AMERICAN BATTERY TECHNOLOGY Co

Previous wording

Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flow and financial position. There can be no assurance future results will meet expectations. Forward-looking statements speak only as of the date of this report and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Current wording

Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flows and financial position. There can be no assurance future results will meet expectations. Forward-looking statements speak only as of the date of this report and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Previous wording

American Battery Technology Company (the “Company”) is a growth company within the lithium–ion battery industry that is working to increase the domestic U.S. production of battery materials, such as lithium, nickel, cobalt, and manganese through its exploration of new domestic-US primary resources of battery metals, development and commercialization of new technologies for the extraction of these battery metals from primary resources, and commercialization of an internally developed integrated process for the recycling of lithium–ion batteries. Through this three–pronged approach the Company is working to both increase the domestic production of these battery materials, and to ensure spent batteries have their elemental battery metals returned to the domestic manufacturing supply chain in an economical, environmentally-conscious, closed–loop fashion.

Current wording

American Battery Technology Company (the “Company”) is an integrated critical battery materials company within the lithium–ion battery industry that is working to increase the domestic U.S. production of battery materials, such as lithium, nickel, cobalt, and manganese through its exploration of new domestic-US primary resources of battery metals, development and commercialization of new technologies for the extraction of these battery metals from primary resources, and commercialization of an internally developed integrated process for the recycling of lithium–ion batteries. Through this three–pronged approach the Company is working to both increase the domestic production of these battery materials, and to ensure spent batteries have their elemental battery metals returned to the domestic manufacturing supply chain in an economical, environmentally-conscious, closed–loop fashion.

Previous wording

To implement this business strategy, the Company has constructed its first integrated lithium–ion battery recycling facility, which takes in waste and end–of–life battery materials from the electric vehicle, stationary storage, and consumer electronics industries. The ramp-up and operations of this facility are of the highest priority to the Company, and as such it has significantly increased the resources devoted to its execution including the further internal hiring of technical staff, expansion of laboratory facilities, and purchasing of equipment. The Company has been awarded a competitively bid grant from the U.S. Advanced Battery Consortium to support a $2 million project to accelerate the development and demonstration of the technologies within this integrated lithium–ion battery recycling facility. The Company has also been awarded an additional grant from the U.S. Department of Energy to support a $20 million project under the Bipartisan Infrastructure Law to validate, test, and deploy three next-generation disruptive advanced separation and processing recycling technologies.

Current wording

To implement this business strategy, the Company has constructed its first integrated lithium–ion battery recycling facility, which takes in waste and end–of–life battery materials from the electric vehicle, stationary storage, and consumer electronics industries. The ramp-up and operations of this facility are of the highest priority to the Company, and as such it has significantly increased the resources devoted to its execution including the further internal hiring of technical staff, expansion of laboratory facilities, and purchasing of equipment. The Company has been awarded a competitively bid grant from the U.S. Advanced Battery Consortium to support a $2 million project to accelerate the development and demonstration of the technologies within this integrated lithium–ion battery recycling facility. The Company has also been awarded an additional grant from the DOE to support a $20 million project under the Bipartisan Infrastructure Law to validate, test, and deploy three next-generation disruptive advanced separation and processing recycling technologies.

Previous wording

Additionally, the Company is accelerating the demonstration and commercialization of its internally developed low–cost and low–environmental impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada–based sedimentary claystone resources. The Company has been awarded a competitive grant from the U.S. Department of Energy’s Advanced Manufacturing and Materials Technologies Office through the Critical Materials Innovation program to support a $4.5 million project for the construction and operation of a multi–ton per day integrated continuous demonstration system to support the scale–up and commercialization of these technologies. The Company has also been awarded an additional grant award under the Bipartisan Infrastructure Law to support a $115 million project to design, construct, and commission a first-of-kind commercial-scale refinery to produce 30,000 MT of battery-grade lithium hydroxide per year from this resource.

