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Critical Metals(CRML) - 2024 Q4 - Annual Report
CRMLCritical Metals(CRML)2024-10-30 18:40

Trading and Financial Information - The company's ordinary shares and warrants began trading on the Nasdaq Capital Market on February 28, 2024, under the symbols "CRML" and "CRMLW" respectively[254]. - There are currently no significant changes reported in the company's financial information[254]. - The Company is subject to the informational requirements of the Exchange Act, including filing reports with the SEC[305]. - The Company is exempt from certain rules under the Exchange Act, including those related to proxy statements and short swing profit recovery provisions[306]. Tax Considerations - The company has not sought any IRS rulings regarding U.S. federal income tax considerations for U.S. Holders[283]. - The tax treatment of cashless exercises of Public Warrants remains unclear under current tax law[266]. - U.S. Holders may face different tax consequences if the company is treated as a Passive Foreign Investment Company (PFIC)[269]. - The company has not provided assurance regarding the timely knowledge of its PFIC status in the future[273]. - The company does not intend to seek any rulings from the IRS regarding tax matters discussed[283]. - The Company has not made a determination regarding its Passive Foreign Investment Company (PFIC) status for its most recent taxable year, which is assessed annually based on income and asset composition[291]. - If classified as a PFIC, U.S. Holders may face adverse tax rules on gains recognized from the sale of ordinary shares or Public Warrants, including excess distributions[292]. - U.S. Holders can avoid excess distribution rules by making a timely Qualified Electing Fund (QEF) election, which allows them to include their share of the Company's net capital gains and earnings in income[294]. - The QEF election is made on a shareholder-by-shareholder basis and can only be revoked with IRS consent[295]. Financial Performance and Condition - The company incurred net losses of 147.5millionand147.5 million and 5.5 million for the years ended June 30, 2024, and June 30, 2023, respectively[407]. - As of June 30, 2024, the company had net cash outflows from operating activities of 15.1millionandaworkingcapitaldeficitof15.1 million and a working capital deficit of 13.8 million[407]. - The company raised cash proceeds of 10millionfromPIPEFinancinginconnectionwiththeBusinessCombination[383].−FollowingtheBusinessCombination,thecompanyreceived10 million from PIPE Financing in connection with the Business Combination[383]. - Following the Business Combination, the company received 879,934 from the exercise of Public Warrants and 6millionfromPrivateWarrants[408].−Thecompanyplanstoseekadditionalcapitalthroughequityordebtfinancingtofundongoingoperationsandfuturecapitalneeds[385].−Thecompanydoesnotexpecttodeclareanydividendsintheforeseeablefuture[377].−Thecompanyisdependentonitsabilitytosuccessfullyaccesscapitalandfinancialmarketstofunditsoperationsandgrowth[385].−Thecompanyhassignificantincreasedexpensesandadministrativeburdensasaresultofbeingapubliccompany[373].−Thecompanyfacessubstantialdoubtaboutitsabilitytocontinueasagoingconcernunlessitraisesadditionalcapital[382].InternalControlsandAudit−TheCompanylacksnecessarycontrolsforaccurateaccountingofrelatedpartytransactionsandcomplexfinancialinstruments[313][314].−TheCompanyidentifiedsixsignificantdeficienciesininternalcontroloverfinancialreporting,includingissueswithaccountspayableandaccruedexpenses[361].−TheCompanyaimstoimplementmeasurestoremediateidentifieddeficiencies,althoughnoassurancecanbegivenregardingtheirsufficiency[363].−TheCompanyhasconcludedthattherearesignificantdeficienciesininternalcontroloverfinancialreporting,whichcouldresultinmaterialmisstatements[358].−TheCompanyreportedauditfeesof6 million from Private Warrants[408]. - The company plans to seek additional capital through equity or debt financing to fund ongoing operations and future capital needs[385]. - The company does not expect to declare any dividends in the foreseeable future[377]. - The company is dependent on its ability to successfully access capital and financial markets to fund its operations and growth[385]. - The company has significant increased expenses and administrative burdens as a result of being a public company[373]. - The company faces substantial doubt about its ability to continue as a going concern unless it raises additional capital[382]. Internal Controls and Audit - The Company lacks necessary controls for accurate accounting of related party transactions and complex financial instruments[313][314]. - The Company identified six significant deficiencies in internal control over financial reporting, including issues with accounts payable and accrued expenses[361]. - The Company aims to implement measures to remediate identified deficiencies, although no assurance can be given regarding their sufficiency[363]. - The Company has concluded that there are significant deficiencies in internal control over financial reporting, which could result in material misstatements[358]. - The Company reported audit fees of 260,960 for the fiscal year ended June 30, 2024, compared to 123,085forthepreviousyear,representinga112123,085 for the previous year, representing a 112% increase[365]. - Audit-related fees increased to 94,760 in 2024 from 42,230in2023,reflectinga12442,230 in 2023, reflecting a 124% rise[365]. - Total fees for professional services amounted to 355,720 in 2024, up from 165,315in2023,indicatinga115165,315 in 2023, indicating a 115% increase[365]. Market and Operational Risks - The Company is subject to market risks, including credit risk and foreign currency exchange risk, which could adversely affect financial performance[335][336]. - The Company lacks adequate cybersecurity measures, which could lead to financial loss and operational disruptions[342]. - The company is classified as a foreign private issuer and complies with British Virgin Islands corporate governance practices[350]. - The Company has not maintained sufficient personnel to ensure proper segregation of duties in accounting and information systems[340]. - The company has not realized any revenues to date from the sale of lithium or any other critical minerals mined from its properties[415]. - The company is substantially dependent on the continued growth of the electric vehicle industry and other industries focused on next-generation technology[418]. - The company faces significant risks including higher than expected extraction costs and lower than expected grades of lithium concentrate[416]. - The company’s future performance is difficult to evaluate due to its limited operating history in the mining and battery metals sector[434]. - The company’s success largely depends on long-term market prices for lithium and rare earth products remaining higher than its realized costs[443]. - The company anticipates that its products may be delivered to customers on an early trial deployment basis, which could affect future orders[422]. - The company’s ability to generate revenues and operate profitably depends on its ability to negotiate and maintain binding sales agreements with customers[440]. Business Agreements - The company has entered into a long-term Offtake Agreement with BMW, which includes an advance payment of 15.0 million, secured by a bank guarantee[441]. - The company aims to derive revenues from the extraction and sale of lithium hydroxide, rare earths, and their byproducts, but prices may fluctuate widely due to various uncontrollable factors[425]. - The company has declared mineral resources related to the Wolfsberg Project but has not yet begun to extract minerals from any of its properties[433].