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Piedmont Lithium Ltd (PLL)
NASDAQ:PLL
Risk Overview Q4, 2024
Risk Distribution
50% Finance & Corporate
18% Legal & Regulatory
16% Production
7% Tech & Innovation
5% Ability to Sell
5% Macro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Piedmont Lithium Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q4, 2024
Main Risk Category
Finance & Corporate
With 22 Risks
Finance & Corporate
With 22 Risks
Number of Disclosed Risks
44
+8
From last reportS&P 500 Average: 31
44
+8
From last reportS&P 500 Average: 31
Recent Changes
10Risks added
2Risks removed
1Risks changed
Since Dec 2024
10Risks added
2Risks removed
1Risks changed
Since Dec 2024
Number of Risk Changed
1
+1
From last reportS&P 500 Average: 3
1
+1
From last reportS&P 500 Average: 3
See the risk highlights of Piedmont Lithium in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 44
Finance & Corporate
Total Risks: 22/44 (50%)Above Sector Average
Share Price & Shareholder Rights6 | 13.6%
Share Price & Shareholder Rights - Risk 1
Sales of our common stock, or the perception that such sales may occur, could depress the price of our common stock.Share Price & Shareholder Rights - Risk 2
If U.S. securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, the market price and trading volume of our common stock could decline.The trading market for our common stock will be influenced by the research and reports that U.S. securities or industry analysts publish about us and our business. Securities and industry analysts may discontinue research on us, to the extent such coverage currently exists, or in other cases, may never publish research on us. If no, or too few, U.S. securities or industry analysts commence coverage of our Company, the trading price for our common stock would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, the market price of our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our price and trading volume to decline. In addition, research and reports that Australian securities or industry analysts publish about us, our business, or our common stock may impact the market price of our common stock.
Share Price & Shareholder Rights - Risk 3
Some provisions of Delaware law and our certificate of incorporation and bylaws may deter third parties from acquiring us or limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.Our certificate of incorporation and bylaws provide for, among other things:
- a staggered board and restrictions on the ability of our stockholders to fill a vacancy on our Board;- the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;- advance notice requirements for stockholder proposals;- a requirement that, except as otherwise provided for or fixed with respect to actions required or permitted to be taken by holders of preferred stock, no action that is required or permitted to be taken by the stockholders may be affected by consent of stockholders in lieu of a meeting of stockholders;- permit the Board to establish the number of directors;- a provision that the Board is expressly authorized to adopt, amend, or repeal our amended and restated bylaws;- a provision that stockholders can remove directors only for cause and only upon the approval of not less than 66 2/3% of all outstanding shares of our voting stock;- a requirement that the approval of not less than 66 2/3% of all outstanding shares of our voting stock to adopt, amend, or repeal certain provisions of our bylaws and certificate of incorporation; and - limit the jurisdictions in which certain stockholder litigation may be brought.
These anti-takeover defenses could discourage, delay, or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and cause us to take other corporate actions than desired.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for any complaint asserting any internal corporate claims (including claims in the right of the Company that are based upon a violation of a duty by a current or former director, officer, employee, or stockholder in such capacity, or as to which the Delaware General Corporation Law confers jurisdiction upon the Court of Chancery) or a cause of action arising under the Securities Act. This provision shall not apply to suits brought to enforce a duty or liability created by the Exchange Act. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees. If a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Share Price & Shareholder Rights - Risk 4
The market price and trading volume of our common stock may be volatile and may be affected by economic conditions beyond our control.The market price of our common stock may be highly volatile and subject to wide fluctuations. For instance, from January 1, 2024, through February 15, 2025, the closing price of our common stock on Nasdaq ranged from as high as $27.88 to as low as $6.58. In addition, the trading volume of our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell your shares of our common stock at or above the purchase price, if at all. We cannot assure you that the market price of our common stock will not fluctuate or significantly decline in the future.
Some specific factors that could negatively affect the price of our common stock or result in fluctuations in the price and trading volume include:
- actual or expected fluctuations in our prospects or operating results;- changes in the demand for, or market price of lithium, lithium hydroxide, or lithium-ion batteries;- additions to or departures of our key personnel;- changes or proposed changes in laws and regulations;- changes in trading volume of our common stock on Nasdaq or the ASX;- sales or perceived potential sales of our common stock by us, our directors, senior management, or our stockholders in the future;- announcement or expectation of additional financing efforts;- conditions in the financial markets or changes in general economic and political conditions and events, including repercussions from the wars in Ukraine and the Middle East;- market conditions or investor sentiment in the broader stock market, or in our industry in particular;- introduction of new products and services by us or our competitors;- issuance of new or changed securities analysts' reports or recommendations;- litigation and governmental investigations; and - changes in investor perception of our market position based on third-party information.
