AMERICAN BATTERY TECHNOLOGY Co 10-Q for FY2024 Q2
AMERICAN BATTERY TECHNOLOGY Co (ABAT)
About this 10-Q
AMERICAN BATTERY TECHNOLOGY Co filed this 10-Q on February 14, 2024, covering the quarter ended December 31, 2023 (FY2024 Q2).
Headline figures
Quarter ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $9.29M
- compared with a net loss of $6.2M a year earlier
- Diluted EPS
- -$0.19
- compared with -$0.14 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
Commission
File number:
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Securities registered pursuant to Section 12(b) of the Act:
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| The |
Indicate
by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the past 12 months (or for such shorter quarter that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter quarter that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition quarter for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐
As of February 12, 2024, shares of common stock, $0.001 par value per share were outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements included in this Report, other than statements of historical facts, that address activities, conditions, events, or developments with respect to our financial condition, results of operations, business prospects or economic performance that we expect, believe, or anticipate will or may occur in the future, or that address plans and objectives of management for future operations, are forward-looking statements. The forward-looking statements are contained principally in the “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this Report. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates”, “believes”, “seeks”, “could”, “estimates”, “expects”, “intends”, “may”, “plans”, “potential”, “predicts”, “projects”, “should”, “would” and similar expressions intended to identify forward-looking statements.
Forward-looking statements appear throughout this report, and include statements about such matters as: anticipated operating results; relationships with our customers; consumer demand; financial resources and condition; changes in revenues; changes in profitability; changes in accounting treatment; cost of sales; selling, general and administrative expenses; interest expense; the ability to produce the liquidity or enter into agreements to acquire the capital necessary to continue our operations and take advantage of opportunities; legal proceedings and claims.
Forward-looking statements reflect our current views with respect to future events and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances. We caution you that forward-looking statements are not guarantees of future performance and these statements are subject to known and unknown risks and uncertainties, which may cause our actual results or performance to be materially different from any future results or performance expressed or implied by the forward-looking statements.
Also, forward-looking statements represent our estimates and assumptions only as of the date of this Report. You should read this Report and the documents that we reference and file as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements in this report speak only as of the filing of this Report. Except as required by applicable securities laws, we assume no obligation to update any prior forward-looking statements.
PRESENTATION OF INFORMATION
Except as otherwise indicated by the context, references in this Report to “we”, “us”, “our” and the “Company” are to the combined business of American Battery Technology Company and its consolidated subsidiaries.
This Report includes our unaudited consolidated financial statements as of and for the period ended December 31, 2023 and 2022. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). All financial information in this Report is presented in US dollars, unless otherwise indicated, and should be read in conjunction with our unaudited consolidated financial statements and the notes included in this Report.
| 2 |
TABLE OF CONTENTS
| PART I | ||
| ITEM 1 | Financial Statements | 4 |
| ITEM 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 |
| ITEM 3 | Quantitative and Qualitative Disclosures about Market Risk | 28 |
| ITEM 4 | Controls and Procedures | 28 |
| PART II. OTHER INFORMATION | ||
| ITEM 1 | Legal Proceedings | 29 |
| ITEM 1A | Risk Factors | 29 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 29 |
| ITEM 3. | Defaults Upon Senior Securities | 29 |
| ITEM 4. | Mine Safety Disclosure | 29 |
| ITEM 5. | Other Information | 29 |
| ITEM 6. | Exhibits | 30 |
| 3 |
ITEM 1. FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements (unaudited) have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
Operating results for the six months ended December 31, 2023, are not necessarily indicative of the results that can be expected for the fiscal year ending June 30, 2024.
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AMERICAN BATTERY TECHNOLOGY COMPANY
Condensed Consolidated Balance Sheets (unaudited)
| December 31, 2023 | June 30, 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Investments | ||||||||
| Inventory (Note 3) | ||||||||
| Grants receivable (Note 4) | ||||||||
| Prepaid expenses and deposits | ||||||||
| Subscription receivable | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Other deposits (Note 5) | ||||||||
| Property, plant and equipment, net (Note 6) | ||||||||
| Mining properties (Note 7) | ||||||||
| Intangible assets (Note 8) | ||||||||
| Right-of-use asset (Note 11) | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities (Note 9) | $ | $ | ||||||
| Notes payable, current (Note 10) | ||||||||
| Total current liabilities | ||||||||
| Notes payable, non-current (Note 10) | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 16) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Series A Preferred Stock Authorized: preferred shares, par value of $ per share; Issued and outstanding: preferred shares as of December 31, 2023 and June 30, 2023. | ||||||||
| Series B Preferred Stock Authorized: preferred shares, par value of $ per share; Issued and outstanding: preferred shares as of December 31, 2023 and June 30, 2023. | ||||||||
| Series C Preferred Stock Authorized: preferred shares, par value of $ per share; Issued and outstanding: preferred shares as of December 31, 2023 and June 30, 2023. | ||||||||
Preferred stock value | ||||||||
| Common Stock Authorized: common shares, par value of $ per share; Issued and outstanding: and common shares as of December 31, 2023 and June 30, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Common stock issuable | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
(The accompanying notes are an integral part of these condensed consolidated unaudited financial statements)
| 5 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Condensed Consolidated Statements of Operations (unaudited)
