AMERICAN BATTERY TECHNOLOGY Co

For the fiscal years ended June 30, 2025 and June 30, 2024

1. Organization and Nature of Operations

American Battery Technology Company (“the Company” or “ABTC”) is an integrated critical battery materials company in the lithium-ion battery industry that is working to increase the domestic U.S. production of critical battery materials, such as lithium, nickel, cobalt, and manganese through its engagement in the exploration of new primary resources of battery metals, in the development and commercialization of new technologies for the extraction of these battery metals from primary resources, and in the 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 that as these materials reach their end of lives that the constituent elemental battery metals are returned to the domestic manufacturing supply chain in a closed-loop fashion.

The Company was incorporated under the laws of the State of Nevada on October 6, 2011, for the purpose of acquiring rights to mineral properties with the eventual objective of being a producing mineral company. We have a limited operating history and generated our initial revenue in the fourth quarter of fiscal 2024. Our principal executive offices are located at 100 Washington Ave., Suite 100, Reno, Nevada 89503.

2. Liquidity and Going Concern

During the fiscal year ended June 30, 2025, the Company incurred a net loss of $46.8 million and used cash of $28.9 million for operating activities. At June 30, 2025, the Company has an accumulated deficit of $260.1 million.

The continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain debt or equity financing. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain them on favorable terms, which could limit its operations. Any such financing activities are subject to market conditions. These uncertainties cause substantial doubt about the Company’s ability to continue as a going concern for 12 months from issuance of these financial statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.

The going concern assessment excludes the Company’s at-the-market (“ATM”) offering (Note 14), which could provide a source of liquidity.

Based on our current operating plan, unless we generate income from the operations of our facilities and receipt of cash from U.S. Government grant awards, 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 (Note 12), which, if such violation is not waived, could result in an event of default, causing an acceleration of the outstanding balance. 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.

3. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

a) Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL (inactive) and LithiumOre Corporation (formerly Lithortech Resources Inc) and ABMC AG, LLC (inactive). All inter-company balances and transactions, if any, have been eliminated upon consolidation.

b) Use of Estimates

The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, the fair value of stock-based compensation, valuation and recoverability of long-lived assets and intangible assets, and fair value less cost to sell assets held-for-sale.

The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations may be affected.

c) Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company didnot have any cash equivalents as of June 30, 2025 and 2024.

d) Accounts Receivable, net

The Company evaluates the creditworthiness of its customers. If the collection of any specific receivable is doubtful, an allowance is recorded in the allowance for expected credit losses which is included in accounts receivable. The Company hadno allowance for expected credit losses recorded at either June 30, 2025 or 2024.

e) Inventory

Inventory consists of raw materials and finished goods, and is stated on a first-in, first-out basis at the lower of cost or net realizable value. Net realizable value is the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion, disposal, and transportation. The Company periodically makes judgments and estimates regarding the future utility and carrying value of inventory. When inventory is adjusted to its net realizable value, a new cost basis is established, and such cost is not adjusted for any potential recovery. Obsolete inventories are written off to cost of revenue. Should the Company’s estimates of future selling prices or production costs change, additional and potentially material write-downs may be required. A small change in the Company’s estimates may result in a material charge to its reported financial results.

f) Restricted cash

As of June 30, 2025, the Company is subject to a minimum liquidity requirement of $5,000,000 in accordance with the terms of its loan agreement. Reference Note 12 for further information on the loan agreement. This required minimum liquidity must be maintained in cash or cash equivalents at all times. Accordingly, $5,000,000 of the Company’s cash balance has been classified as restricted cash on the consolidated balance sheet as it is not available for general operating purposes.

g) Assets Held-For-Sale

The Company classifies assets as held-for-sale (“disposal group”) in the period when all of the relevant criteria to be classified as held for sale are met. These criteria include management’s commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year. Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell. The fair values of disposal groups are estimated using accepted valuation techniques, including indicative listing prices. The Company considers historical experience, guidance received from third parties, and all information available at the time the estimates are made to derive fair value. Any loss resulting from the measurement is recognized in the period when the held for sale criteria are met. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group. Assets held-for-sale are not amortized or depreciated.

h) Property and Equipment, net

Property and equipment are stated at cost, net of depreciation. The Company’s long-lived assets consist of buildings, vehicles, equipment, and land. Buildings, vehicles and equipment are depreciated on a straight-line basis over their estimated value lives, which are as follows:

Expenditures for maintenance and repairs are expensed in the statements of operations as incurred. Expenditures which materially change capacities, or extend useful lives are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are recognized in other income (expense), net in the statements of operations.

i) Mining Properties

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it will enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense, if any allocable to the cost of developing mining properties and to construct new facilities, is capitalized until assets are ready for their intended use. For the fiscal years ended June 30, 2025 and 2024, no interest expense was capitalized.

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

ASC 930-805, “Extractive Activities-Mining: Business Combinations,” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

j) Intangible Assets

Intangible assets consist of water rights that have indefinite useful lives and are tested annually for impairment, or more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds its fair value. Annually, or when there is a triggering event, the Company first performs a qualitative assessment by evaluating all relevant events and circumstances to determine if it is more likely than not that the indefinite-lived intangible assets are impaired; this includes considering any potential effect on significant inputs to determining the fair value of the indefinite-lived intangible assets. When it is more likely than not that an indefinite-lived intangible asset is impaired, then the Company calculates the fair value of the intangible asset and performs a quantitative impairment test. The Company performs its annual impairment test on June 30. No impairment charges for intangible assets were recorded in the fiscal years ended June 30, 2025 and 2024.

k) Leases

We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement. If we determine whether the arrangement is a lease, or contains a lease, at lease inception, we then determine whether the lease is an operating lease or a finance lease. Operating and finance leases result in recording a right-of-use (“RoU”) asset and lease liability on our consolidated balance sheets. The Company does not have any financing leases. RoU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease RoU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For purposes of calculating operating lease RoU assets and operating lease liabilities, we use the non-cancellable lease term plus options to extend that we are reasonably certain to take. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our leases generally do not provide an implicit rate. As such, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have elected not to recognize RoU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. We have elected not to separate lease and non-lease components for any class of underlying asset.

l) Long-lived Assets

Long-lived assets, such as property and equipment, mineral properties, purchased intangibles, and ROU assets are reviewed for impairment whenever events or changes in circumstances indicate, in management’s judgement, that the carrying amount of an asset (or asset group) may not be recoverable. In analyzing potential impairments, projections of future cash flows from the asset (or asset group) are used to estimate fair value. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset (or asset group), a loss is recognized for the difference between the estimated fair value and the carrying value of the asset group.

