obtaining permits, approvals, and funding. We also continue to evaluate opportunities to further expand our resource base and production capacity. As we continue to advance our goal of becoming one of the leading manufacturers of lithium products in North America, we expect to capitalize on our competitive strengths, including the potential for significant near-term offtake and revenue generation, scale and diversification of lithium resources, advantageous locations of projects and assets, access to a variety of potential funding options, opportunities to leverage our greenfield projects, and a highly experienced management team. Advancements that have been made in this effort are highlighted below. 18
Table of Contents Corporate and Project Updates Corporate We continue to engage in activities to strengthen our financial position and business strategy, including support for the development and expansion of our portfolio of projects, strategic investments, and corporate operations.
Recent highlights include:
February 2023, we received $75 millionin gross proceeds from LG Chem as a part of their strategic investment in Piedmont Lithium. In exchange, LG Chem received 1,096,535 newly issued shares of common stock in Piedmont Lithiumat a price of $68.40per share. QuebecWe own an equity interest of approximately 14% in Sayona Mining and are a 25% equity partner in Sayona Quebec with the remaining 75% equity interest owned by Sayona Mining. Sayona Quebec owns a portfolio of projects, which include NAL, the Authier Lithium Project, and the Tansim Lithium Project. We hold an offtake agreement with Sayona Quebec for the greater of 113,000 metric tons per year of spodumene concentrate or 50% of spodumene concentrate production from NAL at market prices, subject to a price floor of $500per metric ton and a price ceiling of $900per metric ton, on a life-of-mine basis. Beginning in the third quarter of 2023, we expect to purchase spodumene concentrate, which is currently being produced at NAL, from Sayona Quebec and make shipments to our customers.
Recent highlights include:
April 2023, Sayona Mining released a definitive feasibility study for NAL, confirming a positive, long-term outlook based on increased production targets, enhanced estimated head grade, and a high initial recovery rate. The study contemplates increased annual spodumene concentrate production averaging 190,000 metric tons per year over a 20-year mine life, with a target of 226,000 metric tons per year in years one through four of steady state operations and approximately 186,000 tons per year beginning in year five. The revised production targets, combined with higher spodumene concentrate pricing, resulted in an increase to the net present value for the NAL project compared to the prefeasibility study completed in 2022. Sayona Mining completed the definitive feasibility study and estimated mineral resources and ore reserves in accordance with JORC Code and NI 43-101 requirements. •In March 2023, Sayona Mining and Piedmont Lithiumannounced the successful restart of commercial spodumene concentrate production at the jointly owned NAL project. The restart of NAL was completed on time and is the only major source of new spodumene production expected in North Americain the next two years. •In February 2023, we entered into a spodumene concentrate offtake agreement with LG Chem, which commits us to sell 200,000 metric tons of spodumene concentrate from our offtake agreement with Sayona Quebec. The term of the agreement expires four years from the date of first shipment, which is expected to occur in the third quarter of 2023 with the final shipment expected in the third quarter of 2027. Pricing for the agreement is determined by a market-based mechanism. •In January 2023, we entered into an amended offtake agreement with Tesla to provide spodumene concentrate from NAL in Quebec. The agreement commits us to sell 125,000 metric tons of spodumene concentrate from our offtake agreement with Sayona Quebec. The three-year agreement commences in the second half of 2023 and can be extended for an additional three years upon mutual agreement. Pricing for the agreement is determined by a market-based mechanism. A prefeasibility study ("PFS") is currently underway to evaluate downstream production at NAL through the completion of the project's lithium carbonate plant, which was partially constructed by prior owners of the operation. Results of the PFS are expected in 2023. Further evaluation of downstream production of lithium carbonate or lithium hydroxide in Quebecmay follow the PFS study. For Sayona Quebec to proceed with the construction and operation of a lithium carbonate conversion plant or lithium hydroxide conversion plant, approvals are required from both Piedmont Lithiumand Sayona Mining. In the event Piedmont Lithiumand Sayona Mining decide to jointly construct and operate a lithium conversion plant through their jointly-owned entity, Sayona Quebec, then spodumene concentrate produced from NAL would be preferentially delivered to that conversion plant upon commencement of conversion operations. Any remaining spodumene concentrate not delivered to a jointly-owned conversion plant would first be delivered to Piedmont Lithiumup to our offtake right and then to third parties. 19
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We own an equity interest of approximately 9% in Atlantic Lithium and we are earning a 50% equity interest in Atlantic Lithium Ghana's spodumene projects in
Ghana, West Africa, which includes Ewoyaa, their flagship project located approximately 70 miles from the Port of Takoradi. We hold an offtake agreement with Atlantic Lithium for 50% of annual production of spodumene concentrate at market prices on a life-of-mine basis from Ewoyaa. Atlantic Lithium is expected to produce a definitive feasibility study in the first half of 2023. As part of our strategy, we expect to transport our 50% offtake of spodumene concentrate from Ewoyaa to the U.S.to serve as the primary feedstock for lithium hydroxide conversion at Tennessee Lithium.
