Company: FEAV
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019943
Chunk: 3

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 8
Chunk 3
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 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 condensed 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 August 2024 Equity Offering (as further described and defined in Note 10–Equity) provided net cash proceeds of approximately $3.0 million, the issuance of the September 2024 Notes (as further described and defined in Note 7–Debt) provided net cash proceeds of approximately $5.5 million, and the issuance of the January 2025 Notes (as further described and defined in Note 7–Debt and Note 14–Subsequent Events) provided $5.0 million of cash proceeds exclusive of issuance costs and fees, each of which improved the Company’s cash position, and while 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 March 31, 2025 (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 amended and restated note purchase agreement, as amended on January 14, 2025 (as further described in Note 7–Debt) would occur if not cured after 30 days. An event of default would give the holders of the Convertible Notes the right to cause the Company’s senior secured Convertible Notes (as further described and defined in Note 7–Debt) 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 cannot be considered probable at this time because these plans are not entirely within management's control as of the date of these condensed consolidated financial statements. Therefore, there exists substantial doubt regarding the Company's ability to continue as a going concern. Even if additional financing is successfully consummated, including as part of the proposed Out-of-Court Restructuring, available liquidity may still not