When the market price of a stock is volatile, certain holders of that stock may institute securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit or any future securities class litigation that may be brought against us.
Share Price & Shareholder Rights - Risk 5
Our directors and officers may be in a position of conflict of interest.Some of our directors and officers currently serve as directors and officers of other companies involved in natural resource exploration, development, and production, and any of our directors and officers may serve in such positions in the future. As of the date of this Annual Report, none of our directors or officers serves as an officer or director of a lithium exploration, development, or producing company nor possess a conflict of interests with our business, other than as follows: (i) pursuant to our agreements related to our Sayona Mining investment, Keith Phillips, our President and Chief Executive Officer, was appointed as a board member of Sayona Quebec, and (ii) pursuant to our agreements related to our Vinland Lithium investment, Mr. Czachor was appointed as a board member of Vinland Lithium. However, there exists the possibility that they may be in a position of conflict of interest in the future. Any decision made by such persons involving us will be made in accordance with their duties and obligations to deal fairly and in good faith with us and such other companies. In addition, any such directors and officers will declare, and refrain from voting on, any matter in which such directors and officers may have a material interest.
Share Price & Shareholder Rights - Risk 6
Piedmont and Sayona Mining may be targets of shareholder class actions or derivative actions, which could result in substantial costs and may delay or prevent the Merger from being completed.Added
Shareholder class action lawsuits or derivative lawsuits are often brought against companies that have entered into transaction agreements. Such litigation can be costly and time consuming and can create uncertainty. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Merger, then that injunction may delay or prevent the Merger from being completed. One of the conditions to consummating the Merger is that no governmental entity has issued any order, decree, ruling, injunction or other action that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the Merger. Consequently, if a party secures injunctive or other relief prohibiting, delaying or otherwise adversely affecting Piedmont's or Sayona Mining's ability to complete the Merger on the terms contemplated by the Merger Agreement, then such law or injunctive or other relief may prevent consummation of the Merger in a timely manner or at all. These lawsuits also have the potential to negatively impact Piedmont's or Sayona Mining's reputation.
Accounting & Financial Operations3 | 6.8%
Accounting & Financial Operations - Risk 1
Our long-term success will depend ultimately on our ability to generate revenues, achieve and maintain profitability, and develop positive cash flows from our mining activities.Accounting & Financial Operations - Risk 2
Our future performance is difficult to evaluate because we have a limited operating history in the lithium industry.We began to implement our current business strategy in the lithium industry in 2016. Until the third quarter of 2023, we had yet to realize any revenues from the sale of lithium, and our operating cash flow needs have been financed primarily through issuances of common stock and not through cash flows derived from our operations. As a result, we have limited historical financial and operating information available to help you evaluate our performance.
Accounting & Financial Operations - Risk 3
We do not anticipate paying dividends in the foreseeable future.We have not declared any dividends during the years ended December 31, 2024, or 2023, and do not anticipate that we will do so in the foreseeable future. We currently intend to retain future earnings, if any, to finance the development of our business. Dividends, if any, on our outstanding shares of common stock will be declared by and subject to the discretion of the Board on the basis of our earnings, financial requirements, and other relevant factors. As a result, a return on your investment will only occur if our common stock price appreciates. We cannot assure you that our common stock will appreciate in value or even maintain the price at which you purchase shares of our common stock. You may not realize a return on your investment in our common stock, and you may even lose your entire investment in our common stock. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.
Debt & Financing4 | 9.1%
Debt & Financing - Risk 1
Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.Debt & Financing - Risk 2
Some of our current or future properties may not contain any reserves, and any funds spent on exploration and evaluation may be lost.We are a development stage mining company. We cannot assure you that our exploration programs will identify economically extractable mineralization, nor can we assure you about the quantity or grade of any mineralization we seek to extract. Our exploration prospects may not contain any reserves and any funds spent on evaluation and exploration may be lost. Even for the mineral reserves we have reported for our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are actually mined. We do not know with certainty that economically recoverable lithium exists on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties.
Debt & Financing - Risk 3
We do not control our equity method investments.We apply the equity method of accounting to investments when we have the ability to exercise significant influence over the operational decision-making authority and financial policies of the investee but we do not exercise control. Our equity method investees are governed by their own board of directors, whose members have fiduciary duties to the investees' shareholders. While we have certain rights to appoint representatives to the investees' boards of directors, the interests of the investees' shareholders may not align with our interests or the interests of our shareholders and strategic and contractual disputes may arise.
