LIT's gross revenue (receipts from customers) was only $235K for the June 2020 quarter (up from $159K for the March 2020 quarter). However their operating activities produced a loss of $139K (expenses were $374K), and that was after a serious reduction in expenditure in the quarter due to COVID. They also produced an additional loss of $330K from investing activities (which included investments in property, plant and equipment, plus loans to other entities), so were only able to continue operating because they raised $918K (before costs) from the issue of new shares during the quarter.
For the 12 months to June 2020, LIT received $394K from customers (gross annual revenue), produced an operating activities loss of $3.879 million (their loss was around 10 times their revenue), plus an additional $2m loss from investing activities. That total loss was ~$5.9m. They were only able to continue operating due to raising $4.45m from issuing additional shares, plus another $2.9m from the issue of convertible debt securities - during that 12-month period.
They are clearly not profitable. However, that doesn't mean they are worth nothing. They could be worth something, but it's hard to know what they are realistically worth. They are involved in many different things, and some of those activities might become profitable at some point, if they can last that long.
From Commsec:
Lithium Australia NL (LIT, formerly Cobre Montana NL) is a developer of disruptive lithium extraction technologies. LIT has strategic alliances with a number of companies, potentially providing access to a diversified lithium mineral inventory. LIT plans for Energy-efficient recovery of lithium from mine waste to create primary battery chemicals, Conversion of those primary battery chemicals into cathode materials via VSPC Ltd and recycling of energy metals from spent LIBs and alkaline batteries, via Recycling and VSPC.
Electra JV - North America: The Electra project in Sonora, Mexico is a farm-in and JV in which the Company can earn up to 65% of the project from its Canadian-based partner Infinite Lithium Corporation. LIT moved to a controlling stake in the project in October 2017, following a successful drill programme that confirmed a new, 2.5 km long, 25-50-metre-thick mineralised zone lying on the western flank of the Agua Fria concession.
Canada: LIT has a technology alliance with MetalsTech Limited. Following field work during 2017, including some 5600 m of diamond core drilling, an Exploration Target at the Cancet lithium project has been estimated in the range of 15 Mt to 25 Mt @ 1.0% to 2.0% Li2O and 100 ppm (parts per million) to 250 ppm Ta2O5 (tantalum oxide).
Europe: LIT was actively farming into a JV with Tin International AG, having spent GBP750,000 on exploration activity. LIT and TIN subsequently signed a binding agreement in which TIN agreed to sell its interest in the project, including the nearby Hegelshohe exploration licence, also held by TIN.
Australia: The Company has several Projects in Australia that include the Ravensthorpe project, Greenbushes project, Stanifer project, Gascoyne project, Lake Johnston project, Cobalark project, Edah project, Cape York projects, Bynoe project and Kangaroo Island project.
VSPCVSPC: LIT's wholly owned nanotechnology subsidiary, is located in Brisbane, Australia. It comprises a comprehensive pilot plant and advanced laboratory and testing facilities. VSPC is focused on the design, manufacture and supply of complex high-purity, metal oxides and other cathode materials - from initial research to pilot and large-scale production.
Recycling: The Company is developing a hydrometallurgical process that recovers all metals, including lithium, from spent LIBs, which contain very high concentrations of critical metals. When processed appropriately, they can provide the materials required to re-birth LIB cathodes, creating an ethical and sustainable supply of materials while reducing negative impacts on the environment.
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Don't know if that info from Commsec is all up-to-date at this point, but this is not a company I follow at all. What I'm saying is that they currently don't have ANY earnings (profits), so that criteria won't work here. They are certainly burning through cash at a fairly alarming rate, but that is something that many early-stage companies do, and that might be OK - IF they go on to become a succesful and profitable disruptor. However, that's a big "IF".
In this case, I think whether or not you choose to tip more money into a company like this (via an SPP or EO) would probably depend on (a) how much you like the story and believe in the company, (b) what the discount is to the prevailing market price (i.e. >10% discount is good, as CanadianAussie says) and (c) your realistic view of their future - i.e. how many more capital raisings do you think are coming, over how many years (until they become self-funding)? - and are you prepared to keep tipping in more money on each of those occasions. If you don't, your share of the company obviously becomes diluted by the issue of more shares to others. If they are able to keep growing the share price, that probably doesn't matter too much, because the value of your investment will grow regardless. Many things to consider, but it's a little different with a loss-making company than it is with a profitable one.