Current wording

Additionally, the Company is accelerating the demonstration and commercialization of its internally developed low–cost and low–environmental impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada–based sedimentary claystone resources. The Company has been awarded a competitive grant from the DOE’s Advanced Manufacturing and Materials Technologies Office through the Critical Materials Innovation program to support a $4.5 million project for the construction and operation of a multi–ton per day integrated continuous demonstration system to support the scale–up and commercialization of these technologies. The Company has also been awarded an additional grant award under the Bipartisan Infrastructure Law to support a $115.5 million project to design, construct, and commission a first-of-kind commercial-scale refinery to produce 30,000 MT of battery-grade lithium hydroxide per year from this resource.

Previous wording

ABTC has completed the construction and commissioning of its claystone to lithium hydroxide (LiOH) pilot plant, marking a significant milestone in the commercialization of its internally-developed processes to access an unrealized domestic primary lithium resource. The construction and commissioning of this pilot plant enables ABTC to demonstrate its technologies for accessing the lithium housed in its unconventional resource, Tonopah Lithium Flats Project (TFLP), in an integrated and continuous system, and to generate large amounts of battery grade lithium hydroxide for delivery to customers for qualifications and evaluation. The construction and operation of this pilot demonstration plant are supported by a competitively awarded grant from the U.S. Department of Energy (DOE) for this $4.5 million effort. Product from the pilot plant is being sent for analysis to confirm and validate the resource.

Current wording

ABTC has completed the construction and commissioning of its claystone to lithium hydroxide (LiOH) pilot plant, marking a significant milestone in the commercialization of its internally-developed processes to access an unrealized domestic primary lithium resource. The construction and commissioning of this pilot plant enables ABTC to demonstrate its technologies for accessing the lithium housed in its unconventional resource, Tonopah Flats Lithium Project (TFLP), in an integrated and continuous system, and to generate large amounts of battery grade lithium hydroxide for delivery to customers for qualifications and evaluation. The construction and operation of this pilot demonstration plant are supported by a competitively awarded grant from the DOE for this $4.5 million effort. Product from the pilot plant is being sent for analysis to confirm and validate the resource.

Previous wording

On March 28, 2024, ABTC was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the U.S. Department of Energy (DOE), which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. This $19.5 million tax credit can be utilized both for the reimbursement of capital expenditures spent to date, and also for equipment and infrastructure for additional value-add operations at ABTC’s battery recycling facility in the Tahoe-Reno Industrial Center (TRIC) in Storey County, Nevada. As of September 30, 2024, the Company has incurred qualifying expenditures for this tax credit but will not recognize any amounts until it has reasonable assurance of compliance with the relevant standards. The Company intends to sell the credit in order to monetize it’s value.

Current wording

On March 28, 2024, ABTC was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the DOE, which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. This $19.5 million tax credit can be utilized both for the reimbursement of capital expenditures spent to date, and also for equipment and infrastructure for additional value-add operations at ABTC’s battery recycling facility in the Tahoe-Reno Industrial Center (TRIC) in Storey County, Nevada. As of December 31, 2024, the Company has incurred qualifying expenditures for this tax credit but will not recognize any amounts until it has reasonable assurance of compliance with the relevant standards. The Company intends to sell the credit in order to monetize it’s value.

Previous wording

Also on March 28, 2024, ABTC was selected for an additional $40.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C) to support the design and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. As with ABTC’s initial $19.5 million tax credit under the 48C program supporting the construction and buildout of its battery recycling facility in Nevada, this additional award was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the U.S. Department of Energy (DOE), which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. As of September 30, 2024, the Company has not incurred any qualifying expenditures towards this tax credit.

Current wording

Also on March 28, 2024, ABTC was selected for an additional $40.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C) to support the design and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. As with ABTC’s initial $19.5 million tax credit under the 48C program supporting the construction and buildout of its battery recycling facility in Nevada, this additional award was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the DOE, which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. As of December 31, 2024, the Company has not incurred any qualifying expenditures towards this tax credit.

Previous wording

For the three months ended September 30:

Current wording

Results of Operations for the Three Months Ended December 31, 2024 and 2023

Previous wording

During the three months ended September 30, 2024, the Company incurred $7.5 million of operating expenses compared to $8.0 million during the three months ended September 30, 2023.

