Company: FEAV
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0000950170-25-019943
Chunk: 124

Company: 5E Advanced Materials, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 2
Chunk 124
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ivative and September 2024 Convertible Note Derivative. Our stock price on September 30, 2024 (the last trading day of our prior fiscal quarter) and December 31, 2024 (the end of the current fiscal quarter) was $0.54 and $0.64, respectively. The observed increase in our stock price resulted in increases in the value of the embedded conversion feature liabilities and resulted in aggregate derivative losses of $0.8 million. There were no comparable embedded conversion features requiring bifurcation and separate accounting in the comparative period in the prior fiscal year and therefore there was no related Derivative gain (loss).

The unrealized derivative gain of $1.4 million during the six months ended December 31, 2024, was primarily due to a decrease in our stock price during the period, which resulted in a gain on the June 2024 Convertible Note Derivative. Our stock price on June 28, 2024 (the last trading day prior to the end of our prior fiscal year) and December 31, 2024 (the end of the current fiscal quarter) was $1.21 and $0.64, respectively. The observed decline in our stock price resulted in a decline in the value of the embedded conversion feature liability and a resulting derivative gain of $2.2 million. This derivative gain was offset, to a lesser extent, by a loss with respect to the September 2024 Convertible Note Derivative during the same period. The unrealized derivative loss was primarily due to an increase in our stock price from $0.50 on September 16, 2024 (the issuance date of the September 2024 Notes) to $0.64 on December 31, 2024 (the end of the current fiscal quarter), resulting in an increase in the value of the embedded conversion feature liability during such period and a resulting derivative loss of $0.9 million. There were no comparable embedded conversion features requiring bifurcation and separate accounting in the comparative period in the prior fiscal year and therefore there was no related Derivative gain (loss). On December 31, 2024, the conversion features associated with the June 2024 Notes and September 2024 Notes that resulted in separate accounting expired and the remaining aggregate fair value of such derivatives of $3.6 million was transferred to additional paid-in capital.

Interest expense

Interest expense primarily relates to interest expense incurred on the Convertible Notes and is net of amounts capitalized to construction-in-progress