S-1/A: Sustainable Projects Group Inc. Files Amendment No. 1 to Form S-1, Eyes Nasdaq Listing and Name Change to Lithium Harvest, Inc.

Sustainable Projects Group Inc. (SPGX) files an amendment to its Form S-1 registration statement, signaling its intent to list on Nasdaq under the symbol LIHV and change its name to Lithium Harvest, Inc., as it prepares for a public offering focused on lithium production from oilfield wastewater.

Summary

• Sustainable Projects Group Inc. (SPGX) has filed Amendment No. 1 to its Form S-1 registration statement with the SEC.
• The company is pursuing an underwritten public offering of its common stock.
• SPGX anticipates a public offering price between an unspecified dollar amount per share.
• Subject to stockholder approval, the company intends to change its name to Lithium Harvest, Inc.
• The company is applying to list its common stock on Nasdaq under the symbol LIHV.
• Prior to the offering, a reverse stock split within the range of 1-for-20 to 1-for-100 is planned, pending stockholder approval.
• The company plans to construct two lithium carbonate manufacturing facilities in North Dakota, with a total capacity of 2,800 metric tons, expected to begin manufacturing in the second half of 2025.
• The company aims to have a total manufacturing capacity of approximately 6,000 metric tons of lithium carbonate by the end of 2026.
• Between March 30, 2023, and December 6, 2023, the company raised $2,946,450 through private placements.
• The company's Direct Lithium Extraction (DLE) technology enables lithium extraction from oilfield wastewater in a few hours, compared to competing technologies that take two to three years.
• The company believes its DLE technology has the lowest environmental footprint in the industry, saving up to 500,000 gallons of water and 15,000 kg of CO2 per metric ton of lithium carbonate produced compared to traditional mining technologies.
• Benchmark Minerals estimates lithium demand will rise from 350,000 tons in 2020 to over 3 million tons in 2030 and over 7 million tons in 2040, with prices exceeding $15,000 per ton from 2025 to 2040.
• The company received a patent grant approval from the Danish Patent and Trademark Office in February 2023, expiring in 2042, and expects a U.S. patent to be granted in the third quarter of 2024, also expiring in 2042.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. The company is pursuing a public offering and has plans for expansion, but it also faces financial challenges and risks related to the lithium market and its operations. The company's innovative technology and focus on sustainability are positive factors, but the company's limited operating history and need for additional capital raise concerns.

Positives

• The company's DLE technology enables lithium extraction from oilfield wastewater in a few hours, compared to competing technologies that take two to three years.
• The company believes its DLE technology has the lowest environmental footprint in the industry, saving up to 500,000 gallons of water and 15,000 kg of CO2 per metric ton of lithium carbonate produced compared to traditional mining technologies.
• The company has secured lithium feedstock supply agreements with leading midstream water management companies.
• The company has obtained sub-lease agreements which allow the lithium extraction facilities to be co-located at the produced water collection sites.
• The company plans to produce its products as close to its customers as possible.
• The company received a patent grant approval from the Danish Patent and Trademark Office in February 2023, expiring in 2042, and expects a U.S. patent to be granted in the third quarter of 2024, also expiring in 2042.

Negatives

• The trading market for the company's common stock is sporadic and extremely limited.
• The company has a limited operating history in the lithium industry.
• The company will need to raise additional capital to fund ongoing operations, and such capital raising may be costly or difficult to obtain and could dilute the stockholders ownership interests.
• The company has material weaknesses in its internal control over financial reporting.
• The company has sustained operating losses resulting in a deficit.
• The company's independent registered public accounting firm included an explanatory paragraph as to the company's ability to continue as a going concern.

Risks

• Demand and market prices for lithium will greatly affect the value of the company's investment in its lithium projects and its ability to develop them successfully.
• There is risk to the growth of lithium markets.
• Fluctuating construction costs can impact the company's business.
• The company's inability to protect its intellectual property rights, or being accused of infringing on intellectual property rights of third parties, could have a material adverse effect on its business, financial condition and results of operations.
• If the company is unable to retain key personnel or attract new skilled personnel, it could have an adverse effect on its business.
• The development of non-lithium battery technologies could adversely affect the company's business.
• The company will need to raise additional capital to fund ongoing operations, and such capital raising may be costly or difficult to obtain and could dilute the stockholders ownership interests.
• The company's required capital expenditures can be complex, may experience delays or other difficulties, and the costs may exceed the company's estimates.
• The price of the company's common stock may fluctuate significantly, and this may make it difficult for you to resell the shares of common stock when you want or at prices you find attractive.
• There can be no assurances that the company's common stock will be listed on Nasdaq or, if listed, will not be subject to potential delisting if the company does not continue to maintain the listing requirements of Nasdaq.
• The offering price per Share in this Offering is not an indication of the fair value of the company's common stock.
• The company's reverse stock split may not result in a proportional increase in the per share price of the company's common stock.
• If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about the company's business, the company's stock price and trading volume could decline.
• Adverse conditions in the global economy, and volatility and disruption of financial markets, can negatively impact the company's business and results of operations.
• The company's business and operations could suffer in the event of cybersecurity breaches, information technology system failures, or network disruptions.
• The company may be exposed to certain regulatory and financial risks related to climate change.