Current wording

During the three months ended December 31, 2024, the Company incurred $10.8 million of operating expenses compared to $8.8 million during the three months ended December 31, 2023.

Previous wording

During the three months ended September 30, 2024, our revenue was $0.2 million. This is related to the sale of our recycled products produced from recycling operations and followed our initial revenue generated by the Company in the fourth quarter of fiscal 2024. The materials were sold to a customer who took delivery at our plant and the materials will remain at our plant to be further processed when phase two of the plant is complete.

Current wording

During the six months ended December 31, 2024, our revenue was $0.5 million. This is related to the sale of our recycled products produced from recycling operations and followed our initial revenue generated by the Company in the fourth quarter of fiscal 2024. The materials were sold to several customers who took delivery at our plant . Approximately $0.2 million of revenue is attributed to materials that will remain at our plant to be further processed when phase two of the plant is complete. The customer for these materials has full ownership, rights and obligations associated with the materials, including cost of storage.

Previous wording

Cost of goods sold during the three months ended September 30, 2024 was $2.5 million. After the removal of non-cash items of $1.2 million such as depreciation expense of $1.1 million and stock-based compensation of $0.1 million, cash cost of goods sold was $1.3 million. The high cost of goods sold is related to the depreciation of the recycling facility fixed assets in the amount of $1.1 million, which is time based, and the finalization of the production process. We expect these costs to continue to rise on an absolute basis but will be reduced as a percentage of revenue as we scale our production and sales and gain efficiencies in the production process. In Q4 of fiscal 2024, the Company generated its first revenue and started to record cost of goods sold. Cost of goods sold during the three months ended June 30, 2024 was $3.3 million of which $1.3 million was related to depreciation expense and $0.2 million was related to stock-based compensation. Cash cost of goods sold for the three months ended June 30, 2024 was $1.8 million.

Current wording

Cost of goods sold during the six months ended December 31, 2024 was $5.8 million. After the removal of non-cash items of $2.4 million such as depreciation expense of $2.2 million and stock-based compensation of $0.2 million, cash cost of goods sold was $3.4 million. The high cost of goods sold is related to the depreciation of the recycling facility fixed assets, which is time based, and the finalization of the production process. We expect these costs to continue to rise on an absolute basis but will be reduced as a percentage of revenue as we scale our production and sales and gain efficiencies in the production process.

Previous wording

General and administrative expenses consist of stock-based compensation, office expenses, legal, recruitment, business development, public relations, and general facility expenses. For the three months ended September 30, 2024, general and administrative expenses were $5.0 million, an increase of $1.9 million over the same period in the prior year primarily related to increased stock-based compensation, personnel costs, audit and insurance costs.

Current wording

General and administrative expenses consist of personnel, stock-based compensation, office, legal, recruitment, business development, public relations, and general facility expenses. For the six months ended December 31, 2024, general and administrative expenses were $12.7 million, an increase of $5.2 million over the same period in the prior year primarily related to increased employee stock-based compensation, personnel costs, and audit and insurance costs.

Previous wording

Research and development expenses consist primarily of laboratory leases, supplies, salaries, stock-based compensation, and employee benefits. Research and development expenses for the three months ended September 30, 2024 and 2023 were $2.0 million and $3.6 million, respectively. The decrease is primarily due to allocation of such costs to cost of goods sold and inventory as part of phase 1 recycling operations coming online in the fourth quarter of fiscal 2024. These costs are partially offset by federal grant funds for awards that it has contracted with various federal agencies. The Company recognized an offset to its research and development costs of $0.8 million and $0.5 million related to these awards for the three months ended September 30, 2024 and 2023 respectively.

