Standard Lithium : Q4 December 31, 2024 YE MD&A

Published: 2025-03-24 11:33:05 ET SLI.V

Management's Discussion and Analysis

FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

INTRODUCTION

The following management's discussion and analysis ("MD&A") was prepared by management based on information available as of March 21, 2025, and should be reviewed in conjunction with the audited consolidated financial statements and related notes thereto for the six month fiscal period ended December 31, 2024. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). All dollar figures are expressed in thousands of United States Dollars ("USD") unless otherwise noted.

References in this MD&A to "Standard Lithium", "we", "our" and "us" mean Standard Lithium Ltd.

Additional information, including our AIF (as defined below), is available under our SEDAR+ profile at www.sedarplus.ca and on EDGAR at www.sec.gov. Unless indicated, additional external information, and documents referenced within this MD&A, do not form part of this MD&A.

FORWARD-LOOKING INFORMATION

Except for statements of historical fact, this MD&A contains certain "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively referred to herein as "forward-looking information"). The forward- looking information relates to future events or our future performance. All statements, other than statements of historical fact, may be forward-looking information. Information concerning mineral resource and mineral reserve estimates also may be deemed to be forward-looking information in that it reflects a prediction of mineralization that would be encountered if a mineral deposit were developed and mined. Forward-looking information generally can be identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "target", "intend", "could", "might", "should", "believe", "scheduled", "implement" and similar words or expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information.

In particular, this MD&A contains forward-looking information, including, without limitation, with respect to the following matters or our expectations relating to such matters: our planned exploration, research and development programs (including, but not limited to, plans and expectations regarding advancement, testing and operation of the lithium extraction Demonstration Plant (as defined below) (formerly pilot plant)); commercial opportunities for lithium products; delivery of studies; filing of technical reports; expected results of exploration; accuracy of mineral or resource exploration activity; accuracy of mineral reserves or mineral resources estimates, including the ability to develop and realize such estimates; whether mineral resources will ever be developed into mineral reserves, and information and underlying assumptions related thereto; our budget estimates and expected expenditures on our properties; regulatory or government requirements or approvals; the reliability of third party information; continued existence and success of any joint ventures; continued access to mineral properties or infrastructure; payments and share issuances pursuant to property agreements; fluctuations in the market for lithium and its derivatives; expected timing of the expenditures; performance of our business and operations; changes in exploration costs and government regulation in Canada and the United States ("U.S."); competition for, among other things, capital, customers, acquisitions, undeveloped lands and skilled personnel; changes in commodity prices and exchange rates; currency and interest rate fluctuations; our funding requirements and ability to raise capital; geopolitical instability; war (such as Russia's invasion of Ukraine and war in the Middle East); and other factors or information.

Forward-looking information does not take into account the effect of transactions or other items announced or occurring after the statements are made. Forward-looking information is based upon a number of expectations and assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. With respect to forward- looking information listed above, we have made assumptions regarding, among other things: current technological trends; ability to fund, advance and develop our properties; our ability to operate in a safe and effective manner; uncertainties with respect to receiving, and maintaining, mining, exploration, environmental and other permits; impacts of changes in current and future trade agreements, legislation, regulations, import tariffs and other similar trade barriers, increases in geo-political tension and tension with respect to lithium, pricing and demand for lithium, including that such demand is supported by growth in the electric vehicle market and the energy storage market; impact of increasing competition; commodity prices,