| Three months ended December 31, 2023 | Three months ended December 31, 2022 | Six months ended December 31, 2023 | Six months ended December 31, 2022 | |||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||
| Research and development | ||||||||||||||||
| Exploration costs | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss before other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Amortization and accretion of financing costs | ( | ) | ( | ) | ||||||||||||
| Gain on sale of mining claims | ||||||||||||||||
| Unrealized gain (loss) on investment | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income | ||||||||||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share, basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
(The accompanying notes are an integral part of these condensed consolidated unaudited financial statements)
| 6 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)
Three months ended December 31, 2023:
| Common Shares | Additional Paid-In | Common Stock | Accumulated | |||||||||||||||||||||
| Number | Amount | Capital | Issuable | Deficit | Total | |||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Vesting of share-based awards | ( | ) | ||||||||||||||||||||||
| Stock-based compensation expense | - | |||||||||||||||||||||||
| Shares issued pursuant to share purchase agreement, net of issuance costs | ||||||||||||||||||||||||
| Shares issued pursuant to warrant exercises | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Three months ended December 31, 2022:
| Common Shares | Additional Paid-In | Common Stock | Subscription | Accumulated | ||||||||||||||||||||||||
| Number | Amount | Capital | Issuable | Receivable | Deficit | Total | ||||||||||||||||||||||
| Balance, September 30, 2022 | $ | $ | $ | $ | ( | ) | $ | 47,319,271 | ||||||||||||||||||||
| Shares issued for professional services | ( | ) | 13,074 | |||||||||||||||||||||||||
| Vesting of share-based awards | ( | ) | – | |||||||||||||||||||||||||
| Stock-based compensation expense | – | 3,427,244 | ||||||||||||||||||||||||||
| Shares issued from purchase agreements, net of issuance costs | ( | ) | 1,353,707 | |||||||||||||||||||||||||
| Net loss for the period | – | ( | ) | (6,196,970 | ) | |||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | 45,916,326 | |||||||||||||||||
(The accompanying notes are an integral part of these condensed consolidated unaudited financial statements)
| 7 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)
Six months ended December 31, 2023:
| Common Shares | Additional Paid-In | Common Stock | Accumulated | |||||||||||||||||||||
| Number | Amount | Capital | Issuable | Deficit | Total | |||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Shares issued for professional services | ( | ) | ( | ) | ||||||||||||||||||||
| Vesting of share-based awards | ( | ) | ||||||||||||||||||||||
| Stock-based compensation expense | – | |||||||||||||||||||||||
| Shares issued pursuant to rounding of share reverse split | ( | ) | ||||||||||||||||||||||
| Shares reclaimed pursuant to asset acquisition | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Shares issued pursuant to share purchase agreement, net of issuance costs | ||||||||||||||||||||||||
| Shares issued pursuant to warrant exercises | ||||||||||||||||||||||||
| Net loss for the period | – | ( | ) | ( | ) | |||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Six months ended December 31, 2022:
| Common Shares | Additional Paid-In | Common Stock | Subscription | Accumulated | ||||||||||||||||||||||||
| Number | Amount | Capital | Issuable | Receivable | Deficit | Total | ||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | 49,634,059 | ||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | 49,634,059 | ||||||||||||||||||||
| Shares issued for professional services | ( | ) | 36,679 | |||||||||||||||||||||||||
| Vesting of share-based awards | ( | ) | - | |||||||||||||||||||||||||
| Stock-based compensation expense | - | 3,523,305 | ||||||||||||||||||||||||||
| Shares issued from private placement, net of issuance costs | ( | ) | 1,353,707 | |||||||||||||||||||||||||
| Net loss for the period | – | ( | ) | (8,631,424 | ) | |||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | 45,916,326 | |||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | 45,916,326 | |||||||||||||||||
(The accompanying notes are an integral part of these condensed consolidated unaudited financial statements)
| 8 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Condensed Consolidated Statements of Cash Flows (unaudited)
| Six months ended. December 31, 2023 | Six months ended. December 31, 2022 | |||||||
| Operating Activities | ||||||||
| Net loss attributable to stockholders | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Accretion of financing costs | ||||||||
| Amortization of right-of-use asset | ||||||||
| Unrealized loss on investment | ||||||||
| Stock-based compensation | ||||||||
| Shares issued for professional services | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Inventory | ( | ) | ||||||
| Grants receivable | ( | ) | ( | ) | ||||
| Prepaid expenses and deposits | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Net change in operating lease liability | ( | ) | ( | ) | ||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Investing Activities | ||||||||
| Other acquisition deposits | ( | ) | ||||||
| Acquisition of property, equipment, and water rights | ( | ) | ( | ) | ||||
| Acquisition cost reimbursements from government grants | ||||||||
| Purchase of mining properties | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Financing Activities | ||||||||
| Proceeds from exercise of share purchase warrants | ||||||||
| Principal paid on notes payable | ( | ) | ||||||
| Proceeds from notes payable, net of issuance costs | ||||||||
| Proceeds from share purchase agreements, net of issuance costs | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| Increase (decrease) in Cash | ( | ) | ||||||
| Cash – Beginning of Period | ||||||||
| Cash – End of Period | $ | $ | ||||||
| Supplemental disclosures (Note 15) | ||||||||
(The accompanying notes are an integral part of these condensed consolidated unaudited financial statements)
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AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
1. Organization and Nature of Operations
American Battery Technology Company (“the Company”) is a new entrant in 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 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 objective of being a producing mineral company. ABTC began operations of its first lithium-ion battery recycling facility in October 2023 and has a limited operating history, and as of December 31, 2023 had not generated or realized significant revenues from its activities. The principal executive offices are located at 100 Washington Ave., Suite 100, Reno, NV 89503.