Recent highlights include:
application for Ewoyaa to the
September 2022, Atlantic Lithium announced the successful completion of a technical study for Ewoyaa, demonstrating spodumene concentrate production using dense medium processing technology. Construction of the mine and concentrator is expected to begin at Ewoyaa in 2024 and production of spodumene concentrate is targeted for 2025, subject to receipt of the mining lease, approval of environmental studies, parliamentary ratification, and other statutory requirements. Atlantic Lithium is expected to release a definitive feasibility study for Ewoyaa in the second quarter of 2023.
Tennessee Lithium is being designed as a world-class lithium hydroxide facility in America's emerging "Battery Belt" and is expected to add 30,000 metric tons per year of lithium hydroxide production capacity to the
U.S.supply chain. We expect the plant to be one of the most sustainable lithium hydroxide operations in the world, utilizing the innovative Metso:Outotec pressure leaching technology. Use of this technology is expected to reduce solid waste, create fewer emissions, and improve capital and operating costs relative to incumbent technologies. Recent highlights include: •In April 2023, we released the results of a definitive feasibility study for the Tennessee Lithium project. The study demonstrated robust economics and the positive impacts of the Inflation Reduction Act of 2022. The 30-year project has an estimated after-tax net present value (8% discount) of $2.5 billion, with an after-tax internal rate of return of 32%, when using pricing assumptions of $26,000per metric ton for lithium hydroxide and $1,600per metric ton for spodumene concentrate (6% Li2O).
project. We submitted this application in
February 2023, the Tennessee Department of Environment and Conservation("TDEC") notified us that our operating conditional major Non-Title V Air Permit application for Tennessee Lithium was deemed complete. •In October 2022, Piedmont Lithiumwas selected for a $141.7 milliongrant from the U.S. Department of Energy("DOE") to expand domestic manufacturing of batteries for electric vehicles and the electrical grid and for materials and components currently imported from other countries. The funding is tied specifically to the construction of Tennessee Lithium and is expected to support project development on a cost-sharing basis. The grant will not be final until Piedmont Lithiumand the DOEhave agreed to specific terms and conditions of the grant. Once terms and conditions are finalized, funding of the grant will remain subject to satisfaction of conditions set forth in those terms. Front end engineering design ("FEED") of Tennessee Lithium is being completed by Kiewit, a leading U.S.based EPC firm. Kiewit is supported by Primero, an Engineering Procurement and Construction ("EPC") firm that specializes in lithium projects. FEED completion and receipt of material permits for TennesseeLithium are expected in 2023. The Company expects to commence detailed design engineering upon completion of FEED. Contingent upon the timely receipt of material permits and completion of financing activities, we anticipate construction to begin in 2024 with first production of lithium hydroxide targeted for 2026. 20
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Carolina Lithium is located within a world-class resource in the Carolina Tin-Spodumene Belt and is being designed as a fully integrated project with mining, spodumene concentrate production, and lithium hydroxide manufacturing on a single site in
Gaston County, North Carolina. Carolina Lithium is expected to produce 30,000 metric tons per year of lithium hydroxide. We are currently engaged in permitting activities with state and local representatives. Our goal is to obtain the necessary material permits in 2023. We expect to proceed with rezoning following receipt of a state mining permit. Construction will commence upon receipt of required permits, rezoning, local approvals, and project financing activities, with first production of lithium hydroxide currently targeted for 2027. A feasibility study completed in December 2021estimated a project capital investment requirement of approximately $1 billion, inclusive of potential recovery of byproduct mineral resources. Due to the expected quality of this hard rock lithium asset, integration of the operation, existing infrastructure, and proximity to lithium and byproduct markets, we believe Carolina Lithium will be one of the lowest cost lithium hydroxide manufacturing operations in the world.