During the fiscal year ended June 30, 2024, the Company recognized an impairment loss on certain assets classified as held for sale, primarily consisting of land and a building located in Fernley, Nevada. No other impairment charges were recorded in the fiscal years ended June 30, 2025 and 2024. Reference Note 7 for further details.

m) Convertible Notes

The Company evaluates all conversion, repurchase and redemption features contained in a debt instrument to determine if there are any embedded features that require bifurcation as a derivative. The Company accounts for its convertible notes as a long-term liability, with the current portion reclassified to a short-term liability, equal to the proceeds received from issuance, including any embedded conversion features, net of the unamortized debt discount and offering costs in the accompanying unaudited consolidated balance sheets. The debt discount, debt issuance and offering costs are amortized over the term of the convertible notes, using the effective interest method, as interest expense in the accompanying consolidated statements of operations.

n) Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in earnings in the consolidated statements of operations.

o) Revenue Recognition

The Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts. These promises, referred to as performance obligations, consist of the transfer of physical goods, including recycled ferrous and nonferrous metals and black mass to customers. These performance obligations are satisfied at the point in time the Company transfers control of the goods to the customer, which i is when title to and risk of loss of the goods transfer to the customer. The timing of transfer of title and risk of loss is dictated by customary or explicitly stated contract terms. The majority of the Company’s sales involve transfer of control to the customer, and thus revenue recognition, before delivery to the customer’s destination; for example, upon release of the goods to the shipper. The Company’s bill-and-hold arrangements involve transfer of control to the customer when the goods have been segregated from other inventory at the Company’s facility and are ready for physical transfer to the customer. Shipping and handling activities that occur after a customer has obtained control of a good are accounted for as fulfillment costs rather than an additional promise in a contract. As such, shipping and handling consideration (freight revenue) is recognized when control of the goods transfers to the customer, and freight expense is accrued to cost of goods sold when the related revenue is recognized.

The Company recognizes revenue based on contractually stated selling prices and quantities shipped, net of sales tax, and adjusted for estimated claims and discounts. Claims are customary in the recycled metal industry and arise from variances in the quantity or quality of delivered products. Revenue adjustments may be required if the settlement of claims exceeds original estimates. For the fiscal year ended June 30, 2025, revenue adjustments related to performance obligations that were satisfied in previous periods were not material.

p) Cost of goods sold

Cost of goods sold includes the cost of the recycled ferrous and nonferrous metals and black mass delivered to our customers during the year. It includes direct and indirect materials, labor costs, manufacturing overhead, including depreciation costs, lower of cost or net realizable value charges, and shipping and logistics costs.

q) Research and Development Costs

Research and development (“R&D”) costs are accounted for in accordance with ASC 730, “Research and Development.” ASC 730-10-25 requires that all R&D costs be recognized as an expense as incurred. However, some costs associated with R&D activities that have an alternative future use (e.g., materials, equipment, facilities) may be capitalizable. As of June 30, 2025 and 2024, no costs associated with R&D activities have been capitalized.

The Company has been awarded U.S. federal grant awards for specific R&D programs. Under Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance,” the Company recognizes invoiced government funds as an offset to R&D costs in the period the qualifying costs are incurred. As the federal grants receivable are not deemed to have any significant realization risk, the Company believes this best reflects the expected net expenditures associated with these programs.

r) Exploration Costs

Mineral property acquisition costs are capitalized as incurred. Exploration and evaluation costs are expensed as incurred until proven and probable reserves are established. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property are capitalized on a prospective basis. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations. As of June 30, 2025 and 2024, the Company has not capitalized any such mineral property costs.

s) Stock-based Compensation

ASC 710 and ASC 718 require recognition of compensation cost once achievement of the performance condition becomes probable as the requisite service is provided. As the common share warrant and restricted stock unit (“RSU”) performance-based awards to executive officers and key employees are granted with a fixed dollar value and settled in a variable number of common share warrants or RSUs, these awards are liability-classified until the number of common share warrants or RSUs are fixed, and the corresponding compensation cost should be recorded to current or long-term liabilities, or additional paid-in capital once the performance conditions become probable of achievement.

The Company measures and recognizes compensation expense for all stock-based awards based on estimated fair values on the date of the grant, recognized over the requisite service period. For awards that vest solely based on a service condition, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. The compensation expense related to stock-based awards with performance conditions is recognized over the requisite service period when achievement of the performance conditions is probable. The Company accounts for forfeitures as they occur. Stock-based awards granted to employees are primarily restricted stock units (“RSUs”).

The fair value of each stock option granted is estimated using the Black-Scholes Merton option-pricing model using the single option award approach. The following assumptions are used in the Black-Scholes Merton option-pricing model:

Risk-Free Interest Rate: The risk-free interest rate is based on the implied yield available on the date of grant on U.S. Treasury zero-coupon bonds issued with a term that is equal to the option’s expected term at the grant date.

Expected Volatility: The Company estimates the volatility for option grants by evaluating the average historical volatility of the company’s stock price for the period immediately preceding the option grant for a term that is approximately equal to the option’s expected term.

Expected Term: The expected term for employees represents the period over which options granted are expected to be outstanding using the simplified method, as the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. The simplified method deems the term to be the average of the time-to-vesting and contractual life of the stock-based awards.

Dividend Yield: The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

The table below sets forth the assumptions used on the date of grant for estimating the fair value of options granted during the fiscal years ending June 30:

t) Government Grant and Tax Credit Awards

For government grants, the Company recognizes a benefit in the consolidated statements of operations, as a reduction to the expense for which the individual government grant is designed to compensate, over the duration of the program when the Company has reasonably assurance that it will comply with the conditions under the grant and that the grant will be received. Grants related to investments in property and equipment are recognized as a reduction to the cost basis of the underlying assets with an ongoing reduction to depreciation expense over the assets’ estimated useful life.

u) Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards.

Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Any uncertain tax position liabilities have been applied against the deferred tax balance given that there is a sufficient net operating loss to cover any penalties and fees associated with the uncertain tax position. The Company assesses each of its identified uncertain positions and determines whether any potential penalties and interest liability should be accrued at the consolidated balance sheet dates. Interest and penalties accrued on unrecognized tax benefits are included within income tax expense in the consolidated financial statements.

Due to the Company’s net loss position since inception, the likelihood of deferred tax assets being realized does not meet the more likely than not assessment guidelines. Accordingly, a valuation allowance equal to the deferred tax assets has been recorded at June 30, 2025 and 2024.

v) Loss per Share

The Company computes net income (loss) per share in accordance with ASC 260, “Earnings per Share.” ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options, warrants and awards. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As the Company has reported losses for all periods presented, all potentially dilutive securities are anti-dilutive, and accordingly, basic net loss per share equaled diluted net loss per share

The Company had the following potentially dilutive shares outstanding as of June 30:

w) Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities that the reporting entity can assess at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability which include the Company’s assumptions regarding the data market participants would use in pricing the asset or liability based on the best information available under the circumstances.

The carrying values of the Company’s cash, accounts receivable, grants receivable, prepaid expenses and deposits, accounts payable and accrued liabilities, and notes payable approximates fair value due to their short maturities.

