Standard Lithium : Q4 December 31, 2024 YE Financial Statements

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

Consolidated Financial Statements

(Expressed in US dollars)

Six month fiscal period ended December 31, 2024 and year ended June 30, 2024

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Standard Lithium Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Standard Lithium Ltd. and its subsidiaries (the Company) as of December 31, 2024 and June 30, 2024, and the related consolidated statements of comprehensive (loss) income, of changes in equity and of cash flows for the six-month period ended December 31, 2024 and for the year ended June 30, 2024, including the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and June 30, 2024, and its financial performance and its cash flows for the six-month period ended December 31, 2024 and for the year ended June 30, 2024, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, Canada

March 21, 2025

We have served as the Company's auditor since 2022.

PricewaterhouseCoopers LLP

PwC Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T.: +1 604 806 7000, F.: +1 604 806 7806, Fax to mail: [email protected]

"PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

STANDARD LITHIUM LTD.

Consolidated Statements of Financial Position As at December 31, 2024 and June 30, 2024 (Expressed in thousands of US dollars)

December 31,

June 30, 2024

July 1, 2023

2024

Currency

remeasurement:

Note 2

ASSETS

Current assets

Cash

31,177

38,667

44,975

Restricted cash

518

345

Receivables - related parties (Note 13)

1,274

848

Other current assets

336

1,657

1,842

33,305

41,517

46,817

Non-current assets

Reclamation deposit

Exploration and evaluation assets (Note 8)

26,446

45,970

75,410

Intangible assets (Note 9)

943

985

1,080

Right of use asset (Note 11)

482

712

930

Property, plant and equipment (Note 7)

1,631

1,514

2,087

Investment in Aqualung (Note 6)

2,335

2,500

Investment in joint ventures (Note 5)

146,158

146,865

Financial asset - FID (Note 15)

48,138

47,086

Advances and deposits

2,013

226,191

245,774

84,083

TOTAL ASSETS

259,496

287,291

130,900

LIABILITIES

Current liabilities

Accounts payable and accrued liabilities

1,104

7,355

8,256

Accounts payable - related parties (Note 13)

4,397

4,862

1,354

Lease liability - short-term

271

381

386

Non-current liabilities

5,772

12,598

9,996

Lease liabilities - long-term

206

342

558

Deferred income tax liabilities (Note 14)

24,889

25,870

Decommissioning provision

572

100

25,667

26,312

658

TOTAL LIABILITIES

31,439

38,910

10,654

SHAREHOLDERS' EQUITY

Share capital (Note 12)

235,782

227,292

211,626

Reserves (Note 12)

36,040

34,781

27,338

Accumulated deficit

(37,849)

(8,338)

(114,139)

Accumulated other comprehensive loss

(5,916)

(5,354)

(4,579)

TOTAL SHAREHOLDERS' EQUITY

228,057

248,381

120,246

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

259,496

287,291

130,900

Approved by the Board of Directors and authorized for issue on March 21, 2025.

"Robert Cross"

"Claudia D'Orazio"

Director

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

STANDARD LITHIUM LTD.

Consolidated Statements of Comprehensive (Loss) Income

For the six month fiscal period ended December 31, 2024 and the year ended June 30, 2024 (Expressed in thousands of US dollars, except share and per share amounts)

Six month fiscal

period ended

Year ended June

December 31,

30,

2024

Currency

remeasurement:

Note 2

Expenses

General and administrative

5,472

16,410

Demonstration Plant operations (Note 10)

1,838

7,324

Management and directors' fees (Note 13)

986

2,489

Share-based compensation (Note 12)

2,091

7,937

Separation benefits

1,295

Foreign exchange gain

(316)

(639)

Loss from operations

11,366

33,521

Gain on deconsolidation of subsidiaries (Note 4)

164,099

Impairment expense (Note 8)

(19,676)

Interest and other income

232

922

Fair value gain on financial asset - FID (Note 15)

1,052

391

Investment loss from joint ventures (Note 5)

(707)

(158)

Interest expense

(27)

(62)

Net (loss) income before income taxes

(30,492)

131,671

Deferred income tax benefit (expense)

981

(25,870)

Net (loss) income

(29,511)

105,801

Other comprehensive loss

Item that may be reclassified subsequently to income or loss:

Currency translation differences of foreign operations

(562)

(775)

Total comprehensive (loss) income

(30,073)

105,026

Weighted average number of common shares outstanding - basic

185,600,192

176,930,274

Weighted average number of common shares outstanding - diluted

185,600,192

179,419,385

(Loss) earnings per share

Basic (loss) earnings per share

(0.16)

0.60

Diluted (loss) earnings per share

(0.16)

0.59

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

STANDARD LITHIUM LTD.

