[20-F/A] Electra Battery Materials Corporation Amends Annual Report (Foreign Issuer)
Qualigen Therapeutics (QLGN) filed an 8-K disclosing a private placement of 4,500 shares of newly created Series A-3 Preferred Stock at $1,000 per share, generating gross proceeds of $4.5 million. The round closed on 28-Jul-25 and was sold to accredited investors under Reg D.
Key terms: (i) each preferred share converts at the holder’s option into common stock at an initial $2.80 conversion price (equal to the 25-Jul-25 Nasdaq close); (ii) anti-dilution resets the conversion price to the lower issue price or a $1.40 floor on future dilutive issuances, subject to Nasdaq 5635(d); (iii) conversion blocked above 4.99 % (optionally 9.99 %) ownership; (iv) voting with common on an as-converted basis; (v) consent of ≥67 % of preferred required for charter changes, dividends on junior stock, or certain related-party deals.
Use of proceeds: general working capital, with up to $0.5 m earmarked for investor-relations expenses. A Form S-1 covering resale of the underlying common shares must be filed within 45 days.
The issue triggers an automatic reset of the conversion price of the outstanding Series A-2 Preferred (issued Nov-24) from $3.64 to $2.80, increasing potential dilution.
Pro forma balance sheet (Ex. 99.2) reflecting the raise and governing documents (Ex. 3.1, 10.1, 10.2) are attached. A related press release was furnished under Reg FD (Ex. 99.1).
Qualigen Therapeutics (QLGN) ha depositato un modulo 8-K comunicando un collocamento privato di 4.500 azioni di nuova emissione della Serie A-3 Preferred Stock a $1.000 per azione, generando proventi lordi di 4,5 milioni di dollari. Il round si è chiuso il 28 luglio 2025 ed è stato venduto a investitori accreditati ai sensi del Regolamento D.
Termini chiave: (i) ogni azione preferenziale può essere convertita a scelta del titolare in azioni ordinarie a un prezzo di conversione iniziale di $2,80 (pari al prezzo di chiusura Nasdaq del 25 luglio 2025); (ii) l’anti-diluizione adegua il prezzo di conversione al prezzo di emissione più basso o a un minimo di $1,40 per future emissioni diluitive, in conformità con la regola Nasdaq 5635(d); (iii) la conversione è bloccata oltre il 4,99% (opzionalmente 9,99%) di proprietà; (iv) diritto di voto con le azioni ordinarie sulla base della conversione; (v) è richiesto il consenso di almeno il 67% delle azioni preferenziali per modifiche dello statuto, dividendi su azioni subordinate o determinate operazioni con parti correlate.
Utilizzo dei proventi: capitale circolante generale, con fino a $0,5 milioni destinati a spese di relazioni con gli investitori. Entro 45 giorni deve essere depositato un modulo S-1 per la rivendita delle azioni ordinarie sottostanti.
L’emissione innesca un reset automatico del prezzo di conversione delle azioni Serie A-2 Preferred in circolazione (emesse a novembre 2024) da $3,64 a $2,80, aumentando la potenziale diluizione.
Il bilancio pro forma (Ex. 99.2) che riflette l’aumento e i documenti regolatori (Ex. 3.1, 10.1, 10.2) sono allegati. Un comunicato stampa correlato è stato fornito ai sensi del Reg FD (Ex. 99.1).
Qualigen Therapeutics (QLGN) presentó un formulario 8-K informando una colocación privada de 4.500 acciones de la recién creada Serie A-3 Preferred Stock a $1,000 por acción, generando ingresos brutos de $4.5 millones. La ronda cerró el 28 de julio de 2025 y se vendió a inversores acreditados bajo el Reglamento D.
Términos clave: (i) cada acción preferente se convierte, a opción del titular, en acciones ordinarias a un precio inicial de conversión de $2.80 (igual al cierre del Nasdaq del 25 de julio de 2025); (ii) la cláusula antidilución reajusta el precio de conversión al precio de emisión más bajo o a un piso de $1.40 en futuras emisiones dilutivas, sujeto a la regla Nasdaq 5635(d); (iii) la conversión está bloqueada por encima del 4.99 % (opcionalmente 9.99 %) de propiedad; (iv) derecho a voto junto con las acciones comunes en base a la conversión; (v) se requiere el consentimiento de ≥67 % de las acciones preferentes para cambios en el estatuto, dividendos en acciones subordinadas, o ciertos acuerdos con partes relacionadas.
Uso de los ingresos: capital de trabajo general, con hasta $0.5 millones destinados a gastos de relaciones con inversores. Debe presentarse un formulario S-1 para la reventa de las acciones comunes subyacentes dentro de 45 días.
La emisión provoca un reajuste automático del precio de conversión de las Series A-2 Preferred en circulación (emitidas en noviembre de 2024) de $3.64 a $2.80, aumentando la posible dilución.
Se adjuntan el balance pro forma (Ex. 99.2) que refleja la recaudación y los documentos regulatorios (Ex. 3.1, 10.1, 10.2). Un comunicado de prensa relacionado fue proporcionado bajo Reg FD (Ex. 99.1).
Qualigen Therapeutics(QLGN)는 신규 발행된 Series A-3 우선주 4,500주를 주당 $1,000에 사모 발행했다고 8-K 보고서를 제출했으며, 총 450만 달러의 총수익을 창출했습니다. 이 라운드는 2025년 7월 28일에 종료되었으며 Reg D에 따라 공인 투자자에게 판매되었습니다.
주요 조건: (i) 각 우선주는 보유자의 선택에 따라 초기 전환 가격 $2.80(2025년 7월 25일 나스닥 종가와 동일)로 보통주로 전환 가능; (ii) 희석 방지 조항은 향후 희석 발행 시 전환 가격을 더 낮은 발행가 또는 $1.40 최저가로 조정하며, 이는 나스닥 규정 5635(d)에 따름; (iii) 보유 지분 4.99% 초과 시(선택적으로 9.99% 초과 시) 전환 차단; (iv) 전환 기준으로 보통주와 동일한 의결권 부여; (v) 정관 변경, 하위 주식 배당 또는 특정 관련 당사자 거래에 대해 우선주 67% 이상의 동의 필요.
자금 사용처: 일반 운영 자금, 이 중 최대 50만 달러는 투자자 관계 비용에 할당. 기초 보통주 재판매를 위한 Form S-1은 45일 이내에 제출해야 합니다.
이번 발행은 2024년 11월 발행된 기존 Series A-2 우선주의 전환 가격을 $3.64에서 $2.80으로 자동 리셋하여 잠재적 희석을 증가시킵니다.
모금액 반영 및 관련 문서(Ex. 3.1, 10.1, 10.2)가 포함된 프로포마 재무제표(Ex. 99.2)가 첨부되어 있습니다. 관련 보도자료는 Reg FD에 따라 제출되었습니다(Ex. 99.1).
Qualigen Therapeutics (QLGN) a déposé un formulaire 8-K annonçant un placement privé de 4 500 actions nouvellement créées de Série A-3 Preferred Stock à 1 000 $ par action, générant des produits bruts de 4,5 millions de dollars. Le tour s’est clôturé le 28 juillet 2025 et a été vendu à des investisseurs accrédités selon le règlement D.
Conditions clés : (i) chaque action préférentielle peut être convertie, au choix du détenteur, en actions ordinaires à un prix de conversion initial de 2,80 $ (équivalent à la clôture Nasdaq du 25 juillet 2025) ; (ii) la clause antidilution ajuste le prix de conversion au prix d’émission le plus bas ou à un plancher de 1,40 $ lors d’émissions dilutives futures, sous réserve de la règle Nasdaq 5635(d) ; (iii) conversion bloquée au-delà de 4,99 % (optionnellement 9,99 %) de détention ; (iv) droit de vote avec les actions ordinaires sur une base convertie ; (v) consentement d’au moins 67 % des actions préférentielles requis pour les modifications des statuts, les dividendes sur actions subordonnées ou certaines opérations avec des parties liées.
Utilisation des fonds : fonds de roulement général, avec jusqu’à 0,5 million de dollars alloués aux frais de relations avec les investisseurs. Un formulaire S-1 couvrant la revente des actions ordinaires sous-jacentes doit être déposé dans les 45 jours.
L’émission déclenche une réinitialisation automatique du prix de conversion des Series A-2 Preferred en circulation (émises en novembre 2024) de 3,64 $ à 2,80 $, augmentant la dilution potentielle.
Le bilan pro forma (Ex. 99.2) reflétant la levée de fonds et les documents régissant l’émission (Ex. 3.1, 10.1, 10.2) sont joints. Un communiqué de presse associé a été fourni conformément au Reg FD (Ex. 99.1).
Qualigen Therapeutics (QLGN) hat eine 8-K-Meldung eingereicht, in der eine Privatplatzierung von 4.500 neu geschaffenen Series A-3 Preferred Shares zu je 1.000 $ bekanntgegeben wird, wodurch Bruttoerlöse von 4,5 Millionen $ erzielt wurden. Die Runde wurde am 28. Juli 2025 abgeschlossen und unter Regulation D an akkreditierte Investoren verkauft.
Wichtige Bedingungen: (i) Jede Vorzugsaktie kann nach Wahl des Inhabers zu einem anfänglichen Umwandlungspreis von 2,80 $ (entsprechend dem Nasdaq-Schlusskurs vom 25. Juli 2025) in Stammaktien umgewandelt werden; (ii) Anti-Dilution passt den Umwandlungspreis auf den niedrigeren Ausgabepreis oder eine Untergrenze von 1,40 $ bei zukünftigen verwässernden Emissionen an, vorbehaltlich Nasdaq-Regel 5635(d); (iii) Umwandlung ist über 4,99 % (optional 9,99 %) Eigentumsanteil blockiert; (iv) Stimmrecht gemeinsam mit Stammaktien auf umgewandelter Basis; (v) Zustimmung von ≥67 % der Vorzugsaktionäre erforderlich für Satzungsänderungen, Dividenden auf nachrangige Aktien oder bestimmte Geschäfte mit verbundenen Parteien.
Verwendung der Erlöse: allgemeines Betriebskapital, bis zu 0,5 Mio. $ für Investor-Relations-Kosten vorgesehen. Innerhalb von 45 Tagen muss ein Formular S-1 zur Wiederveräußerung der zugrunde liegenden Stammaktien eingereicht werden.
Die Emission löst eine automatische Anpassung des Umwandlungspreises der ausstehenden Series A-2 Preferred (ausgegeben im November 2024) von 3,64 $ auf 2,80 $ aus, was die potenzielle Verwässerung erhöht.
Die Pro-forma-Bilanz (Ex. 99.2), die die Kapitalerhöhung und die zugehörigen Dokumente (Ex. 3.1, 10.1, 10.2) widerspiegelt, sind beigefügt. Eine zugehörige Pressemitteilung wurde gemäß Reg FD eingereicht (Ex. 99.1).
- $4.5 m in gross proceeds adds short-term liquidity for working capital.
- Registration Rights mandate S-1 filing within 45 days, potentially improving share liquidity.
- Dilution risk: A-3 converts into ~1.6 m shares at $2.80 with a ratchet down to $1.40, plus Series A-2 reset to $2.80.
- Preferred voting power on an as-converted basis could diminish common shareholder influence.
- Potential overhang once resale registration becomes effective.
Insights
TL;DR: $4.5 m raise modestly extends runway but adds highly dilutive preferred; overall impact neutral.
The cash injection equals roughly one quarter of QLGN’s FY-24 operating burn, providing limited but welcome liquidity. However, the Series A-3 carries a low $2.80 conversion price, adjustable down to a $1.40 floor, and an as-converted vote—meaning potential issuance of >1.6 m shares plus further anti-dilution. The reset of Series A-2 to the same $2.80 level magnifies dilution. Because proceeds are small relative to market cap and near-term funding needs, I view the transaction as capital-raising neutral: positive for cash, negative for dilution. The requirement to file an S-1 within 45 days could create an overhang once shares become freely tradable.
TL;DR: Preferred terms concentrate voting power and restrict corporate actions; governance impact negative.
The A-3 Preferred votes with common stock based on an as-converted share count, providing investors meaningful influence despite owning a modest dollar stake. Anti-dilution ratchets and senior liquidation preference place common holders behind a growing stack of preference securities. Requiring 67 % of stated value to approve dividends, buybacks or charter changes further limits board flexibility. Combined with the reset on Series A-2, common shareholders face increased dilution risk and reduced control, warranting a −1 impact score.
Qualigen Therapeutics (QLGN) ha depositato un modulo 8-K comunicando un collocamento privato di 4.500 azioni di nuova emissione della Serie A-3 Preferred Stock a $1.000 per azione, generando proventi lordi di 4,5 milioni di dollari. Il round si è chiuso il 28 luglio 2025 ed è stato venduto a investitori accreditati ai sensi del Regolamento D.
Termini chiave: (i) ogni azione preferenziale può essere convertita a scelta del titolare in azioni ordinarie a un prezzo di conversione iniziale di $2,80 (pari al prezzo di chiusura Nasdaq del 25 luglio 2025); (ii) l’anti-diluizione adegua il prezzo di conversione al prezzo di emissione più basso o a un minimo di $1,40 per future emissioni diluitive, in conformità con la regola Nasdaq 5635(d); (iii) la conversione è bloccata oltre il 4,99% (opzionalmente 9,99%) di proprietà; (iv) diritto di voto con le azioni ordinarie sulla base della conversione; (v) è richiesto il consenso di almeno il 67% delle azioni preferenziali per modifiche dello statuto, dividendi su azioni subordinate o determinate operazioni con parti correlate.
Utilizzo dei proventi: capitale circolante generale, con fino a $0,5 milioni destinati a spese di relazioni con gli investitori. Entro 45 giorni deve essere depositato un modulo S-1 per la rivendita delle azioni ordinarie sottostanti.
L’emissione innesca un reset automatico del prezzo di conversione delle azioni Serie A-2 Preferred in circolazione (emesse a novembre 2024) da $3,64 a $2,80, aumentando la potenziale diluizione.
Il bilancio pro forma (Ex. 99.2) che riflette l’aumento e i documenti regolatori (Ex. 3.1, 10.1, 10.2) sono allegati. Un comunicato stampa correlato è stato fornito ai sensi del Reg FD (Ex. 99.1).
Qualigen Therapeutics (QLGN) presentó un formulario 8-K informando una colocación privada de 4.500 acciones de la recién creada Serie A-3 Preferred Stock a $1,000 por acción, generando ingresos brutos de $4.5 millones. La ronda cerró el 28 de julio de 2025 y se vendió a inversores acreditados bajo el Reglamento D.
Términos clave: (i) cada acción preferente se convierte, a opción del titular, en acciones ordinarias a un precio inicial de conversión de $2.80 (igual al cierre del Nasdaq del 25 de julio de 2025); (ii) la cláusula antidilución reajusta el precio de conversión al precio de emisión más bajo o a un piso de $1.40 en futuras emisiones dilutivas, sujeto a la regla Nasdaq 5635(d); (iii) la conversión está bloqueada por encima del 4.99 % (opcionalmente 9.99 %) de propiedad; (iv) derecho a voto junto con las acciones comunes en base a la conversión; (v) se requiere el consentimiento de ≥67 % de las acciones preferentes para cambios en el estatuto, dividendos en acciones subordinadas, o ciertos acuerdos con partes relacionadas.