The Company’s fair value measurements included the valuation of the derivative liabilities for the bifurcated notes payable freestanding call and conversion options and for the liability-classified equity-linked contracts, both of which are classified as Level 3 of the fair value hierarchy. As of December 31, 2024, the Company reclassified derivative liabilities and liability-classified equity-linked contracts from long-term liabilities to equity. No derivative instruments that required liability classification were issued during the fiscal year ended June 30, 2025; accordingly, fair value measurement was not required. See Notes 6 and 11 for further discussion.

The Company’s fair value measurements include the valuation of the assets held-for-sale as of June 30, 2025 and 2024. See Note 7 for relevant fair value disclosures.

x) Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07,” Improvements to Reportable Segment Disclosures (Topic 280)”. This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 during the year ended June 30, 2025. See Note 18, Segment and Other Information, in the accompanying notes to the financial statements for further detail.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.

In November 2024, the FASB Issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The amendments in this update require disclosures, in the notes to financial statements, of specified information about certain costs and expenses. The amendment clarifies which certain costs and expenses that are included in cost of sales and selling, general, and administrative expense categories that should be disclosed with qualitative descriptions of amounts that are not separately disaggregated quantitatively. Additionally, the amendment requires disclosure of total amounts of selling expenses and an entity’s definition of selling expense. The update will be effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date previously communicated. The revised effective date for public business entities is for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.

Grants receivable represent qualifying costs incurred where there is reasonable assurance that the conditions of the grant have been met but the corresponding funds have not been received as of the reporting date. As collections from the federal government have been and are expected to continue to be timely, no allowance for doubtful accounts has been established. If amounts become uncollectible, they will be charged to operations. Grants receivable was $0.2 million at June 30, 2025 and 2024. The Company recognizes invoiced government funds as an offset to research and development costs in the period the qualifying costs were incurred. Grants related to investments in property and equipment are recognized as a reduction to the cost basis of the underlying assets with an ongoing reduction to depreciation expense over the assets’ estimated useful life.

On January 20, 2021, the U.S. Department of Energy (“DOE”) announced that the Company had been selected for award negotiation for a three-year project with a total budget of $4.5 million for the field demonstration of its selective leaching, targeted purification, and electro-chemical production of battery grade lithium hydroxide from domestic claystone resources technology. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, or up to $2.3 million. The prime agreement contract for this grant was issued with a project start date of October 1, 2021. The Company began receiving funds related to this award during the fiscal year ending June 30, 2022. As of June 30, 2025, the cumulative funds invoiced for this grant totaled $2.3 million, which represents 100% of the total eligible reimbursements. As of June 30, 2025, $0.02 million was an outstanding receivable on the consolidated balance sheet.

On August 16, 2021, the Company received a contract award for a 30-month project with a total budget of $2.0 million from the United States Advanced Battery Consortium (the “USABC grant”) as part of a competitively bid project, through which the Company will receive reimbursement for up to $0.5 million of eligible expenditures. The objective of the contract award is for the commercial-scale development and demonstration of an integrated lithium-ion battery recycling system, the production of battery cathode grade metal products, the synthesis of high energy density active cathode material from these recycled battery metals, and the fabrication of large format automotive battery cells from these recycled materials and the testing of these cells against otherwise identical cells made from virgin sourced metals. The Company began receiving funds related to this award during the fiscal year ended June 30, 2022, and this contract award project concluded on September 30, 2024. As of June 30, 2025, the cumulative funds invoiced and collected for this grant totaled $0.5 million, which represents 100% of the total eligible reimbursements.

On October 21, 2022, the U.S. DOE announced that the Company had been selected for award negotiation for a five-year project with a total budget of $115.5 million to design, construct, and commission a first-of-kind lithium hydroxide refinery using Nevada-based claystone as the feedstock to expand domestic manufacturing of battery grade lithium hydroxide for lithium-ion batteries for electric vehicles, with a focus on domestic processing of materials and components that are currently imported from foreign countries. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, up to $57.7 million. The prime agreement contract for this grant was issued with a project start date of September 1, 2023. The Company began receiving funds related to this award during the period ending December 31, 2023. As of June 30, 2025, the cumulative funds invoiced and collected for this grant totaled $4.7 million, which represents 8% of the total eligible reimbursements.

On November 17, 2022, the U.S. DOE announced that the Company had been selected for award negotiation for a three-year project with a total budget of $20.0 million to demonstrate and commercialize next generation techniques for its lithium-ion battery recycling processes to produce low-cost and low-environmental impact domestic battery materials. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, up to $10.0 million. The prime agreement contract for this grant was issued with a project start date of October 1, 2023. The Company began receiving funds related to this award during the period ending December 31, 2023. As of June 30, 2025, the cumulative funds invoiced and collected for this grant totaled $2.2 million, which represents 22% of the total eligible reimbursements.

On March 28, 2024, ABTC was selected for a tax credit for up to $19.5 million 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. DOE, which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. This tax credit may be utilized both for the reimbursement of capital expenditures spent to date and also future capital expenditures at ABTC’s battery recycling facility in the Tahoe-Reno Industrial Center (TRIC) in Storey County, Nevada. As of June 30, 2025, 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.

Also on March 28, 2024, ABTC was selected for an additional tax credit of up to $40.5 million through the 48C program, which may be used in support of the design and construction of a new commercial battery recycling facility to be located in the United States. As of June 30, 2025, the Company has not incurred any qualifying expenditure toward this tax credit.

On September 23, 2024, the U.S. DOE announced that the Company had been selected for award negotiations for a highly competitive grant for $150 million to be applied towards the construction of a new lithium-ion battery recycling facility. On December 18, 2024, the Company received a contracted grant award for $144 million of federal investment by the DOE, with these funds awarded to the Company and an additional $6.4 million awarded to its subcontractor Argonne National Laboratory, to support the construction of a new lithium-ion battery recycling facility. The Company began receiving funds related to this award during the period ending March 31, 2025. As of June 30, 2025, the cumulative funds invoiced for this grant totaled $0.6 million, which represents 0.4% of the total eligible reimbursements.

The table below summarizes the effects of government grants on the consolidated financial statements for the fiscal years ended June 30:

The Company’s inventory for its lithium-ion battery recycling operation is comprised of raw materials, in the form of battery feedstock, and finished goods, in the form of black mass and other metals. Inventory is valued at the lower of average cost or net realizable value. The net carrying value of inventory includes those costs to acquire battery feedstock and any related carrying and processing costs incurred by the Company.

The table below presents the components of inventory as of June 30:

The balance of the Company’s inventory was written down by $2.9 million and $0.6 million from its cost to its net realizable value as of June 30, 2025 and 2024, respectively.

The table below presents the property, plant and equipment as of June 30:

The Company recognized depreciation expense of $5.0 million and $1.7 million during the fiscal years ended June 30, 2025 and 2024, respectively.