Current wording

Research and development expenses consist primarily of laboratory leases, supplies, personnel, stock-based compensation, and employee benefits. Research and development expenses for the six months ended December 31, 2024 and 2023 were $5.0 million and $7.2 million, respectively. The decrease in the current period is primarily due to allocation of a portion of such costs to inventory and cost of goods sold as part of phase 1 recycling operations coming online in the fourth quarter of fiscal 2024. These costs are partially offset by federal grant funds for awards that it has contracted with various federal agencies. The Company recognized an offset to its research and development costs of $2.3 million and $1.2 million related to these awards for the six months ended December 31, 2024 and 2023 respectively.

Previous wording

Exploration costs consist primarily of drilling, assay, claim fees, personnel, stock-based compensation, office and warehouse costs, travel, and other costs related to exploration of claims in central Nevada. Exploration expenses totaled $0.4 million for the three months ended September 30, 2024 compared to $1.4 million during the same period in the prior year. The decrease year-over-year resulted principally from higher costs in prior year related to drilling, assaying and engineering to further define and potentially upgrade the geological classification of the mineral rights.

Current wording

Exploration costs consist primarily of drilling, assay, claim fees, personnel, stock-based compensation, office and warehouse, travel, and other costs related to exploration of claims in central Nevada. Exploration expenses totaled $0.7 million for the six months ended December 31, 2024 compared to $2.2 million during the same period in the prior year. The decrease year-over-year resulted principally from higher costs in the prior year related to drilling, assaying and engineering to further define and potentially upgrade the geological classification of the mineral rights.

Previous wording

During the three months ended September 30, 2024, the Company recorded other expense of $1.9 million, including $1.2 million for amortization of debt financing costs, $0.7 million loss on debt extinguishment, $0.6 million loss on private placement and $0.2 million for change in fair value of liability classified instruments; offset by other income of $0.7 million for change in fair value of derivative liability and $0.1 million for interest income.

Current wording

During the six months ended December 31, 2024, the Company recorded other expense of $1.5 million, including $1.9 million for amortization of debt financing costs, a $0.7 million loss on debt extinguishment, and $0.6 million loss on private placement. These expenses were partially offset by other income of $0.9 million for change in fair value of liability classified instruments and $0.7 million for change in fair value of derivative liability.

Previous wording

At September 30, 2024, the Company had cash of $5.8 million and total assets of $73.8 million compared to cash of $7.0 million and total assets of $77.7 million at June 30, 2024. The decrease of cash is due to normal transactional activities related to plant production and paydown of debt obligation.

Current wording

At December 31, 2024, the Company had cash of $20.6 million (of which $15.6 million was available and $5.0 million is restricted) and total assets of $88.3 million compared to available cash of $7.0 million and total assets of $77.7 million at June 30, 2024. On December 23, 2024, the Company issued 5,000,000 shares of common stock and warrants exercisable for up to 5,000,000 shares of common stock in exchange for gross proceeds of $5.0 million (the “First Offering”). On December 27, 2024, the Company issued 3,773,586 shares of common stock and warrants exercisable for up to 3,773,586 shares of common stock in exchange for gross proceeds of $10.0 million (the “Second Offering” and, together with the First Offering, the “Offerings”). The increase of cash is due to proceeds of approximately $15 million from the Offerings and approximately $12 million from the issuance of the 2024 Notes, offset by normal transactional activities related to plant production and paydown of debt obligations.

Previous wording

The Company had total current liabilities of $10.0 million at September 30, 2024, compared to $15.8 million at June 30, 2024. The decrease related to paydown of debt and timing of payments for accounts payable and accrued expenses.

Current wording

The Company had total current liabilities of $17.7 million at December 31, 2024, compared to $15.8 million at June 30, 2024. The increase is related to the issuance of the 2024 Notes, offset by some paydown of debt, and the timing of payments for accounts payable and accrued expenses.

Previous wording

As of September 30, 2024 the Company had working capital of $5.5 million compared to $2.6 million at June 30, 2024. The positive working capital at the end of both periods results from the classification of $8.4 million of held-for-sale assets as current at September 30, 2024 and June 30, 2024. Absent this classification, the working capital deficiency would have been $2.9 million and $5.8 million at September 30, 2024 and June 30, 2024, respectively.