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

currency rates, interest rates and general economic conditions; the legislative, regulatory and community environments in the jurisdictions where we operate; impact of unknown financial contingencies; continued existence and success of any joint venture; market prices for lithium products; budgets and estimates of capital and operating costs; estimates of mineral resources and mineral reserves; reliability of technical data; the ability to negotiate access agreements on commercially reasonable terms, anticipated timing and results of operation and development; inflation; and the impacts of war (such as Russia's invasion of Ukraine and war in the Middle East) on us and our business. Although we believe that the assumptions and expectations reflected in such forward-looking information are reasonable, we can give no assurance that these assumptions and expectations will prove to be correct. Since forward-looking information inherently involves risks and uncertainties, undue reliance should not be placed on such information.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, but are not limited to: general economic conditions in Canada, the U.S. and globally; industry conditions, including the state of the electric vehicle market and the energy storage market; governmental regulation of the mining industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; negotiation of commercial access agreements, competition for and/or inability to retain drilling rigs and other services and to obtain capital, competition for and /or inability to secure customer offtake agreements that are economically favorable to us, undeveloped lands, skilled personnel, equipment and inputs; reliance on third parties; potential or ongoing joint ventures; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; uncertainties associated with estimating mineral resources and mineral reserves, including uncertainties relating to the assumptions underlying mineral resource and mineral reserve estimates; whether mineral resources will ever be converted into mineral reserves; uncertainties in estimating capital and operating costs, cash flows and other project economics; liabilities and risks, including environmental liabilities and risks inherent in mineral extraction operations; health and safety risks; risks related to unknown financial contingencies, including litigation costs, on our operations; unanticipated results of exploration activities; unpredictable weather conditions; unanticipated delays in preparing technical studies; inability to generate profitable operations; restrictive covenants in debt instruments; lack of availability of additional financing on terms acceptable to us; intellectual property ("IP") risk; stock market volatility; volatility in market prices for commodities; liabilities inherent in the mining industry; inflation risks; risks related to war (such as Russia's invasion of Ukraine and war in the Middle East); changes in tax laws and incentive programs relating to the mining industry; other risks pertaining to the mining industry; conflicts of interest; dependency on key personnel; and fluctuations in currency and interest rates, as well as those factors discussed in the section entitled "Risk Factors" in our annual information form for the six month fiscal period ended December 31, 2024 (the "AIF").

Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.

Readers are cautioned that the foregoing lists of factors are not exhaustive. All forward-looking information in this MD&A speaks as of the date of this MD&A. We do not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. All forward-looking information contained in this MD&A is expressly qualified in its entirety by this cautionary statement. Additional information about these assumptions and risks and uncertainties is contained in our filings with securities regulators, including our most recent AIF, which are available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov.

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

CAUTIONARY NOTES TO U.S. INVESTORS CONCERNING RESOURCE ESTIMATES

This MD&A has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of the securities laws in effect in the U.S. In particular, and without limiting the generality of the foregoing, the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "inferred mineral resources," "indicated mineral resources," "measured mineral resources" and "mineral resources" used or referenced in this MD&A are Canadian mineral disclosure terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") under the guidelines set out in the 2014 Canadian Institute of Mining, Metallurgy and Petroleum Standards for Mineral Resources and Mineral Reserves, Definitions and Guidelines, May 2014 (the "CIM Standards"). The CIM Standards differ from the mineral property disclosure requirements of the U.S. Securities and Exchange Commission (the "SEC") in Regulation S-K Subpart 1300 (the "SEC Modernization Rules") under the U.S. Securities Act of 1933, as amended.

As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure system, we are not required to provide disclosure on our mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101 and the CIM Standards. Accordingly, our disclosure of mineralization and other technical information may differ significantly from the information that would be disclosed had we prepared the information under the standards adopted under the SEC Modernization Rules.

SUMMARY OF STANDARD LITHIUM'S BUSINESS

We are a near-commercial lithium company focused on the sustainable development of a portfolio of lithium-brine bearing properties in the U.S. We prioritize brine projects characterized by high-grade resources, robust infrastructure, skilled labor, and streamlined permitting. We aim to achieve sustainable, commercial-scale lithium production via the application of scalable and fully integrated Direct Lithium Extraction ("DLE") and purification processes. Recognized as a critical mineral by the U.S. Department of Energy ("DOE"), lithium holds strategic importance for the rapidly expanding sectors of electric vehicles and energy storage systems, further influencing the broader economy and national security.

Our flagship projects, the South West Arkansas Project (as defined below) and the Lanxess Property Project (as defined below), are located on the Smackover Formation in southern Arkansas, a region with a long-standing and established industry of mineral extraction from brine. We consider the South West Arkansas Project and the Lanxess Property Project to be separate and independent projects, as they are not contiguous or located within immediate proximity of each other, do not share common ownership of underlying brine rights, and are unlikely to be developed using common infrastructure or financing.

We are also developing prospective lithium brine areas within the Smackover Formation in East Texas (the "East Texas Properties").