An impairment loss of $10.2 million on assets held-for-sale was recorded in the fiscal year ended June 30, 2024, related to two parcels of land and building at the Fernley, Nevada location, comprising 12.44 acres and 11.55 acres, that the Company decided to sell. The fair value of the assets held-for-sale is classified within Level 3 of the fair value hierarchy and was determined based on indicative market listing prices of the assets. As of June 30, 2024, these assets had a carrying value of $8.4 million. As of June 30, 2025, the 11.55 acres of land, valued at $2.4 million, was no longer actively marketed for sale and was therefore reclassified back to property, plant, and equipment. As of June 30, 2025, the other parcel of land and building (12.44 acres) has a carrying value of $6.0 million and is subject to further impairment, if required, until the asset is sold. On July 28, 2025, a potential buyer canceled the Commercial/Investment Property Purchase Agreement and Joint Escrow Instructions.

As of March 31, 2025, the Company reclassified certain water rights with a carrying value of $3.8 million to assets held for sale in the consolidated balance sheet. This reclassification follows the company’s decision to actively market these water rights for sale to unrelated third parties.

As of June 30, 2025, there wereno additional impairments on the assets held-for-sale.

On July 21, 2022, the Company exercised the option to purchase the rights to unpatented lode claims in Tonopah, Nevada. Since that time, the Company has worked with third parties to conduct drill programs and analysis to verify the grade and continuity of the mining claims. Over 50% of the inferred mineral resources have been upgraded to measured and indicated classifications. The Company is still in the exploration stage and expenses all mineral exploration costs. If the Company identifies proven and probable reserves and develops an economic plan for operating a mine, it will enter the development stage and capitalize future costs until production is established.

On July 22, 2023, the Company began a third exploration program to advance its Tonopah Flats Lithium Project. This drill program includes core infill and step out drilling to support the evolution of its domestic resource with the goal of upgrading to a ‘measured and indicated’ resource classification. The Company selected and engaged KB Drilling for the collection of infill and step out samples for this latest drill program, which consists of sample collections from eight additional drill holes and includes 6,500 feet of total drilling.

In December 2023, the Company entered into a vacant land offer and acceptance agreement for the Company’s acquisition of certain mineral patents totaling $0.2 million which was capitalized to mining properties.

On April 24, 2024, the Company announced the completion of the “Amended Resource Estimate and Initial Assessment with Project Economics for the Tonopah Flats Lithium Project, Esmeralda and Nye Counties, Nevada, USA” (“Amended IA”) and the publication of the S-K 1300 Technical Report Summary (“TRS”) disclosing mineral resources, including an initial economic assessment, for the Tonopah Flats Lithium Project. The TRS was completed by RESPEC Company LLC, a qualified person, in compliance with Item 1300 of Regulation S-K and with an effective date of April 5, 2024.

The Company’s acquisition of the commercial-scale battery recycling facility at the TRIC included water rights valued at $0.7 million and are described as an eighteen and forty-five one-hundredths (18.45) acre-foot/annually portion of the Truckee-Carson Irrigation District, Serial Number 1081-A-1. These have an unlimited useful life upon assignment to a property through use of a will-serve, which has no expiration date.

The table below presents the intangible assets as of June 30:

RoU assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. RoU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the RoU assets for certain properties include the renewal options that the Company is reasonably certain to exercise.

The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company estimates a rate of 8.0% for the fiscal years ending June 30, 2025 and 2024, based primarily on historical lending agreements. RoU assets include lease payments required to be made prior to commencement and exclude lease incentives. Both RoU assets and the related lease liability exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions, or covenants.

The Company leases office space under a non-cancelable operating lease agreement. The lease commenced December 1, 2024 and has a lease term of three years, expiring on November 30, 2027. The lease includes an option to renew for an additional two years; however, the Company is not reasonably certain to exercise the renewal option. Therefore, the renewal period has not been included in the calculation of the lease liability and the right-of-use asset in accordance with ASC 842. The Company occupies other office facilities under lease agreements that expire at various dates, many of which do not exceed a year in length. The Company does not have any finance leases as of June 30, 2025 and 2024.

Operating lease right-of-use assets are presented within the asset section of the Company’s consolidated balance sheets, while lease liabilities are included within the liability section of the Company’s consolidated balance sheets at June 30, 2025 and 2024.

The table below presents information related to the components of lease expense for the fiscal years ended June 30, 2025 and 2024, respectively:

The table below presents total operating lease RoU assets and lease liabilities at June 30:

The table below presents the maturities of operating lease liabilities as of June 30, 2025:

The table below presents the weighted average remaining lease term for operating leases and the weighted average discount rate used in calculating operating lease right-of-use asset as of June 30, 2025.

The table below presents the accounts payable and accrued liabilities as of June 30:

As of June 30, 2025 and 2024, no individual supplier accounted for more than 10% of the Company’s total accounts payable and accrued liabilities balance.

On July 3, 2024, the Company and Mercuria Energy America, LLC agreed to resolve their respective disputes related to a Marketing Agreement entered into in May 2023. Under the terms of the Settlement Agreement, the Company agreed to make six monthly payments to Mercuria Energy America, LLC of $0.3 million each. Upon the completion of the payments, the parties agreed to release any and all claims, disputes, actions, suits, proceedings, demands and/or liabilities in law and/or equity or otherwise. The total amount of payments due of $1.8 million was accrued as of June 30, 2024. As of June 30, 2025, all amounts have been paid.

On August 29, 2023, the Company and High Trail (the “Buyers”) entered into a Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company can sell to the Buyers up to $51.0 million of a new series of senior secured convertible notes (the “Notes”), of which $25.0 million was initially received. The Company analyzed the conversion features of the Notes for derivative accounting considerations under ASC 815-15, “Derivatives and Hedging,” and determined a freestanding call option should be bifurcated and separately accounted for as a derivative liability. Accordingly, the derivative liability is carried at fair value at each reporting date with the corresponding gain or loss reflected in earnings in the consolidated statements of operations. The Company determined the derivative liability to have a fair value of $0.4 million at issuance of the Notes. For the three months ended September 30, 2024, the Company recorded a gain of $0.7 million within the change in fair value of the derivative liability in the consolidated statements of operations. As of September 30, 2024, the fair value of the derivative liability was determined to be nil given the expiration of the freestanding call option on October 1, 2024. No derivative instruments requiring liability-classification were outstanding during the period December 1, 2024 through June 30, 2025, and there has been no related activity since the option’s expiration; accordingly, fair value measurement was not required.

The carrying value, net of debt discount and issuance costs, was being accreted over the term of the Notes from date of issuance to date of full repayment, expected to be in October 2024 based on partial redemption payments, using the effective interest rate method.