Future Outlook

The company plans to start construction of its first two lithium carbonate manufacturing facilities in North Dakota in the second half of 2024, with manufacturing expected to begin in the second half of 2025. The company aims to have a total manufacturing capacity of approximately 6,000 metric tons of lithium carbonate by the end of 2026. The company intends to continue to expand its operations in North America in the near term, and eventually expand to Europe.

Management Comments

• The document does not contain direct quotes from management.
• Management anticipates increased inflation in all areas of operations.
• Management anticipates that the Company will not generate sufficient revenues to continue the development of current projects and projects in the pipeline.
• Management anticipates that additional funding will be in the form of equity financing from the sale of the Company's common stock, as well as debt if available.

Industry Context

The announcement aligns with the increasing global demand for lithium driven by the growth of the electric vehicle and renewable energy sectors. The company's focus on sustainable lithium production from oilfield wastewater positions it to capitalize on the growing emphasis on responsible sourcing and environmental concerns within the industry. The company's DLE technology offers a competitive advantage over traditional lithium extraction methods.

Comparison to Industry Standards

• The document states that competing technologies typically extract and manufacture lithium compounds from brine or hard rock through processes that take up to two to three years, while the company's DLE technology enables extraction in a few hours.
• The document states that the company's technology saves up to 500,000 gallons of water and 15,000 kg of CO2 per metric ton of lithium carbonate produced compared to traditional mining technologies.
• The document references Benchmark Minerals estimates for lithium demand and price trends.

Related Party Transactions

• During the year ended December 31, 2023, the Company incurred management fees to the CFO totaling an aggregate of $120,625.
• At December 31, 2023, $140,875 was owing to the CFO for management fees, consisting of current and past due amounts, and $2,020 for reimbursement of out of pocket expenses.
• At December 31, 2023, $12,766 was owing to Ms. Muehlbauer for past due salaries and $25,500 for management fees.
• At December 31, 2023, the Company owed a company controlled by Stefan Muehlbauer and Tiffany Muehlbauer the amount of $20,647 for office expenses.
• During the year ended December 31, 2023, Legacy Lithium Harvest incurred management fees payable to the CEO totaling an aggregate of $285,020 (DKK 1,925,000).
• At December 31, 2023, $151,764 (DKK 1,025,000) was owing to the CEO for salaries, and $2,771 (DKK 18,714) for reimbursement of out of pocket expenses.
• At December 31, 2023, a company controlled by the director and CEO was owed $40,425 (DKK 273,027) for out of pocket expenses, current and past due.
• During the year ended December 31, 2023, Legacy Lithium Harvest entered into two notes payable with a company controlled by the CEO of the Company, with one note in the principal amount of $17,173 (DKK 118,000) and the other in the principal amount of $2,183 (DKK 15,000), and each with a 3% interest rate per annum that was due on or before May 1, 2023.
• During the year ended December 31, 2023, Legacy Lithium Harvest incurred management fees from the CTO totaling an aggregate of $285,020 (DKK 1,925,000).
• At December 31, 2023, $143,895 (DKK 971,850) was owing to the CTO for salaries.
• On April 28, 2023, a Company controlled by a director and CTO of the Company, Paw Juul, loaned the Company $14,506 (DKK 99,000).
• The Loan accrued interest at the rate of 10% per annum and converted into the Company's common stock upon the effectiveness of the Exchange Transaction.

Stakeholder Impact

• Shareholders will experience dilution as a result of the public offering and potential future equity issuances.
• Employees may benefit from the company's growth and expansion plans, but also face risks related to the company's financial stability and ability to execute its strategy.
• Customers in the EV and battery markets may benefit from the company's sustainable lithium production and innovative DLE technology.
• Suppliers and creditors face risks related to the company's financial stability and ability to meet its obligations.

Next Steps

• Obtain stockholder approval for the name change and reverse stock split.
• Secure Nasdaq listing approval.
• Complete the public offering.
• Begin construction of the lithium carbonate manufacturing facilities in North Dakota.
• Begin manufacturing battery-grade lithium compounds at the North Dakota facilities in the second half of 2025.
• Continue investment in research and development and expansion of the product portfolio.

Key Dates

Keywords

lithium, direct lithium extraction, DLE, oilfield wastewater, lithium carbonate, lithium hydroxide, electric vehicles, EV, battery market, Nasdaq, public offering, reverse stock split, North Dakota, manufacturing facilities, private placement, patent, SPGX, LIHV