Uso de los ingresos: capital de trabajo general, con hasta $0.5 millones destinados a gastos de relaciones con inversores. Debe presentarse un formulario S-1 para la reventa de las acciones comunes subyacentes dentro de 45 días.
La emisión provoca un reajuste automático del precio de conversión de las Series A-2 Preferred en circulación (emitidas en noviembre de 2024) de $3.64 a $2.80, aumentando la posible dilución.
Se adjuntan el balance pro forma (Ex. 99.2) que refleja la recaudación y los documentos regulatorios (Ex. 3.1, 10.1, 10.2). Un comunicado de prensa relacionado fue proporcionado bajo Reg FD (Ex. 99.1).
Qualigen Therapeutics(QLGN)는 신규 발행된 Series A-3 우선주 4,500주를 주당 $1,000에 사모 발행했다고 8-K 보고서를 제출했으며, 총 450만 달러의 총수익을 창출했습니다. 이 라운드는 2025년 7월 28일에 종료되었으며 Reg D에 따라 공인 투자자에게 판매되었습니다.
주요 조건: (i) 각 우선주는 보유자의 선택에 따라 초기 전환 가격 $2.80(2025년 7월 25일 나스닥 종가와 동일)로 보통주로 전환 가능; (ii) 희석 방지 조항은 향후 희석 발행 시 전환 가격을 더 낮은 발행가 또는 $1.40 최저가로 조정하며, 이는 나스닥 규정 5635(d)에 따름; (iii) 보유 지분 4.99% 초과 시(선택적으로 9.99% 초과 시) 전환 차단; (iv) 전환 기준으로 보통주와 동일한 의결권 부여; (v) 정관 변경, 하위 주식 배당 또는 특정 관련 당사자 거래에 대해 우선주 67% 이상의 동의 필요.
자금 사용처: 일반 운영 자금, 이 중 최대 50만 달러는 투자자 관계 비용에 할당. 기초 보통주 재판매를 위한 Form S-1은 45일 이내에 제출해야 합니다.
이번 발행은 2024년 11월 발행된 기존 Series A-2 우선주의 전환 가격을 $3.64에서 $2.80으로 자동 리셋하여 잠재적 희석을 증가시킵니다.
모금액 반영 및 관련 문서(Ex. 3.1, 10.1, 10.2)가 포함된 프로포마 재무제표(Ex. 99.2)가 첨부되어 있습니다. 관련 보도자료는 Reg FD에 따라 제출되었습니다(Ex. 99.1).
Qualigen Therapeutics (QLGN) a déposé un formulaire 8-K annonçant un placement privé de 4 500 actions nouvellement créées de Série A-3 Preferred Stock à 1 000 $ par action, générant des produits bruts de 4,5 millions de dollars. Le tour s’est clôturé le 28 juillet 2025 et a été vendu à des investisseurs accrédités selon le règlement D.
Conditions clés : (i) chaque action préférentielle peut être convertie, au choix du détenteur, en actions ordinaires à un prix de conversion initial de 2,80 $ (équivalent à la clôture Nasdaq du 25 juillet 2025) ; (ii) la clause antidilution ajuste le prix de conversion au prix d’émission le plus bas ou à un plancher de 1,40 $ lors d’émissions dilutives futures, sous réserve de la règle Nasdaq 5635(d) ; (iii) conversion bloquée au-delà de 4,99 % (optionnellement 9,99 %) de détention ; (iv) droit de vote avec les actions ordinaires sur une base convertie ; (v) consentement d’au moins 67 % des actions préférentielles requis pour les modifications des statuts, les dividendes sur actions subordonnées ou certaines opérations avec des parties liées.
Utilisation des fonds : fonds de roulement général, avec jusqu’à 0,5 million de dollars alloués aux frais de relations avec les investisseurs. Un formulaire S-1 couvrant la revente des actions ordinaires sous-jacentes doit être déposé dans les 45 jours.
L’émission déclenche une réinitialisation automatique du prix de conversion des Series A-2 Preferred en circulation (émises en novembre 2024) de 3,64 $ à 2,80 $, augmentant la dilution potentielle.
Le bilan pro forma (Ex. 99.2) reflétant la levée de fonds et les documents régissant l’émission (Ex. 3.1, 10.1, 10.2) sont joints. Un communiqué de presse associé a été fourni conformément au Reg FD (Ex. 99.1).
Qualigen Therapeutics (QLGN) hat eine 8-K-Meldung eingereicht, in der eine Privatplatzierung von 4.500 neu geschaffenen Series A-3 Preferred Shares zu je 1.000 $ bekanntgegeben wird, wodurch Bruttoerlöse von 4,5 Millionen $ erzielt wurden. Die Runde wurde am 28. Juli 2025 abgeschlossen und unter Regulation D an akkreditierte Investoren verkauft.
Wichtige Bedingungen: (i) Jede Vorzugsaktie kann nach Wahl des Inhabers zu einem anfänglichen Umwandlungspreis von 2,80 $ (entsprechend dem Nasdaq-Schlusskurs vom 25. Juli 2025) in Stammaktien umgewandelt werden; (ii) Anti-Dilution passt den Umwandlungspreis auf den niedrigeren Ausgabepreis oder eine Untergrenze von 1,40 $ bei zukünftigen verwässernden Emissionen an, vorbehaltlich Nasdaq-Regel 5635(d); (iii) Umwandlung ist über 4,99 % (optional 9,99 %) Eigentumsanteil blockiert; (iv) Stimmrecht gemeinsam mit Stammaktien auf umgewandelter Basis; (v) Zustimmung von ≥67 % der Vorzugsaktionäre erforderlich für Satzungsänderungen, Dividenden auf nachrangige Aktien oder bestimmte Geschäfte mit verbundenen Parteien.
Verwendung der Erlöse: allgemeines Betriebskapital, bis zu 0,5 Mio. $ für Investor-Relations-Kosten vorgesehen. Innerhalb von 45 Tagen muss ein Formular S-1 zur Wiederveräußerung der zugrunde liegenden Stammaktien eingereicht werden.
Die Emission löst eine automatische Anpassung des Umwandlungspreises der ausstehenden Series A-2 Preferred (ausgegeben im November 2024) von 3,64 $ auf 2,80 $ aus, was die potenzielle Verwässerung erhöht.
Die Pro-forma-Bilanz (Ex. 99.2), die die Kapitalerhöhung und die zugehörigen Dokumente (Ex. 3.1, 10.1, 10.2) widerspiegelt, sind beigefügt. Eine zugehörige Pressemitteilung wurde gemäß Reg FD eingereicht (Ex. 99.1).
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 2)
(Mark One)
| | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
For the transition period from to
Commission file number:
Electra Battery Materials Corporation
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
(Jurisdiction of Incorporation or Organization)
(Address of Principal Executive Offices)
Electra Battery Materials Corporation
Telephone: (
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Shares | ELBM | The Nasdaq Stock Market LLC |
Securities registered or to be registered pursuant to Section 12(g) of the Act
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to section 15(d) of the Act
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐Yes ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐Yes ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
†The term “new or revised financial accounting standard” refers to any updated issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D‑1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| U.S. GAAP ☐ |
|
|
| Other ☐ |
|
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court
☐Yes ☐No
EXPLANATORY NOTE
This Amendment No. 2 to Form 20-F (the “Amendment No. 2”) amends the annual report on Form 20-F for the year ended December 31, 2024 (the “Annual Report”) of Electra Battery Materials Corporation (the “Company”), which was originally filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 23, 2025 (the “Original Filing”), and was first amended on May 1, 2025 (“Amendment No. 1”).
The purpose of this Amendment No. 2 is to (i) amend and replace Part II - Item 15. Controls and Procedures of the Annual Report, (ii) to amend the “Report of Management’s Accountability,” presented in Part III, Item 18 of the Original Filing, and (iii) to amend exhibits 12.1 and 12.2, with the amended exhibits 12.1 and 12.2 superseding and replacing the exhibits made with the Original Filing and with Amendment No. 1. This Amendment No. 2 does not reflect events occurring after the filing of the Original Filing and does not modify or update the disclosure therein in any way except as described above. Accordingly, this Amendment should be read in conjunction with the Original Filing, Amendment No. 1 and the Company’s other filings with the SEC.
TABLE OF CONTENTS
| Explanatory Note |
i |
| Table of Contents |
ii |
| Part II |
1 |
| Item 15. Controls and Procedures |
1 |
| Disclosure Controls and Procedures |
1 |
| Management Report on Internal Control Over Financial Reporting |
1 |
| Attestation Report of Independent Auditor |
2 |
| Changes in Internal Control over Financial Reporting |
2 |
| Part III |
3 |
| Item 18. Financial Statements |
3 |
| Item 19. Exhibits |
3 |
PART II
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At the end of the period covered by this report, an evaluation of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as such term is defined in Rule 13a‑15(e) and Rule 15d‑15(e) under the Exchange Act) was carried out by the Company’s principal executive officer (the “CEO”) and principal financial officer (the “CFO”). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
Based upon their evaluation, the Company’s CEO and CFO concluded that, during the first three quarters of the fiscal year ended December 31, 2024, there were material weaknesses in the Company’s disclosure controls and procedures.
Management identified the following material weaknesses:
| i. |
An ineffective control environment resulting from the combination of an insufficient number of trained financial reporting and accounting personnel with the appropriate skills and knowledge regarding the design, implementation, and operation of internal control over financial reporting. |
| ii. |
Management had not designed or implemented a control monitoring process necessary to identify control weaknesses and remediations in a timely manner necessary to ensure the reliability of its internal control over financial reporting. |
| iii. |
Control deficiencies in procurement and payment resulting from a lack of formal processes and inconsistent receiving processes at the Company’s refinery project. |
During each of the third and fourth fiscal quarters of the fiscal year ended December 31, 2024, the Company improved its disclosure controls and procedures such that, by December 31, 2024, the Company’s CEO and CFO no longer identified material weaknesses. However, while recognizing the improvements that had been made to the disclosure controls and procedures, the Company’s CEO and CFO concluded that significant deficiencies in the disclosure controls and procedures remained as at December 31, 2024.
As a consequence, the disclosure controls and procedures were not effective to ensure that (i) information required to be disclosed in reports that the Company files or submits to regulatory authorities is recorded, processed, summarized and reported within the time periods specified by regulation, and (ii) is accumulated and communicated to management, including the Company’s CEO and CFO, to allow timely decisions regarding required disclosure.
Management Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”) (as such term is defined in Rule 13a‑15(f) and Rule 15d‑15(f) under the Exchange Act) and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
In designing and evaluating the Company’s ICFR, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its reasonable judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management conducted an evaluation of the effectiveness of the Company’s ICFR as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon their evaluation, the Company’s CEO and CFO have concluded that, during the first three quarters of the fiscal year ended December 31, 2024 (from January 1, 2024 through September 30, 2024), there were material weaknesses in the internal control over financial reporting. Similar to the material weaknesses outlined jn Disclosure Controls and Procedures, outlined above, material weaknesses in the internal control over financial reporting included (i) an ineffective control environment resulting from the combination of an insufficient number of trained financial reporting and accounting personnel, (ii) lack of a control monitoring process necessary to identify weaknesses and (iii) deficiencies in the procurement, payment and receiving processes resulting from a lack of formal processes at the Company’s refinery project. During the second half of the fiscal year ended December 31, 2024 (July 1, 2024 through December 31, 2024), the Company improved its internal control over financial reporting such that, by December 31, 2024, the Company’s CEO and CFO no longer identified material weaknesses. However, while recognizing the improvements that had been made to the internal control over financial reporting, the Company’s CEO and CFO concluded that significant deficiencies in the internal control over financial reporting remained as at the end of the year on December 31, 2024.
As a consequence, the Company’s internal control over financial reporting was not effective as of December 31, 2024.
Attestation Report of Independent Auditor
In accordance with the JOBS Act enacted on April 5, 2012, the Company qualifies as an “emerging growth company,” which entitles the Company to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. Specifically, the JOBS Act defers the requirement to have the Company’s independent auditor assess the Company’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. As such, the Company is exempted from the requirement to include an auditor attestation report in this Annual Report for so long as the Company remains an EGC, which may be for as long as five years following its initial registration in the United States.
Changes in Internal Control over Financial Reporting
The Company’s CEO and CFO are responsible for designing internal control over financial reporting or causing it to be designed under their supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
Although substantial progress has been made strengthening internal control over financing reporting during the fourth quarter of fiscal 2024, management acknowledges that it has identified certain significant deficiencies in ICFR as at the end of the fiscal year on December 31, 2024. These deficiencies are not uncommon for an early-stage, pre-revenue company with a small finance team and limited resources. Like many small companies at a similar stage of development, the Company has not yet implemented the full suite of systems, processes, and personnel typically found in more mature organizations. Management continues to assess and enhance its internal control as the company scales and transitions toward commercial operations.
The Company’s CEO and CFO identified the following areas where material improvements were made during the fourth quarter of fiscal 2024.
| ● |
Control Environment |
| o |
The Company increased the number of trained financial reporting and accounting personnel with the appropriate skills and knowledge regarding the design, implementation, and operation of internal controls over financing reporting. |
| ● |
Control Monitoring Process |
| o |
The Company implemented a control monitoring process to identify weaknesses in its ICFR. |
| ● |
Procurement, Payment and Receiving Processes |
| o |
The Company improved reporting and receiving processes to ensure adherence to the Company’s policies at the Company’s refinery project. |
The Company’s primary assets, including its hydrometallurgical refinery in Ontario, Canada and its cobalt exploration properties in Idaho, USA, are currently on care and maintenance. One or both of these assets are expected to become more active during fiscal 2025 and 2026, at which time, the Company intends to further enhance and improve its ICFR appropriately for such additional activities. Specific areas of focus are expected to be: (i) the control environment, including IT infrastructure and processes, and internal audit function; (ii) the control monitoring process; (iii) the payroll process; (iv) the property, plant and equipment process; and (v) the procurement, payment and receiving processes.
PART III
ITEM 18. FINANCIAL STATEMENTS
Audited Annual Financial Statements as at December 31, 2022, 2023 and 2024:
Independent Auditor’s Report of MNP LLP, dated March 28, 2025, except for the subsequent events described in Note 24 and Note 17 as it relates to the share consolidation in 2022, as to which the date is April 23, 2025 (PCAOB ID:
Independent Auditor’s Report of KPMG LLP, dated April 4, 2023 (PCAOB ID: 85);
Consolidated Statements of Financial Position for the years ended December 31, 2024 and 2023;
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022;
Consolidated Statements of Changes in Shareholder Equity (Deficiency) for the years ended December 31, 2024, 2023 and 2022;
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022;
Notes to the Consolidated Financial Statements.