On September 13, 2024, the Notes were amended to allow payment of principal totaling $0.6 million in common shares of the Company in lieu of cash, with the remaining principal due in September 2024 deferred to October 2024. Subsequent to September 30, 2024, further payment on the Notes had been deferred by the Buyers while negotiations on a potential amendment to the Notes are on-going. Total common shares of 726,216 were issued with a fair market value of $0.7 million. The Notes were also amended to increase the conversion option rate. The Company concluded that the amendment to the Notes was an extinguishment for accounting purposes due to the increase in the conversion option fair value. The Company recognized a $0.7 million loss on extinguishment in the consolidated statement of operations, comprised of the write-off of the remaining debt discount and debt issuance costs of $0.6 million and the excess of fair value of the common shares paid in lieu of cash over the principal owed of $0.1 million.

On November 14, 2024, the Purchase Agreement and Notes were amended to provide for the issuance of a new series of senior secured convertible notes (the “2024 Notes”) in the aggregate principal amount of $12.0 million, less discount totaling $2.1 million. The amendment also allowed payment of principal of the Notes totaling $1.1 million in common shares of the Company in lieu of cash, with the remaining principal of the Notes of $1.8 million paid with proceeds from issuance of the 2024 Notes. The 2024 Notes bear zero coupon, mature on September 1, 2025, and require $5.0 million in cash to be maintained in a restricted account. The Buyers may request partial redemptions of up to an aggregate of $1.0 million on the 1st of each month beginning on January 1, 2025, with the remaining principal due on the maturity date, or the Buyers may convert the 2024 Notes into shares of common stock of the Company at a conversion rate of 1,333.33 shares of common stock per $1,000 of principal for the first $3,000,000 of principal, and a conversion rate of 945.0992 shares of common stock per $1,000 of principal for the remaining principal.

The Company evaluated the amendment to the Purchase Agreement and concluded it was required to be accounted for as a troubled debt restructuring under ASC 470-60, “Troubled Debt Restructurings by Debtors,” as a concession had been granted to the Company. Per ASC 470-60, the carrying value of the Notes remained the same as before the amendment, reduced only by the fair value, $1,142,580, of the common shares issued,1,210,360, to partially settle the Notes. No gain was recognized as the future undiscounted cash flows of the restructured Notes did not exceed the carrying amount of the Notes, with the effect of the restructuring accounted for prospectively through the revised effective interest rate of 50.73%.

On December 19, 2024, the 2024 Notes were amended to increase the portion of principal that is subject to the higher conversion rate of 1,333.33 shares of commons stock per $1,000 of principal from $3,000,000 to $5,000,000. The Company analyzed the embedded conversion feature of the 2024 Notes for derivative accounting considerations under ASC 815-15, “Derivatives and Hedging,” and determined that it did not qualify to be bifurcated and accounted for as a derivative liability. For the fiscal year ended June 30, 2025, amortization of the debt discount of the 2024 Notes totaled $2.3 million.

On March 24, 2025, the conversion rate of the 2024 Notes was amended for $2.0 million of principal payments upon which the payments were converted to common shares. The conversion rates for the remaining principal of the 2024 Notes were not amended. Total common shares of 2,284,410 were issued with a fair market value of $2.3 million. The amendment was accounted for as debt modification and as a result, the excess fair market value of the common shares over the principal payments was recorded as an additional debt discount.

The table below presents the net carrying amounts of the Notes as of June 30, 2025:

The table below presents the maturities of notes payable as of June 30, 2025:

13. Derivative Liabilities

During the six months ended December 31, 2024, the Company’s embedded conversion feature on its convertible notes and its outstanding warrants had been treated as derivative liabilities for accounting purposes under ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity,” due to insufficient authorized shares to settle these outstanding equity-linked contracts, while the terms of these instruments still allowed the holders to exercise which would require the Company to net-cash settle the instrument. In such cases, the Company adopted a sequencing approach under ASC 815-40 to determine the classification of its equity-linked financial instruments at issuance and at each subsequent reporting date. Under this sequencing policy, the Company reclassified to liabilities those equity-linked financial instruments with the most recent issuance or modification date. The derivative liabilities were initially recorded at fair value and subsequently re-valued each reporting date, with changes in fair value reported in the consolidated statements of operations. The Company utilized the Black-Scholes option-pricing model to value the derivative liabilities at initial reclassification and subsequent valuation dates, adjusted for instrument-specific terms as applicable.

In August 2024, the Company issued common shares and warrants to purchase common shares under private placement subscription agreements. See further discussion at Note 14. As there were insufficient authorized shares available at the time of issuance, the warrants were classified as derivative liabilities, measured at fair value as of issuance, and re-measured to fair value as of September 30, 2024. Of the $1.9 million in proceeds received from the private placement, $0.6 million was received from related parties of the Company, including current employees and an immediate family member of the Chief Executive Officer. The Company recognized common shares and warrants to purchase common shares with a total fair value of $1.4 million, compensation expense of $0.7 million and a loss on private placement of $0.1 million in the consolidated statements of operations. The Company recognized less than a $0.1 million loss on change in fair value of these liability-classified equity-linked financial instruments.

For the remaining private placement subscription agreements, the Company recognized the fair value of the warrants of $1.7 million and a loss on private placement of $0.6 million as of issuance, and a fair value of $1.7 million as of September 30, 2024, with the loss on change in fair value of less than $0.1 million recorded to change in fair value of liability-classified equity-linked contracts in the consolidated statements of operations. The associated derivative liability was included in long-term liabilities in the consolidated balance sheets. In November 2024, a portion of the private placement subscription agreements were rescinded. Prior to rescission, a gain of $0.3 million was recognized upon revaluation of the warrant liability, reducing the warrant liability from $1.2 million to $0.9 million. A gain of less than $0.1 million was recognized upon extinguishment of the warrant liability at the rescission date. A payable of $0.9 million is included in accounts payable and accrued liabilities on the consolidated balance sheet as of December 31, 2024 for the return of the subscription agreement proceeds to the investors.

In September 2024, the Company’s convertible notes were amended to increase the conversion rate of the conversion option. See further discussion at Note 11. Upon modification, the Company no longer had sufficient authorized shares to settle all equity-linked contracts including the convertible notes upon a potential conversion and accordingly, the embedded conversion feature was bifurcated from the convertible notes to be accounted for as a derivative liability. The Company calculated a fair value of the bifurcated conversion feature of $0.7 million as of the modification date and a fair value of $0.9 million as of September 30, 2024, with the loss on change in fair value of $0.2 million recorded to change in fair value of liability-classified financial instruments in the consolidated statements of operations.

In November 2024, the Company’s shareholders approved and adopted an amendment to the articles of incorporation to increase the number of authorized shares of the Company’s common stock from 80,000,000 to 250,000,000. Upon the increase, the Company had sufficient authorized shares available to settle all equity-linked contracts including the convertible notes and warrants to purchase common shares included in derivative liabilities. As a result, the Company revalued the bifurcated conversion feature and the warrants to purchase common shares as of the shareholder approval date and reclassified the associated derivative liabilities from long-term liabilities to additional paid-in capital in the consolidated balance sheets. The Company recognized a $0.8 million gain on change in fair value of the derivative liabilities prior to the reclassification to equity from long-term liabilities. The amount reclassed to equity totaled $2.1 million.

