Company: FEAV
Filing Date: 2025-01-24
Form Type: PRE 14A
Source: 0000950170-25-008828
Chunk: 136

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-01-24
Form: PRE 14A
Chunk 136
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ible Note Derivatives require the input of subjective assumptions including expected share price volatility, risk-free interest rate and debt rate. Changes in the input assumptions as well as the Company's underlying share price can materially affect the fair value estimates. Changes in the reported fair value of the Convertible Notes between periods are not recognized in net income and therefore have no effect on reported net income (loss).

The significant assumptions used in the fair value model for the Convertible Notes and related Convertible Note Derivatives include the following, with changes in volatility, debt rate and stock price having the most significant impact on the related fair values.

|                         |     | Sep. 30, 2024 |    |     Sep. 16, 2024 
 (Sep. 2024 Notes) |     | Jun. 30, 2024 |    |
|:------------------------|:----|--------------:|---:|------------------:|:----|--------------:|---:|
| Risk-free interest rate |     |          3.6% |    |              3.4% |     |          4.5% |    |
| Volatility              |     |         65.0% |    |             60.0% |     |         50.0% |    |
| Debt rate               |     | 22.6% - 33.6% | -1 |             23.7% |     | 28.7% - 36.7% | -2 |
| Stock price per share   |     |         $0.54 |    |             $0.50 |     |         $1.21 |    |

Debt rates of 25.5%, 33.6% and 22.6% were utilized in the valuation of the August 2022 Notes, June 2024 Notes and September 2024 Notes, respectively.

Debt rates of 28.7% and 36.7% were utilized in the valuation of the August 2022 Notes and June 2024 Notes, respectively.

8. Convertible Note Derivatives

The June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative, each which relate to the June 2024 Notes and September 2024 Notes, respectively, described above in Note 7–Debt, were valued upon initial recognition and at each

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reporting period at