Liquidity and Capital Resources
During
the six months ended December 31, 2023, the Company incurred a net loss of $
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 to exist as to the Company’s ability to continue as a going concern for 12 months from issuance of these financial statements. These condensed 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 undrawn amounts from the common stock purchase agreement with Tysadco, which provides a source of liquidity that enables equity financing as needed. Additionally, one of the ways to continue to support the company’s liquidity position might include entering an at-the-market (“ATM”) offering or similar program from time to time.
Based on our current operating plan, unless we generate income from the operations of our facilities and Government Grant Awards, raise additional capital (debt or equity), or obtain waivers from complying with such financial covenants, it is possible that we will be unable to maintain our financial covenants under our existing Note agreement, which could 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.
2. Summary of Significant Accounting Policies
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 (dissolved), LithiumOre Corporation (formerly Lithortech Resources Inc), ABMC AG, LLC (dissolved) and Aqua Metals Transfer LLC. All inter-company accounts and transactions have been eliminated upon consolidation.
On
September 11, 2023, the Company effected a
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 the fair value of stock-based compensation, valuation and recoverability of long-lived assets and intangible assets subject to impairment testing, and deferred income tax asset valuation allowances.
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.
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AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
2. Summary of Significant Accounting Policies (continued)
c) Long-Lived Assets
Long-lived
assets, such as property and equipment, mineral properties, and purchased intangibles, are evaluated for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with Accounting Standards
Codification (“ASC”) topic 360, Property, Plant, and Equipment. Circumstances which could trigger a review include, but are
not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset;
current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of
its estimated useful life. 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 ranging between and
The recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the estimated fair value of the asset. Any impairment in value is recognized as an expense in the period when the impairment occurs.
Expenses for major repairs and maintenance which extend the useful lives of property and equipment are capitalized. All other maintenance expenses, including planned major maintenance activities, are expensed as incurred. Gains or losses from property disposals are included in income or loss from operations.
d) 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 allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.
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.
e) Intangible Assets
Intangible assets consist of water rights that have indefinite useful lives 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.
| 11 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
2. Summary of Significant Accounting Policies (continued)
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 income statement. Basic EPS is computed by dividing net income (loss) attributable to common stockholders (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. At December 31, 2023, the Company had potentially dilutive shares outstanding, consisting of from convertible notes, from warrants and from share awards outstanding. 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 records stock-based compensation in accordance with ASC 718, “Stock Compensation,” using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. The Company utilizes the Black Scholes method when calculating stock-based compensation expense relating to stock option awards and warrants.
The Company records the stock-based compensation expense attributed to share awards in accordance with US GAAP using the graded-vesting method. The Company amortizes the grant date fair value over the respective vesting period, beginning with recognition on the date of grant.
h) 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. The Company assesses the carrying costs for impairment under ASC 360, “Property, Plant, and Equipment,” at each period end. 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 December 31, 2023 and 2022, the Company has not capitalized any such mineral property costs.
i) 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.
The Company has been awarded federal grant awards for specific R&D programs. Under 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.
| 12 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
2. Summary of Significant Accounting Policies (continued)
j) Leases
The Company follows the guidance of ASC 842, “Leases,” which requires an entity to recognize a right-of-use (“ROU”) asset and a lease liability for virtually all leases. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines the present value of lease payments utilizing its incremental borrowing rate, as the implicit rate of interest in the respective leases is not readily determinable. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be.
k) 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 balance sheet dates.
Due to the Company’s cumulative 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 asset has been recorded at December 31, 2023 and June 30, 2023.
l) Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update expands segment disclosures by requiring disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This update is effective for our annual report for fiscal year 2025, for interim period reporting beginning in fiscal year 2026, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.
| 13 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for our annual report for fiscal year 2026, with early adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.
m) 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 the statements of operations.
n) 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 issuance and offering costs are amortized over the term of the convertible notes, using the effective interest method, as interest expense in the accompanying unaudited consolidated statements of operations.
o) Inventory
Inventory is stated at the lower of cost or market (net realizable value). The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified.
p) 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 did not have any cash equivalents as of December 31, 2023 or June 30, 2023.
q) Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC 820, “Fair Value Measurements”, equals or approximates the carrying amounts represented in the balance sheets.
r) Fair Value of Financial Instruments
Other Current Assets are comprised of payroll tax credits related to research and development activities per IRS form 6765.
s) Accrued Claims and Contingencies
The Company is subject to various claims and contingencies related to lawsuits. A liability is recorded for claims, legal costs or other contingencies when the risk of loss is probable and reasonable estimable. The required reserves may change due to new developments in each period.
| 14 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
3. Inventories
The Company’s inventory as of December 31, 2023 and June 30, 2023 relates to the lithium-ion battery recycling operations and was comprised of raw materials in the form of battery feedstock and finished goods in the form of black mass and other metals. Inventories are valued at the lower of average cost or net realizable value. The carrying value of inventory includes those costs to acquire battery feedstock and any related carrying and processing costs incurred by the Company.