Consolidated Statements of Changes in Equity

For the six month fiscal period ended December 31, 2024 and the year ended June 30, 2024 (Expressed in thousands of US dollars, except share amounts)

Accumulated

other

Number of

Accumulated

comprehensive

Total

capital

Reserves

deficit

loss

equity

Balance, June 30, 2023 (Currency remeasurement: Note

172,752,197

211,626

27,338

(114,139)

(4,579)

120,246

Share-based compensation

7,937

Shares issued under the ATM (as defined herein) (Note 12)

10,613,059

15,817

Share issuance costs

(1,226)

Options exercised

550,000

1,075

(494)

581

Net income

105,801

Currency translation differences of foreign operations

(775)

Balance, June 30, 2024 (Currency remeasurement: Note

183,915,256

227,292

34,781

(8,338)

(5,354)

248,381

Share-based compensation

2,091

Shares issued under the ATM (Note 12)

3,551,390

6,595

Shares issued in consideration for services

666,667

800

Share issuance costs

(203)

Vesting of DSUs

189,370

413

(413)

Options exercised

450,000

885

(419)

466

Net loss

(29,511)

Currency translation differences of foreign operations

(562)

Balance, December 31, 2024

188,772,683

235,782

36,040

(37,849)

(5,916)

228,057

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

STANDARD LITHIUM LTD.

Consolidated Statements of Cash Flows

For the six month fiscal period ended December 31, 2024 and year ended June 30, 2024 (Expressed in thousands of US dollars)

Six month fiscal

period ended

December 31,

Year ended June

2024

30, 2024

Currency

remeasurement:

Note 2

Operating activities

Net (loss) income

(29,511)

105,801

Add items not affecting cash

Share-based compensation (Note 12)

2,091

7,937

Deferred income tax (benefit) expense (Note 14)

(981)

25,870

Foreign exchange

(316)

(890)

Impairment expense (Note 8)

19,676

Gain on deconsolidation of subsidiaries (Note 4)

(164,099)

Investment loss from joint ventures (Note 5)

707

158

Fair value gain on financial asset - FID (Note 15)

(1,052)

(391)

Amortization

603

1,142

Interest expense

Other

Net changes in non-cash working capital items:

Other current assets

1,321

185

Advances and deposits

1,934

Accounts payable and accrued liabilities

(3,735)

1,059

Receivables - related parties

(426)

(848)

Accounts payable - related parties

(465)

4,000

Net cash used in operating activities

(11,994)

(18,080)

Investing activities

Exploration and evaluation assets

(2,182)

(31,596)

Proceeds received from Equinor

30,000

Purchase of property, plant and equipment

(10)

(803)

Purchase of short-term investments

(173)

(349)

Patent

(36)

Net cash used in investing activities

(2,401)

(2,748)

Financing activities

Proceeds from issuance of shares

6,595

15,817

Exercise of options

466

581

Share issuance costs

(203)

(1,226)

Lease payments

(256)

(470)

Net cash provided by financing activities

6,602

14,702

Effect of exchange rates on cash

303

(182)

Net change in cash

(7,490)

(6,308)

Cash, beginning of period

38,667

44,975

Cash, end of period

31,177

38,667

Non-cash investing and financing

Change in exploration and evaluation expenditures included in accounts

payable

2,030

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

STANDARD LITHIUM LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024 AND YEAR ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except where indicated and share and per share amounts)

Ownership

Arkansas Lithium LLC

100%

California Lithium Ltd.

100%

SLL El Dorado South LLC

100%

Standard Lithium US Holdings LLC

100%

SWA Lithium Holdings LLC

100%

Texas Lithium Corp.

100%

STANDARD LITHIUM LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024 AND YEAR ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except where indicated and share and per share amounts)

Basis of presentation

The consolidated 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 their fair value.

The consolidated 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 the Company 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 reported 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 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 reported 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.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications have no effect on the reported results of operations.

Change in fiscal year-end

On November 18, 2024, the Company changed its 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 the Company's reporting cycle more closely with how it plans to manage its business. These consolidated financial statements report the Company's 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."

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 lithium mining, exploration and production industry. This change has been applied retrospectively. As at and for the year ended June 30, 2024 and all prior periods, the Company's presentation currency was CAD as described in the Company's June 30, 2024 annual consolidated financial statements. The change in accounting policy was applied in accordance with International Accounting Standards ("IAS") 21. The amounts reported in these consolidated financial statements as at June 30, 2024 and the year ended June 30, 2024 have been remeasured in USD based on the closing exchange rate on June 30, 2024 and the average rate for the year ended June 30, 2024, 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.