We are generally dependent on the management team of our investees to operate and control such projects or businesses. While we may exert influence pursuant to our positions, as applicable, on the boards of directors and through certain limited governance or oversight roles, such influence may be limited. The management teams of our investees may not have the level of experience, technical expertise, human resources, management, and other attributes necessary to operate their projects or businesses optimally, and they may not share our business priorities, including, but not limited to, those priorities that relate to desired production levels. This could have a material adverse effect on the value of such investments as well as our growth, business, financial condition, results of operations, and prospects.
Debt & Financing - Risk 4
There is no assurance we will secure a loan from the Department of Energy's Loan Programs Office.We previously received a conditional invitation from the DOE to due diligence for an ATVM loan for our Carolina Lithium project. As our Carolina Lithium project has not yet met the conditional criteria for the Loan Programs Office to start due diligence, we withdrew our application in 2023 with the intention to resubmit an application at a future date and remain in the pre-application stage of the ATVM loan process. If and when we submit an application for an ATVM loan, the Loan Programs Office must make a finding that Carolina Lithium is eligible and meets the viability thresholds specified under law. Thereafter, our application becomes subject to both preliminary and advanced-stage due diligence and the negotiation of preliminary terms and conditions. Should the Loan Programs Office issue a conditional commitment letter for either project, and should we satisfy all conditions precedent and requirements specified in the letter, we would become eligible to enter into a final loan agreement. Upon closing, the loan would remain subject to certain restrictive covenants and financial reporting requirements set forth in the final loan agreement. As a result, there can be no assurance that we will secure such loan from the DOE for the project within the expected timeframe, on terms that are acceptable to the Company, or at all.
Corporate Activity and Growth9 | 20.5%
Corporate Activity and Growth - Risk 1
In order to manage our growth effectively and support our future operations, we expect to improve our financial and operations systems.Corporate Activity and Growth - Risk 2
We may acquire additional businesses or assets, form joint ventures, or make investments in other companies that may be unsuccessful and harm our operating results and prospects.As part of our business strategy, we may pursue additional acquisitions of complementary businesses or assets or seek to enter into joint ventures. We may pursue strategic alliances, such as our Sayona Mining, Atlantic Lithium, and Vinland Lithium investments, in an effort to leverage our existing operations and industry experience, increase our product offerings, expand our distribution, and make investments in other companies.
The success of any acquisitions, joint ventures, strategic alliances, or investments, including our Sayona Quebec, Atlantic Lithium, and Vinland Lithium investments, will depend on our ability to identify, negotiate, complete and, in the case of acquisitions, integrate those transactions and, if necessary, obtain satisfactory debt or equity financing to fund those transactions. We may not realize the anticipated benefits of any acquisition, joint venture, strategic alliance or investment. We may not be able to integrate acquisitions successfully into our existing business, maintain the key business relationships of businesses we acquire, or retain key personnel of an acquired business. We could assume unknown or contingent liabilities or incur unanticipated expenses. Integration of acquired companies or businesses also may require management resources that otherwise would be available for ongoing development of our existing business. Any acquisitions or investments made by us could result in significant write-offs or the incurrence of debt and contingent liabilities, any of which could harm our operating results. If we choose to issue equity as consideration for any acquisition, our stockholders may experience dilution.
Corporate Activity and Growth - Risk 3
Our ability to manage growth will have an impact on our business, financial condition, and results of operations.Future growth may place strains on our financial, technical, operational, and administrative resources and cause us to rely more on project partners and independent contractors, thus, potentially adversely affecting our financial position and results of operations. Our ability to grow will depend on a number of factors, including, but not limited to:
- our ability to purchase, obtain leases on, or obtain options on properties;- our ability to identify and acquire new exploratory prospects;- our ability to develop existing prospects;- our ability to continue to retain and attract skilled personnel;- our ability to maintain or enter into new relationships with project partners and independent contractors;- the results of our exploration programs;- the market price for lithium products;- our ability to successfully complete construction projects on schedule, and within budget;- our access to capital; and - our ability to enter into agreements for the sale of lithium products.
We may not be successful in upgrading our technical, operational, and administrative resources or increasing our internal resources sufficiently to provide certain services currently provided by third parties. Our inability to achieve or manage growth may materially and adversely affect our business, results of operations, and financial condition.