Schedule of Inventories
| December 31, 2023 | June 30, 2023 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
4. Government Grant Awards
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 were $
On
August 16, 2021, the Company received a contract award for a 30-month project with a total budget of $
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 $
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 $
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 $
5. Other Deposits
On
March 1, 2023, the Company and Linico Corporation (“Linico”) entered into an Asset Purchase Agreement (“APA”)
whereby the Company acquired specific tangible equipment and personal property for an aggregate purchase price of $
On
June 30, 2023, the Company and Linico entered into an amendment to the MIPA. Pursuant to the terms of the amended agreement, the parties
agreed to (i) remove the requirement that $
| 15 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
6. Property, Plant and Equipment
The table below presents the property and equipment as of December 31, 2023 and June 30, 2023:
Schedule of Property and Equipment
| Land | Building | Equipment | Total | |||||||||||||
| Cost: | ||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | ||||||||||||
| Additions | ||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Accumulated Depreciation: | ||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | ||||||||||||
| Additions | ||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ||||||||||||
| Carrying Amounts: | ||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | $ | ||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ||||||||||||
On
August 11, 2023, the Company finalized the purchase of its commercial-scale battery recycling facility located in the TRIC, as
indicated in Note 5. At that time, the aggregate total of $
7. Mining Properties
On July 21, 2022, the Company exercised the option to purchase the rights to unpatented lode claims in the Tonopah, Nevada. Since that time, the Company has worked with third parties to conduct drill programs and analysis in order to verify the grade and continuity of the mining claims. Over 50% of the inferred mineral resource 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.
8. Intangible Assets
On
September 12, 2023, the Company acquired approximately
The
Company’s acquisition of the commercial-scale battery recycling facility at the TRIC included water rights valued at $
The table below presents total intangible assets at:
Schedule of Intangible Assets
| December 31, 2023 | June 30, 2023 | |||||||
| Water rights | $ | $ | ||||||
| 16 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
9. Accounts Payable and Accrued Liabilities
The table below presents total accounts payable and accrued liabilities at:
Schedule of Accounts Payable and Accrued Liabilities
| December 31, 2023 | June 30, 2023 | |||||||
| Trade payables | $ | $ | ||||||
| Accrued fixed assets | ||||||||
| Accrued expenses | ||||||||
| Right-of-use liability, current | ||||||||
| Total accounts payable and accrued liabilities | $ | $ | ||||||
10. Notes Payable
On
May 17, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Mercuria Investments US, Inc. for
pre-payment on the purchase of the Company’s recycled battery metal products. As such, inventory serves as collateral for outstanding
balances. The Credit Agreement provides for an aggregate loan amount of up to $
On August 30, 2023, the Company caused the repayment in full of all indebtedness, liabilities and other obligations under, and terminated, its former credit agreement, dated as of May 17, 2023 by and among the Company, as Borrower, and Mercuria Investments US, Inc., as Agent. The Company did not incur any material early termination penalties because of such termination of the credit agreement. The Company remains engaged with Mercuria Investments US, Inc. in a marketing and presale capacity.
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 sold to the Buyers up to $
Note
discount and issuance costs totaled $
The table below presents the net carrying amounts of the Notes as of:
Schedule of Net Carrying Amounts of the Notes
| December 31, 2023 | June 30, 2023 | |||||||
| Principle outstanding | $ | $ | ||||||
| Unamortized debt discount and issuance costs | ( | ) | ||||||
| Net carrying value | $ | $ | ||||||
The table below presents the maturities of notes payable as of December 31, 2023:
Schedule of Maturities of Notes Payable
| December 31, 2024 | $ | |||
| December 31, 2025 | ||||
| Total note payments | ||||
| Less: unamortized debt discount and issuance costs | ( | ) | ||
| Total notes payable | $ | |||
| Notes payable, current | $ | |||
| Notes payable, non-current | $ |
| 17 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
11. Leases
A lease provides the lessee the right to control the use of an identified asset for a period in exchange for consideration. Operating lease right-of-use assets (“RoU 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 December 31, 2023 and June 30, 2023.
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
The
Company occupies office facilities under lease agreements that expire at various dates, many of which do not exceed a year in length.
Total operating lease costs for the six months ended December 31, 2023 and 2022, were approximately $
As
of December 31, 2023, current lease liabilities of $
Schedule of Operating Lease ROU Assets and Lease Liabilities
| December 31,2023 | June 30, 2023 | |||||||
| Operating lease right-of-use asset | $ | $ | ||||||
| Operating lease liabilities | $ | $ | ||||||
The table below presents the maturities of operating lease liabilities as of December 31, 2023:
Schedule of Maturity of Operating Lease Liabilities
| December 31, 2024 | $ | |||
| December 31, 2025 | ||||
| Total lease payments | ||||
| Less: discount | ( | ) | ||
| Total operating lease liabilities | $ | |||
| Operating lease liabilities, current | $ | |||
| Operating lease liabilities, non-current | $ |
The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use asset as of December 31, 2023.
Schedule of Weighted Average Remaining Lease Term for Operating Leases and Weighted Average Discount Rate
| Weighted average lease term (years) | |||
| Weighted average discount rate | % |
| 18 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
12. Stockholders’ Equity
On September 21, 2023, the Company’s common stock began trading on the Nasdaq Capital Market under the symbol “ABAT.” The Company was previously traded on the OTCQX Markets under the symbol “ABML.”