ITEM 19. EXHIBITS
The following Exhibits are being filed as part of this Annual Report, or are incorporated by reference where indicated:
| Exhibit Number |
Description |
|
| 1.1 |
Certificate of Continuance, First Cobalt Corp., dated September 4, 2018 (incorporated herein by reference to exhibit 1.1 to the Company’s Form 20-F filed May 16, 2024) |
|
| 1.2 |
Certificate of Amendment to the Articles of Incorporation of Electra Battery Materials Corporation, dated December 6, 2021 (incorporated herein by reference to exhibit 4.2 to the Company’s Form S‑8 (File No. 333‑264589) filed with the SEC on April 29, 2022) |
|
| 1.3 |
Certificate of Amendment to the Articles of Incorporation of Electra Battery Materials Corporation dated November 17, 2022 (incorporated herein by reference to exhibit 1.3 to the Company’s Form 20-F filed May 16, 2024) |
|
| 1.4† |
Certificate of Amendment to the Articles of Incorporation of Electra Battery Materials Corporation dated December 31, 2024 |
|
| 1.5 |
By Laws of Electra Battery Materials Corporation (incorporated herein by reference to exhibit 4.3 to the Company’s Form S‑8 (File No. 333‑264589) filed April 29, 2022) |
|
| 2.1 |
Description of Securities (incorporated herein by reference to exhibit 2.1 to the Company’s Form 20-F filed May 16, 2024) |
|
| 2.2 |
Warrant Indenture by and between Electra Battery Materials Corporation and TSX Trust Company, dated November 15, 2022 (incorporated herein by reference to exhibit 99.1 to the Company’s Form 6‑K filed November 15, 2022) |
|
| 2.3 |
Warrant Indenture by and between Electra Battery Materials Corporation and TSX Trust Company, dated February 13, 2023 (incorporated herein by reference to exhibit 99.2 to the Company’s Form 6‑K filed February 14, 2023) |
|
| 2.4† |
First Supplemental Warrant Indenture by and between Electra Battery Materials Corporation and TSX Trust Company, dated January 12, 2024 |
|
| 2.5† |
Second Supplemental Warrant Indenture by and between Electra Battery Materials Corporation and TSX Trust Company, dated November 27, 2024 |
|
| 2.6 |
Indenture, dated as of February 13, 2023, for Convertible Senior Secured Notes due 2028, by and between, Electra Battery Materials Corporation, the Guarantors Party thereto, and GLAS Trust Company LLC, as Trustee and Collateral Trustee (incorporated herein by reference to exhibit 99.2 to the Company’s Form 6‑K filed February 14, 2023) |
|
| 2.7† |
Supplemental Indenture, dated as of November 27, 2024, for Convertible Senior Secured Notes due 2028, by and between, Electra Battery Materials Corporation, the Guarantors Party thereto, and GLAS Trust Company LLC, as Trustee and Collateral Trustee |
|
| 2.8 |
Limited Waiver, dated as of February 27, 2024, by and among Electra Battery Materials Corporation, certain Holders of the Company’s Convertible Senior Secured Notes due 2028, and GLAS Trust Company, LLC, as Trustee for the Holders (incorporated herein by reference to exhibit 99.2 to the Company’s Form 6-K filed February 28, 2024) |
|
| 2.9† |
Limited Waiver, dated as of August 14, 2024, by and among Electra Battery Materials Corporation, certain Holders of the Company’s Convertible Senior Secured Notes due 2028, and GLAS Trust Company, LLC, as Trustee for the Holders |
|
| 2.10† |
Limited Waiver, dated as of November 27, 2024, by and among Electra Battery Materials Corporation, certain Holders of the Company’s Convertible Senior Secured Notes due 2028, and GLAS Trust Company, LLC, as Trustee for the Holders |
| 2.11† |
Warrant Indenture, dated as of November 27, 2024, by and between Electra Battery Materials Corporation and TSX Trust Company |
|
| 2.12† |
Equity Subscription Agreement, entered into on November 25, 2024, by and among Electra Battery Materials Corporation and the Subscriber named thereto |
|
| 2.13† |
Convertible Note Subscription Agreement, entered into on November 25, 2024, by and among Electra Battery Materials Corporation and the Subscriber named thereto |
|
| 2.14† |
Indenture, dated as of November 27, 2024, for 12.00% Convertible Senior Secured Notes due 2027, by and among Electra Batter Materials Corporation, the Guarantors Party thereto, and GLAS Trust Company, LLC, as Trustee and Collateral Trustee |
|
| 8.1 |
Subsidiaries of the Company (incorporated herein by reference to exhibit 8.1 to the Company’s Form 20-F filed May 16, 2024) |
|
| 11.1 |
Code of Business Conduct and Ethics (incorporated herein by reference to exhibit 11.1 to the Company’s Form 20-F filed May 16, 2024) |
|
| 11.2† |
Insider Trading Policy |
|
| 12.1* |
Rule 13a‑14(a)/15d‑14(a) Certification of Chief Executive Officer |
|
| 12.2* |
Rule 13a‑14(a)/15d‑14(a) Certification of Chief Financial Officer |
|
| 13.1† |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
| 13.2† |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
| 15.1 |
Management Discussion and Analysis of the Company for the year ended December 31, 2024 (incorporated herein by reference to exhibit 99.2 to the Company’s Form 6-K filed March 31, 2025) |
|
| 15.2 |
Management Discussion and Analysis of the Company for the year ended December 31, 2023 (incorporated by reference to exhibit 99.2 to the Company’s Form 6-K filed May 14, 2024) |
|
| 15.3† |
Audit Committee Charter |
|
| 15.4 |
Compensation, Governance and Nominating Committee Charter (incorporated herein by reference to exhibit 15.4 to the Company’s Form 20-F filed May 16, 2024) |
|
| 15.5 |
SK1300 Technical Report Summary and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA, effective January 27, 2023 (incorporated herein by reference to exhibit 15.5 to the Company’s Form 20-F filed May 16, 2024) |
|
| 15.6 |
NI 43101 Technical Report and Mineral Resource Estimate for the Iron Creek Cobalt-Copper Property, Lemhi County, Idaho, USA, effective January 27, 2023 (incorporated herein by reference to exhibit 99.2 to the Company’s Form 6-K filed March 13, 2023) |
|
| 15.7* |
Consent of independent registered public accounting firm, MNP LLP, Charted Professional Accountants (PCAOB ID: |
|
| 15.8* |
Consent of independent registered public accounting firm, KPMG LLP (PCAOB ID: 85) |
|
| 15.9† |
Consent of Norda Stelo Inc. (formerly Innovexplo Inc.) |
|
| 15.10† |
Consent of Martin Perron, P.Eng. |
|
| 15.11† |
Consent of Marc R. Beauvais, P.Eng. |
|
| 15.12† |
Consent of Eric Kinnan, P.Geo |
|
| 15.13† |
Consent of Soutex Inc. |
|
| 15.14† |
Consent of Pierre Roy, P.Eng. |
|
| 15.15 |
Letter from KPMG LLP, as the Company’s former independent registered public accountant (incorporated herein by reference to exhibit 15.15 to the Company’s Form 20-F filed May 16, 2024) |
|
| 97.1 |
Clawback Policy (incorporated herein by reference to exhibit 97.1 to the Company’s Form 20-F filed May 16, 2024) |
| 101* |
The following materials from the Company’s Annual Report on Form 20F for the fiscal year ended December 31, 2024, formatted in Inline eXtensible Business Reporting Language (iXBRL): |
|
| Independent Auditor’s Report of MNP LLP, dated March 28, 2025 and April 23, 2025; |
||
| Independent Auditor’s Report of KPMG LLP, dated April 4, 2023; |
||
| Consolidated Statements of Financial Position for the years ended December 31, 2024 and 2023; |
||
| Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2024, 2023 and 2022; |
||
| Consolidated Statements of Changes in Shareholders Equity (Deficiency) for the years ended December 31, 2024, 2023 and 2022; |
||
| Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022; |
||
| Notes to the Consolidated Financial Statements |
||
| 104* |
Cover Page Interactive Data File (formatted as Inline eXtensible Business Reporting Language (iXBRL) and contained in Exhibit 101) |
_____________________________
* Filed herewith.
† Previously Filed
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20‑F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.
| Electra Battery Materials Corporation |
|||
| /s/ Trent Mell |
|||
| By: |
Trent Mell |
||
| Title: |
President & Chief Executive Officer |
||
| Date: July 25, 2025 |
|||
|
ELECTRA BATTERY MATERIALS CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(EXPRESSED IN THOUSANDS OF CANADIAN DOLLARS)
|
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Report of Management’s Accountability
The accompanying audited consolidated financial statements of Electra Battery Materials Corporation were prepared by management in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Management acknowledges responsibility for significant accounting judgements and estimates and for the choice of accounting principles and methods that are appropriate to the Company’s circumstances.
During the first 3 quarters of the fiscal year 2024, management identified material weaknesses in the internal controls over financial reporting and disclosure controls and procedures. During each of the third and fourth fiscal quarters of the fiscal year ended December 31, 2024, the Company improved its internal controls over financial reporting such that, as at December 31, 2024, management no longer identified material weaknesses. However, while recognizing the improvements, management concluded that significant deficiencies in the internal controls over financial reporting and disclosure controls and procedures remained at December 31, 2024. As a consequence, the Company had ineffective controls activities related to the design of process level and financial statement close controls.
Management has implemented appropriate processes to support management representations that it has exercised reasonable diligence that the consolidated financial statements fairly present, in all material respects, the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented in the consolidated financial statements.
The Board of Directors is responsible for reviewing and approving the audited consolidated financial statements to ensure the Company fulfills its financial reporting responsibilities. The Board of Directors carries out this responsibility principally through its Audit Committee.
The Audit Committee is appointed by the Board of Directors and all of its members are non-management Directors. The Audit Committee reviews the consolidated financial statements, management’s discussion and analysis and the external auditors’ report; examines the fees and expenses for audit services; and considers the engagement or reappointment of the external auditors. The Audit Committee reports its findings to the Board of Directors for its consideration when approving the consolidated financial statements for issuance. MNP LLP, the external auditors, have full and free access to the Audit Committee.
| /s/ Trent Mell |
/s/ Marty Rendall |
| President and Chief Executive Officer |
Chief Financial Officer |
July 25, 2025
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of Electra Battery Materials Corporation
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Electra Battery Materials Corporation (the “Company") as at December 31, 2024 and 2023 and the related consolidated statements of loss and other comprehensive loss, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and 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 consolidated financial position of the Company as at December 31, 2024 and 2023, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with IFRS® Accounting Standards as issued by the International Accounting Standards Board.
We have also audited the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effect of the share consolidation as described in Note 17 to the 2022 consolidated financial statements. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2022 consolidated financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2022 consolidated financial statements taken as a whole.
Material Uncertainty Related to Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 of the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Change in Accounting Principle
As discussed in Note 4 to the consolidated financial statements, the Company has changed its method of accounting for the classification of convertible notes as current or non-current as of January 1, 2023 due to the adoption of amendments to IAS 1 – Non- current liabilities with covenants.
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 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.
| 1 Adelaide Street East, Suite 1900, | 1.877.251.2922 T: 416.596.1711 F: 416.596.7894 |
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.
Chartered Professional Accountants
Licensed Public Accountants
March 28, 2025, except for the subsequent events
described in Note 24 and Note 17 as it relates to the share
consolidation in 2022, as to which the date is April 23, 2025
Toronto, Ontario
We have served as the Company’s auditor since 2023.
| 1 Adelaide Street East, Suite 1900, Toronto, Ontario, M5C 2V9 1.877.251.2922 T: 416.596.1711 F: 416.596.7894 MNP.ca |
|
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
KPMG LLP
Bay Adelaide Centre
Suite 4600
333 Bay Street
Toronto ON M5H 2S5
Tel 416-777-8500
Fax 416-777-8818
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Electra Battery Materials Corporation
Opinion on the Consolidated Financial Statements
We have audited, before the effects of the adjustments to retrospectively apply the change in segment composition as described in Note 22 and the effects of the share consolidation as described in Note 17, the consolidated statements of income (loss) and other comprehensive income (loss), cash flows and shareholders’ equity for the year ended December 31, 2022, and the related notes (collectively, the consolidated financial statements) of Electra Battery Materials Corporation (the Company). The 2022 consolidated financial statements before the effects of the adjustments described in Note 22 and Note 17 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the change in segment composition described in Note 22 and the effects of the share consolidation described in Note 17, present fairly, in all material respects the financial performance and cash flows of the Company for the year ended December 31, 2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in segment composition described in Note 22 or the effect of the share consolidation described in Note 17 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit 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 audit 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 audit provides a reasonable basis for our opinion.
/s/ KPMG LLP
Chartered Professional Accountants, Licensed Public Accountants
We served as the Company’s auditor from 2020 to 2023
Toronto, Canada
April 4, 2023
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31, 2024 AND 2023
(expressed in thousands of Canadian dollars)
| December 31, | December 31, | |||||||
| 2024 | 2023 (Restated – Note 4) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Marketable securities (Note 8) | ||||||||
| Prepaid expenses and deposits | ||||||||
| Receivables (Note 5) | ||||||||
| Non-Current Assets | ||||||||
| Exploration and evaluation assets (Note 7) | ||||||||
| Property, plant and equipment (Note 6) | ||||||||
| Capital long-term prepayments (Note 6) | ||||||||
| Long-term restricted cash | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued interest | ||||||||
| Convertible notes payable (Note 11) | ||||||||
| Warrants (Note 11) | ||||||||
| US warrants (Note 14 (c)) | ||||||||
| Lease liability (Note 12) | ||||||||
| Non-Current Liabilities | ||||||||
| Government loan payable (Note 10) | ||||||||
| Government grants (Note 10) | ||||||||
| Royalty (Note 11) | ||||||||
| Lease liability (Note 12) | ||||||||
| Asset retirement obligations (Note 9) | ||||||||
| Total Liabilities | $ | $ | ||||||
| Shareholders’ Equity | ||||||||
| Common shares (Note 13) | ||||||||
| Reserve (Note 13) | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | $ | $ | ||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
Going Concern (Note 1)
Commitments and Contingencies (Note 21)
Subsequent Events (Note 24)
Approved on behalf of the Board of Directors and authorized for issue on April 15, 2025
| /s/ Susan Uthayakumar |
/s/ Trent Mell |
||
| Susan Uthayakumar, Director |
Trent Mell, Director |
See accompanying notes to consolidated financial statements.
