Ann: Quarterly Report (Form 10-Q), page-52

Can anyone explain to me how an accounting method applied to one specific section of PLL's consolidated accounts has caused so much confusion... I think many of you will know what I'm talking about - THE 3 MONTH LAG.

Within a very specific line item of the consolidated statements of operations and confined to that section is in the practice of recording "Loss from equity method investments in uncosolidated affiliates", PLL's share is recorded on a one quarter lag.



You will find this line item in the P&L statement and the Cashflow statement. I'll highlight it so you can spot it.

Sounds pretty straightforward, but in some hands this has been extrapolated to cover the entire statements - claims that every single line item is on a 3 month lag, or at least the line items that cover cashflows and investments into Sayona Quebec. The implication being that because of the way PLL reports a single different line item, PLL pays everything 3 months late or that the investment into SYQ that is listed for the time period, doesn't actually cover that period.

As an example, some have argued that the following highlighted section covering the SYQ payments as well as the notes are either unreliable, lagging, or don't exist at all. Essentially the claims are that PLL "owe" SYA significant sums because of the "3 month lag in reporting" that other line item.

To me the concept that the clear payments to SYQ recorded and explained in the statement and notes - to the tune of around US$28m in just the 6 months to June 30th 2023 - do not exist, are lagging or are not cashflows but rather measures of what PLL owes is astounding.

We have clear documentation from PLL demonstrating how much they have been paying into the JV and when, while on the other hand zero evidence to suggest that PLL is behind on calls for funds from the JV.

My own assumption is that some are not looking at SYQ as a separate company to SYA - that somehow SYA pays the bills when they come in and then tells PLL how much they owe SYA on a regular basis and that has been confounded with the lagging accounts reporting method for a separate line item.

Of course the reality is that calls are made to both SYA and PLL in advance based on anticipated funding requirements so that SYQ is in a position to meet it's liabilities - Calls are made to partners when it is expected SYQ will require more funds and distributions are made once the JV becomes profitable when the partners deem it is appropriate.

Is this simply an effort to distract away from the SP performance of SYA and vent frustration at PLL for having locked in a highly lucrative LOM offtake agreement or does any argument that PLL is overdue on payments to the JV by even a single cent, or owes SYA anything at this point in time hold any merit? Are SYA holders in need of a villain given the low levels of shorts?

Does anyone have any documentation to show that at any period PLL has been late in supplying funds to SYQ? I for one would certainly not accuse SYA of owing SYQ or paying late without a factual basis, yet it seems that many SYA holders are comfortable in throwing that accusation at PLL.