Preferred Stock
Our 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. Our board of directors will be 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. Our board of directors will be 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 our 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 us or the removal of existing management.
To date, the Company has authorized a total of shares of preferred stock. Of this amount the Company has designated a total of shares to three classes of preferred stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock. As of June 30, 2023 and December 31, 2023, no shares of any of these classes are issued and outstanding. A description of each class of preferred stock is listed below.
Series A Preferred Stock
The Company has shares of Series A Preferred Stock authorized with a par value of $, per share. The Company had shares of Series A Preferred Stock issued and outstanding at December 31, 2023 and June 30, 2023.
Series B Preferred Stock
The Company has shares of Series B Preferred Stock authorized with a par value of $, per share. The Company had shares of Series B Preferred Stock issued and outstanding at December 31, 2023 and June 30, 2023.
Series C Preferred Stock
The Company has shares of Series C Preferred Stock authorized with a par value of $, per share. The Company had shares of Series C Preferred Stock issued and outstanding at December 31, 2023 and June 30, 2023.
Common Stock
The Company has million shares of common stock authorized, with a par value of $, per share.
On September 11, 2023, in preparation for listing on the Nasdaq Capital Market, the Company implemented a one-for-fifteen (1-for-15) reverse split of our common stock. Prior to the reverse stock split the Company had shares of common stock issued and outstanding, and after the reverse stock split, the Company had approximately shares of common stock issued and outstanding. Immediately after the reverse stock split, each stockholder’s percentage ownership interest in the Company and proportional voting power remained unchanged aside from rounding fractional shares into whole shares, resulting in an additional common shares issued. The reverse stock split did not change the par value of the common stock or preferred stock.
| 19 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
12. Stockholders’ Equity (continued)
Common Stock (continued)
Six months ended December 31, 2023:
During the period the Company issued 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 common shares with an issuance date fair value of $
On
July 28, 2023, the Company recorded an increase of $
During
the period, the Company filed a prospectus supplements related to the offer and sale from time to time of up to common shares
directly by the Company at market prices, to Tysadco Partners, LLC, a Delaware limited liability company, pursuant to the terms of written
sales agreement(s) (“Tysadco Agreement”).
During
the period, the Company issued common shares pursuant to cashless exercise of share purchase warrants exercised as of June
30, 2023. During the period, the Company received cash proceeds of $
During the period, the Company recognized stock-based compensation expense of approximately $ million, which was an increase to additional paid-in capital, a component of stockholders’ equity. Of the amount, approximately $ million was recognized for officers and directors of the Company.
Six months ended December 31, 2022:
During the period, the Company issued common shares pursuant the vesting of restricted share units issued to employees and directors of the Company. Of the vested shares, common shares with a fair value of approximately $ were issued to officers of the Company.
During the period, the Company issued common shares pursuant the Share Purchase Agreement, effective April 2, 2021. The Company received proceeds of $ million after December 31, 2022. Of this amount $ million was reflected in current assets and $ million as a component of stockholders’ equity at December 31, 2022.
During
the period the Company issued common shares for professional services, with a fair value of approximately $
During the period, the Company recognized stock-based compensation expense of approximately $ million, which was an increase to additional paid-in capital, a component of stockholders’ equity. Of the amount, approximately $ million was recognized for officers and directors of the Company.
| 20 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
During the six months ended December 31, 2023, there were common shares issued related to warrants exercised, of which were issued pursuant to a cashless exercise of share purchase warrants. In addition, there were warrants granted related to stock-based compensation.
Schedule of Share Purchase Warrants Activity
| Number of Warrants | Weighted Average Exercise Price | |||||||
| Balance, June 30, 2023 | $ | |||||||
| Granted | $ | |||||||
| Exercised | ( | ) | $ | ( | ) | |||
| Expired | $ | |||||||
| Balance, December 31, 2023 | $ | |||||||
Schedule of Additional Information Regarding Share Purchase Warrants
| Outstanding and Exercisable | ||||||||
| Range of Exercise Prices | Number of Warrants | Weighted Average Remaining Contractual Life (years) | ||||||
| $ - $ | ||||||||
| $ - $ | ||||||||
| $ - $ | ||||||||
The Company has 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, 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 % 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 (%) 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 six months ended December 31, 2023 and 2022, the Company granted million and million share awards, respectively. As of December 31, 2023 several grant performance targets for the fiscal year ended June 30, 2024 have been defined via employee and retention agreements. These performance targets have not yet been achieved by employees and officers thus, the Company has deferred any stock-based compensation recognition until such achievements are probable of achievement and approval by the board of directors has occurred.
| 21 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
14. Share Awards (continued)
Schedule of Restricted Shares and Restricted Share Units Non-vested
| Units | Weighted- Average Grant Date Fair Value per Unit | |||||||
| Unvested share awards at June 30, 2023 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Other | ||||||||
| Forfeitures | $ | |||||||
| Unvested awards at December 31, 2023 | $ | |||||||
As awards are granted, stock-based compensation equivalent to the fair market value on the date of grant is expensed over the requisite service period, using the graded vesting attribution method as acceptable under ASC 718, “Stock-Based Compensation.”
The Company recognized stock-based compensation expense of $ million and $ million for the periods ended December 31, 2023 and 2022, respectively. Of these amounts, $ million and $ million, respectively, were related to officers and directors of the Company.