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| December 31, |
December 31, |
December 31, |
||||||||||
| 2024 |
2023 |
2022 |
||||||||||
| Operating expenses |
||||||||||||
| General and administrative |
$ | $ | $ | |||||||||
| Consulting and professional fees |
||||||||||||
| Exploration and evaluation expenditures |
||||||||||||
| Investor relations and marketing |
||||||||||||
| Refinery, engineering and metallurgical studies |
||||||||||||
| Refinery, permitting and environmental expenses |
||||||||||||
| Salaries and benefits |
||||||||||||
| Share-based payments (Note 14) |
||||||||||||
| Operating loss before noted items below: |
||||||||||||
| Other |
||||||||||||
| Unrealized loss on marketable securities (Note 8) |
( |
) | ( |
) | ||||||||
| Gain on financial derivative liability - Convertible Notes (Note 11) |
( |
) | ||||||||||
| Changes in fair value of US Warrant (Note 14 (c)) |
||||||||||||
| Other non-operating income (loss) (Note 16) |
( |
) | ( |
) | ||||||||
| Impairment (Note 6) |
( |
) | ||||||||||
| Net Income (loss) |
$ | ( |
) | $ | ( |
) | $ | |||||
| Other comprehensive income (loss): |
||||||||||||
| Fair value adjustment of 2028 Notes due to credit risk |
( |
) | ||||||||||
| Foreign currency translation gain (loss) |
( |
) | ||||||||||
| Net income (loss) and other comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | |||||
| Basic income (loss) per share (Note 17) |
$ | ( |
) | $ | ( |
) | $ | |||||
| Diluted loss per share (Note 17) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Weighted average number of common shares outstanding - Basic (Note 17) |
||||||||||||
| Weighted average number of common shares outstanding - Diluted (Note 17) |
||||||||||||
See accompanying notes to consolidated financial statements.
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Common Shares |
||||||||||||||||||||||||
| Accumulated |
||||||||||||||||||||||||
| Other |
||||||||||||||||||||||||
| Number of |
Comprehensive |
|||||||||||||||||||||||
| shares |
Amount |
Reserves |
Income (loss) |
Deficit |
Total |
|||||||||||||||||||
| Balance – January 1, 2024 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
| Other comprehensive loss for the year, net of taxes |
— | |||||||||||||||||||||||
| Net loss for the year |
— | ( |
) | ( |
) | |||||||||||||||||||
| Share-based payment expense |
— | |||||||||||||||||||||||
| Directors’ fees paid in deferred share units |
— | |||||||||||||||||||||||
| Shares and units issued for: |
||||||||||||||||||||||||
| Proceeds from issuance of shares, net of transaction costs (Note 13) |
||||||||||||||||||||||||
| Warrants issued in connection with 2027 Notes, net of transaction costs (Note 11) |
— | |||||||||||||||||||||||
| Performance based incentive payment (Note 13) |
||||||||||||||||||||||||
| Exercise of restricted and performance share units (Note 13) |
( |
) | ||||||||||||||||||||||
| Settlement of interest on 2028 Notes (Note 15) |
||||||||||||||||||||||||
| Balance – December 31, 2024 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Balance – January 1, 2023 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Other comprehensive loss for the year, net of taxes |
— | ( |
) | ( |
) | |||||||||||||||||||
| Net loss for the year |
— | ( |
) | ( |
) | |||||||||||||||||||
| Share-based payment expense |
— | |||||||||||||||||||||||
| Directors’ fees paid in deferred share units |
— | |||||||||||||||||||||||
| Exercise of restricted share units (Note 13) |
( |
) | ||||||||||||||||||||||
| Proceeds from issuance of share, net of transaction costs |
||||||||||||||||||||||||
| Settlement of transaction costs on 2028 Notes |
||||||||||||||||||||||||
| Convertible Notes Conversion (Notes 11 and 13) |
||||||||||||||||||||||||
| Settlement of interest on 2028 Notes (Note 13) |
||||||||||||||||||||||||
| 2022 Private Placement transaction costs |
— | ( |
) | ( |
) | |||||||||||||||||||
| Settlement of easement |
||||||||||||||||||||||||
| Balance – December 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
See accompanying notes to consolidated financial statements.
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Common Shares |
||||||||||||||||||||||||
| Accumulated |
||||||||||||||||||||||||
| Other |
||||||||||||||||||||||||
| Number of |
Comprehensive |
|||||||||||||||||||||||
| shares |
Amount |
Reserves |
Income |
Deficit |
Total |
|||||||||||||||||||
| Balance – January 1, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Net income for the year |
— | |||||||||||||||||||||||
| Share - based payment expense |
— | |||||||||||||||||||||||
| Directors’ fees paid in deferred share units |
— | |||||||||||||||||||||||
| Shares and units issued for: |
||||||||||||||||||||||||
| Exercise of warrants, options, deferred share units, performance share units and restricted share units (Note 13) |
( |
) | ||||||||||||||||||||||
| ATM Program sales (Note 13) |
||||||||||||||||||||||||
| Cash, net of transaction costs and fair value derivative (Note 13) |
||||||||||||||||||||||||
| Convertible Notes Conversion (Notes 11 and 13) |
||||||||||||||||||||||||
| Balance – December 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
See accompanying notes to consolidated financial statements.
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Year ended | Year ended | Year ended | ||||||||||
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Operating activities | ||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | |||||
| Adjustments for items not affecting cash: | ||||||||||||
| Share-based payments | ||||||||||||
| Unrealized loss on marketable securities | ( | ) | ||||||||||
| Realized loss on marketable securities | ( | ) | ( | ) | ||||||||
| Depreciation (Note 6) | ||||||||||||
| Accretion (Notes 9, 10 and 11) | ||||||||||||
| Interest expense on convertible 2028 Notes and 2027 Notes (Note 11) | ||||||||||||
| Changes in fair value of convertible 2028 Notes and 2027 Notes (Note 11) | ||||||||||||
| Changes in fair value of convertible 2026 Notes (Note 11) | ( | ) | ||||||||||
| Loss on extinguishment of 2026 Notes and recognition of 2028 Notes (Note 11) | ||||||||||||
| Fair value gain on convertible notes and warrants 2028 Notes (Note 11) | ( | ) | ||||||||||
| Settlement of transaction costs on 2028 Notes (Note 11) | ( | ) | ||||||||||
| Changes in fair value of warrants related to 2028 Notes (Note 11) | ( | ) | ||||||||||
| Impairment charge (reversal) | ( | ) | ||||||||||
| Directors’ fees paid in DSUs | ||||||||||||
| Performance based incentive payment | ||||||||||||
| Changes in warrants (US Warrant) | ( | ) | ( | ) | ||||||||
| Withholding tax liability | ||||||||||||
| Unrealized foreign exchange | ||||||||||||
| Other | ||||||||||||
| $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Changes in working capital: | ||||||||||||
| Decrease (increase) in receivables | ( | ) | ( | ) | ||||||||
| Decrease (increase) in prepaid expenses and other assets | ( | ) | ( | ) | ||||||||
| (Decrease) increase in accounts payable and accrual liabilities | ( | ) | ( | ) | ||||||||
| Cash used in operation activities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Investing activities | ||||||||||||
| Transfer to restricted cash | ( | ) | ||||||||||
| Acquisition of exploration and evaluation assets, net of cash | ( | ) | ( | ) | ||||||||
| Capital long-term prepayments | ||||||||||||
| Proceeds from sale of marketable securities (Note 8) | ||||||||||||
| Additions to property, plant and equipment (Note 6) | ( | ) | ( | ) | ( | ) | ||||||
| Sale of exploration and evaluation assets, net of cash | ||||||||||||
| Cash used in investing activities | ( | ) | ( | ) | ||||||||
| Financing activities | ||||||||||||
| Proceeds from issuance of common shares, net transaction costs of $ (2023 - $ and 2022 – $) (Note 13) | ||||||||||||
| Proceeds from at-the-market equity program (“ATM Program”), net of transaction costs of (2022 - $) | ||||||||||||
| Transaction costs private placement 2022 | ( | ) | ||||||||||
| Proceeds from exercise of warrants | ||||||||||||
| Proceeds from exercise of options | ||||||||||||
| Proceeds from government loan, and grant net of repayments of $ (2023 - $, 2022 - $) (Note 10) | ||||||||||||
| Payment of lease liability, net of interest | ( | ) | ( | ) | ||||||||
| Proceeds from 2028 Notes (Note 11) | ||||||||||||
| Proceeds from 2027 Notes, net of transaction costs of $ (Note 11) | ||||||||||||
| Repayment of 2026 Notes (Note 11) | ( | ) | ||||||||||
| Settlement of transaction costs on 2028 Notes (Note 11) | ( | ) | ||||||||||
| Exercise of convertible Notes | ||||||||||||
| Interest settlement of 2026 Notes (Note 11) | ( | ) | ( | ) | ||||||||
| Cash provided by financing activities | ||||||||||||
| Change in cash during the year | ( | ) | ( | ) | ( | ) | ||||||
| Effect of exchange rates on cash | ||||||||||||
| Cash, beginning of year | ||||||||||||
| Cash, end of year | $ | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
ELECTRA BATTERY MATERIALS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024,2023 AND 2022
(expressed in thousands of Canadian dollars)
| 1. | Significant Nature of Operations |
Electra Battery Materials Corporation (the “Company”, “Electra”) was incorporated on July 13, 2011 under the Business Corporations Act of British Columbia (the “Act”). On September 4, 2018, the Company filed a Certificate of Continuance into Canada and adopted Articles of Continuance as a Federal Company under the Canada Business Corporations Act (the “CBCA”). On December 6, 2021, the Company changed its corporate name from First Cobalt Corp. to Electra Battery Materials Corporation. The Company is in the business of producing battery materials for the electric vehicle supply chain. The Company is focused on building a supply of cobalt, nickel and recycled battery materials.
Electra is a public company which is listed on the Toronto Venture Stock Exchange (TSX-V) (under the symbol ELBM). On April 27, 2022, the Company began trading on the NASDAQ (under the symbol ELBM). The Company’s registered office is Suite 2400, Bay-Adelaide Centre, 333 Bay Street, Toronto, Ontario, M5H 2T6 and the corporate head office is located at 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3.
The Company is focused on building a North American integrated battery materials facility for the electric vehicle supply chain. The Company is in the process of constructing its expanded hydrometallurgical cobalt refinery (the “Refinery”), assessing the various optimizations and modular growth scenarios for a recycled battery material (known as black mass) program, and exploring and developing its mineral properties.
Going Concern Basis of Accounting
The accompanying audited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future, and, as such, the audited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
The Company has recurring net operating losses and negative cash flows from operations. As of December 31, 2024, 2023 and 2022, the Company had an accumulated deficit of $
In order to continue its operations, the Company must achieve profitable operations and/or obtain additional equity or debt financing. Until the Company achieves profitability, management plans to fund its operations and capital expenditures with cash on hand, borrowings, and issuance of capital stock. Until the Company generates revenue at a level to support its cost structure, the Company expects to continue to incur substantial operating losses and net cash outflows from operating activities.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The Company is actively pursuing various alternatives including government grants and loans, strategic partnerships, equity and debt financing to increase its liquidity and capital resources. During 2024, a government loan from Federal Economic Development Agency for Northern Ontario (“FedNor’) was received in the amount of $
On August 19, 2024, the Company was awarded in funding by the U.S. Department of Defense (“DoD”) for the construction of the Refinery funded on a reimbursement basis. The award was made pursuant to Title III of the Defense Production Act (DPA) to expand domestic production capability. On November 25, 2024, the Company completed a private placement of as detailed in Note 13. On November 27, 2024, the Company issued secured convertible notes in the principal amount of as detailed in Note 11. Although the Company has historically been successful in obtaining financing in the past, there can be no assurances that the Company will be able to obtain adequate financing in the future. These audited consolidated financial statements do not include the adjustments to the amounts and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These adjustments may be material.
| 2. | Material Accounting Policies and Basis of Preparation |
Basis of Presentation and Statement of Compliance
These consolidated financial statements, including comparatives, have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standard Board. These financial statements have been prepared on a historical cost basis, except for certain financial instruments, which are classified as fair value through profit or loss (“FVTPL”). All amounts on the consolidated financial statements are presented in thousands of Canadian dollars, except share and per share amounts, and otherwise noted.
Certain comparatives in 2023 have been restated to conform with current accounting presentation.
Functional Currency
The functional currency of the Company and its controlled entities are measured using the principal currency of the primary economic environment in which each entity operates. The functional currency of the Company and its subsidiaries is Canadian dollars, except for Cobalt One Limited which has a functional currency of Australian Dollars and United States entities which has a functional currency of US Dollars for 2024 and 2023.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are retranslated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Foreign exchange differences on monetary items are recognized in profit or loss in the period in which they arise except for:
| ● | Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the costs of assets as they are regarded as an adjustment to interest costs on those currency borrowings. |
| ● | Foreign exchange gains or losses arising from a monetary item receivable for or payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation are recognized in other comprehensive income or loss. |
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The assets and liabilities of entities with a functional currency that differs from the presentation currency are translated to the presentation currency as follows:
| ● | Assets and liabilities are translated at the closing rate at the end of the financial reporting period; |
| ● | Income, expenses, and cash flows are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case, income and expenses are translated at the rate on the dates of the transactions); |
| ● | Equity transactions are translated using the exchange rate at the date of the transaction; and |
| ● | All resulting exchange differences are recognized as a separate component of equity as accumulated other comprehensive income. |
During 2023, the Company’s considered primary and secondary indicators in determining functional currency including the currency in which funds from financing activities were generated, the Company re-evaluated the functional currency of its US subsidiaries and determined that a change in their functional currency from Canadian dollars to US Dollars was appropriate. The Company translated its US subsidiaries’ assets and liabilities into the new functional currency of US dollars at the opening spot rate for the year and recorded a translation adjustment from January 1, 2023 onwards to reflect the impact of translating the Company’s US dollar assets and liabilities to the presentation currency. The change in functional currency for these subsidiaries has been applied prospectively.
Basis of Consolidation
These consolidated financial statements include the accounts of the Company and its controlled entities. Control is achieved when the Company has the power to govern the financial operating policies of an entity to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control is transferred to the Company until the date on which control ceases.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The following subsidiaries have been consolidated for all dates presented within these financial statements:
| Subsidiary | Ownership % | Location | Status | |
| Cobalt Projects International Corp. | | | Inactive | |
| Cobalt Industries of Canada Corp. | | | Inactive | |
| Cobalt One Limited | | | Active | |
| Cobalt Camp Refinery Ltd. | | | Active | |
| Cobalt Camp Ontario Holdings Corp. | | | Inactive | |
| Ophiolite Consultants Pty Ltd. | | | Inactive | |
| Acacia Minerals Pty Ltd. | | | Inactive | |
| CobalTech Mining Inc. | | | Inactive | |
| US Cobalt Inc. (“USCO”) | | | Active | |
| 1086360 BC Ltd. | | | Active | |
| Idaho Cobalt Company | | | Active | |
| Scientific Metals (Delaware) Corp. | | | Inactive | |
| Orion Resources NV | | | Inactive | |
| Grafito La Barranca de Mexico S.A. de C.V. | | | Inactive | |
| Grafito La Colorada de Mexico S.A. de C.V. | | | Inactive |
All inter-company transactions, balances, income and expenses are eliminated in full upon consolidation.
Cash and Cash equivalents
Cash and cash equivalents consist of cash on hand, deposits in banks and highly liquid investments with an original maturity of three months or less.
Restricted cash
Restricted cash consists of escrow funds for settlement with vendors held by the Company’s legal counsel with term of less than one year. Long-term restricted cash relates to amounts on deposit as financial assurance for the refinery closure plan.