CORPORATE SUMMARY

We were incorporated under the laws of the Province of British Columbia on August 14, 1998, and were continued under the Canadian Business Corporations Act on December 1, 2016. Our principal operations are comprised of exploration for and development of lithium brine properties in the U.S. We also have significant investments in joint venture arrangements for the exploration and evaluation of lithium brine production facilities. Our corporate office address and principal place of business is Suite 1625, 1075 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3C9. Our common shares are listed on the TSX Venture Exchange (the "TSXV") and NYSE American, LLC under the symbol "SLI".

CHANGE IN FISCAL YEAR-END

On November 18, 2024, we changed our fiscal year-end from June 30 to December 31, effective immediately. The decision to change the fiscal year-end to a calendar year-end was to align our reporting cycle more closely with how we plan to manage our business. This MD&A reports our financial results for the period from July 1, 2024, through December 31, 2024, which it refers to as the "six month fiscal period ended December 31, 2024." Following the transition period, we will file an annual report for each twelve-month period ended December 31 of each year beginning with December 31, 2025.

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

CHANGE IN PRESENTATION CURRENCY

Effective July 1, 2024, we changed our presentation currency from Canadian Dollars ("CAD") to USD due to our most significant assets and liabilities being denominated in USD and for consistency with peer companies in the lithium exploration, production, and mining industries in North America. This change in presentation currency has been applied retrospectively. As at and for the year ended June 30, 2024 and all prior periods, our reporting currency was CAD as described in our 2024 annual consolidated financial statements. The currency remeasurement of our results applied the International Accounting Standards ("IAS") transitional rules. The amounts reported in the Consolidated Statements of Financial Position as at June 30, 2024 in USD are based on the closing exchange rate on June 30, 2024 and the amounts reported in the Consolidated Statements of Comprehensive Income (Loss) for the year ended June 30, 2024 in USD are based on the average rate for the same period. 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.

HIGHLIGHTS FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024

EVENTS SUBSEQUENT TO THE YEAR ENDED DECEMBER 31, 2024

PROJECT OVERVIEW

We currently have the following material projects:

South West Arkansas Project

The resource development project in southwest Arkansas (the "South West Arkansas Project"), being developed in partnership with Equinor ASA ("Equinor"), a multi-national energy company, encompasses over 27,000 net mineral acres and is a key project in our portfolio due to its scale and the quality of its lithium-brine resources. The South West Arkansas Project is held by SWA Lithium LLC whereby we retain a 55% ownership stake, and Equinor retains a 45% ownership stake. We completed a Preliminary Feasibility Study ("PFS") in the third quarter of 2023 for the South West Arkansas Project. A Definitive Feasibility Study ("DFS") and a Front-End Engineering Study ("FEED") are currently underway for the South West Arkansas Project. A Final Investment Decision ("FID") is planned by year-end 2025, with construction targeted to begin thereafter, if a positive FID is reached. Construction would take approximately two years, with first production expected in 2028. Please refer to the technical report titled "NI 43-101 Technical Report, South West Arkansas Project" dated effective

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

August 8, 2023, as filed on our SEDAR+ profile at www.sedarplus.ca and on EDGAR at www.sec.gov for further information with respect to the South West Arkansas Project.