As of December 31, 2023 and June 30, 2023, there were approximately $ million and $ million of unamortized expenses relating to outstanding share awards to be recognized over a remaining weighted-average period of years and years, respectively.
Schedule of Stock-Based Compensation Expense
| 2023 | 2022 | |||||||
| General and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Exploration | ||||||||
| Stock-based compensation expense | $ | $ | ||||||
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 are generally four-years. No granting of these awards occurs until performance thresholds are achieved. The Company has granted million and performance-based awards to officers and employees of the Company for the period ended December 31, 2023 and 2022, respectively. The Company grants awards at the time of reaching such performance targets.
| 22 |
AMERICAN BATTERY TECHNOLOGY COMPANY
Notes to the Condensed Consolidated Financial Statements
For the period ended December 31, 2023
(unaudited)
15. Supplemental Statement of Cash Flow Disclosures
For the six months ended December 31:
Schedule of Statement of Cash Flow Disclosures
| 2023 | 2022 | |||||||
| Supplemental disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Deposits capitalized as investing activities | ||||||||
16. Commitments and Contingencies
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, 2024 and the Lab leases expire on November 30, 2024. 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 11 – Leases.
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 December
31, 2023, The Company’s financial assurance obligations associated with U.S. mine closure and reclamation/restoration cost estimate
totaled $
17. Subsequent Events
Pursuant
to the Tysadco Agreement, subsequent to December 31, 2023, the Company has issued common shares for net proceeds of $
XX
| 23 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The following discussion of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Form 10-K. The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and undue reliance should not be placed on the Company’s forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements except as required by applicable securities laws.
Overview
American Battery Technology Company (the “Company”) is a new entrant in 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.
To implement this business strategy, the Company has constructed and is now operating 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.
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 grant cooperative agreement 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.
Financial Highlights:
| ● | In October 2023, the Company commenced commercial scale operations at its first integrated lithium-ion battery recycling facility near Reno, NV. Once fully ramped, this facility has the capacity to process approximately 20,000 MT/year of battery materials and to produce multiple streams of battery grade metals and other byproducts. | |
| ● | The prime agreement contract for the Company’s grant to support its $115M project for its commercial-scale lithium hydroxide refinery was issued with a project start date of September 1, 2023. The Company began receiving funds related to this award during the period ended December 31, 2023. | |
| ● | The prime agreement contract for the Company’s grant to support its $20M project for its next-generation advanced battery recycling technologies was issued with a project start date of October 1, 2023. The Company began receiving funds related to this award during the period ended December 31, 2023. | |
| ● | Government grant funding increased to $1.7 million for the six months ended December 31, 2023 compared to $0.4 million during the same period of the prior year. Out of the current period’s $1.7 million in grant funding, $0.5 million was recorded as an offset to fixed assets, as reimbursements related to equipment purchases, and $1.2 million was recorded as an offset to research and development costs within the statement of operations. | |
| ● | As of December 31, 2023, the Company had total cash on hand of $7.6 million. | |
| ● | Cash used for the acquisition of property, construction, equipment, mineral rights and water rights for the six months ended December 31, 2023 was $10.9 million. Cash used in the same period of the prior year totaled $10.2 million for water rights and equipment. | |
| ● | Cash used in operations for the six months ended December 31, 2023 was $7.4 million, which was in line with the $7.4 million use of cash during the six months ended December 31, 2022. | |
| ● | Government grant funding increased to $1.7 million for the six months ended December 31, 2023 compared to $0.4 million during the same period of the prior year. | |
| ● | On August 29, 2023, the Company entered into a Securities Purchase Agreement for up to $51.0 million of a new series of senior secured convertible notes. To date, $25.0 million of these notes have been issued, and the remaining notes may be issued to expand operations in the future. |
| 24 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Components of Statements of Operations
Operating Expenses
During the six months ended December 31, 2023, the Company incurred $14.6 million of operating expenses compared to $8.8 million during the six months ended December 31, 2022. The increase is primarily due to the items described below.
General and administrative expenses consist of stock-based compensation, office expenses, legal, recruitment, business development, public relations, and general facility expenses. For the six months ended December 31, 2023, general and administrative expenses were $7.3 million, an increase of $1.4 million over the same period in the prior year. The Company recognized a $2.3 million in non-cash stock-based compensation expense, while other general and administrative expenses decreased by $0.9 million largely due to payroll tax credits related to research & development activities.
Research and development expenses consist primarily of laboratory leases, supplies, salaries, stock-based compensation, and employee benefits. Research and development expenses for the six months ended December 31, 2023 and 2022 were $5.3 million and $2.0 million, respectively. The increase is primarily due to increased employee headcount. 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 $1.2 million and $0.4 million related to these awards for the six months ended December 31, 2023 and 2022, respectively.
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 $2.1 million for the six months ended December 31, 2023 compared to $0.9 million during the same period in the prior year. The increase year-over-year resulted principally from increased drilling, assaying and engineering costs to further define and potentially upgrade the geological classification of the mineral rights.
Other Income (Expense)
During the six months ended December 31, 2023, the Company recorded other expense of $1.9 million, including $0.1 million for interest expense and $1.8 million for amortization of debt financing costs. During the six months ended December 31, 2022, the Company recorded other income of $0.1 million largely related to the sale of mining claims it previously held in Railroad Valley, Nevada.