Corporate Activity and Growth - Risk 4
The Merger Agreement contains restrictions on our ability to pursue alternatives to the Merger, which may limit the value that our stockholders could receive from a transaction.Added
The Merger Agreement generally prohibits us, subject to certain exceptions, from initiating, soliciting, proposing, knowingly encouraging or otherwise knowingly facilitating any inquiries or the making of any proposal or offer that constitute or would reasonably be expected to lead to any competing transaction proposal. Further, subject to limited exceptions and consistent with applicable law, the Merger Agreement prohibits our Board from changing, withholding, withdrawing, qualifying or modifying, in a manner adverse to Sayona Mining, its recommendation that our stockholders approve the Merger and, in specified circumstances, Sayona Mining has a right to negotiate with us in order to match any competing transaction proposal that may be made. Although our Board is permitted to take certain actions in response to a superior transaction proposal or a competing transaction proposal that would reasonably be expected to result in a superior transaction proposal if it determines that the failure to do so would likely breach its statutory or fiduciary duties under applicable law, in specified situations, we may still be required to pay to Sayona Mining a termination fee of $2.62 million. These provisions may limit our ability to pursue offers from third parties that could result in greater value to our stockholders than they would receive in the Merger. The $2.62 million termination fee may also discourage third parties from pursuing an acquisition proposal with respect to Piedmont.
Corporate Activity and Growth - Risk 5
Piedmont will incur significant costs related to the Merger that could have a material adverse effect on its liquidity, cash flows and operating results.Added
Piedmont expects to incur significant one-time costs in connection with the Merger. These costs have been, and will continue to be, substantial and, in many cases, will be borne by Piedmont whether or not the Merger is completed. A substantial majority of these one-time costs will be transaction-related fees and expenses and include, among others, fees paid to financial, legal, accounting and other professional fees and transition and pre-Merger integration planning-related expenses. While Piedmont expects to be able to fund these one-time costs using existing cash, these costs will negatively impact Piedmont's liquidity, cash flows and results of operations in the periods in which they are incurred.
Corporate Activity and Growth - Risk 6
The pendency of the Merger could adversely affect our and Sayona Mining's respective business, results of operations, and financial condition.Added
The pendency of the Merger could cause disruptions in and create uncertainty surrounding Piedmont's and Sayona Mining's respective businesses, including by affecting relationships with Piedmont's and Sayona Mining's respective existing and future customers, suppliers, vendors, partners, and employees, and Piedmont's and Sayona Mining's respective standing with local communities, regulators, and other government officials. This could have an adverse effect on Piedmont's and Sayona Mining's respective businesses, results of operations and financial condition, as well as the market prices of Piedmont's shares and Sayona Mining's shares, regardless of whether the Merger is completed. In particular, Piedmont and Sayona Mining could potentially lose important personnel who decide to pursue other opportunities as a result of the Merger. Any adverse effect could be exacerbated by a prolonged delay in completing the Merger. Piedmont and Sayona Mining could also potentially lose customers, suppliers or vendors, existing customers, suppliers or vendors may seek to change their existing business relationships or renegotiate their contracts with Piedmont or Sayona Mining or defer decisions concerning Piedmont or Sayona Mining and potential customers, suppliers, or vendors could defer entering into contracts with Piedmont or Sayona Mining, each as a result of uncertainty relating to the Merger. In addition, in an effort to complete the Merger, Piedmont and Sayona Mining have expended, and will continue to expend, significant management resources on matters relating to the Merger, which are being diverted from Piedmont's and Sayona Mining's day-to-day operations, and significant demands are being, and will continue to be, placed on the managerial, operational and financial personnel and systems of Piedmont and Sayona Mining in connection with efforts to complete the Merger.
Corporate Activity and Growth - Risk 7
The termination of the Merger Agreement could negatively impact us and, in certain circumstances, could require us to pay a termination fee to Sayona.Added
If the Merger Agreement is terminated in accordance with its terms and the Merger is not completed, our ongoing business may be adversely affected by a variety of factors, including the failure to pursue other beneficial opportunities during the pendency of the Merger, the failure to obtain the anticipated benefits of completing the Merger, the payment of certain costs relating to the Merger and the focus of our management on the Merger for an extended period of time rather than on ongoing business matters or other opportunities or issues. Our stock price may fall as a result of any such termination, to the extent that the current price of our shares reflects a market assumption that the Merger will be completed (although this is difficult to predict with any certainty). In addition, the failure to complete the Merger may result in negative publicity or a negative impression of Piedmont in the investment community and may affect our relationship with employees, customers, suppliers, vendors and other partners.
We may be required to pay Sayona Mining a termination fee equal to $2.62 million if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement relating to, among other things, if Piedmont's Board changes its recommendation that Piedmont stockholders vote in favor of the Merger or if there is a willful and material breach of certain provisions of the Merger Agreement by Piedmont.
Further, Piedmont will also be required to pay Sayona Mining the $2.62 million termination fee if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement after we receive a competing transaction proposal, and, within twelve months after the date of termination, we enter into a definitive agreement with respect to or consummate the competing transaction proposal. If the Merger Agreement is terminated and we determine to seek another business combination or strategic opportunity, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.
