10-Q: NEXT-ChemX Reports Unaudited Q1 2025 Results Amidst Auditor Transition and Legal Challenges

NEXT-ChemX Corporation files its Q1 2025 report, noting it is unaudited due to auditor transition, while continuing to advance its iTDE technology and facing ongoing legal proceedings.

Summary

• NEXT-ChemX Corporation has filed its Quarterly Report on Form 10-Q for the period ended March 31, 2025, but the financial statements have not been reviewed by a registered public accounting firm, rendering the filing substantially deficient.
• The company transitioned to a new auditor, Fruci & Associates, after its previous auditor, BF Borgers CPA PC, was barred from practicing before the SEC.
• Fruci & Associates was unable to complete the audit or review of the 2024 financials due to workload constraints.
• The company refiled its 2023 Annual Report on Form 10-K/A with audited financials by Fruci & Associates on April 28, 2025.
• The company's quarterly financial statements for 2024 remain unreviewed.
• NEXT-ChemX is focused on commercializing its iTDE Technology for extracting lithium and other elements from various sources.
• The company is constructing two pilot plant systems to demonstrate the scalability and commercial viability of the iTDE Technology.
• The smaller system is nearing completion and will be used for extraction tests on brine solutions.
• The company has received brine samples from Clontarf Energy plc for testing.
• Due to funding constraints, the company has scaled back its intellectual property protection strategy.
• The company incurred a net loss of $465,926 for the three months ended March 31, 2025, compared to a net loss of $556,408 for the same period in 2024.
• As of March 31, 2025, the company had an accumulated deficit of $8,792,362 and a working capital deficit of $4,148,409, raising substantial doubt about its ability to continue as a going concern.
• The company is involved in legal proceedings related to a Turnover Order requiring the transfer of its common shares to settle a debt of NextMetals, Limited, a Gibraltar company.
• The company terminated Empire Stock Transfer Inc. as its transfer agent due to unauthorized actions regarding the issuance of shares related to the legal proceedings.

Sentiment

Score: 3

Explanation: The document presents a challenging financial situation with ongoing losses, auditor issues, and legal proceedings, leading to a negative sentiment.

Positives

• The company refiled its 2023 Annual Report on Form 10-K/A with audited financials by Fruci & Associates on April 28, 2025.
• The company is nearing completion of a smaller pilot system to test its iTDE Technology.
• The company has received brine samples from Clontarf Energy plc for testing in its pilot plant system.
• Management continued to keep operating costs to the minimum with a slight decrease when compared to the same period of 2024.
• There was a slight increase in the value of the shares held by the Company in Clontarf.

Negatives

• The Q1 2025 report is unaudited due to a transition to a new auditor, Fruci & Associates, after the previous auditor was barred from practicing before the SEC.
• The company's quarterly financial statements for 2024 remain unreviewed.
• Due to funding constraints, the company has scaled back its intellectual property protection strategy.
• The company incurred a net loss of $465,926 for the three months ended March 31, 2025.
• As of March 31, 2025, the company had an accumulated deficit of $8,792,362 and a working capital deficit of $4,148,409, raising substantial doubt about its ability to continue as a going concern.
• The company is involved in legal proceedings related to a Turnover Order requiring the transfer of its common shares to settle a debt of NextMetals, Limited, a Gibraltar company.
• The company terminated Empire Stock Transfer Inc. as its transfer agent due to unauthorized actions regarding the issuance of shares related to the legal proceedings.

Risks

• The company's ability to continue as a going concern is dependent on raising sufficient financing and generating profitable operations.
• The company relies on short-term debt, requiring constant refinancing or extension.
• The legal proceedings related to the Turnover Order could result in the transfer of a significant number of the company's shares.
• The company's internal control over financial reporting was not effective as of March 31, 2024.
• The company's reliance on advances from related parties may not be sustainable.
• The company's intellectual property protection strategy has been scaled back due to funding constraints.

Future Outlook

The company plans to complete its pilot plants to demonstrate its iTDE system and its extraction economics to potential users, and anticipates launching commercial testing and deployment of its system following successful completion and trial and calibration of the iTDE System pilot plant.

Management Comments

• Management considers the iTDE Technology to be more environmentally friendly and sustainable when compared to alternatives.
• Management considers it preferable to focus on the work necessary to complete its pilot plants, and this has led to an overall reduction in expenses prior to reengaging in other activities.

Industry Context

The company operates in the lithium extraction and metal mining industry, where it aims to provide a more environmentally friendly and cost-effective extraction method compared to traditional methods.

Comparison to Industry Standards

• The company's iTDE technology aims to offer a more sustainable approach compared to traditional lithium extraction methods that rely on evaporation ponds, which can have significant environmental impacts.
• The company's technology is designed to reduce energy costs and target specific ions, potentially offering a more efficient and cost-effective extraction process compared to conventional methods.
• Competitors in the lithium extraction industry include companies like Albemarle, SQM, and Livent, which utilize various extraction methods, including traditional evaporation ponds and direct lithium extraction (DLE) technologies.
• The company's pilot plant systems are intended to demonstrate the scalability and commercial viability of its iTDE technology, which could potentially position it as a competitive player in the industry if successful.

Legal Proceedings

• The company is involved in legal proceedings related to a Turnover Order requiring the transfer of its common shares to settle a debt of NextMetals, Limited, a Gibraltar company.
• The Turnover Order is currently on appeal with the Texas Court of Appeals for the 11th District in Eastland, Texas.
• The company terminated Empire Stock Transfer Inc. as its transfer agent due to unauthorized actions regarding the issuance of shares related to the legal proceedings.

Related Party Transactions

• The Company continues to rely on advances from related parties in support of its operations.
• As of March 31, 2025, Directors, Officers and employees, including certain full-time consultants, were owed a total of $ 2,404,296 for salaries, remuneration and expenses.

Stakeholder Impact

• Shareholders face uncertainty due to the company's financial condition and legal proceedings.
• Employees and consultants are impacted by deferred salary payments.
• The company's ability to commercialize its technology could impact customers in the lithium extraction and metal mining industries.
• Creditors face risk due to the company's reliance on short-term debt.

Next Steps

• Complete the construction of the two pilot plant systems.
• Conduct extraction tests on brine solutions.
• Launch commercial testing and deployment of the iTDE system.
• Open new corporate offices and organize an initial production facility.

Key Dates

Keywords

iTDE Technology, Lithium Extraction, Financial Statements, Going Concern, Legal Proceedings, Auditor Transition, Pilot Plant, NEXT-ChemX, Financials