Company: FEAV
Filing Date: 2025-02-03
Form Type: DEF 14A
Source: 0000950170-25-012391
Chunk: 68

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-03
Form: DEF 14A
Chunk 68
---
, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the consolidated financial statements are issued. In performing this analysis, management concluded there continues to exist substantial doubt regarding the Company’s ability to continue as a going concern.

Although the Out-of-Court Restructuring, issuance of $6.0 million of additional senior secured convertible notes in June 2024 (the “June 2024 Notes,” and together with the Original Convertible Notes, the “Convertible Notes,” each as further described in Note 7—Debt), and August 2024 Offering (as further described and defined in Note 15—Subsequent Events) improved the Company’s cash position, and the Company continues to operate under a business plan that includes reductions in certain spending, management anticipates the need for additional financing within the next twelve months to maintain a cash balance in excess of the $7.5 million minimum cash covenant which goes into effect December 31, 2024 (as discussed in Note 7—Debt). If the Company is not able to secure additional financing and the Company’s cash balance falls below $7.5 million after such date, an event of default under the May 2024 Amended and Restated Note Purchase Agreement (as defined in Note 7—Debt) would occur if not cured after 30 days. An event of default would cause the Convertible Notes balance outstanding to become immediately due and payable, for which the Company would not have the resources to repay without additional financing. The receipt of potential funding, including the financing contemplated by the Debt Commitment Letters (as further described and defined in Note 15—Subsequent Events) cannot be considered probable at this time because these plans are not entirely within management's control as of the date of these consolidated financial statements. Therefore, there exists substantial doubt regarding the Company's ability to continue as a going concern for a period of one year after the date that these financial statements are issued. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding the Company's ability to continue as a going concern.

These financial statements have been prepared on a going concern basis, which contemplates the realization