Corporate Activity and Growth - Risk 8
The combined company may not realize all of the anticipated benefits of the Merger.Added
The combined company may not realize all of the anticipated benefits of the transaction. There is a risk that some or all of the expected benefits of the transaction may fail to materialize, or may not occur within the time periods anticipated by Sayona and Piedmont. The realization of such benefits may be affected by a number of factors, many of which are beyond the control of Sayona and Piedmont. The challenge of integrating previously independent businesses makes evaluating the business and future financial prospects of the combined company following the transaction difficult. Piedmont and Sayona have operated and, until completion of the transaction, will continue to operate, independently. The success of the transaction, including anticipated benefits and cost savings, will depend, in part, on the ability to successfully integrate the operations of both companies in a manner that results in various benefits, including, among other things, the expected optimization of NAL, currently owned 75% by Sayona and 25% by Piedmont, through consolidated offtake economics, complimentary technical capabilities, and material logistics, procurement and marketing synergies with aligned economic interests in pursuing NAL brownfield expansion. The past financial performance of each of Piedmont and Sayona may not be indicative of the future financial performance of the combined company. Piedmont and Sayona have incurred significant financial services, accounting, tax and legal fees in connection with the process of negotiating and evaluating the terms of the transaction. Additional significant unanticipated costs may be incurred in the course of coordinating the businesses of Piedmont and Sayona after completion of the transaction. Even if the transaction is not completed, Piedmont and Sayona will need to pay certain costs relating to the transaction incurred prior to the date the transaction was abandoned, such as financial advisory, accounting, tax, legal, filing and printing fees. Such costs may be significant and could have an adverse effect on the parties' future results of operations.
Corporate Activity and Growth - Risk 9
The completion of the Merger Agreement is subject to a number of conditions and the Merger Agreement may be terminated in accordance with its terms. As a result, the timing surrounding the closing of the Merger Agreement is uncertain and there is risk that the Merger may not be completed.Added
The completion of the Merger is subject to the satisfaction or waiver of a number of conditions as set forth in the Merger Agreement, including, among others: (1) requisite approvals of Piedmont's stockholders and Sayona's shareholders of the Merger Agreement, (2) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended), (3) the absence of certain enumerated legal impediments to the consummation of the Merger, (4) effectiveness of the registration statement for the Sayona Mining Ordinary Shares and Sayona Mining ADSs to be issued as consideration in the Merger and the related Form F-6, (5) the authorization to list the Sayona Mining ADSs and Sayona Mining Ordinary Shares issuable pursuant to the Merger Agreement on the Nasdaq and the ASX, respectively, (6) required approvals from ASX and the Australian Securities and Investments Commission, (7) the representations and warranties of each of Piedmont and Sayona Mining being true and correct to the extent required by, and subject to the applicable materiality standards set forth in, the Merger Agreement; each of Piedmont, Sayona Mining and the other parties to the Merger Agreement having in all material respects performed the obligations and complied with the covenants required to be performed or complied with by it under the Merger Agreement, and (8) there having been no material adverse effect (as defined in the Merger Agreement) with respect to Piedmont or Sayona Mining. The timing surrounding whether these conditions will be satisfied or waived, if at all, is uncertain. Additionally, other events could intervene to delay or result in the failure to close the Merger.
If completion of the Merger has not occurred by September 30, 2025, either Piedmont or Sayona Mining may choose to terminate the Merger Agreement. However, this right to terminate the Merger Agreement will not be available to Piedmont or Sayona Mining if such party has failed to fulfill any material covenant or agreement under the Merger Agreement and such failure has been the cause of, materially contributed to, or resulted in the failure of the Merger to occur on or before such date. Piedmont or Sayona Mining may elect to terminate the Merger Agreement in certain other circumstances, including if the Sayona Mining shareholders or Piedmont's stockholders fail to approve the Merger at the respective shareholder meetings, and Piedmont and Sayona Mining can mutually decide to terminate the Merger Agreement at any time prior to the effective time of the Merger, before or after the required approval by the Sayona Mining shareholders or Piedmont stockholders.
Legal & Regulatory
Total Risks: 8/44 (18%)Below Sector Average
Regulation5 | 11.4%
Regulation - Risk 1
The proposed Carolina Lithium project will be subject to significant governmental regulations, including the U.S. Federal Mine Safety and Health Act.Regulation - Risk 2
We will be required to obtain governmental permits and approvals in order to conduct development and mining operations, a process that is often costly and time-consuming. There is no certainty that all necessary permits and approvals for our planned operations will be granted.We are required to obtain and renew governmental permits and approvals for our exploration and development activities, and prior to mining any mineralization we discover, we will be required to obtain additional governmental permits and approvals that we do not currently possess. Obtaining and renewing any of these governmental permits is a complex, time-consuming, and uncertain process involving numerous jurisdictions, public hearings, and possibly costly undertakings. The timeliness and success of permitting efforts are contingent upon many variables not within our control, including the interpretation of approval requirements administered by the applicable governmental authority.