Marketable Securities
Marketable securities represent shares held in a publicly traded company. Marketable securities held by the Company are held for trading purposes and are classified as financial asset measured at FVTPL. At each reporting date, the Company marks-to-market the value of the marketable securities based on quoted market prices; therefore, these financial assets are classified as Level 1 on the fair value hierarchy.
Any profit or loss arising from the sale of these securities, or the revaluation at reporting dates, is recorded to the consolidated statement of income (loss) and other comprehensive income (loss). As the marketable securities are held for trading purposes and not as part of a strategic investment, they are expected to be liquidated within a twelve-month period and are classified as a current asset on the statement of financial position.
Financial instruments
Cash and cash equivalents, restricted cash, receivables, accounts payable and accrued liabilities, and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The Company recognizes all financial assets initially at fair value and classifies them into one of the following measurement categories: FVTPL, fair value through other comprehensive income or amortized cost, as appropriate.
Financial liabilities are initially recognized at fair value and classified as either FVTPL or amortized cost, as appropriate.
Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.
At each reporting date, the Company assesses whether there is objective evidence that a financial asset has been impaired.
The Company had made the following classification of its financial instruments:
| Financial assets or liabilities, accrued interest and lease liability | Measurement Category | |
| Cash and cash equivalents | Amortized Cost | |
| Restricted cash | Amortized Cost | |
| Receivables | Amortized Cost | |
| Marketable securities | FVTPL | |
| Account payable and accrued liabilities | Amortized Cost | |
| Convertible notes payable | FVTPL | |
| Government loan payable | Amortized Cost | |
| Warrants | FVTPL | |
| Royalty | Amortized Cost |
Financial instruments measured at fair value are classified into one of the three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly;
Level 3 – Inputs that are not based on observable market data.
Exploration and Evaluation Assets
The acquisition costs of mineral property interests have been capitalized as exploration and evaluation assets within the Company’s financial statements. Subsequent exploration and evaluation costs are expensed until the property to which they relate has demonstrated technical feasibility and commercial viability, after which costs are capitalized.
The acquisition costs include the cash consideration paid and the fair market value of any shares issued for mineral property interests being acquired or optioned pursuant to the terms of relevant agreements. When a partial sale of a mineral property occurs, if control is lost the asset is derecognized and there is a resultant gain or loss recorded to profit and loss in the period the transaction takes place. When all of the interest in a property is sold, subject only to any retained royalty interests which may exist, the accumulated property costs are derecognized, with any gain or loss included in profit or loss in the period the transaction takes place.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Management reviews its mineral property interests at each reporting period for indicators of impairment taking into consideration whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future and management’s assessment of likely proceeds from the disposition of the property. If a property’s carrying value exceeds its recoverable amount through either not being recoverable, being abandoned, or considered to have no future economic potential, the acquisition and deferred exploration and evaluation costs are written down to their recoverable amount.
Should a project be put into production, the costs of acquisition will be amortized using the units-of-production method over the life of the project based on estimated economic reserves.
Property, Plant and Equipment
Plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment losses. The cost of an asset includes the purchase price or construction cost, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use, an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, and borrowing costs related to the acquisition or construction of the qualifying assets.
Depreciation of plant and equipment commences when the asset is in the condition and location necessary for it to operate in the manner intended by management. Plant and equipment assets are depreciated using the straight-line method over the estimated useful life of the asset. Where an item of plant and equipment comprises of major components with different useful lives, the components are accounted for as separate items of plant and equipment. Depreciation is recognized in the consolidated statement of loss and comprehensive loss upon commercial production having been achieved.
At the date of the financial statements no plant and equipment assets are in use. The Company will assess the useful lives of the assets once they are put into use.
Development costs associated with bringing the Company’s Refinery to the location and condition necessary for it to be capable of operating in its intended manner are capitalized as property, plant and equipment costs.
Capital Long-Term Prepayments
For major equipment items where milestone payments are made during the manufacturing process, these costs are initially recorded as capital long-term prepayments. Once the piece of equipment is delivered to the Refinery site, the associated cost is then reclassified to property, plant and equipment costs.
Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. For such contracts, the Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The ROU asset is initially measured at cost, which comprises of initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and any estimated costs to dismantle or restore the underlying asset, less any lease incentives received. ROU asset is subsequently depreciated using straight-line method over the lease term, or useful life of the underlying asset if a purchase option is expected to be exercised. ROU asset is presented as part of property, plant and equipment.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date and subsequently measured at amortized cost using the effective interest rate method.
Lease payments for short-term leases with a term of 12 months or less, leases of low-value assets, as well as leases with variable lease payments are recognized as an expense over the term of such leases.
Borrowing Costs
Borrowing costs are expensed as incurred except where they relate to the financing of construction or development of qualifying assets in which case they are capitalized as property, plant and equipment up to the date when the qualifying asset is ready for its intended use.
Majority of the proceeds from the convertible notes and the government grant are being utilized for the construction and expansion of the Refinery, which given its construction timeline of over a year, is a qualifying asset under IAS 23 Borrowing Costs. Construction of the Refinery has not resumed during 2024 and
Impairment
(i) Financial assets
For financial assets measured at amortized cost, the impairment model under IFRS 9, Financial Instruments (“IFRS 9”), reflects expected credit losses. The Company recognizes loss allowances for expected credit losses and changes in those expected credit losses. At each reporting date, financial assets carried at amortized cost are assessed to determine whether they are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. The gross carrying amount of a financial asset is written off to the extent that there is no realistic prospect of recovery.
(ii) Non-financial assets
Non-financial assets are evaluated at each reporting period by management for indicators that carrying value is impaired and may not be recoverable. When indicators of impairment are present the recoverable amount of an asset is evaluated at the CGU level, the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets, where the recoverable amount of a CGU is the greater of the CGU’s fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss to the extent that the carrying amount exceeds the recoverable amount.
Previously recognized impairment losses are evaluated at each reporting period for indication that an impairment loss recognized in prior periods for an asset may no longer exist or may have decreased. If such indication exists, the Company estimates the recoverable amount of that asset, and an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Assets Held for Sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probably that they will be recovered primarily through sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated to the assets and liabilities on a pro rata basis. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognized in profit or loss. Once classified as held-for-sale, property, plant, and equipment are no longer amortized or depreciated.
Share capital
Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash, are valued based on the fair value of goods or services received.
Warrants classified as equity
Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s consolidated balance sheets and no further adjustments to their valuation are made.
Warrants classified as liabilities
Warrants classified as derivative liabilities and other derivative financial instruments require separate accounting as liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for expected volatility, expected life, yield, and risk-free interest rate.
Share-based payment transactions
The Company has a long-term incentive plan that provides for the granting of options, deferred share units (“DSUs”), restricted share units (“RSUs”) and performance share units (“PSUs”) to officers, directors, consultants and related company employees to acquire shares of the Company.
(i) Stock options
The fair value of the options is measured on grant date and is recognized as an expense with a corresponding increase in reserves as the options vest. Options granted to employees and others providing similar services are measured on grant date at the fair value of the instruments issued. Fair value is determined using the Black-Scholes option pricing model considering the terms and conditions upon which the options were granted. The amount recognized as an expense is adjusted to reflect the actual number of stock options that are expected to vest. Each tranche in an award with graded vesting is considered a separate grant with a different vesting date and fair value. Each grant is accounted for on that basis.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Options granted to non-employees are measured at the fair value of the goods or services received, unless that fair value cannot be estimated reliably, in which case the fair value of the equity instruments issued is used. The value of the goods or services is recorded at the earlier of the vesting date, or the date the goods or services are received. On vesting, share-based payments are recorded as an operating expense and as reserves. When options are exercised, the consideration received is recorded as share capital. The related share-based payments originally recorded as reserves remain in reserves on either exercise or expiry of the underlying options.
(ii) Deferred, restricted and performance share units
DSUs, RSUs and PSUs are classified as equity settled share-based payments and are measured at fair value on the grant date. The expense for DSUs, RSUs and PSUs, to be redeemed in shares, is recognized over the vesting period, or using management’s best estimate when contractual provisions restrict vesting until completion of certain performance conditions, with a charge as an expense and a corresponding increase in reserves as the instrument vests. Upon exercise of any DSUs, RSUs, and PSUs, the grant date fair value of the instrument is transferred to share capital.
Environmental rehabilitation
An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. The estimated costs arising from the future decommissioning of plant and other site preparation work, discounted to their net present value where material, are determined, and capitalized at the start of each project to the carrying amount of the asset, as soon as the obligation to incur such costs arises. Discount rates, using a pretax rate that reflect the time value of money and risks specific to the liability, are used to calculate the net present value. Costs are charged against profit or loss over the economic life of the related asset, through amortization of the asset retirement obligation using either the unit-of-production or the straight-line method. The related liability is adjusted at each period-end with changes related to the unwinding of the discount rate accounted for in profit or loss and changes related to the current market-based discount rate or the amount or timing of the underlying cash flows needed to settle the obligation accounted for as an adjustment to the related rehabilitation asset.
Income taxes
Income tax expense is comprised of current and deferred taxes. Current tax and deferred tax are recognized in profit or loss, except to the extent that they relate to items recognized directly in equity or equity investments.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority for the same taxable entity. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Income / Loss per share
The Company presents basic and diluted income/loss per share (“LPS”) data for its common shares. Basic LPS is calculated by dividing the income/loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held. Diluted LPS is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held and for the effects of all dilutive potential common shares related to outstanding stock options and warrants issued by the Company. In a period of losses, the warrants, options and non-vested RSUs, PSUs and DSUs are excluded for the determination of dilutive net loss per share because their effect is anti-dilutive.
Operating Segments
The Company’s Chief Operating Decision Maker reviews operating results and assesses performance for the Refinery and exploration and evaluation activities on a separate basis, and therefore, the Refinery and exploration and evaluation assets both meet the definition of a segment. Upon the decision to move into the full development stage of the Refinery, this business unit is now likely to earn revenue and incur expenses that are separate and discrete from the rest of the Company. The Company’s operating segments are as follows:
| ● | Refinery |
| ● | Exploration and Evaluation assets |
| ● | Corporate and Other |
Related Party Transactions
Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities and include directors and key management of the Company and its parent. A transaction is a related party transaction when there is a transfer of resources, services or obligations between related parties.
Government Loans
The Company received funding from the Federal Government of Canada in the form of non-interest-bearing loans. The Company records the present value of these loans, assuming a market rate of interest, as a liability in accordance with IFRS 9 Financial Instruments. The difference between the funding received and the present value of the loan is the benefit provided by the below market interest rate and is recorded as government grant liability. This is amortized to income over the life of the Refinery asset to which the funding related to.
The funding from the Federal Government of Canada is received as a proportion of construction costs incurred.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Government Grant /Award
Government grants are accounted for in accordance with IAS 20, Accounting for Governmental Grants. Governmental Grants are recognized when they are received or receivable and when there is reasonable assurance that the Company will comply with any conditions attached to the grant.
The Company received funding from the Ontario Government and US Department of Defense in the form of a non-repayable grant. Government grants will be recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related costs for which the grants are intended to compensate. Government grants related to assets shall be presented in the statement of financial position either by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset. The Company records government grants by reducing the carrying amount of the asset.
Convertible notes payable
Convertible notes payable are financial instruments which contain a separate financial liability and equity instrument. These financial instruments are accounted for separately dependent on the nature of their components. The identification of such components embedded within a convertible notes payable requires significant judgement given that it is based on the interpretation of the substance of the contractual arrangement. The convertible notes are considered to contain embedded derivatives. The embedded derivatives were measured at fair value upon initial recognition and separated from the debt component of the notes. The debt component of the notes is measured at residual value upon initial recognition. Subsequent to initial recognition, the embedded derivative components are re-measured at fair value at each reporting date while the debt components are accreted to the face value of the note using the effective interest rate through periodic charges to finance expense over the term of the note. The Company elected to measure the convertible notes payable at fair value as a whole instrument (“FVO”), therefore the convertible notes payable are measured at FVTPL at their entirety.
| 3. | Significant Accounting Judgments and Estimates |
The preparation of the Company’s financial statements in conformity with IFRS® Accounting Standards as issued by the International Accounting Standard Board requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes may differ significantly from these estimates.
Judgments and estimates that have the most significant effect on the amounts recognized in the Company’s consolidated financial statements are as follows:
| ● | Refinery Asset |
The net carrying value of the Refinery asset is reviewed regularly for conditions that suggest potential indications of impairment. The review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the technological, market, economic or legal environment in which the entity operates; and internal indicators that the economic performance of the asset will be worse than expected.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| ● | Exploration and Evaluation Assets |
The net carrying value of each mineral property is reviewed regularly for conditions that suggest potential indications of impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property’s value; whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future and management’s assessment of likely proceeds from the disposition of the property.
| ● | Financial Derivative Liability |
The Financial Derivative Liability values relating to convertible note and US dollar denominated warrants involve significant estimation. The fair value of financial derivative liability was determined at inception and is reviewed and adjusted on a quarterly basis or when conversions take place. Factors considered in the fair value of the financial derivative liability are risk free rate, the Company’s share price, equity volatility, and credit spread.
| ● | Environmental Rehabilitation |
Management’s determination of the Company’s decommissioning and rehabilitation provision is based on the reclamation and closure activities it anticipates as being required, the additional contingent mitigation measures it identifies as potentially being required and its assessment of the likelihood of such contingent measures being required, and its estimate of the probable costs and timing of such activities and measures. Significant estimations must be made when determining such reclamation and closure activities and measures required and potentially required.
| 4. | New Accounting Standards Issued |
Certain new accounting standards and interpretations have been published that are either applicable in the current year or not mandatory for the current period. The Company adopted amendments to IAS 1 – Non-current liabilities with covenants and determined a reclassification of the convertible notes from long-term to current liabilities during the current period. The amendments clarify certain requirements for determining whether a liability should be classified as current or non-current and require new disclosures for non-current liabilities that are subject to covenants within 12 months after the reporting period. This resulted in a change in the accounting policy for classification of liabilities that can be settled in the Company’s own shares (e.g. convertible notes issued by the Company). Previously, the Company excluded all counterparty conversion options when classifying the related liabilities as current or non-current. Under the revised policy, when a liability includes a counterparty conversion option that may be settled by a transfer of a Company’s own shares, the Company takes into account the conversion option in classifying the host liability as current or non-current except when it is classified as a equity component of a compound instrument. The Company’s other liabilities were not impacted by the amendments.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The Company has presented convertible notes payable as current liabilities in these consolidated financial statements in accordance with the amendments. Since the amendments are applicable retrospectively for annual reporting periods beginning on or after January 1, 2024, the Company has restated the comparative figures. The amendments to IAS 1 did not have any impact on the consolidated statement of financial position as at January 1, 2023. The following table outlines the impact of the restatements as at December 31, 2023:
| December 31, 2023 | ||||||||||||
| As reported | Restatement | Restated | ||||||||||
| Current liabilities | $ | $ | $ | |||||||||
| Non-current liabilities | ( | ) | ||||||||||
IFRS 18 Presentation and Disclosure in Financial Statements was issued by the IASB in April 2024, with mandatory application of the standard in annual reporting periods beginning on or after January 1, 2027. The Company is currently assessing the impact of IFRS 18 on its consolidated financial statements. No standards have been early adopted in the current period.