Lanxess Property Project

The Lanxess South Plant (as defined below) in southern Arkansas (the "Lanxess Property Project") centers on the development of the Lanxess 1A Project (as defined below), the first commercial lithium extraction initiative on the extensive brine leases operated by LANXESS Corporation ("LANXESS") in Arkansas. LANXESS operates three existing brine processing facilities for bromine extraction, covering over 150,000 acres of unitized brine leases in southern Arkansas. The first phase of the Lanxess Property Project (the "Lanxess 1A Project") is located at the LANXESS South facility near El Dorado, Arkansas (the "Lanxess South Plant"). With LANXESS, we are focusing on the Lanxess 1A Project as the initial step. The cooperative framework between us is expected to include a brine supply and disposal agreement, a lease agreement for the production facility site, and the provisioning of certain infrastructure services. Details of the future framework are the subject of ongoing negotiations, and these agreements will form the basis of the operational framework for the Lanxess 1A Project. We have been successfully operating an industrial-scale DLE demonstration plant (the "Demonstration Plant") at the Lanxess 1A Project location for over four years. The Demonstration Plant serves as a testing and optimization facility, refining the commercial blueprint for scalable and replicable DLE processes. In Q4 of 2023, we completed a DFS for the Lanxess 1A Project, which is planned to be situated at the Lanxess South Plant. This innovative project, utilizing DLE technology to extract lithium from an existing brine pipeline system, aims to produce battery-quality lithium carbonate. We may advance toward a FID for the Lanxess 1A Project, with the timing contingent upon ongoing project definition, the brine supply and disposal agreement with Lanxess, royalty definition as applicable, and the subsequent completion of project financing initiatives. Please refer to the technical report titled "NI 43-101 Technical Report for the Definitive Feasibility Study for Commercial Lithium Extraction Plant at Lanxess South Plant" dated effective August 18, 2023 as filed on our SEDAR+ profile at www.sedarplus.ca and on EDGAR at www.sec.gov for further information with respect to the Lanxess Property Project.

East Texas Properties

We, in partnership with Equinor, are also developing and advancing mineral right acquisitions and exploration of prospective lithium brine areas in East Texas. The East Texas Properties are held by Texas Lithium Financing, LLC ("Texas Lithium"), whereby we retain a 55% ownership stake, and Equinor retains a 45% ownership stake. We published exploration drilling results and testing in October of 2023, which demonstrated lithium concentrations of 644 mg/L on average, with a high concentration of 806 mg/L, highlighting the potential for globally significant lithium resource concentrations in the areas we are exploring. In partnership with Equinor, we plan to continue securing further leasehold positions and to perform further exploration drilling on the East Texas Properties and will pursue developing a resource assessment for the project area that we expect to report in 2025.

Other Projects

We have further interests in certain mineral leases and option agreements in the Mojave Desert in San Bernardino County, California.

During the six month fiscal period ended December 31, 2024, in accordance with IFRS 6, we assessed our future plans and currently plans to focus our investments in the South West Arkansas Project and East Texas properties, and therefore, in the near term have not budgeted further expenditures on the California properties. Accordingly, we determined there is an indicator of impairment for the California properties. We estimated the recoverable amount for the California properties as a nominal amount and recognized a $19,676 impairment expense.

ENVIRONMENTAL

We are firmly committed to the responsible production of sustainable lithium chemicals, essential for critical minerals security, energy storage system development, and electric vehicle manufacturing. Our project selection process underscores this dedication, opting, where feasible, to use existing infrastructure, roads, rail, water, and power within well- established industrial areas with a history of timber harvesting, oil, gas, and brine industries. Implementing DLE technology

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

is aimed at ensuring an environmentally responsible approach, offering a reduced surface footprint, environmental impacts when compared to traditional evaporation pond methods and hard-rock lithium mining operations.

Beyond our main operations, our environmental ethos is also evident. In September 2021, our collaboration with Aqualung Carbon Capture AS ("Aqualung") marked a significant step in advancing carbon capture technology. This partnership solidified in May 2022 when we made an investment in Aqualung. This was followed by a master service agreement (the "MSA") with Telescope Innovations Corp. ("Telescope"), signaling our intent to further investigate the possible applications of captured carbon dioxide (CO2) in various chemical processes, emphasizing our forward-thinking approach to environmental sustainability.

SOCIAL RESPONSIBILITY AND COMMUNITY RELATIONS

We remain committed to supporting the community as a central element of our operations. In support of the communities surrounding the South West Arkansas Project and the Lanxess Property Project, initiatives include participating in STEM events with local school districts, establishing a community office location, supporting local non-profits and charities, and hosting stakeholders at the Demonstration Plant. Additionally,we have taken part in music festivals, holiday events, Independence Day celebrations. These initiatives reflect our ongoing dedication to fostering positive relationships and contributing to the cultural and social vitality of the regions in which it operates.

To further support local workforce development, we have established partnerships with institutions such as South Arkansas Community College. These collaborations are aimed at enhancing training programs to prepare community members for specialized roles within our projects. Currently, we employ approximately 28 engineers, operators, technicians, and administrative staff, predominantly drawn from nearby communities. This strategy underscores our commitment to local employment and economic development.