We may not be able to obtain or renew permits or approvals that are necessary to our planned operations, or we may discover that the cost and time required to obtain or renew such permits and approvals exceeds our expectations. Any unexpected delays, costs or conditions associated with the governmental approval process could delay our planned exploration, development, and mining operations, which in turn could materially adversely affect our prospects, revenues, and profitability. In addition, our prospects may be adversely affected by the revocation or suspension of permits or by changes in the scope or conditions to use of any permits obtained.
For example, in addition to the permits that we have been issued to date, we are required to obtain other permits and approvals before construction or operations of Carolina Lithium, including approvals related to rezoning, mining, mineral concentration, and chemical manufacturing. Such permits include an air permit that would be issued by the Division of Air Quality and rezoning that would be approved by the Gaston County Board of Commissioners. The following permits have been submitted for Carolina Lithium: (i) Prevention of Significant Deterioration Title V Air Permit to the Division of Air Quality on August 31, 2022, and (ii) North Carolina General Stormwater permits for both the conversion plant as well as the mine and concentrator operations.
Private parties frequently attempt to intervene in the permitting process to persuade regulators to deny necessary permits or seek to overturn permits that have been issued. For example, on June 6, 2024, four petitioners with residential or business properties near our permitted Carolina Lithium project filed a Petition for a Contested Case Hearing with the North Carolina Office of Administrative Hearings, challenging DEMLR's issuance of our mining permit for Carolina Lithium. While the four petitioners voluntarily dismissed without prejudice all claims asserted under their petition on February 3, 2025, we cannot guarantee the petitioners will not attempt to refile the petition in the future. For more information, see Note 19-Commitments and Contingencies. Third-party actions like these can materially increase the costs, cause delays in the permitting process, and could cause us to not proceed with the development or operation of a property. Our ability to successfully obtain key permits and approvals to explore for, develop, operate, and expand operations will likely depend on our ability to undertake such activities in a manner consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be required by law. Our ability to obtain permits and approvals and to successfully operate in particular communities may be adversely affected by real or perceived detrimental events associated with our activities.
Certain members of the Gaston County Board have indicated opposition to granting the approvals necessary for Carolina Lithium. In September 2021, the Gaston County Board approved updates to the Gaston County Unified Development Ordinance, which in part, established certain operating limitations for new mines and quarries within the county and provides the parameters for requisite Conditional District zoning. While we have initiated a dialog with the Gaston County Board, we are unable to predict the duration, scope, result, or related costs or conditions associated with the Boards' review, nor can we assure you that we will be successful in obtaining required local approvals.
Regulation - Risk 3
If we are required to register as an investment company, we will be subject to a significant regulatory burden and our results of operations will suffer.We are an operating company and believe we are not subject to regulation as an investment company under the U.S. Investment Company Act of 1940, as amended. However, if we were required to register as an investment company, our ability to use debt would be substantially reduced, and we would be subject to significant additional disclosure obligations and restrictions on our operational activities. Because of the additional requirements imposed on an investment company with regard to the distribution of earnings, operational activities and the use of debt, in addition to increased expenditures due to additional reporting responsibilities, our cash available for investments would be reduced. The additional expenses would reduce income. These factors would adversely affect our business, financial condition, and the results of operations and cash flows.
Regulation - Risk 4
The completion of the Merger is subject to risks and uncertainties surrounding conditions that may be imposed by regulatory or governmental entities which may reduce the anticipated benefits of the Merger or could prevent the closing of the Merger entirely.Added
Regulatory and governmental entities may impose conditions on the granting of consents required in connection with the Merger. The conditions imposed by regulatory and governmental entities on the granting of authorizations, consents, orders and approvals may require divestitures of certain divisions, operations or assets of Piedmont or Sayona Mining and may impose costs, limitations or other restrictions on business conduct. Under the Merger Agreement, each of Piedmont and Sayona Mining has agreed to use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner reasonably practicable, the Merger. However, neither party shall be required to become subject to, consent to, or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (1) sell or otherwise dispose of, or hold separate and agree to sell or otherwise dispose of, assets, categories of assets or businesses of Piedmont or Sayona Mining, (2) terminate, modify or extend any existing relationships and contractual rights and obligations of Piedmont, Sayona Mining or their respective subsidiaries, (3) terminate any relevant venture or other arrangement, (4) effectuate any other change or restructuring of Piedmont, Sayona Mining or their respective subsidiaries (and, in each case, to enter into agreements or stipulate to the entry of an order or file appropriate applications with any governmental entity), or (5) litigate (or defend) against any administrative or judicial action or proceeding (including any proceeding seeking a temporary restraining order or preliminary injunction) challenging any of the transactions contemplated by the Merger Agreement as violative of any applicable national security law.