| 5. | Receivables |
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| GST receivables | $ | $ | ||||||
| Grant receivables | ||||||||
| Other | ||||||||
| $ | $ | |||||||
Grant receivables consist of $
| 6. | Property, Plant and Equipment and Capital Long-Term Prepayments |
| Property, Plant and | Construction | Right-of- | ||||||||||||||
| Cost | Equipment | in Progress | use Assets | Total | ||||||||||||
| Balance January 1, 2023 | $ | $ | $ | $ | ||||||||||||
| Additions during the year | ||||||||||||||||
| Transfers from capital long-term prepayments | ||||||||||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Balance December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Reclassification | ( | ) | ||||||||||||||
| Additions during the year | ||||||||||||||||
| Transfers to capital long-term prepayments | ( | ) | ( | ) | ||||||||||||
| Asset retirement obligation – Change in estimate | ( | ) | ( | ) | ||||||||||||
| Balance December 31, 2024 | $ | $ | $ | $ | ||||||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Property, Plant and | Construction | Right-of- | ||||||||||||||
| Accumulated Depreciation | Equipment | in Progress | use Assets | Total | ||||||||||||
| Balance January 1, 2023 | $ | $ | $ | $ | ||||||||||||
| Change for the year | ||||||||||||||||
| Balance December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Change for the year | ||||||||||||||||
| Balance December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Net Book Value | ||||||||||||||||
| Balance December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Balance December 31, 2024 | $ | $ | $ | $ |
Majority of the Company’s property, plant, and equipment assets relate to the Refinery located near Temiskaming Shores, Ontario, Canada. The carrying value of property, plant, and equipment is $
During the year ended December 31, 2023, an impairment charge was recognized on the Refinery in Ontario. The impairment loss of $
During the year ended December 31, 2024, the Company performed their annual impairment assessment and determined based on third party appraisal, the fair value less costs of disposal was determined to be higher than the carrying value of the Refinery CGU, resulting in
Capitalized development costs for the year ended December 31, 2024 totaled (2023 - $
Right-of-use asset relate to office lease which the Company entered into during 2022. Refer to Note 12.
| Capital long-term | ||||
| prepayments | ||||
| Balance January 1, 2023 | $ | |||
| Additions during the year | ||||
| Transfers to property, plant and equipment | ( | ) | ||
| Balance December 31, 2023 | $ | |||
| Additions during the year | ||||
| Balance December 31, 2024 | $ | |||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Capital long-term prepayments relate to payments for long-term capital contracts made for Refinery equipment purchases that have not yet been received by the Company as of December 31, 2024, all of which are pledged as security for the 2028 Notes (Note 11). The prepayments mainly relate to milestone payments to vendors for the cobalt crystallizer and the solvent extraction equipment being manufactured for the Refinery.
| 7. | Exploration and Evaluation Assets |
| Balance January 1, 2023 | Foreign Exchange | Balance December 31, 2023 | Foreign Exchange | Acquisition cost | Balance December 31, 2024 | |||||||||||||||||||
| Iron Creek, USA | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||
All of the Iron Creek mineral properties are pledged as security for the Convertible Notes issued on February 13, 2023 and November 27, 2024 (Note 11). Upon successful commissioning of the Refinery, the Iron Creek mineral properties will be released from the Convertible Notes security package.
Certain claims relating to the Iron Creek properties were acquired by the Company against earn-in and option agreements entered with the original owners of such claims. These agreements provide a working interest in the property to the Company, upon making certain milestone payments and/or incurring certain expenditures on the property. The claims are also subject to future net smelter royalty (“NSR”) payments.
| 8. | Marketable Securities |
Marketable securities represent Kuya Silver Corp (“Kuya”) shares held by the Company. The Kuya shares were acquired via the Kerr Assets sale on February 26, 2021 and January 31, 2023 described below (“2023 Sale”). The total value of marketable securities at December 31, 2023 was $
On January 31, 2023, the Company completed the sale of the remaining assets of Canadian Cobalt Camp consisting of Keely-Frontier patents (“Cobalt Camp”) which Kuya did not own, as well as their associated asset retirement obligations. To complete the sale, Kuya issued to the Company
Marketable securities represent Kuya Silver Corp (“Kuya”) shares held by the Company. The Kuya shares were acquired via the Kerr Assets sale on February 26, 2021 and January 31, 2023 described below (“2023 Sale”). The total value of marketable securities at December 31, 2024 was $
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| 9. | Asset Retirement Obligations |
As at December 31, 2024, the estimated cost of closure is $
The full estimated closure cost in the new closure plan incorporated a number of new disturbances that have yet to take place, such as new roadways, new chemicals on site, and a new tailings area. The new closure plan also included cost updates relating to remediating disturbances that existed at December 31, 2024. The following assumptions were used to calculate the asset retirement obligation:
| ● | Discounted cash flows of $ |
| ● | Closure activities date of 2073 ( December 31, 2023 – 2037) |
| ● | Risk-free discount rate of |
| ● | Long-term inflation rate of |
The continuity of the asset retirement obligation at December 31, 2024 and 2023 is as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| Balance at January 1 | $ | $ | ||||||
| Change in estimate from discounting | ( | ) | ||||||
| Accretion | ||||||||
| Change in estimate of costs | ||||||||
| Transferred to held for sale | ||||||||
| Balance at December 31 | $ | $ | ||||||
| 10. | Long-Term Government Loan Payable and Government Grant |
On November 24, 2020, the Company had entered into a contribution agreement with the Ministry of Economic Development and Official Languages as represented by the Federal Economic Development Agency for Northern Ontario (“FedNor”) for up to a maximum of $
Once construction is completed, the cumulative balance borrowed will be repaid in
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
On June 10, 2024, the Company received $
On August 19, 2024, the Company was awarded by the U.S. Department of Defense (“DoD”). The award was made pursuant to Title III of the Defense Production Act (“DPA”) to expand domestic production capability and is funded through the Additional Ukraine Supplemental Appropriations Act. Partial proceeds have been received in the fourth quarter of 2024 on a reimbursement basis for approved expenditures.
The following table sets out the balances of Government Loan and Government Grant received at December 31, 2024 and December 31, 2023:
| Government Loan | Government Grant | Total | ||||||||||
| Balance at January 1, 2023 | $ | $ | $ | |||||||||
| FedNor loan (Nickel Study) - February 2023 | — | |||||||||||
| Accretion | ( | ) | ||||||||||
| Balance at December 31, 2023 | $ | $ | $ | |||||||||
| FedNor - February 2024 | — | |||||||||||
| FedNor - April 2024 | — | |||||||||||
| FedNor loan (Nickel Study) - Payment | ( | ) | — | ( | ) | |||||||
| FedNor - August 2024 | — | |||||||||||
| Allocation to government grant | ( | ) | — | |||||||||
| Accretion | ||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | |||||||||
The Company received approval for a $
| 11. | Convertible Note Arrangement |
On February 13, 2023, the Company completed subscription agreements with certain institutional investors in the United States with respect to $
The investors in the offering also received an aggregate of
Upon early conversion of the 2028 Notes, the Company will make an interest make whole payment equal to the lesser of the years of interest payments or interest payable to maturity, which may be made in cash or shares at the Company’s discretion. The investors also received a royalty of: (i)
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The Company used a portion of the proceeds of the 2028 Notes offering to purchase all of the outstanding convertible notes consisting of $
| Financial | ||||||||||||
| Convertible | Derivative | |||||||||||
| Notes Payable | Liability | Total | ||||||||||
| Balance at January 1, 2022 | $ | $ | $ | |||||||||
| Effective interest | ||||||||||||
| Foreign exchange loss | ||||||||||||
| Interest payment | ( | ) | ( | ) | ||||||||
| Gain on fair value derivative revaluation | ( | ) | ( | ) | ||||||||
| Portion de-recognized due to conversions | ( | ) | ( | ) | ( | ) | ||||||
| Less: Accrued interest | ( | ) | ( | ) | ||||||||
| Balance at December 31, 2022 | $ | $ | $ | |||||||||
| Effective interest | ||||||||||||
| Foreign exchange loss | ( | ) | ( | ) | ||||||||
| Loss on fair value derivative re-valuation | ||||||||||||
| Less: Accrued interest | ( | ) | ( | ) | ||||||||
| Balance at February 13, 2023 | $ | $ | $ | |||||||||
| Proceeds from 2028 Notes | ||||||||||||
| Fair value used to settle 2026 Notes | ||||||||||||
| Fair value of 2028 Notes | ||||||||||||
| Loss before transaction costs | ( | ) | ||||||||||
| Transaction costs | ( | ) | ||||||||||
| Loss on extinguishment of 2026 Notes and recognition of 2028 Notes | $ | ( | ) | |||||||||
The 2028 Notes contains components of Convertible Notes, Warrants, and a Royalty. Based on the 2028 Notes agreements, these components are separately exercisable hence the Company has accounted for each as a freestanding financial instrument and initially recorded these components at fair value. They have been recorded as derivative liabilities until they are elected to conversion to common shares.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
As at initial recognition on February 13, 2023, the embedded derivatives were fair valued using the finite difference valuation method with the following key assumptions:
| ● | Risk free rate at February of 13, 2023 of |
| ● | Equity volatility at February 13, 2023 of |
| ● | An Electra share price at February 13, 2023 of $ |
| ● | A credit spread at February 13, 2023 of |
In addition, subject to certain conditions, the noteholders have agreed to waive the requirement set out in the 2028 Notes for the Company to file a registration statement to provide for the resale of the common shares underlying the 2028 Notes and the common share purchase warrants issued on February 13, 2023.
In January 2024, the terms of the 2028 Warrants were amended and the exercise price of was re-priced to $
In addition, the 2028 Warrants now include a revised acceleration clause such that their term will be reduced to -day in the event the closing price of the common shares on the TSXV exceeds $
On March 21, 2024, the Company satisfied $
The 2028 Notes are secured by a first priority security interest (subject to customary permitted liens) in substantially all of the Company’s assets, and the assets and/or equity of the secured guarantors. The 2028 Notes are subject to customary events of default and basic positive and negative covenants. The Company is required to maintain a minimum liquidity balance of under the terms of the 2028 Notes. The 2028 Notes are convertible at the discretion of the lenders and as such have been classified as a current liability.
On November 27, 2024, the Company has also issued additional 2028 Notes to the noteholders, in the principal amount of $
For the year ended December 31, 2024, the embedded derivatives were fair valued using the finite difference valuation method with the following key assumptions:
| ● | Risk free rate at December 31, 2024 of |
| ● | Equity volatility at December 31, 2024 of |
| ● | An Electra share price at December 31, 2024 of ( December 31, 2023 - ) reflecting the quoted market prices; and |
| ● | A credit spread at December 31, 2024 of |
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The following table sets out the details of the Company’s financial derivative liability related to embedded derivatives in the 2028 Notes as of December 31, 2024 and December 31, 2023:
| Convertible | ||||||||||||||||
| Notes | ||||||||||||||||
| Payable | Warrants | Royalty | Total | |||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | $ | ||||||||||||
| Initial recognition at fair value | ||||||||||||||||
| Balance at February 13, 2023 | ||||||||||||||||
| Portion de-recognized due to conversions | ( | ) | ( | ) | ||||||||||||
| Revaluation to fair value | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange gain | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Accretion | ||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Revaluation to fair value | ||||||||||||||||
| Capitalized interest | ||||||||||||||||
| Revaluation to fair value due to own credit risk | ||||||||||||||||
| Foreign exchange gain | ||||||||||||||||
| Accretion | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ||||||||||||
The unpaid interest as at December 31, 2024 is $
On November 27, 2024, the Company closed a financing transaction (the “2027 Notes”) with the holders of the 2028 Notes for gross proceeds of $
As at initial recognition on November 27, 2024, the convertible notes were fair valued using the finite difference valuation method with the following key assumptions:
| ● | Risk free rate at November 27, 2024 of |
| ● | Equity volatility at November 27, 2024 of |
| ● | An Electra share price at November 27, 2024 of reflecting the quoted market prices; and |
| ● | A credit spread at November 27, 2024 of |
The transaction costs relating to the 2027 Notes and equity financing in the amount of $
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The 2027 Notes will rate pari passu to the 2028 Notes, will bear interest at a rate of
In connection with closing the 2027 Notes, the noteholders of the 2028 Notes have waived certain existing events of default regarding the non-payment of interest under the 2027 Notes and the minimum required cash balance through until February 15, 2025, and have agreed that the previous failure to register the resale of the common shares issuable pursuant to the terms of the 2028 Notes and the 2028 Warrants will not constitute an event of default.
For the year ended December 31, 2024, the 2027 Notes were fair valued using the finite difference valuation method with the following key assumptions:
| ● | Risk free rate at December 31, 2024 of |
| ● | Equity volatility at December 31, 2024 of |
| ● | An Electra share price at December 31, 2024 of reflecting the quoted market prices; and |
| ● | A credit spread at December 31, 2024 of |
The following table sets out the details of the Company’s financial derivative liability related to convertible notes in the 2027 Notes as of December 31, 2024 and November 27, 2024 (inception of 2027 Notes):
| Convertible Notes Payable | ||||
| Balance at January 1, 2024 | $ | |||
| Initial recognition at fair value | ||||
| Revaluation to fair value | ||||
| Foreign exchange loss | ||||
| Balance at December 31, 2024 | $ | |||
The following table sets out the details of the Company’s financial derivative liability related to convertible notes in the 2028 Notes and 2027 Notes as of December 31, 2024 and December 31, 2023:
| Convertible | ||||||||||||||||
| Notes | ||||||||||||||||
| Payable | Warrants | Royalty | Total | |||||||||||||
| Balance at January 1, 2023 | $ | $ | $ | $ | ||||||||||||
| Initial recognition at fair value | ||||||||||||||||
| Balance at February 13, 2023 | ||||||||||||||||
| Portion de-recognized due to conversions | ( | ) | ( | ) | ||||||||||||
| Revaluation to fair value | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange gain | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Accretion | ||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Initial recognition at fair value | ||||||||||||||||
| Revaluation to fair value | ||||||||||||||||
| Capitalized interest | ||||||||||||||||
| Revaluation to fair value due to own credit risk | ||||||||||||||||
| Foreign exchange loss | ||||||||||||||||
| Accretion | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ||||||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
For the years ended December 31, 2024, 2023, and 2022, the Company incurred the following finance costs relating to 2028 Notes, 2027 Notes, and 2026 Notes.