Recent highlights include:
•We submitted our mining permit application to the
North Carolina Department of Environmental Quality("NCDEQ") Department of Energy, Mineral and Land Resources("DEMLR") in August 2021. In January 2022, DEMLR requested additional information from the Company in connection with our mining permit application. We submitted our response to DEMLR in relation to their most recent information request on April 27, 2023. •A Prevention of Significant Deterioration-Title V Air Permit application has been submitted to the NCDEQ Division of Air Qualityand was deemed complete in February 2023.
Critical Accounting Polices and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements, which have been prepared in accordance with
U.S.GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes in the significant accounting policies
followed by us during the three months ended
disclosed in our Annual Report for the year ended
To protect the health and safety of our employees, contractors, visitors, and communities, we implemented a comprehensive plan in response to the COVID-19 pandemic. Our plan included policies and protocols governing issues such as close contact exposure and contraction of COVID-19 and other communicable diseases, providing employees with additional personal protective equipment and allowing our employees to work remotely. We have provided paid time off for employees impacted by COVID-19, reimbursed employees for costs associated with COVID-19 testing, provided time for employees to get vaccinated, and encouraged flexible work schedules to accommodate personal and family needs. Currently, the rate of COVID-19 outbreaks in the
U.S.appears to be significantly reduced, but the possibility of new strains emerging continues to pose a risk. While our business has not been materially impacted, the global economy and our markets have been, and may continue to be, materially and adversely effected by COVID-19. If the impact of COVID-19 is not effectively and timely controlled on a sustained basis going forward, our business operations and financial condition may be materially and adversely effected by factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition, and results of operations. 21
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Components of our Results of Operations
Exploration and Mine Development Costs
We incur costs in resource exploration, evaluation, and development during the different phases of our resource development projects. Exploration costs incurred before the declaration of proven and probable mineral reserves, which primarily include exploration, drilling, engineering, metallurgical testwork, site-specific reclamation, and compensation for employees associated with exploration activities, are expensed as incurred. We have also expensed as incurred engineering costs attributable to the evaluation of land for our future concentrator and chemical plants, development project management costs, feasibility studies and other project expenses that do not qualify for capitalization. After proven and probable mineral reserves are declared, exploration and mine development costs necessary to bring the property to commercial capacity or increase the capacity or useful life will be capitalized.
General and Administrative Expenses
General and administrative expenses relate to overhead costs, such as employee compensation and benefits for corporate management and office staff including accounting, legal, human resources, and other support personnel, professional service fees, insurance, and costs associated with maintaining our corporate headquarters. Included in employee compensation costs are cash and stock-based compensation expenses.
Loss from Equity Investments in Unconsolidated Affiliates
Loss from equity investments in unconsolidated affiliates reflects our proportionate share of the net loss resulting from our investments in Sayona Mining, Sayona Quebec, and Atlantic Lithium. These investments are recorded under the equity method and adjusted each period, on a one-quarter lag, for our share of each investee's loss. Our equity method investments are an integral and integrated part of our ongoing operations. We have determined this justifies a more meaningful and transparent presentation of our proportional share of income in our equity method investments as a component of our loss from operations. In the third quarter of 2022, we reclassified our share of loss in equity method investments to operating income for all periods presented. See Note 3-Equity Investments in Unconsolidated Affiliates for further discussion.
Other Income (Expense)
Other income (expense) consists of interest income (expense), foreign currency exchange gain (loss), and gain on dilution of equity method investments in unconsolidated affiliates. Interest income consists of interest earned on our cash and cash equivalents. Interest expense consists of interest incurred on long-term debt related to noncash acquisitions of mining interests financed by the seller as well as interest incurred for lease liabilities. Foreign currency exchange gain (loss) relates to our foreign bank accounts and marketable securities denominated in Australian dollars. Gain on dilution of equity method investments in unconsolidated affiliates relates to our reduction in ownership of Sayona Mining and Atlantic Lithium due to their issuance of additional shares through public offerings and employee stock compensation grants.
Results of Operations
Three Months Ended
March 31, 2023Compared to Three Months Ended March 31, 2022Three Months Ended March 31, 2023 2022 $ Change % Change
Exploration and mine development costs
350.9% General and administrative expenses 8,621,450 5,578,005 3,043,445 54.6% Total operating expenses 9,378,224 5,745,843 3,632,381 63.2% Loss from equity investments in unconsolidated (19.1)% affiliates (2,742,364) (3,389,503) 647,139 Loss from operations (12,120,588) (9,135,346) (2,985,242) 32.7% Other income (expense) 3,974,199 (19,286) 3,993,485 * Income tax expense 493,343 - 493,343 * Net loss
$ (8,639,732) $ (9,154,632) $ 514,900(5.6)%
* Not meaningful.