During the period December 31, 2024 through June 30, 2025, there was no activity related to the Company’s derivative liability instruments and the balance of derivative liabilities remained unchanged throughout this period.

The table below sets forth the Black-Scholes inputs and assumptions for the Company’s valuation and re-valuation of its derivative liabilities for the fiscal year ending June 30:

A summary of the activity related to derivative liabilities for the fiscal year ending June 30, 2025, is as follows:

Preferred Stock

The Company’s amended and restated articles of incorporation authorize shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. The Company’s board of directors (the “Board of Directors”) is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board of Directors is able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of the Board of Directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of the Company or the removal of existing management.

To date, the Company has authorized a total of 1,666,667 shares of preferred stock. Of this amount the Company has designated a total of 233,340 shares to four classes of preferred stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock. A description of each class of preferred stock is listed below.

Series A Preferred Stock

The Company has 33,334 shares of Series A Preferred Stock authorized with a par value of $0.001 per share. The Company hadnil shares of Series A Preferred Stock issued and outstanding on June 30, 2025 and 2024.

Series B Preferred Stock

The Company has 133,334 shares of Series B Preferred Stock authorized with a par value of $10.00 per share. The Company hadnil shares of Series B Preferred Stock issued and outstanding on June 30, 2025 and 2024.

Series C Preferred Stock

The Company has 66,667 shares of Series C Preferred Stock authorized with a par value of $10.00 per share. The Company hadnil shares of Series C Preferred Stock issued and outstanding on June 30, 2025 and 2024.

Series D Preferred Stock

The Company has 5 shares of Series D Preferred Stock authorized with a par value of $0.001 per share. The Company hadnil shares of Series D Preferred Stock issued and outstanding on June 30, 2025 and 2024.

Common Stock

In November 2024, the Company’s shareholders approved and adopted an amendment to the articles of incorporation to increase the number of authorized shares of the Company’s common stock from 80,000,000 to 250,000,000. As of June 30, 2025, the Company has 250,000,000 shares of common stock authorized, with a par value of $0.001 per share.

Fiscal year ended June 30, 2025

During the period, the Company issued 3,407,702 common shares upon vesting of share-based awards.

On July 22, 2024, the Board of Directors authorized and approved to extend the expiration date to April 30, 2025 for 600,000 certain warrants with an exercise price of $1.125 issued in connection with a previous equity offering which were previously scheduled to expire on October 31, 2024. Of the 600,000 warrants,200,000 warrants are held by Ryan Melsert, Chief Executive Officer. The modification of the warrants resulted in incremental fair value of $0.1 million as of the modification date, of which less than $0.1 million was recognized as stock-based compensation expense for those warrants held by the Chief Executive Officer and the remainder as a deemed dividend per the requirements of ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity.” The Company utilized a Black-Scholes option-pricing model to determine the incremental fair value with assumptions including volatility of 100.47% and a risk-free rate of 5.06%.

On August 1, 2024, the Company agreed to sell in a private placement 53 Group A Units (defined below) to several accredited investors and 23 Group B Units to the Company’s new Chief Operating Officer, to an immediate family member of the Chief Executive Officer, and to two current employees, a portion of which was rescinded on November 12, 2024 (see Note 6), resulting in the sale of a total of only 18 Group A Units and 23 Group B Units in such private placement. Each “Group A Unit” consists of 25,000 shares of Common Stock,25,000 Series A warrants with afive-year term to purchase Common Stock (“Series A Warrants”) and 25,000 Series B Warrants with an 18-month term to purchase Common Stock (collectively with the Series A Warrants, the “Warrants”) with a purchase price of $25,000 per Unit; each “Group B Unit” consists of 19,531 shares of Common Stock and 39,062 Series A Warrants with afive-year term and a purchase price of U.S. $25,000 per Unit. The Company received an initial payment of approximately $1.9 million but after the rescission retained only an aggregate purchase price of $1.0 million.

Upon issuance of the common stock and warrants in the private placement, the Company concluded that it had insufficient authorized shares to settle the warrants sold as well as certain previously issued warrants (see Note 13). As the warrants were therefore accounted for as derivative liabilities and remeasured at fair value each reporting period (see Note 13), the Company allocated the proceeds first to the warrants with any residual proceeds allocated to the common shares. A day-one loss is recognized to the extent the recognized fair value of common shares and warrants exceeds the proceeds received.

In February 2025, investors purchased 35 units at a purchase price of $25,000 per unit, with each unit consisting of 26,316 shares of common stock and 52,632 warrants to purchase common stock. The payable of $0.9 million previously included in accounts payable and accrued liabilities, as of December 31, 2024, for the return of the subscription agreement proceeds to these investors (see Note 6) was recognized in additional paid-in capital for the $0.9 million purchase price of the 35 units.

During the fiscal year ended June 30, 2025, the Company issued 4,220,986 common shares to the Note holders pursuant to the debt conversion option in lieu of cash payment of $3.6 million (see Note 12). The fair value of the common shares issued of $4.2 million was recorded in additional paid-in capital for this transaction.

During the fiscal year ended June 30, 2025, the Company recognized stock-based compensation expense of $14.7 million, which was an increase to additional paid-in capital of $13.9 million and an increase to the equity compensation liability of less than $0.1 million. Stock-based compensation expense also included $0.7 million related to the excess fair value related to warrants issued to the insiders and the incremental fair value from modification of certain warrants discussed above.

On November 13, 2024, the Company’s shareholders approved the Company’s 2024 Employee Stock Purchase Plan (the “2024 ESPP”). The 2024 ESPP provides the Company’s employees with the ability to contribute a portion of their earnings to purchase the Company’s shares of common stock. Pursuant to the terms of the 2024 ESPP, the Company’s executive officers and all of its other employees will be allowed to participate in the 2024 ESPP. During the period, employees purchased 389,349 shares under the 2024 ESPP with an aggregate purchase price of $0.3 million.

On December 23, 2024, the Company entered into a securities purchase agreement with two institutional investors including the Buyers for the purchase and sale of (i)5,000,000 shares its common stock, and (ii) warrants exercisable for up to an aggregate of 5,000,000 shares of common stock for a combined offering price of $1.00 per share and accompanying warrant. The warrants have an exercise price of $1.10 per share, areexercisable immediately from the date of issuance and expire five years from the initial exercise date.

On December 27, 2024, the Company entered into another securities purchase agreement with two institutional investors including the Buyers for the purchase and sale of (i)3,773,586 shares of its common stock, and (ii) warrants exercisable for up to an aggregate of 3,773,586 shares of common stock for a combined offering price of $2.65 per share and accompanying warrant. The warrants have an exercise price of $2.80 per share, will beexercisable immediately from the date of issuance and will expire five years from the initial exercise date. The Company received total proceeds from both December 2024 securities purchase agreements of $15.0 million, net of offering costs of $1.1 million, which were recorded to additional paid-in capital as the Company determined the warrants met the equity classification criteria.

