First Phosphate's Strategic Exit: Deregistering from SEC to Focus on Lithium Iron Phosphate Growth

First Phosphate Corp. (CSE: PHOS, OTCQB: FRSPF, FSE: KD0) has taken a bold step by filing Form 15F with the U.S. Securities and Exchange Commission (SEC) to voluntarily terminate its registration under the Securities Exchange Act of 1934. This move, effective immediately, will suspend its reporting obligations to the SEC, with full deregistration expected by late July 2025. The decision reflects a strategic pivot to reduce compliance costs and refocus resources on its core mission: developing high-purity phosphate deposits in Quebec for use in Lithium Iron Phosphate (LFP) battery cathodes.

The Strategic Move: Why Deregister?

First Phosphate’s Form 15F filing was driven by two primary factors:
1. Resolution of Legacy SEC Reporting Issues: The SEC registration, initiated in April 2024, was tied to a historical matter predating current management. With the issue resolved to the SEC’s satisfaction, the company determined ongoing U.S. reporting obligations were unnecessary for its near-term operations.
2. Cost Efficiency: Maintaining SEC compliance, including Sarbanes-Oxley audits and quarterly filings, incurs significant financial and administrative burdens. By deregistering, First Phosphate can redirect these resources to its core business—expanding its phosphate operations and advancing partnerships in the LFP supply chain.

The filing also aligns with Rule 12h-6, which allows foreign private issuers to exit U.S. reporting if they meet eligibility criteria like the Average Daily Trading Volume (ADTV) test (U.S. trading ≤5% of global volume) and shareholder thresholds. First Phosphate’s U.S. trading activity is minimal, making it a prime candidate for deregistration.

Impact on Investors: Trading Continues Uninterrupted

While the SEC deregistration removes First Phosphate from U.S. reporting requirements, its shares remain fully tradable on the Canadian Securities Exchange (CSE: PHOS), the OTCQB (OTCQB: FRSPF), and the Frankfurt Stock Exchange (FSE: KD0). Canadian investors will continue to benefit from continuous disclosure requirements, including filings on SEDAR (System for Electronic Document Analysis and Retrieval).

This comparison will help investors gauge the stock’s resilience amid broader market trends.

Risks and Considerations

While the move streamlines operations, risks remain:
- Market Perception: Some investors may interpret SEC deregistration as a negative signal, though First Phosphate’s rationale—cost reduction and strategic focus—is widely accepted.
- Forward-Looking Challenges: The company’s success hinges on its ability to scale phosphate production and secure partnerships in the LFP battery sector. Regulatory hurdles in Canada or delays in project timelines could impact valuation.

This data will highlight the company’s financial health and trading activity outside the U.S.

Conclusion: A Calculated Bet on Lithium Iron Phosphate Growth

First Phosphate’s decision to exit U.S. reporting obligations is a tactical move that prioritizes operational efficiency and alignment with its core mission. By eliminating SEC-related costs, the company can reinvest in its Quebec phosphate deposits, which are critical to producing high-purity lithium iron phosphate for electric vehicle (EV) batteries—a sector projected to grow at a CAGR of 15% through 2030, according to BloombergNEF.

The company’s continued compliance with Canadian regulations ensures transparency for its key investor base, while its global listings maintain liquidity. With $50 million in market capitalization (as of early 2025) and a focus on vertically integrating into North American battery supply chains, First Phosphate positions itself to capitalize on the LFP boom.

However, investors must monitor two key metrics:
1. Project Execution: Progress at the Bégin-Lamarche deposit, including permitting and production timelines.
2. Market Demand: Growth in LFP battery adoption, particularly in EVs and energy storage systems.

In a sector where cost efficiency and specialization are paramount, First Phosphate’s deregistration from U.S. reporting obligations may prove a prudent step—one that could amplify returns for investors aligned with its vision.