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Exploration and Mine Development Costs
Exploration and mine development costs increased
$0.6 million, or 350.9%, to $0.8 millionin the three months ended March 31, 2023compared to $0.2 millionin the three months ended March 31, 2022. The increase was primarily driven by an increase in exploration and engineering costs related to new project targets and an increase in employee compensation expenses primarily related to additional headcount in the three months ended March 31, 2023compared to the three months ended March 31, 2022.
General and Administrative Expenses
General and administrative expenses increased
$3.0 million, or 54.6%, to $8.6 millionin the three months ended March 31, 2023compared to $5.6 millionin the three months ended March 31, 2022. The increase in general and administrative expenses was primarily due to increased professional fees and consulting services. Employee compensation costs also contributed to higher general and administrative expenses due to the hiring of additional management and support staff at our headquarters in Belmont, North Carolina. Stock-based compensation expense included in general and administrative expenses was $1.1 millionand $0.1 millionin the three months ended March 31, 2023and 2022, respectively.
Loss from Equity Investments in Unconsolidated Affiliates
Loss from equity investments in unconsolidated affiliates decreased
$0.6 millionto $2.7 millionin the three months ended March 31, 2023, from $3.4 millionin the three months ended March 31, 2022. The loss reflects our proportionate share of the net loss resulting from our investments in Sayona Mining, Sayona Quebec, and Atlantic Lithium. The change was driven by a decrease in loss from Atlantic Lithium and Sayona Mining of $0.5 millionand $0.4 million, respectively, partially offset by an increase in loss from Sayona Quebec of $0.2 million.
Other Income (Expense)
Other income was
$4.0 millionin the three months ended March 31, 2023compared to a nominal expense in the three months ended March 31, 2022. The increase of $4.0 millionwas primarily due to our gain on dilution of equity method investments of $3.3 millionrelated to Sayona Mining in the three months ended March 31, 2023and, to a lesser extent, an increase in interest income of $0.8 millionduring the same period.
Income Tax Expense
Income tax expense was
$0.5 millionfor the three months ended March 31, 2023compared to $0.0 millionin the three months ended March 31, 2022. The increase was primarily related to deferred tax expense of $0.5 millionassociated with the Australian tax effects of our gain on dilution and our proportional share of income in Sayona Mining for the three months ended March 31, 2023. We recorded a valuation allowance against a material component of our net deferred tax assets as of March 31, 2023and December 31, 2022. We intend to continue maintaining a valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of the allowance. However, given our anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a material portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease in income tax expense for the period in which the release is recorded. The exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to achieve.
Liquidity and Capital Resources
March 31, 2023, we had cash and cash equivalents of $129.2 millioncompared to $99.2 millionas of December 31, 2022. As of March 31, 2023, the vast majority of our cash balances were held in the U.S.A significant portion of our cash balances are covered by FDICinsured limits. Our predominant source of cash has been generated through equity financing from issuances of our common stock. Since our inception, we have not generated revenues, and as such, have principally relied on equity financing to fund our operating and investing activities and to fund our debt payments. In February 2023, we issued 1,096,535 shares of our common stock at $68.40per share to LG Chem for $75 million. We received cash proceeds of $71.1 million, which is net of $3.9 millionin share issuance costs associated 23
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with the private placement. As of
remaining under our shelf registration statement, which expires on
Our primary uses of cash during the three months ended
March 31, 2023consisted of: (i) purchases of real property and associated mining interests of $12.5 million, and exploration and development expenditures of $1.0 millionassociated with Carolina Lithium; (ii) equity investments in Sayona Quebec mainly for the operational restart of NAL totaling $12.0 million; (iii) capital expenditures primarily related to engineering costs of $5.0 millionfor Tennessee Lithium; (iv) $2.0 millionin working capital; and (v) advances to Atlantic Lithium for exploration and evaluation activities as part of Phase 1 of our investment in Ewoyaa totaling $0.9 million. As of March 31, 2023, we had working capital of $118.8 millionand long-term debt of $0.1 million, net of the current portion of $0.4 million, related to seller financed debt, as discussed above.