The Company had the following potentially dilutive shares outstanding as of June 30:

Fiscal year ended June 30, 2024

During the period the Company issued 1,326 common shares that were previously listed as issuable as of June 30, 2023. These shares for professional services relate to previously earned board compensation.

During the period, the Company issued 1,306,480 common shares with an issuance date fair value of $5.3 million to executives, directors and employees pursuant to share award service and performance achievements. This included 171,500 RSUs granted upon election by officers of the Company to receive warrants and RSUs in lieu of cash bonuses.

On July 28, 2023, the Company recorded an increase of $0.2 million to stockholders’ equity for the change in fair value between the balance sheet date of June 30, 2023 and the fair value on the date the shares were returned. These shares were pursuant to the Company modifying its building purchase agreement to nullify a $1.5 million indemnification requirement and reclaim 128,205 shares that it had previously issued to the Selling Stockholder (See Note 6).

During the period, the Company filed prospectus supplements related to the offer and sale from time to time of up to 8,666,667 common shares directly by the Company at market prices, to Tysadco Partners, LLC, a Delaware limited liability company (“Tysadco”), pursuant to the terms of written sales agreement(s) (“Tysadco Agreement”). Pursuant to the Tysadco Agreement, the Company may offer and sell up to 8,666,667 common shares of the Company at a purchase price of 95% of the weighted-average price, with a minimum request of 33,333 shares. During the period, the Company sold 8,209,262 common shares for total proceeds of $27.8 million, of which $1.5 million is recorded as a subscription receivable offset within equity on the consolidated balance sheet at June 30, 2024. During the year ended June 30, 2025, the Company recorded a credit loss of $1.5 million against the outstanding subscription receivable balance. The credit loss reflects management’s assessment that the receivable is no longer collectible. Accordingly, the Company reduced the carrying value of the subscription receivable and recognized the corresponding loss as a credit loss expense within other income (expenses) on the Statement of Operations.

On April 3, 2024, the Company entered into an ATM sales agreement with Virtu Americas LLC, pursuant to which the Company may offer and sell, from time to time through the sales agent, shares (the “Shares”) of the Company’s common stock, par value $0.001 per share, having an aggregate offering price of up to $50,000,000, subject to the terms and conditions of the Sales Agreement. The Company has filed a prospectus supplement to its registration statement on Form S-3 (File No. 333-252492) offering the Shares. During the period, the Company sold 9,109,573 common shares for total proceeds of $12.1 million, of which $0.6 million is recorded as a subscription receivable on the consolidated balance sheet at June 30, 2024.

During the period, the Company issued 45,545 common shares pursuant to cashless exercise of 50,000 share purchase warrants exercised as of June 30, 2023. During the period, the Company received cash proceeds of $37,500 pursuant to 33,334 share purchase warrants. Also, during the period, the Company issued 39,883 common shares pursuant to cashless exercise of 66,667 share purchase warrants.

During the period, the Company recognized stock-based compensation expense of approximately $14.6 million, which was an increase to additional paid-in capital of approximately $14.2 million and an increase in the equity compensation liability of $0.4 million. Stock-based compensation in additional paid-in capital also includes $0.3 million of bonuses settled in equity awards in lieu of cash. Of total stock-based compensation, approximately $7.5 million was recognized for officers and directors of the Company.

During the fiscal year ended June 30, 2024, there were 118,762 common shares issued related to warrants exercised, of which 85,428, common shares were issued pursuant to cashless exercise. In addition, there were 539,435 warrants vested related to previously granted stock-based compensation to officers of the Company, and of those,171,500 warrants granted upon election by officers of the Company to receive warrants and RSUs in lieu of cash bonuses. The weighted average grant date fair value of warrants issued during the fiscal year ended June 30, 2024 totaled $1.90. The warrants have a contractual term offive years and vest over the respective employee’s requisite service period ofthree tofive years.

During the fiscal year ended June 30, 2025, there were 14,360,308 total warrants issued. The Company issued 3,548,426 warrants pursuant to the Private Placement (see Note 14), of which 898,426 warrants were purchased by employees of the Company,900,000 were purchased by accredited investors, and 1,750,000 warrants were cancelled per the rescission agreement executed with certain investors in November 2024 (see Note 13). The Company also issued 8,773,586 warrants in December 2024 in connection with the securities purchase agreements (see Note 14). The Company issued 196,176 warrants under its compensation arrangements (see Note 16). In February 2025, the Company issued 1,842,120 warrants to accredited investors that had previously rescinded private placement agreements (see Note 14).

The Company established the 2021 Retention Plan (“the Retention Plan”) to issue shares in the effort to retain key executives, directors, and employees. The Retention Plan allows for several different types of awards to be granted, including but not limited to, warrants, restricted share units and restricted share awards, collectively referred to as “share awards”. Share awards generally have the same expense characteristics under US GAAP and generally vest over a four-year period at a rate of 25% per annum.

Under the Retention Plan, the Company is authorized to issue shares of common stock to employees and non-employees up to ten percent (10%) of the total number of shares of common stock outstanding as of December 31, 2022, on a fully diluted basis. The Company adjusts the authorized shares under the plan each December 31, while the Retention Plan remains in effect. During the fiscal year ended June 30, 2025 and 2024, the Company granted 9.5 million and 3.3 million share awards, respectively, under the Retention Plan.

The table below reflects the share award activity for the periods ended June 30, 2025 and 2024:

As awards are granted, stock-based compensation equivalent to the fair market value of the underlying common stock on the date of grant is expensed over the requisite service period, generally four years with a maximum contractual term of ten years, using the graded vesting attribution method as acceptable under ASC 718, “Stock-Based Compensation.” The Company accounts for forfeitures as they occur. The fair value of share awards that vested during the fiscal year ended June 30, 2025 and 2024, totaled $4.0 and $5.3 million, respectively.

The Company recognized stock-based compensation expense of $14.7 million and $14.6 million for the fiscal years ended June 30, 2025 and 2024, respectively. Of these amounts, $6.2 million and $7.5 million, respectively, were related to officers and directors of the Company. For the fiscal years ended June 30, 2025 and 2024, total stock-based compensation expense included $4.3 million and $1.9 million, respectively, related to warrants awarded to officers of the Company. As of June 30, 2025 and 2024, the equity compensation liability totalednil and $0.4 million related to warrants awarded to officers of the Company, respectively. As of June 30, 2024 several grant performance targets for the fiscal year ended June 30, 2024 were defined via employee and retention agreements. These performance targets were yet achieved by employees and officers; thus, the Company deferred recognition of stock-based compensation expense of $0.4 million until such achievements until they were deemed probable and achievement and approval by the board of directors occurred. The expense was recognized during fiscal year 2025.

As of June 30, 2025, there were approximately $14.3 million of unamortized expenses relating to outstanding equity compensation awards to be recognized over a remaining weighted-average period of 2.99 years.