As we extend our operations into East Texas, a similar approach will be adopted, with efforts focused on engaging local stakeholders and ensuring that the benefits of our projects are shared with the surrounding communities. Our ongoing focus on sustainable development seeks to balance environmental stewardship with the social and economic needs of the regions in which it operates.

SCIENTIFIC AND TECHNICAL INFORMATION

The scientific and technical information contained in this MD&A has been reviewed and approved by Steve Ross, P. Geol., VP Resource Development, who is a "qualified person" as defined in NI 43-101.

SHARE ISSUANCES

During the six month fiscal period ended December 31, 2024, we issued a total of 450,000 common shares for the exercise of Options. We received proceeds of $466 and reclassified $419 from reserves to share capital upon exercise.

During the year ended June 30, 2024, we issued a total of 550,000 common shares for the exercise of Options. We received proceeds of $581 and reclassified $494 from reserves to share capital upon exercise.

On July 23, 2024, we signed an agreement with an arms-length third-party advisor to settle a fee of $800,000 in consideration for 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 were advisory in nature and did not assume management responsibilities.

During the six month fiscal period ended December 31, 2024, we issued a total of 3,551,390 common shares at an average price of $1.86 per share, under the ATM program, providing gross and net proceeds of $6,595 and $6,430, respectively.

During the year ended June 30, 2024, we issued a total of 10,613,059 common shares at an average price of $1.49 per share, respectively, under the ATM program, providing gross and net proceeds of $15,817 and $15,422, respectively.

Subsequent to December 31, 2024, we issued 4,532,370 common shares at an average price of $1.57 per share, respectively, under the ATM program, providing gross and net proceeds of $7,094 and $6,916, respectively.

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

EQUITY GRANTS

On August 9, 2024, we granted 1,063,394 Options, 1,357,289 restricted share units ("RSUs") and 441,935 deferred share units ("DSUs") to employees, directors, and management.

On September 1, 2024, 2,000,000 Options were granted to a corporation controlled by an officer. These Options were designated as a replacement for 1,000,000 Options previously granted on September 25, 2023.

On December 18, 2024, we granted 300,000 Options to a new member of the Board and 563,852 Options, 423,325 RSUs, and 182,040 DSUs to employees, directors and management.

SELECTED ANNUAL FINANCIAL INFORMATION

The following table contains a summary of our financial results for each of the three most recently completed financial fiscal periods, as reported under IFRS Accounting Standards in thousands of USD, except per share amounts:

Six month fiscal

period ended

Dember 31,

2024

June 30, 2024

June 30, 2023

Total assets

259,496

287,291

130,900

Working capital(1)

27,533

28,919

36,821

Total non-current liabilities

25,667

26,312

658

Net (loss) income

(29,511)

105,801

(31,350)

(Loss) earnings per share

Basic

(0.16)

0.60

(0.19)

Diluted

(0.16)

0.59

(0.19)

(1) Working capital is defined as current assets less current liabilities.

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

OVERALL PERFORMANCE AND RESULTS OF OPERATIONS

Comparison of Three Months Ended December 31, 2024 and June 30, 2024

The following table sets forth our results of operations for the three months ended December 31, 2024 and June 30, 2024.

Three months ended

December 31,

June 30,

2024

Expenses

General and administrative

2,661

6,803

Demonstration Plant operations

799

2,009

Management and directors' fees

391

1,018

Share-based compensation

1,197

551

Separation benefits

547

Foreign exchange gain

(402)

(102)

Loss from operations

5,193

10,279

Impairment expense

(19,676)

Gain on deconsolidation of subsidiaries

164,099

Interest and other income

157

108

Fair value gain on financial asset - FID

(437)

391

Investment loss from joint ventures

(284)

(158)

Interest expense

(12)

(14)

Net (loss) income before income taxes

(25,445)

154,147

Deferred income tax benefit (expense)

763

(25,870)

Net (loss) income

(24,682)

128,277

Revenue

As at December 31, 2024, we have not generated any revenue. We raise capital through the issuance of common shares, debt instruments, non-core assets sales, and other forms of financing.