We expect our current cash balances to fund our cash expenditures in 2023 primarily related to: (i) continued equity investments in Sayona Quebec primarily for the restart and working capital requirements of NAL, (ii) continued cash advances to Atlantic Lithium for Ewoyaa, (iii) real property acquisition costs and engineering and permitting activities associated with Tennessee Lithium, (iv) real property and associated mineral rights acquisition costs and continued permitting, engineering, and testing activities associated with Carolina Lithium, and (v) working capital requirements. In
February 2023, we received $75.0 millionfrom LG Chem as a part of their strategic investment in Piedmont Lithium, which included an offtake sales agreement to sell LG Chem 200,000 metric tons of spodumene concentrate from production at NAL over a four-year period. Based on Sayona Quebec's production forecast for 2023, we believe there is an opportunity to generate operating cash flow from the offtake agreement beginning in the second half of 2023. As of March 31, 2023, we had entered into land acquisition contracts in North Carolinatotaling $28.0 million, of which we expect to close and fund $10.2 millionin 2023, $16.3 millionin 2024, and $1.5 millionin 2025. These amounts do not include closing costs such as attorneys' fees, taxes, and commissions. We are not obligated to exercise our land option agreements, and we are able to cancel our land acquisition contracts, at our option with de minimis cancellation costs, during the contract due diligence period. Certain land option agreements and land acquisition contracts become binding upon commencement of construction for Carolina Lithium. We believe our current cash balances are sufficient to fund our cash requirements for at least the next 12 months. In the event costs were to exceed our planned expenditures, we will reduce or eliminate current and/or planned discretionary spending. If further reductions are required, we will reduce certain non-discretionary expenditures. In October 2022, Piedmont Lithiumwas selected for a $141.7 milliongrant from the DOE Office of Manufacturing and Energy Supply Chainsand the Office of Energy Efficiency and Renewable Energyunder the Bipartisan Infrastructure Law-Battery Materials Processing and Battery Manufacturing to expand domestic manufacturing of batteries for electric vehicles and components currently imported from other countries. Funding from the grant is solely in support of the construction of Tennessee Lithium. The final details of the project grant are subject to negotiations. The grant will not be final until Piedmont Lithiumand the DOEhave agreed to the specific terms of the grant. Once the terms have been finalized, funding of the grant will remain subject to satisfaction of conditions set forth in those terms. Historically, we have been successful raising cash through equity financing; however, no assurances can be given that additional financing will be available in amounts sufficient to meet our needs or on terms that are acceptable to us. If we issue additional shares of our common stock, it would result in dilution to our existing shareholders. There are many factors that could significantly impact our ability to raise funds through equity and debt financing as well as influence the timing of future cash flows. See Part II, Item 1A, "Risk Factors" in this Form 10-Q. 24
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The following table is a condensed schedule of cash flows provided as part of
the discussion of liquidity and capital resources:
Three Months Ended March 31, Net cash provided by (used in): 2023 2022 Operating activities
$ (9,512,132) $ (8,849,009)Investing activities (31,477,908) (11,297,724) Financing activities 70,966,469 121,812,242
Net increase in cash and cash equivalents
Cash Flows from Operating Activities
Operating activities used
$9.5 millionand $8.8 millionin the three months ended March 31, 2023and 2022, respectively, resulting in an increase in cash used in operating activities of $0.7 million. The increase was primarily due to an increase in net loss of $1.6 millionafter adjusting for noncash items, including gain on dilution, loss from equity method investments, stock compensation expense, and deferred taxes. This increase in cash flows from operating activities was partially offset by a decrease in working capital use of $0.9 million.
Cash Flows from Investing Activities
Investing activities used
$31.5 millionand $11.3 millionin the three months ended March 31, 2023and 2022, respectively, resulting in an increase in cash used in investing activities of $20.2 million. The increase was mainly due to (i) an increase in investments in equity investments of $10.0 millionrelating to Sayona Quebec for additional investments to fund the NAL restart and (ii) an increase in land purchased for Carolina Lithium of $7.3 millionand (iii) an increase in front-end engineering expenses for Tennesseeof $5.0 million. These increases were partially offset by decreases in cash advances to Atlantic Lithium totaling $2.8 million, for exploration and evaluation activities related to Phase 1 of Ewoyaa.
Cash Flows from Financing Activities
Financing activities provided
$71.0 millionand $121.8 millionin the three months ended March 31, 2023and 2022, respectively, resulting in a decrease in cash provided of $50.8 million. The decrease in cash from financing activities was mainly due to a $51.0 milliondecrease in net cash proceeds from issuances of our common stock and cash exercises of stock options in the three months ended March 31, 2023compared to March 31, 2022. The decrease in cash provided was partially offset by an decrease in debt payments totaling $0.1 million.
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