Compliance with any conditions imposed by regulatory and governmental entities may reduce the anticipated benefits of the Merger, which could also have an adverse effect on the business, cash flows and results of operations, and neither Piedmont nor Sayona Mining can predict what, if any, changes may be required by regulatory or governmental authorities whose consents, orders or approvals are required.
Regulation - Risk 5
While the Merger Agreement is in effect, Piedmont and Sayona Mining are subject to restrictions on their conduct and business activities, which could adversely affect both companies' business, financial results, financial condition or share price.Added
Under the Merger Agreement, each of Piedmont and Sayona Mining is subject to a range of restrictions on the conduct of its respective business and generally must operate its business in the ordinary course of business consistent with past practice prior to completing the Merger. These restrictions may constrain Piedmont's and Sayona Mining's ability to pursue certain business strategies. The restrictions may also prevent Piedmont and Sayona Mining from pursuing otherwise attractive business opportunities, making acquisitions and investments or making other changes to our and its respective businesses prior to the completion of the Merger or the termination of the Merger Agreement. Any such lost opportunities may reduce either or both companies' competitiveness or efficiency and could lead to an adverse effect on their respective business, financial results, financial condition or share prices.
Litigation & Legal Liabilities2 | 4.5%
Litigation & Legal Liabilities - Risk 1
Our mineral properties may be subject to defects in title.Litigation & Legal Liabilities - Risk 2
Lawsuits may be filed against us and an adverse ruling in any such lawsuit may adversely affect our business, financial condition, or liquidity or the market price of our common stock.We may become involved in, named as a party to, or be the subject of various legal proceedings, including regulatory proceedings, tax proceedings, and legal actions related to personal injuries, property damage, property taxes, land rights, the environment, and contract disputes. For additional information, refer to Part I, Item 3, "Legal Proceedings."
The outcome of outstanding, pending, or future proceedings cannot be predicted with certainty and may be determined adversely to us and as a result, could have a material adverse effect on our assets, liabilities, business, financial condition, or results of operations. Even if we prevail in any such legal proceeding, the proceedings could be costly, time-consuming, and may divert the attention of management and key personnel from our business operations, which could adversely affect our financial condition.
Environmental / Social1 | 2.3%
Environmental / Social - Risk 1
Compliance with environmental regulations and litigation based on environmental regulations could require significant expenditures.Production
Total Risks: 7/44 (16%)Below Sector Average
Manufacturing2 | 4.5%
Manufacturing - Risk 1
We face risks related to mining, exploration, mine construction, and plant construction, if warranted, on our properties.Manufacturing - Risk 2
There is no guarantee that our development will result in the commercial extraction of mineral deposits.We are engaged in the business of exploring and developing mineral properties with the intention of locating economic deposits of minerals. We have declared mineral reserves on our development stage properties; however, we have yet to begin commercial extraction of minerals on these properties. Accordingly, we cannot assure you that we will realize profits in the medium to long term. Further, we cannot assure you that any of our property interests can be commercially mined or that our ongoing exploration programs will result in profitable commercial mining operations. The exploration and development of mineral deposits involve a high degree of financial risk over a significant period of time, which may or may not be reduced or eliminated through a combination of careful evaluation, experience, and skilled management. While discovery of additional ore-bearing deposits may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to construct mining and processing facilities and to establish additional reserves. The profitability of our operations will be, in part, directly related to the cost and success of our exploration and development programs, which may be affected by a number of factors. Additional expenditures are required to construct, complete, and install mining and processing facilities in those properties that are actually mined and developed.
Our exploration and development projects have no operating history upon which to base estimates of future operating costs and capital requirements. Exploration project items, such as any future estimates of reserves, metal recoveries, or cash operating costs will, to a large extent, be based upon the interpretation of geologic data, obtained from a limited number of drill holes and other sampling techniques as well as future feasibility studies. Actual operating costs and economic returns of any and all exploration projects may materially differ from the costs and returns estimated, and accordingly, our financial condition, results of operations, and cash flows may be negatively affected.