Net Loss
During the six months ended December 31, 2023, the Company incurred a net loss of $16.5 million or $0.35 loss per share compared to a net loss of $8.6 million, or $0.20 loss per share, during the six months ended December 31, 2022.
Liquidity and Capital Resources
At December 31, 2023, the Company had cash of $7.6 million and total assets of $88.9 million compared to cash of $2.3 million and total assets of $74.7 million at June 30, 2023. The increase in cash is due to the Company having received net proceeds of $5.3 million from Tysadco financing transactions.
The Company had total current liabilities of $22.3 million at December 31, 2023, compared to $13.4 million at June 30, 2023. The increase related to new convertible notes debt, offset by Mercuria debt fully repaid and payments on the convertible notes.
As of December 31, 2023 the Company had a working capital deficiency of $10.7 million compared to a working capital deficiency of $8.6 million at June 30, 2023. The higher level of working capital deficiency is largely attributed to the current classification of the convertible notes, as well as acquisitions of property and equipment and cash used in operating activities, partially offset by an increase in cash generated from financing activities during the six months ended December 31, 2023.
| 25 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Cash Flows
For the six months ended December 31:
| 2023 | 2022 | |||||||
| Cash used in operating activities | $ | (7,418,700 | ) | $ | (7,366,547 | ) | ||
| Cash used in investing activities | (10,868,460 | ) | (10,178,961 | ) | ||||
| Cash provided by financing activities | 23,613,794 | - | ||||||
| Net increase (decrease) in cash during the period | 5,326,635 | (17,545,508 | ) | |||||
Cash from Operating Activities.
During the six months ended December 31, 2023, the Company used $7.4 million of cash for operating activities, which was in line with the $7.4 million cash used during the six months ended December 31, 2022. The increase included cash costs for engineering, research and development as well as increased exploration expenses. Increased research and development costs were to support the development of the Company’s process for the recycling of lithium-ion batteries and for the extraction of lithium from the Company’s lithium claystone mining claims. The Company has also seen a steady increase in exploration activity expenses as it works to continue upgrading the geological category of its claims in the Tonopah, Nevada region.
Cash from Investing Activities
During the six months ended December 31, 2023, the Company used cash in investing activities of $10.9 million, consisting primarily of $10.0 million related to property and equipment for its recycling facilities. This is in comparison to cash used in investing activities of $10.2 million for the six months ended December 31, 2022, consisting primarily of $8.0 million for mineral rights.
Cash from Financing Activities
During the six months ended December 31, 2023, the Company had net cash provided by financing activities of $23.6 million. This represents the need for capital while the Company ramps up the recycling plant, develops its lithium ore pilot plant, and upgrades the geological category of its Tonopah claims through additional studies and assessments.
During the six months ended December 31, 2023, the Company issued 3,106,225 shares of common stock pursuant to purchase agreements for net proceeds of $15.8 million, of which, $1.5 million was received after December 31, 2023.
Working Capital
For the six months ended September 30:
| 2023 | 2022 | |||||||
| Current assets | $ | 11,568,258 | $ | 4,753,590 | ||||
| Current liabilities | $ | 22,295,581 | $ | 13,389,864 | ||||
| Working capital | $ | (10,727,323 | ) | $ | (8,636,274 | |||
Future Financing
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 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.
| 26 |
Critical Accounting Estimates
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.
While our significant accounting policies are more fully described in Note 2, “Summary of Significant Accounting Policies” in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the accounting policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
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 the statements of operations.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC 820, “Fair Value Measurements”, equals or approximates the carrying amounts represented in the balance sheets.
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 issuance and offering costs are amortized over the term of the convertible notes, using the effective interest method, as interest expense in the accompanying unaudited consolidated statements of operations.
Long-Lived Assets
Long-lived assets, such as property, plant and equipment, mineral properties, and purchased intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with Accounting Standards Codification (“ASC”) topic 360, Property, Plant, and Equipment. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. 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 ranging between three and thirty years.
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The recoverability of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by an asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount exceeds the estimated fair value of the asset. Any impairment in value is recognized as an expense in the period when the impairment occurs.
Expenses for major repairs and maintenance which extend the useful lives of property, plant and equipment are capitalized. All other maintenance expenses, including planned major maintenance activities, are expensed as incurred. Gains or losses from property disposals are included in income or loss from operations.
Off-Balance Sheet Arrangements
As of December 31, 2023, we had no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenses or capital resources that are material to stockholders.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2023, the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2023, the Company’s disclosure controls and procedures are not effective, based on the material weakness described below, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in its reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Material Weakness in Internal Control over Financial Reporting
We did not maintain appropriate segregation of duties related to accounting processes. This material weakness creates a reasonable possibility that a material misstatement to the financial statements will not be prevented or detected on a timely basis, and we concluded that the deficiency represents a material weakness in our internal control over financial reporting and our internal control over financial reporting was not effective as of December 31, 2023.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including the individuals serving as our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
A material weakness is a deficiency, or combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
Management assessed the effectiveness of our internal controls over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, management concluded that, as of December 31, 2023, our internal control over financial reporting was deemed not to be effective, based on the criteria therein. The material weakness presiding over our internal controls as it relates to financial reporting is described below.
