Liquidity

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity

2. LIQUIDITY

At June 30, 2018, the Company had working capital of $2.2 million, an ATM Offering with $8.0 million remaining, of which $7.8 million was currently registered for sale and a non-current note receivable from Laramide for $2.0 million. These sources along with other anticipated financings is expected to provide it with the necessary liquidity through September 30, 2019. At December 31, 2017, the Company had working capital of $3.9 million. The decrease in working capital of $1.7 million for the six months ended June 30, 2018 was primarily due to the following:

• loan advances to Alabama Graphite to fund their pre-acquisition operating costs of $0.9 million.

• a decrease of $1.0 million in the fair value of Laramide Resources Ltd. (“Laramide”) securities as of June 30, 2018.

During 2018 and 2017, the Company entered into the following financing agreements and anticipates funding from these sources to sustain operations through September 30, 2019:

• Registered Direct Offering

On June 14, 2018, the Company completed a registered direct offering of securities with Aspire Capital Fund, LLC (“Aspire Capital”) for net proceeds of $2.9 million. The securities consisted of 3,717,773 shares of common stock at a price of $0.34 per share for net proceeds of $1.3 million and 4,968,518 pre-funded common stock warrants at a price of $0.33 per warrant for net proceeds of $1.6 million. The exercise price of the warrants is $0.01 per share and the warrants are exercisable at any time and from time to time through June 14, 2021. The Company did not incur underwriting discounts or commissions with this offering. The previous Common Stock Purchase Agreement (“CSPA”) with Aspire Capital dated September 25, 2017 was terminated on June 14, 2018 concurrently with the launch of the registered direct offering.

• Controlled Equity Offering Sales Agreement

On April 14, 2017, the Company entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co. (“Cantor”) acting as sales agent, pursuant to which the Company has registered the offer and sale from time to time of shares of its common stock having an aggregate offering price of up to $8.0 million (the “ATM Offering”), of which approximately $7.8 million is available for future sales as of August 8, 2018.

The Company believes that its current working capital balance, the remaining registered shares of the ATM Offering, the non-current note receivable from Laramide and other anticipated financings will provide it with the necessary liquidity to fund operations through September 30, 2019. The Company will also continue to explore additional opportunities to raise capital, further monetize its non-core assets and identify ways to reduce its cash expenditures.

While the Company has been successful in the past raising funds through equity and debt financings as well as through the sale of non-core assets, no assurance can be given that additional financing will be available to it in amounts sufficient to meet the Company’s needs or on terms acceptable to the Company. In the event that funds are not available, the Company may be required to materially change its business plans.