The table below presents the stock-based compensation expense per respective line item of the consolidated statements of operations for the fiscal years ended June 30:

Executive officers and selected other key employees are eligible to receive common share performance-based awards, as determined by the board of directors. The payouts, in the form of share awards, vary based on the degree to which corporate operating objectives are met. These performance-based awards typically include a service-based requirement, which is generally four years.

The Company has not recognized any income tax provisions for the fiscal years ended June 30, 2025 and 2024. The U.S. federal corporate statutory rate of 21.0% is the applicable corporate tax rate used for fiscal years ended June 30, 2025 and 2024. The statutory rate differs from the Company’s computed expected tax recovery rate due to the following adjustments for the fiscal years ended June 30:

The significant components of deferred income tax assets and liabilities at June 30, after applying the statutory corporate income tax rate, are as follows for the fiscal years ended June 30:

We believe that it is more likely than not that the benefit from our net deferred tax assets will not be realized. At June 30, 2025 and 2024, respectively, we have provided a valuation allowance of $41.7 and $32.2 million against our deferred taxes. If our assumptions change and we determine that we will be able to realize these deferred tax asset amounts, the Company will adjust its disclosures appropriately.

As of June 30, 2025, the Company has accumulated federal and state net operating loss carryforwards of approximately $141.8, and $15.6 million, respectively. If unused, $2.5 million of our federal net operating loss carryforwards will expire in 2032, and $139.2 million will carry forward indefinitely. $2.6 million of our state net operating loss carryforwards will begin toexpire in 2041 and $13.0 million will carryforward indefinitely. In addition, under the Tax Cuts and Jobs Act (Tax Act) the amount of federal net operating losses generated in taxable periods beginning after December 31, 2017, that we are permitted to deduct in any taxable year is limited to 80% of our taxable income in such year, where taxable income is determined without regard to the net operating loss deduction itself. The Tax Act generally eliminates the ability to carry back any net operating loss to prior taxable years, while allowing post-2017 unused net operating losses to be carried forward indefinitely. The Company also has $66.2 thousand of federal Research and Development Credit carryforwards will expire in 2042.

Utilization of net operating losses, credit carryforwards, and certain deductions may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The tax benefits related to future utilization of federal and state net operating losses, tax credit carryforwards, and other deferred tax assets may be limited or lost if cumulative changes in ownership exceeds 50% within any three-year period. Additional limitations on the use of these tax attributes could occur in the event of possible disputes arising in examinations from various taxing authorities. Any net operating loss or credit carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets.

The Company has recorded uncertain tax positions (“UTP”) that result in unrecognized tax benefits recorded on the books of the Company. The unrecognized tax benefits for the Company are as follows as of June 30:

The Company does not have an accrual for interest or penalties related to uncertain tax positions as of June 30, 2025.

The Company files U.S. income tax returns with varying statutes of limitations. The tax returns for fiscal years ended September 30, 2016, to June 30, 2025, remain open to examination due to the carryover of unused NOL carryforwards and tax credits. The Company is not under examination by any tax authority as of June 30, 2025.

The Company has determined that its Chief Executive Officer is its chief operating decision maker (“CODM”). The Company operates as a single business operating segment, which includes all activities related to the exploration of new primary resources of battery metals, in the development and commercialization of new technologies for the extraction of these battery metals from primary resources, and in the commercialization of an internally developed integrated process for the recycling of lithium-ion batteries. Accordingly, the CODM uses consolidated net income to assess financial performance and inform decisions on how to allocate resources. The financial information provided to the CODM does not contain significant disaggregated expenses outside of what is already disclosed in the statements of operations.

Revenue from three major customers during the years ended June 30, 2025 and 2024 accounted for 74% of the fiscal year ended June 30, 2025 revenue.

Substantially all of the Company’s long-lived assets and operating lease right-of-use assets were located in the United States as of June 30, 2025 and 2024.

For the fiscal years ended June 30:

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Except as otherwise identified herein, management is currently not aware of any such legal proceedings or claims that could have, individually or in aggregate, a material adverse effect on our business, financial condition, or operating results.

Operating Leases

The Company leases its principal office location in Reno, Nevada. It also leases lab space at the University of Nevada, Reno on short term leases. The principal office location lease expires on November 30, 2027 and the Lab leases expire on February 1, 2026. Consistent with the guidance in ASC 842, The Company has recorded the principal office lease in its consolidated balance sheet as an operating lease. For further information on operating lease commitments, see Note 10.

Financial Assurance

Nevada and other states, as well as federal regulations governing mine operations on federal land, require financial assurance to be provided for the estimated costs of mine reclamation and closure, including groundwater quality protection programs. The Company has satisfied financial assurance requirements using a combination of cash bonds and surety bonds. The amount of financial assurance the Company is required to provide will vary with changes in laws, regulations, reclamation and closure requirements, and cost estimates. At June 30, 2025, the Company’s financial assurance obligations associated with U.S. mine closure and reclamation/restoration cost estimate totaled $0.1 million, for which the Company is legally required to satisfy its financial assurance obligations for its mining properties in Tonopah, Nevada. The Company was previously released of all of its liability in the Railroad Valley region of Nevada.

Subsequent to year end and up until filing, management has leveraged the Company’s inclusion in the Russell 2000 to raise capital through the At-the-Market Offering facility, received proceeds from warrant exercises, and benefited from High Trail’s full debt conversion and release of restricted cash. As a result, the Company’s net cash position improved significantly to $25.4 million as of September 15, 2025.

On July 18, 2025, the Buyers converted $5,000,000 of the 2024 Notes into shares of common stock of the Company at a conversion rate of 1,333.33 shares of common stock per $1,000 of principal amount. Total common shares of 6,666,651 were issued with a fair market value of $16.0 million.

On July 23, 2025, one of the Company’s institutional investors exercised 4,000,000 common stock warrants at an exercise price of $1.10 per share. The warrant exercise resulted in gross proceeds of approximately $4.4 million to the Company. The shares were issued in accordance with the original warrant terms.

As of June 30, 2025, the Company had $5.0 million classified as restricted cash. Subsequent to year-end, on July 29, 2025, the restrictions were lifted, and the funds became available for general use. As the restriction was still in place as of the balance sheet date, the cash remains classified as restricted.

At June 30, 2025, the Company classified land and a building at its Fernley, Nevada location as assets held for sale.

On July 28, 2025, a potential buyer canceled the Commercial/Investment Property Purchase Agreement and Joint Escrow Instructions. The Company plans to make improvements to the property in fiscal year 2026, including obtaining a final certificate of occupancy (COO) and completing other upgrades. The property will reclassified into property, plant and equipment during the first quarter of fiscal year 2026.

On August 20, 2025, the Buyers converted $3,000,000 of the 2024 Notes into shares of common stock of the Company at a conversion rate of 945.0992 shares of common stock per $1,000 of principal amount. Total common shares of 2,835,299 were issued with a fair market value of $6.9 million.