The exchange rates used to reflect the change in presentation currency were as follows:

For the three months ended

September

December

June 30,

30,

31,

March 31,

June 30,

CAD - USD exchange rate

2023

2024

Closing rate

0.7545

0.7364

0.7547

0.7384

0.7310

Average rate

0.7466

0.7455

0.7402

0.7407

0.7383

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 assets and liabilities as at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Estimates and

STANDARD LITHIUM LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024 AND YEAR ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except where indicated and share and per share amounts)

judgments are continuously evaluated and are based on historical 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.

The estimates and judgments that affect the application of the Company's accounting policies and disclosures and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below.

Assessment of Impairment indicators

At each reporting period end, management applies judgment in assessing whether there are any indicators of impairment relating to exploration and evaluation assets. If there are indicators of impairment, the recoverable amount of the related asset is estimated in order to determine the extent of any impairment. An impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount.

Valuation of other assets and liabilities at fair value

The Company periodically measures and records certain assets and liabilities at fair value. The assets and liabilities that the Company measures and records at fair value on a recurring basis include its financial assets and investment in Aqualung. Other assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. The assets and liabilities that the Company measures and records at fair value on a nonrecurring basis can include investments in joint ventures and other long-lived assets that are written down to fair value when they are determined to be impaired or held for sale. The valuation methods used by the Company to measure the fair values of these assets and liabilities may require considerable management judgment and estimates to derive the inputs necessary to determine fair value estimates, such as future prices, discount rates and current market volatility factors.

3. Summary of Material Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements and have been applied consistently by the Company.

Cash

Cash consists of cash held via bank deposits. The Company's cash balance includes $4,000 of cash received and designated for the working capital needs associated with the Company's joint ventures. Please see Note 13 - Related Parties. There is a corresponding current liability included in Accounts payable - related parties in the Company's consolidated statement of financial position which matures on May 7, 2025.

Fair value of financial instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. In arriving at a fair value measurement, the Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable. The three levels of inputs used to establish fair value are the following:

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).

STANDARD LITHIUM LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH FISCAL PERIOD ENDED DECEMBER 31, 2024 AND YEAR ENDED JUNE 30, 2024

(Expressed in thousands of US dollars, except where indicated and share and per share amounts)

The following table summarizes the classification and measurement of the Company's financial instruments under IFRS Accounting Standards 9:

Financial Instrument

Classification

Cash

Amortized cost

Restricted cash

Amortized cost

Financial asset - FID

Fair value through profit or loss

Investment in Aqualung Carbon Capture SA

Fair value through profit or loss

Accounts payable

Amortized cost

The Company measures financial assets at amortized cost if both of the following conditions are met: the financial asset is held with the objective to collect contractual cash flows; and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through other comprehensive income ("FVOCI")

FVOCI assets are financial assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest.

Fair value through profit or loss ("FVTPL")

A financial asset is measured at FVTPL unless it is measured at amortized cost or FVOCI. The Company may however make the irrevocable option to classify particular investments as FVTPL.

All financial instruments are initially recognized at fair value on the consolidated statement of financial position. Subsequent measurement of financial instruments is based on their classification. Financial assets and liabilities classified at FVTPL are measured at fair value with changes in those fair values recognized in the consolidated statement of income and comprehensive income for the year. Financial assets classified at amortized cost are measured at amortized cost using the effective interest method.

Derecognition of financial assets

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to those assets are transferred.

Exploration and evaluation expenditures

Pre-acquisition expenditures are charged to profit or loss as incurred. Expenditures directly related to the exploration and evaluation of mineral properties are capitalized once the legal rights to explore the mineral properties are acquired or obtained, including license and property acquisition costs, geological and geophysical expenditures, costs of drilling exploratory wells and directly attributable overhead including salaries and employee benefits, are initially capitalized as E&E assets.

When the technical and commercial viability of a mineral resource has been demonstrated and a development decision has been made, the capitalized costs of the related property are first tested for impairment and then transferred to property, plant and equipment and amortized following commencement of commercial production.

E&E assets are assessed for impairment to ensure they are not carried at amounts above their estimated recoverable values. The Company evaluates whether there are any indicators of impairment at the cash-generating unit level. If there are indicators of impairment, the recoverable amount of the related asset is estimated in order to determine the extent of any impairment. An impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount. The Company considers the following to be indicators of impairment: the period for which the entity has the right to explore

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 15:32:08.028.