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ITEM 4. CONTROLS AND PROCEDURES (CONTINUED)
Remediation Plan
During the year ended June 30, 2023, we enhanced our internal control over financial reporting and remediated material weaknesses including lack of adequate documentation evidencing operating effectiveness of internal controls and controls relating to the supervision and review of complex accounting matters. These material weaknesses were previously presented in our financial statements for the fiscal years ended June 30, 2022 and 2021.
The steps below were implemented, and as a result we have remediated the material weaknesses, aside from segregation of duties.
| ● | Successful hiring of additional personnel with the expertise necessary to improve the financial reporting function | |
| ● | Complete the implementation of a robust Enterprise Resource Planning (ERP) solution that provides the necessary segregation and approval workstreams necessary to mitigate control weaknesses in key accounting processes and procedures | |
| ● | Provide additional guidance, education and training to employees relating to our accounting procedures with a continued focus on its segregation-of-duties as the Company hires more accounting personnel | |
| ● | Further develop and document detailed accounting policies for significant accounts, accounting estimates and presentation of complex items, as is required by US GAAP | |
| ● | Establishing effective general controls over IT systems to ensure that information produced can be relied upon by process level controls | |
| ● | We have engaged a firm that specializes in Cyber and IT protection to further enhance the protection of our financial information, employee information, proprietary methods, and strategic partnerships |
We are committed to ensuring that our internal control over financial reporting is designed and operating effectively. We expect to remediate this material weakness during the period ending June 30, 2024. However, there is no guarantee that such material weaknesses will be remediated during the year, and we may discover additional material weaknesses that may require additional time and resources to remediate.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Interim Report on Form 10–Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Please refer to “Item 1. Legal Proceedings” in our 2023 Form 10-Q for the six months ended December 31, 2022, for information regarding material pending legal proceedings. In addition to those material legal proceedings, on January 21, 2024, Kimberly Eckert filed a Charge of Discrimination with the Nevada Equal Rights Commission, alleging that that the Company discriminated against her due to her sex (female) in violation of Title VII of the Civil Rights Act of 1964, as amended. There have been no additional material legal proceedings and no other material developments in the legal proceedings previously disclosed.
Other than these proceedings, to the best of our knowledge, we are not currently a party to any legal proceedings that, individually or in aggregate, are deemed to be material to our financial condition or results of operations.
ITEM 1A. RISK FACTORS
There were no material changes from the risk factors set forth under Part I, Business; Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the SEC on September 28, 2023.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not Applicable
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
The following exhibits are either provided with this Annual Report or are incorporated herein by reference:
| Exhibit | Description | Filed Herein | Incorporated Date |
By Form |
Reference Exhibit | |||||
| 31.1 | Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer | x | ||||||||
| 31.2 | Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer | x | ||||||||
| 32.1 | Section 1350 Certification of Chief Executive Officer* | |||||||||
| 32.2 | Section 1350 Certification of Chief Financial Officer* | |||||||||
| 101 | INS Inline XBRL Instant Document. | x | ||||||||
| 101 | SCH Inline XBRL Taxonomy Extension Schema Document | x | ||||||||
| 101 | CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document | x | ||||||||
| 101 | LAB Inline XRBL Taxonomy Label Linkbase Document | x | ||||||||
| 101 | PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document | x | ||||||||
| 101 | DEF Inline XBRL Taxonomy Extension Definition Linkbase Document | x | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | x |
*Furnished herewith.
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EXHIBIT 31.1
The certification required by Rule 13a–14a (17 CFR 240.13a–14(a)) or Rule 15d–14(a) (17CFR 240. 15d–14(a))
I, Ryan Melsert, certify that:
| 1. | I have reviewed this Form 10–Q of American Battery Technology Company (the “Registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
| 4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act 13a–15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f) for the Registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end to the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal period (the Registrant’s fourth fiscal period in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
| 5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: February 14, 2024 | By: | /s/ Ryan Melsert |
| Ryan Melsert | ||
| Chief Executive Officer, | ||
| Director |
EXHIBIT 31.2
The certification required by Rule 13a–14a (17 CFR 240.13a–14(a)) or Rule 15d–14(a) (17CFR 240. 15d–14(a))
I, Jesse Deutsch, certify that:
| 1. | I have reviewed this Form 10–Q of American Battery Technology Company (the “Registrant”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
| 4. | The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act 13a–15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f) for the Registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financing reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end to the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal period (the Registrant’s fourth fiscal period in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
| 5. | The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
| Date: February 14, 2024 | By: | /s/ Jesse Deutsch |
| Jesse Deutsch | ||
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002
In connection with the Quarterly Report (the “Report”) on Form 10–Q of American Battery Technology Company. (the “Company”) for the period ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, Ryan Melsert, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, that, to the best of my knowledge and belief:
| 1. | The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934, as amended; and |
| 2. | The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: February 14, 2024 | By: | /s/ Ryan Melsert |
| Ryan Melsert | ||
| Chief Executive Officer, | ||
| Director |
EXHIBIT 32.2
CERTIFICATE PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002
In connection with the Quarterly Report (the “Report”) on Form 10–Q of American Battery Technology Company. (the “Company”) for the period ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, Jesse Deutsch, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, that, to the best of my knowledge and belief:
| 1. | The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934, as amended; and |
| 2. | The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: February 14, 2024 | By: | /s/ Jesse Deutsch |
| Jesse Deutsch | ||
| Chief Financial Officer |