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Gain (loss) on financial derivative liability - 2026 Notes | $ | $ | ( | ) | ||||||||
| Loss on extinguishment of 2026 Notes and recognition of 2028 Notes | ( | ) | ||||||||||
| Fair value gain on convertible notes payable and warrants | ( | ) | ||||||||||
| Other | ( | ) | ||||||||||
| Total | $ | ( | ) | $ | ||||||||
The 2028 Notes are secured by a first priority security interest (subject to customary permitted liens) in substantially all of the Company’s assets, and the assets and/or equity of the secured guarantors. The 2028 Notes are subject to customary events of default and basic positive and negative covenants. The Company is required to maintain a minimum liquidity balance of under the terms of the 2028 Notes.
| 12. | Lease |
The Company leases an office space, which runs for a period of
Right-of-use assets
| December 31, | December 31, | |||||||
| Office space | 2024 | 2023 | ||||||
| Balance at January 1 | $ | $ | ||||||
| Additions to right-of-use | ||||||||
| Depreciation | ( | ) | ( | ) | ||||
| Balance at December 31 | $ | $ | ||||||
Right-of-use assets related to leased office is presented as property, plant and equipment (see Note 6).
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Lease liabilities
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Balance at January 1 | $ | $ | ||||||
| Lease interest | ||||||||
| Lease repayment | ( | ) | ( | ) | ||||
| Change in discount rate | ( | ) | ||||||
| Balance at December 31 | $ | $ | ||||||
| Less – Current portion | ( | ) | ( | ) | ||||
| Balance at December 31 – Long-term portion | $ | $ | ||||||
The office lease also requires the Company to make additional payments for the Company’s proportionate share of operating costs including property taxes, utilities, and other operating expenses. These costs are variable and not included in the calculation of right-of-use asset or lease liability.
| 13. | Shareholder’s Equity |
| a. | Authorized Share Capital |
The Company is authorized to issue an unlimited number of common shares without par value. As at December 31, 2024, the Company had
| b. | Issued Share Capital |
On December 31, 2024, the Company completed a share consolidation on the basis of one new post-consolidation common share for every
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
During the year ended December 31, 2024, the Company issued common shares as follows:
| ● | On February 27, 2024, the Company settled a total of $ |
| ● | On March 21, 2024, the Company issued an aggregate of |
| ● | On November 27, 2024, the Company closed a financing transaction with the holders of the 2027 Notes for gross proceeds of and issued |
| ● | During the year ended December 31, 2024, the Company issued |
During the year ended December 31, 2023, the Company issued common shares as follows:
| ● | The Company made an interest payment of $ |
| ● | $ |
| ● | The Company issued |
| ● | The Company issued |
| ● | The Company issued |
| ● | On August 11, 2023, the Company completed a private placement for gross proceeds of $ |
During the year ended December 31, 2022, the Company issued common shares as follows:
| ● | On November 15, 2022, the Company completed a best-efforts, overnight-marketed offering by issuing |
| ● | |
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| ● | |
| ● | of 2026 Notes were converted by Noteholders which resulted in the Company issuing a total of |
| 14. | Share based payments |
Long-term incentive plan
The Company adopted a long-term incentive plan on December 20, 2024 whereby it can grant stock options, restricted share units (“RSUs”), Deferred Share Units (“DSUs”), and Performance Share Units (“PSUs”) to directors, officers, employees, and consultants of the Company. The maximum number of shares that may be reserved for issuance under the incentive plan is limited to
During the year, the Company implemented an employee share purchase plan (“ESP”) to provide its employees an incentive to promote performance and growth potential over the long-term. The Company has reserved
Stock options generally vest in equal tranches over three years. The grant date fair value is determined using the Black-Scholes Option Pricing Model and this value is recognized as an expense over the vesting period. DSUs vest in one year but cannot be exercised until the holder ceases to be a Director or Officer of Electra. DSUs are valued based on the market price of the Company’s common shares on the grant date. PSUs generally vest over an 18 – 24 months if certain performance metrics have been achieved. They are valued based on the market price of the Company’s shares on the grant date and this value is expensed over the vesting period. RSUs generally vest over a 12 – 36 months. They are valued based on the market price of the Company’s shares on the grant date and this value is expensed over the vesting period.
| a. | Stock Options |
During the year ended December 31, 2024:
| ● | On January 15, 2024, the Company granted | |
| ● | On February 12, 2024, the Company granted |
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| ● | On August 28, 2024, the Company granted |
| ● | On September 9, 2024, the Company granted |
During the year ended December 31, 2023:
| ● | The Company granted |
The changes in incentive stock options outstanding are summarized as follows:
| Number of shares | ||||||||
| issued or issuable | ||||||||
| Exercise price | on exercise | |||||||
| Balance at January 1, 2022 | $ | |||||||
| Granted | ||||||||
| Exercised | ( | ) | ||||||
| Expired | ( | ) | ||||||
| Balance at December 31, 2022 | $ | |||||||
| Granted | ||||||||
| Expired | ( | ) | ||||||
| Forfeited / Cancelled | ( | ) | ||||||
| Balance at December 31, 2023 | $ | |||||||
| Granted | ||||||||
| Expired | ( | ) | ||||||
| Forfeited / Cancelled | ( | ) | ||||||
| Balance at December 31, 2024 | $ | |||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Incentive stock options outstanding and exercisable (vested) at December 31, 2024 are summarized as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||
| Weighted | Weighted | |||||||||||||||||||||
| Number of | average | average | Number of | Weighted | ||||||||||||||||||
| shares issuable | remaining life | exercise | shares issuable | average | ||||||||||||||||||
| Exercise price | on exercise | (Years) | price | on exercise | exercise price | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||
During the year ended December 31, 2024, the Company expensed $
Incentive stock options outstanding and exercisable (vested) at December 31, 2023 are summarized as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||
| Weighted | Weighted | |||||||||||||||||||||
| Number of | average | average | Number of | Weighted | ||||||||||||||||||
| shares issuable | remaining life | exercise | shares issuable | average | ||||||||||||||||||
| Exercise price | on exercise | (Years) | price | on exercise | exercise price | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||
During the year ended December 31, 2023, the Company expensed $
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Incentive stock options outstanding and exercisable (vested) at December 31, 2022 are summarized as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||||||||
| Weighted | Weighted | |||||||||||||||||||||
| Number of | average | average | Number of | Weighted | ||||||||||||||||||
| shares issuable | remaining life | exercise | shares issuable | average | ||||||||||||||||||
| Exercise price | on exercise | (Years) | price | on exercise | exercise price | |||||||||||||||||
| $ | $ | $ | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||
| b. | DSUs, RSUs and PSUs |
Deferred Shares Units
The Company’s DSU plan transactions during the years ended December 31, 2024, 2023 and 2022 were as follows:
| December 31, | December 31, | December 31, | ||||||||||
| Number of Units | 2024 | 2023 | 2022 | |||||||||
| Balance at January 1 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||
| Expired | ( | ) | ( | ) | ||||||||
| Balance at December 31 | ||||||||||||
During the year ended December 31, 2024, the Company has expensed $
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Restricted Share Units
The Company’s RSU plan transactions during the years ended December 31, 2024, 2023 and 2022 were as follows:
| December 31, | December 31, | December 31, | ||||||||||
| Number of Units | 2024 | 2023 | 2022 | |||||||||
| Balance at January 1 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ( | ) | ( | ) | ||||||
| Expired | ( | ) | ( | ) | ||||||||
| Forfeited / Cancelled | ( | ) | ( | ) | ||||||||
| Balance at December 31 | ||||||||||||
Performance Share Units
The Company’s PSU plan transactions during the years ended December 31, 2024, 2023 and 2022 were as follows:
| December 31, | December 31, | December 31, | ||||||||||
| Number of Units | 2024 | 2023 | 2022 | |||||||||
| Balance at January 1 | ||||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||
| Expired | ( | ) | ( | ) | ( | ) | ||||||
| Balance at December 31 | ||||||||||||
| c. | Warrants |
Details regarding warrants issued and outstanding are summarized as follows:
| Canadian dollar denominated warrants | Grant date | Expiry date | Weighted average | Number of shares issued or | ||||||
| exercise price | issuable on exercise | |||||||||
| Balance at January 1, 2022 | $ | |||||||||
| Exercised warrants | ( | ) | ||||||||
| Expired warrants | ( | ) | ||||||||
| Balance at December 31, 2022 | $ | |||||||||
| Expired warrants | ( | ) | ||||||||
| Issuance of warrants | August 11, 2023 | August 11, 2025 | ||||||||
| Balance at December 31, 2023 | $ | |||||||||
| Re-pricing of warrants (Note 11) | February 13, 2023 | February 13, 2028 | ||||||||
| Cancellation of warrants (Note 11) | August 11, 2023 | August 11, 2025 | ( | ) | ||||||
| Issuance of warrants (Note 11) | November 27, 2024 | November 12, 2026 | ||||||||
| Balance at December 31, 2024 | $ | |||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| United States dollar denominated warrants (US Warrant) | Grant date | Expiry date | Weighted average | Number of shares issued or | ||||||
| exercise price | issuable on exercise | |||||||||
| Balance at January 1, 2022 | $ | |||||||||
| Issuance of warrant (Note 13) | November 15, 2022 | November 15, 2025 |
| |||||||
| Balance at December 31, 2022 | $ | $ | ||||||||
| Issuance of warrant (Note 13) | February 13, 2023 | February 13, 2028 |
| |||||||
| Balance at December 31, 2023 | $ | $ | ||||||||
| Re-pricing of warrants | February 13, 2023 | February 13, 2028 |
| ( | ) | |||||
| Balance at December 31, 2024 | $ | $ | ||||||||
On November 15, 2022,
As part of the November 15, 2022 Offering,
During the year ended December 31, 2022,
On August 11, 2023,
During the year ended December 31, 2023, the Company issued
On November 27, 2024, in connection with the 2027 Notes,
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| 15. | Income Tax |
Income tax reconciliation
The following table reconciles the expected income taxes expense (recovery) at the Canadian statutory income tax rates to the amounts recognized in the statements of operations for the year ended December 31, 2024, 2023 and 2022:
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| (Loss) income before income taxes | $ | ( | ) | $ | ( | ) | $ | |||||
| Statutory tax rate | % | % | % | |||||||||
| Expected expense (recovery) at statutory rate | ( | ) | ( | ) | ||||||||
| Tax rate difference | ( | ) | ( | ) | ||||||||
| Share based compensation | ||||||||||||
| Permanent differences | ( | ) | ||||||||||
| Net change in benefits previously not recognized | ( | ) | ||||||||||
| Share issuance costs | ( | ) | ( | ) | ||||||||
| True up | ( | ) | ||||||||||
| OCI | ( | ) | ||||||||||
| Foreign exchange | ( | ) | ||||||||||
| Other | ||||||||||||
| Income tax expense (recovery) | $ | $ | $ | |||||||||
The significant components of the Company’s deferred income tax assets (liabilities) are as follows:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Deferred tax liabilities: | ||||||||
| Convertible notes payable | $ | ( | ) | $ | ( | ) | ||
| Property, plant and equipment | ||||||||
| $ | ( | ) | $ | ( | ) | |||
| Deferred tax assets: | ||||||||
| Non-capital loss | $ | $ | ||||||
| Financial derivative liability | ||||||||
| $ | ||||||||
| Deferred income tax assets / (liabilities) | $ | $ | ||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax values. The unrecognized deductible temporary differences at December 31, 2024 and 2023 are as follows:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Non-capital loss carry-forwards | $ | $ | ||||||
| Exploration and evaluation properties | ||||||||
| Property, Plant and Equipment | ||||||||
| Capital loss carry forward | ||||||||
| Other | ||||||||
| Total unrecognized temporary differences | $ | $ | ||||||
The capital loss of $
The Company has the following unrecognized non-capital loss carryforwards of approximately $
| December 31, | December 31, | |||||||
| Year | 2024 | 2023 | ||||||
| 2037 | $ | $ | ||||||
| 2038 | ||||||||
| 2039 | ||||||||
| 2040 | ||||||||
| 2041 | ||||||||
| 2042 | ||||||||
| 2043 | ||||||||
| 2044 | ||||||||
| Total | $ | $ | ||||||
The Company also has non-capital loss carryforwards of $
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| 16. | Other Non-Operating Income (Expense) |
The Company’s Other Non-Operating Income (Expense) comprises the following for the years ended December 31, 2024, 2023 and 2022:
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Foreign exchange gain (loss) | $ | ( | ) | $ | ( | ) | ||||||
| Interest (expense) income | ( | ) | ( | ) | ||||||||
| Realized gain (loss) on marketable securities | ( | ) | ||||||||||
| Other non-operating income | ||||||||||||
| Reversal of impairment (Note 8) | ||||||||||||
| Year ended December 31 | $ | ( | ) | $ | ( | ) | $ | |||||
| 17. | Income (Loss) Per Share |
On December 31, 2024, the Company completed a share consolidation on the basis of one new post-consolidation common share for every four (
The following table sets forth the computation of basic and diluted loss per share for the year ended December 31, 2024, 2023 and 2022:
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Numerator | ||||||||||||
| Net income (loss) for the year – basic | $ | ( | ) | $ | ( | ) | $ | |||||
| Gain on financial derivative liability | ( | ) | ( | ) | ||||||||
| Net loss for the year - diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Denominator (Pre- consolidation of common shares) | ||||||||||||
| Basic – weighted average number of shares outstanding | ||||||||||||
| Effect of dilutive securities | ||||||||||||
| Diluted – adjusted weighted average number of shares outstanding | ||||||||||||
| Income (loss) Per Share – Basic | $ | ( | ) | $ | ( | ) | $ | |||||
| Loss Per Share – Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Denominator (Post-consolidation of common shares – Pre-consolidation divided by four (4)) | ||||||||||||
| Basic – weighted average number of shares outstanding | ||||||||||||
| Effect of dilutive securities | ||||||||||||
| Diluted – adjusted weighted average number of shares outstanding | ||||||||||||
| Income (loss) Per Share – Basic | $ | ( | ) | $ | ( | ) | $ | |||||
| Loss Per Share – Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding stock options, and share purchase warrants, in the weighted average number of common shares outstanding during the period, if dilutive.
Conversion option, share purchase warrants and stock options were excluded from the calculation of diluted weighted average number of common shares outstanding for the years ended December 31, 2024, 2023 and 2022 as the warrants and stock options were anti-dilutive.
| 18. | Financial Instruments |
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Per Note 1, the Company does not have sufficient financial resources necessary to complete the construction and final commissioning of the Refinery and the Company is going through a planning and budgeting process to update the capital estimates and completion schedule associated with the Refinery. The Company attempts to ensure there is sufficient access to funds to meet ongoing business requirements, considering its current cash position and potential funding sources. Although the Company has historically been successful in obtaining financing in the past, there can be no assurances that the Company will be able to obtain adequate financing in the future. This represents a material uncertainty that casts substantial doubt on the Company’s ability to continue as a going concern. These consolidated financial statements do not include the adjustments to the amounts and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These adjustments may be material.