Current wording

As of December 31, 2024 the Company had working capital of $12.8 million compared to $2.6 million at June 30, 2024. The positive working capital at the end of both periods results from the classification of $8.4 million of held-for-sale assets as current at December 31, 2024 and June 30, 2024 and the increase in cash due to proceeds from the Offerings and the issuance of the 2024 Notes. Absent the held-for-sale classification of certain assets, the working capital would have been a positive $4.4 million and a deficiency of $5.8 million at December 31, 2024 and June 30, 2024, respectively.

Previous wording

Based on our current operating plan, unless we generate income from the operations of our facilities or raise additional capital (debt or equity), it is possible that we will be unable to maintain our financial covenants under our existing Note agreement. If such covenant violations are not waived by the Note holder, it would result in an event of default, causing an acceleration of the outstanding balances. If we do raise additional capital through public or private equity offerings, as opposed to debt or additional Note issuances, the ownership interest of our existing stockholders may be diluted.

Current wording

Based on our current operating plan, unless we generate income from the operations of our facilities or raise additional capital (debt or equity), it is possible that we will be unable to maintain our financial covenants under our existing debt agreements. If such covenant violations are not waived by the holders of the Notes and the 2024 Notes, it would result in an event of default, causing an acceleration of the outstanding balances. If we do raise additional capital through public or private equity offerings, as opposed to debt issuances, the ownership interest of our existing stockholders may be diluted.

Previous wording

During the three months ended September 30, 2024, the Company used $5.5 million of cash for operating activities, compared to $4.8 million cash used during the three months ended September 30, 2023. In both periods, the cash used has supported an increased scale of operations including employee headcount and personnel costs, production, and, administrative costs related to insurance, legal and accounting.

Current wording

During the six months ended December 31, 2024, the Company used $12.8 million of cash for operating activities, compared to $7.4 million used during the six months ended December 31, 2023. In both periods, the cash used has supported an increased scale of operations including increased employee headcount and personnel costs, increased production, and increased administrative costs related to insurance, legal and accounting.

Previous wording

During the three months ended September 30, 2024, the Company used cash in investing activities of $0.9 million for acquisition of property and equipment for its recycling facilities. This is in comparison to cash used in investing activities of $7.3 million for the three months ended September 30, 2023. The decrease is due to the Company purchasing more equipment in the beginning stages of the plant build-out in prior year.

Current wording

During the six months ended December 31, 2024, the Company used cash in investing activities of $1.5 million for acquisition of property and equipment for its recycling facilities. This is in comparison to cash used in investing activities of $10.9 million for the six months ended December 31, 2023. The decrease is due to the Company’s purchasing more equipment in the beginning stages of the recycling plant build-out in the prior year.

Previous wording

During the three months ended September 30, 2024, the Company had cash provided by financing activities of $5.2 million, compared to $15.1 million provided during the three months ended September 30, 2023. The Company has relied on equity and debt financings to support the increased operating activities, and the ramp up of the recycling plant, development of the lithium ore pilot plant, and upgrades to the geological category of its Tonopah claims through additional studies and assessments.

Current wording

During the six months ended December 31, 2024, the Company had cash provided by financing activities of $27.9 million, compared to $23.6 million provided during the six months ended December 31, 2023. The Company has relied on equity and debt financings to support its increased operating activities, the ramp up of the recycling plant, development of the lithium ore pilot plant, and upgrades to the geological category of its Tonopah claims through additional studies and assessments.

Previous wording

We will continue to rely on sales of our common shares, debt, or other financing to fund our business operations as needed beyond any revenue generated from internal operations and the government tax credits and grants that offset research & development expenses, and capital expenditures. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the securities or arrange for debt or other financing to fund planned operating activities, acquisitions and exploration activities.

Current wording

The Company will continue to rely on sales of our common shares, debt, or other financing to fund our business operations as needed beyond any revenue generated from internal operations and the government tax credits and grants we have been awarded. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the securities or arrange for debt or other financing to fund planned operating activities, acquisitions and exploration activities.

Previous wording

Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.

Current wording

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.