General and administrative costs

General and administrative costs are associated with our Vancouver, British Columbia corporate head office, the El Dorado office in Arkansas, the Austin office in Texas and related back-office professional and corporate costs.

General and administrative costs were $2,661 for the three months ended December 31, 2024, as compared to $6,803 for the three months ended June 30, 2024. The $4,142, or 61%, decrease is primarily attributable to costs incurred during the three months ended June 30, 2024, for consultant engagement to support our advancement of strategic initiatives, including SWA Lithium LLC and Texas Lithium (the "Joint Ventures"), as well as back-office cost reductions such as reduced consultant, software and personnel expenses during the three months ended December 31, 2024.

Demonstration Plant operations

Demonstration Plant operating costs relate to personnel, supplies, reagents, site office, utilities, repairs and maintenance, vehicle, waste, disposal and recycling fees, and ongoing testing. Demonstration Plant costs were $799 for the three months ended December 31, 2024 and $2,009 for the three months ended June 30, 2024. The $1,210, or 60%, decrease is primarily attributable to a decrease in personnel, supplies and test work. The decrease in personnel is driven by allocations to the Joint Ventures and reduced billable rates paid to intermediary companies which are attributable to the hiring of plant employees during the three months ended December 31, 2024. Additionally, supplies and test work decreased due to non- recurring charges for DLE process development and other research and development projects for the purpose of developing new technologies incurred during the three months ended June 30, 2024.

STANDARD LITHIUM LTD.

Management's Discussion and Analysis

For the Six Month Fiscal Period Ended December 31, 2024

Management and directors' fees

Management and directors' fees include salaries, bonuses, benefits and directors' fees to key management personnel. Management and directors' fees were $391 and $1,018 for the three months ended December 31, 2024 and three months ended June 30, 2024, respectively. The $627, or 62%, decrease is attributable a reduction in accrued bonus expenses and a reduction in director fees associated with a former member of the Board. Further, management fee allocations to the Joint Ventures increased during the three months ended December 31, 2024, therefore reducing management fee expenses.

Share-based compensation

Share-based compensation was $1,197 for the three months ended December 31, 2024 as compared to $551 for the three months ended June 30, 2024. The $646 increase was primarily related to share-based compensation expense associated with awards granted during the six month fiscal period ended December 31, 2024.

Separation benefits

Separation benefits were $547 for the three months ended December 31, 2024. There were no such costs for the three months ended June 30, 2024. Such costs are attributable to severance payments to a former executive officer and former member of the Board.

Foreign exchange gain

We recorded foreign exchange gains of $402 for the three months ended December 31, 2024 and $102 during the three months ended June 30, 2024. The CAD spot rate in terms of USD weakened by 5.9% and 1.0% during the three months ended December 31, 2024 and the three months ended June 30, 2024, respectively. A weaker CAD created a foreign exchange gain on our income statement for each respective period.

Other income

We earned $157 and $108 of interest and other income, net of fees on the investment of cash on hand during the three months ended December 31, 2024 and the three months ended June 30, 2024, respectively.

Deferred income tax benefit (expense)

We had a deferred income tax benefit of $763 for the three months ended December 31, 2024 and a deferred income tax expense of $25,870 for the three months ended June 30, 2024. The deferred income tax benefit for the three months ended December 31, 2024 was primarily driven by the loss before income taxes for the period. The deferred income tax expense for the three months ended June 30, 2024 is primarily driven by the Equinor Transaction, due to the difference in the tax basis and fair value of our retained interests in our Investments in Joint Ventures, and has no impact on cash taxes owed or paid.

Net (loss) income

We had a net loss of $24,682 for the three months ended December 31, 2024, and net income of $128,277 for the three months ended June 30, 2024. Net loss for the three months ended December 31, 2024 resulted primarily from impairment expense of $19,676 during the period. Net income for the three months ended June 30, 2024 resulted primarily from the $164,099 gain recognized on the deconsolidation of subsidiaries and retainment of our investments in Joint Ventures recorded at fair value, in addition to the recognition of financial assets associated with Equinor acquiring interests in the Joint Ventures.

Disclaimer

Standard Lithium Ltd. published this content on March 24, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 24, 2025 at 15:32:07.857.