The following are the contractual maturities of financial liabilities as at December 31, 2024 and December 31, 2023:
| As at December 31, 2024 | ||||||||||||
| < 1 Year | Between 1 – 2 Years | >2 Years | ||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Long-term government loan payable 1 | ||||||||||||
| Convertible notes payable | ||||||||||||
| Lease payable | ||||||||||||
| Total | $ | $ | $ | |||||||||
| As at December 31, 2023 | ||||||||||||
| < 1 Year | Between 1 – 2 Years | >2 Years | ||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | |||||||||
| Long-term government loan payable 1 | ||||||||||||
| Convertible notes payable | ||||||||||||
| Lease payable | ||||||||||||
| Total | $ | $ | $ | |||||||||
1 Amounts are based on contractual maturities of 2028 Notes and assumption that it would remain outstanding until maturity. Per Note 13, 2026 Notes were cancelled and replaced with 2028 Notes on February 13, 2023.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
For 2024 and 2023 the Company assumed the notes will remain outstanding until maturity. If noteholders convert prior to maturity, they would be entitled to a make-whole interest payment upon conversion. This payment cannot exceed the remaining coupon payments owing and thus the tables above present all interest payments to maturity, which represents the maximum possible cash outflow to the Company.
The contractual liabilities relating to government loan payable assumes that repayment would began on June 30, 2025 in 19 equal quarterly instalments.
Fair Value
The Company’s financial instruments consisted of cash and cash equivalents, restricted cash, convertible notes payable, long-term government loan payable, warrants liability, and accounts payable and accrued liabilities. The fair values of cash and cash equivalents, restricted cash, prepaid expenses and deposits, receivables and accounts payable and accrued liability approximate their carrying values because of their current nature. The fair value of long-term government loan payables are estimated as $
Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash and cash equivalents and restricted cash which are being held in with major Canadian banks that are high credit quality financial institutions as determined by rating agencies.
The Company’s receivables primarily consist of HST refund due from Canada Revenue Agency and reimbursement to be received from NRCan and DoD, hence there is no significant credit risk on receivables.
As at December 31, 2024, the Company’s maximum exposure to credit was the carrying value of cash and cash equivalents, restricted cash, and receivables.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because they are denominated in currencies that differ from the Company’s functional currency. The Company is exposed to foreign currency risk on fluctuations related to cash and cash equivalents, prepayments, accounts payable and accrued liabilities, derivative financial liabilities on warrants and its long-term debts that are denominated in US Dollars. The Company has not used derivative instruments to reduce its exposure to foreign currency risk nor has it entered into foreign exchange contracts to hedge against gains or losses from foreign exchange fluctuations. The following table indicates the foreign currency exchange risk on monetary financial instruments as at December 2024 and 2023 converted to Canadian Dollars:
| As at December 31, 2024 | ||||
| USD denominated | ||||
| expressed in CAD | ||||
| Cash and cash equivalents | $ | |||
| Accounts payable and accrued liabilities | ( | ) | ||
| Interest accrual | ( | ) | ||
| Long-term convertible notes payable | ( | ) | ||
| Royalty | ( | ) | ||
| Total | $ | ( | ) | |
| As at December 31, 2023 | ||||
| USD denominated | ||||
| expressed in CAD | ||||
| Cash and cash equivalents | $ | |||
| Accounts payable and accrued liabilities | ( | ) | ||
| Interest accrual | ( | ) | ||
| Long-term convertible notes payable | ( | ) | ||
| Royalty | ( | ) | ||
| Financial derivative liability – Convertible Notes | ( | ) | ||
| Embedded derivative liability (US Warrant) | ( | ) | ||
| Total | $ | ( | ) | |
During the year ended December 31, 2024, the Company recognized a loss of $
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flow of a financial instrument will fluctuate because of changes in market interest rate. The Company currently does not have any financial instruments that are linked to LIBOR, SOFR, or any form of a floating market interest rate. Therefore, changes in the market interest rate does not have an impact on the Company as at December 31, 2024.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| 19. | Management of Capital |
The Company’s objectives when managing capital are to ensure it has sufficient cash available to support its future Refinery expansion and exploration activities; and ensure compliance with debt covenants under the convertible notes arrangement.
The Company manages its capital structure, consisting of cash and cash equivalents, share capital and debt (convertible notes and loans), and will make adjustments to it depending on the funds available to the Company for its future Refinery expansion and exploration activities. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the size of the Company, is reasonable. Other than the minimum liquidity balance covenant under the convertible note arrangement, the Company is not subject to externally imposed capital requirements. The convertible notes arrangement does not impose any quantitative ratio covenants on the Company in the course of the normal construction and operation of its current assets.
| 20. | Fair Value Measurements |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described, as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 — Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Assets and Liabilities Measured at Fair Value
The Company’s fair values of financial assets and liabilities were as follows:
| Carrying Value | December 31, 2024 | |||||||||||||||||||||||
| Fair value through | ||||||||||||||||||||||||
| profit or loss | Amortized cost | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||
| Receivables | ||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Accrued interest | ||||||||||||||||||||||||
| Long-term government loan payable | ||||||||||||||||||||||||
| Convertible notes payable 1 | ||||||||||||||||||||||||
| Warrants – Convertible Notes payable 1 | ||||||||||||||||||||||||
| Royalty | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Carrying Value | December 31, 2023 | |||||||||||||||||||||||
| Fair value through | ||||||||||||||||||||||||
| profit or loss | Amortized cost | Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||
| Receivables | ||||||||||||||||||||||||
| Marketable securities | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||
| Accounts payable and accrued liabilities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Accrued interest | ||||||||||||||||||||||||
| Long-term government loan payable | ||||||||||||||||||||||||
| Convertible notes payable 1 | ||||||||||||||||||||||||
| Warrants – Convertible Notes payable 1 | ||||||||||||||||||||||||
| Royalty | ||||||||||||||||||||||||
| Warrants derivative liability | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
Valuation techniques
A) Marketable securities
Marketable securities are included in Level 1 as these assets are quoted on active markets.
B) Financial Derivative Liability – Convertible Notes
For the convertible notes payable designated at fair value through profit or loss, the valuation is derived by a finite difference method, whereby the convertible debt as a whole is viewed as a hybrid instrument consisting of two components, an equity component (i.e., the conversion option) and a debt component, each with different risk. The key inputs in the valuation include risk-free rates, share price, equity volatility, and credit spread. As there are significant unobservable inputs used in the valuation, the convertible notes payable is included in Level 3.
Methodologies and procedures regarding Level 3 fair value measurements are determined by the Company’s management. Calculation of Level 3 fair values is generated based on underlying contractual data as well as observable and unobservable inputs. Development of unobservable inputs requires the use of significant judgment. To ensure reasonability, Level 3 fair value measurements are reviewed and validated by the Company’s management. Review occurs formally on a quarterly basis or more frequently if review and monitoring procedures identify unexpected changes to fair value.
While the Company considers its fair value measurements to be appropriate, the use of reasonably alternative assumptions could result in different fair values. On a given valuation date, it is possible that other market participants could measure a same financial instrument at a different fair value, with the valuation techniques and inputs used by these market participants still meeting the definition of fair value. The fact that different fair value measurements exist reflects the judgment, estimates and assumptions applied as well as the uncertainty involved in determining the fair value of these financial instruments.
The fair value of the convertible note payable has been estimated based on significant unobservable inputs which are equity volatility and credit spread. The Company used an equity volatility of
The fair value of the 2027 Notes has been estimated based on significant unobservable inputs which are equity volatility and credit spread. The Company used an equity volatility of
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
C) Warrants – Convertible Notes
The Warrants issued in a foreign currency and accounted for at fair value through profit or loss are valued using a Monte Carlo Simulation Model to better model the variability in exercise date. The key inputs in the valuation include risk-free rates and equity volatility. As there are significant unobservable inputs used in the valuation, the financial derivative liability is included in Level 3.
The fair value of the Warrants has been estimated using a significant unobservable input which is equity volatility. The Company used an equity volatility of
The fair value of the 2027 Warrants has been estimated using a significant unobservable input which is equity volatility. The Company used an equity volatility of
D) Royalty
The fair value of the Royalty has been estimated at inception using a discounted cash flow model. The key inputs in the valuation include the effective interest rate of
E) Other Financial Derivative Liability (US Warrants)
The fair value of the embedded derivative on Warrants issued in foreign currency as at December 31, 2024 was ( December 31, 2023 - $
| 21. | Commitments and Contingencies |
From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to defend itself vigorously against all legal claims. Electra is not aware of any unrecorded claims against the Company that could reasonably be expected to have a materially adverse impact on the Company’s consolidated financial position, results of operations or the ability to carry on any of its business activities. The Company has negotiated settlement on one claim as at March 31, 2025. The amount due is approximately $
As at December 31, 2024, the Company’s commitments relate to purchase and services commitments for work programs relating to Refinery expansion and payments under financing arrangements. The Company had the following commitments as at December 31, 2024.
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |||||||||||||||||||
| Purchase commitments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Convertible notes payments 1 | ||||||||||||||||||||||||
| Government loan payments 2 | ||||||||||||||||||||||||
| Lease payments | ||||||||||||||||||||||||
| Royalty payments 3 | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
1 Convertible notes payment amounts are based on contractual maturities of 2028 Notes, 2027 Notes and the assumption that it would remain outstanding until maturity. Interest is calculated based on terms as at December 31, 2024.
2 The Company is currently in negotiations to extend the commencement of payments based on the Company's latest construction completion date.
3 Royalty payments are estimated amounts associated with the royalty agreements entered with the convertible debt holders as part of the 2028 Notes offering. The estimated amounts and timing are subject to changes in cobalt sulfate prices, timing of completion of the refinery, reaching commercial operations and timing and amounts of sales.
| 22. | Segmented Information |
The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM reviews the results of Company’s refinery business and exploration and evaluation activities as discrete business units, separate from the rest of the Company’s activities which are reviewed on an aggregate basis.
The Company’s exploration and evaluation activities are located in Idaho, USA, with its head office function in Canada. All of the Company’s capital assets, including property and equipment, and exploration and evaluation assets are located in Canada and USA, respectively.
| (a) | Segmented operating results for the years ended December 31, 2024, 2023 and 2022: |
| Exploration and | ||||||||||||||||
| For the year ended December 31, 2024 | Refinery | Evaluation2 | Corporate and Other2 | Total | ||||||||||||
| Operating expenses | ||||||||||||||||
| Consulting and professional fees | $ | $ | $ | $ | ||||||||||||
| Exploration and evaluation expenditures | ||||||||||||||||
| General and administrative and travel | ||||||||||||||||
| Investor relations and marketing | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Share-based payments | ||||||||||||||||
| Operating loss | $ | $ | $ | $ | ||||||||||||
| Unrealized loss on marketable securities | ||||||||||||||||
| Loss on financial derivative liability - Convertible Notes | ( | ) | ( | ) | ||||||||||||
| Changes in US Warrants | ||||||||||||||||
| Other non-operating expenses | ( | ) | ( | ) | ||||||||||||
| Loss before taxes | $ | $ | $ | $ | ||||||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
| Exploration and | ||||||||||||||||
| For the year ended December 31, 2023 | Refinery | Evaluation2 | Corporate and Other2 | Total | ||||||||||||
| Operating expenses | ||||||||||||||||
| Consulting and professional fees | $ | $ | $ | $ | ||||||||||||
| Exploration and evaluation expenditures | ||||||||||||||||
| General and administrative and travel | ||||||||||||||||
| Investor relations and marketing | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Share-based payments | ||||||||||||||||
| Operating loss | $ | $ | $ | $ | ||||||||||||
| Unrealized loss on marketable securities | ( | ) | ( | ) | ||||||||||||
| Gain on financial derivative liability - Convertible Notes | ||||||||||||||||
| Changes in US Warrants | ||||||||||||||||
| Other non-operating expenses | ( | ) | ( | ) | ||||||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Loss before taxes | $ | $ | $ | $ | ||||||||||||
| Exploration and | Corporate and | |||||||||||||||
| For the year ended December 31, 2022 (Restated) | Refinery | Evaluation2 | Other 2 | Total | ||||||||||||
| Operating expenses | ||||||||||||||||
| Consulting and professional fees | $ | $ | $ | $ | ||||||||||||
| Exploration and evaluation expenditures | ||||||||||||||||
| General and administrative and travel | ||||||||||||||||
| Investor relations and marketing | ||||||||||||||||
| Refinery, engineering and metallurgical studies | ||||||||||||||||
| Refinery, permitting and environmental expenses | ||||||||||||||||
| Salaries and benefits | ||||||||||||||||
| Share-based payments | ||||||||||||||||
| Operating loss | $ | $ | $ | $ | ||||||||||||
| Unrealized loss on marketable securities | ( | ) | ( | ) | ||||||||||||
| Gain on financial derivative liability - Convertible Notes | ||||||||||||||||
| Changes in US Warrants | ||||||||||||||||
| Other non-operating income | ||||||||||||||||
| (Loss) income before taxes | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
(b) Segmented assets and liabilities for the years ended December 31, 2024, 2023 and 2022:
| Total Assets | Total Liabilities | |||||||||||||||||||||||
| As at December 31, | 2024 | 2023 | 2022 2 | 2024 | 2023 | 2022 2 | ||||||||||||||||||
| Refinery | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Exploration and Evaluation 1 | ||||||||||||||||||||||||
| Corporate and Other | ||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
1 Total non-current assets comprising of exploration and evaluation assets in the amount of $
2 The Company has reclassified the Exploration and Evaluation assets, liabilities, and results from the Corporate and Other category and comparatives have been updated to reflect this change.
| 23. | Related Party Transactions |
The Company’s related parties include key management personnel and companies related by way of directors or shareholders in common. The Company paid and/or accrued during the year ended December 31, 2024, 2023 and 2022, following fees to management personnel and directors.
| December 31, | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2022 | ||||||||||
| Management | $ | $ | $ | |||||||||
| Directors | ||||||||||||
| $ | $ | $ | ||||||||||
During the year ended December 31, 2024, the Company had share-based payments made to management and directors of $
As at December 31, 2024, the accrued liabilities balance for related parties was $
| 24. | Subsequent Events |
| (a) | Subsequent to December 31, 2024, the Company granted |
| (b) | Subsequent to December 31, 2024, the Company entered into an agreement with the holders of its senior secured debt that enhances the Company’s financial flexibility. Under this agreement, lenders have agreed to defer all interest payments until February 15, 2027, allowing Electra to invest its capital towards completing its cobalt refinery rather than debt servicing. |
ELECTRA BATTERY MATERIALS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
(expressed in thousands of Canadian dollars)
The agreement, entered into on March 5, 2025, covers all outstanding
| (c) | Subsequent to December 2024, on March 21, 2025, the Company announced receipt of a Letter of Intent (“LOI”) for proposed funding of $ |
| (d) | Subsequent to December 31, 2024, on April 14, 2025, the Company closed the final tranche of its oversubscribed non-brokered private placement raising aggregate gross proceeds of approximately (the “Offering”). |
The Offering closed in two tranches, the first occurring on April 3, 2025, and the second occurring on the date hereof. An aggregate of
Each of Trent Mell, Chief Executive Officer of the Company (purchased
In connection with the closing of the Offering, the Company paid an aggregate of in cash finders fees and issued
Page 55 of 55
FAQ
How much capital did Qualigen Therapeutics (QLGN) raise in July 2025?
What is the initial conversion price of the new Series A-3 Preferred Stock?
Will the conversion price of the A-3 Preferred adjust in the future?
How does this financing affect the existing Series A-2 Preferred Stock?
What will Qualigen use the proceeds for?
When will resale of the underlying common shares be registered?