Employment / Personnel3 | 6.8%
Employment / Personnel - Risk 1
Our growth will require new personnel, which we will be required to recruit, hire, train, and retain.Employment / Personnel - Risk 2
We are dependent upon key management employees.The responsibility of overseeing the day-to-day operations and the strategic management of our business depends substantially on our senior management and key personnel. Loss of any such personnel may have an adverse effect on our performance. The success of our operations will depend upon numerous factors, many of which, in part, are beyond our control, including our ability to attract and retain additional key personnel in sales, marketing, technical support, and finance. Certain areas in which we operate are highly competitive and competition for qualified personnel is significant. We may be unable to hire suitable field personnel for our technical team or there may be periods of time where a particular position remains vacant while a suitable replacement is identified and appointed. We may not be successful in attracting and retaining the personnel required to grow and operate our business profitably.
Employment / Personnel - Risk 3
Piedmont and Sayona Mining may have difficulty attracting, motivating and retaining executives and other employees in light of the Merger.Added
Uncertainty about the effect of the Merger on current Piedmont employees and/or Sayona Mining employees may have an adverse effect on the combined company. This uncertainty may impair Piedmont's ability to attract, retain and motivate personnel until the Merger is completed. Employee retention may be particularly challenging during the pendency of the Merger, as employees may feel uncertain about their future roles with Piedmont after their combination. If large numbers of employees, or a concentration of critical employees of Piedmont, depart because of issues relating to the uncertainty or perceived difficulties of integration or a desire not to become employees of the combined company after the Merger, Piedmont's ability to realize the anticipated benefits of the Merger could be reduced.
Costs2 | 4.5%
Costs - Risk 1
We incur significant costs as a result of being publicly traded in the U.S. and Australia.Costs - Risk 2
Lithium and lithium byproduct prices are subject to unpredictable fluctuations which may greatly affect the value of our investment in our lithium assets and our ability to develop them successfully.The prices of lithium and lithium byproducts may fluctuate widely and are affected by numerous factors beyond our control, including international, economic, and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global and regional consumptive patterns, speculative activities, increased production due to new extraction developments and improved extraction and production methods and technological changes in the markets for the end products. The effect of these factors on the prices of lithium and lithium byproducts, and therefore the economic viability of any of our exploration, development, and operational properties, cannot be accurately predicted and could have dramatic effects on the results of our operations and our ability to execute our business plan.
New production of lithium hydroxide or lithium carbonate from current or new competitors in the lithium markets could adversely affect prices. In recent years, new and existing competitors have increased the supply of lithium hydroxide and lithium carbonate, which has affected pricing. Further production increases could negatively affect prices. There is limited information on the status of new lithium hydroxide production capacity expansion projects being developed by current and potential competitors and, as such, we cannot make accurate projections regarding the capacities of possible new entrants into the market and the dates on which they could become operational. If these potential projects are completed in the short term, they could adversely affect market lithium prices, thereby resulting in a material adverse effect on the economic feasibility of extracting any mineralization we discover and reducing or eliminating any reserves we identify.
We may not be able to effectively mitigate pricing risks for our products. Depressed pricing for our products will affect the level of revenues expected to be generated by us, which, in turn, could affect our value, share price and the potential value of our assets. There can be no assurance that the price of lithium products will be such that it can be produced at a profit.
Tech & Innovation
Total Risks: 3/44 (7%)Below Sector Average
Innovation / R&D1 | 2.3%
Innovation / R&D - Risk 1
Our long-term success depends on our ability to enter into and deliver product under offtake agreements.Cyber Security1 | 2.3%
Cyber Security - Risk 1
Our business is subject to cybersecurity risks.Technology1 | 2.3%
Technology - Risk 1
Changes in technology or other developments could adversely affect demand for lithium compounds or result in preferences for substitute products.Ability to Sell
Total Risks: 2/44 (5%)Below Sector Average
Demand2 | 4.5%
Demand - Risk 1
Our growth depends upon the continued growth in demand for electric vehicles with high performance lithium compounds.Demand - Risk 2
We are dependent on a limited number of customers, which makes us vulnerable to the continued relationship with and financial health of those customers.Changed
Four customers have accounted for 100% of our revenue as of the date of this Annual Report. Our future prospects may depend on the continued business of a limited number of key customers and on our continued status as a qualified supplier to such customers. We cannot guarantee that these key customers will continue to buy products from us at current levels. The loss of a key customer could have a material adverse effect on our business, financial condition, and results of operations.
Macro & Political
Total Risks: 2/44 (5%)Below Sector Average
Economy & Political Environment1 | 2.3%
Economy & Political Environment - Risk 1
Unstable market and economic conditions may have serious adverse consequences on our business and financial condition.Capital Markets1 | 2.3%
Capital Markets - Risk 1
We depend on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial markets may limit our ability to meet our liquidity needs and long-term commitments, fund our ongoing operations, execute our business plan or pursue investments that we may rely on for future growth.See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.