American Battery Materials, Inc S-1/A, filed Mar 27, 2026
American Battery Materials, Inc. (BLTH)
As filed with the Securities and Exchange Commission on March 26, 2026
Registration No. 333-277021
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
TO
FORM
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction
of incorporation or organization) |
(Primary Standard Industrial Classification Code No.) |
(IRS Employer Identification No.) |
American Battery Materials Inc.
(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)
Chief Executive Officer
American Battery Materials Inc.
(Name, address, including zip code and telephone number, including area code, of agent for service)
Copies to:
Spencer G. Feldman, Esq. Olshan Frome Wolosky LLP 1325 Avenue of the Americas, 15th Floor New York, New York 10019 (212) 451-2300 |
Anthony J. Marsico, Esq. Reed Smith LLP 599 Lexington Avenue New York, New York 10022 (212) 521-5400 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
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 period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the Registration Statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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PRELIMINARY PROSPECTUS |
SUBJECT TO COMPLETION | DATED MARCH 26, 2026 |
2,004,009 Shares Common Stock
American Battery Materials Inc.
This is a public offering of common stock of American Battery Materials Inc. We are offering 2,004,009 shares of common stock. We have assumed a public offering price of $4.99 per share of common stock. The actual public offering price per share of common stock will not be determined by any particular formula but will rather be determined through negotiations between us and the underwriters at the time of pricing. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final offering price.
Our shares are quoted on the OTC Market Group’s Pink (Current Information) Open Market under the symbol “BLTH.” On March 23, 2026, our common stock closed at $4.99 per share. We have applied to list our common stock for trading on the NYSE American and expect such listing to occur concurrently with this offering. No assurance can be given that our application will be approved. A NYSE American listing is a condition to completing this offering.
Investing in our common stock involves a high degree of risk. See the section titled “Risk Factors” beginning on page 14 of this prospectus to read about factors you should consider before purchasing shares of our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| Per Share | Total | |||||||
| Public offering price | $ | $ | ||||||
| Underwriting discounts and commissions (1) | $ | $ | ||||||
| Proceeds to us, before expenses | $ | $ | ||||||
| (1) | Underwriting discounts and commissions do not include a non-accountable expense allowance equal to 1.0% of the public offering price payable to the underwriters. We refer you to “Underwriting” beginning on page 54 for additional information regarding underwriters’ compensation. |
We have granted a 45-day option to the representative of the underwriters to purchase up to 300,602 additional shares of our common stock, solely to cover over-allotments, if any, at the public offering price less underwriting discounts and commissions.
The underwriters expect to deliver the shares of our common stock to purchasers on or about , 2026.
ThinkEquity
The date of this prospectus is , 2026
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American battery materials INC.
Table of Contents
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About this Prospectus
Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the securities offered hereby and only under circumstances and in jurisdictions where it is lawful to do so. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
We are not and the underwriters are not, offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted. We and the underwriters have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to, the offering of the securities as to distribution of the prospectus outside of the United States.
The industry and market data and certain other statistical information used throughout this prospectus are from our own research, surveys or studies conducted by third parties and industry or general publications. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We are responsible for all of the disclosures contained in this prospectus and we believe that these sources are reliable; however, we have not independently verified the information contained in such publications. While we are not aware of any misstatements regarding any third-party information presented in this prospectus, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section entitled “Risk Factors” and elsewhere in this prospectus. Some data are also based on our good faith estimates.
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PROSPECTUS SUMMARY
This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is incomplete and does not contain all the information you should consider in making your investment decision. You should read the entire prospectus carefully before investing in our common stock. You should carefully consider, among other things, our financial statements and the related notes and the sections entitled “Risk Factors,” “Summary Consolidated Financial Information,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. Unless otherwise indicated or the context otherwise requires, the terms “we,” “us,” “our,” and “our company” refer to American Battery Materials Inc., a Delaware corporation.
Our Company
We operate as a U.S. based renewable energy company focused on the extraction, refinement and distribution of technical minerals in an environmentally responsible manner. In November 2021, we found ourselves with the unique opportunity to acquire federal mining claims that historically reported high levels of lithium, magnesium and other technical minerals crucial to produce batteries used in many technology products and markets. Subsequent to acquiring such mining claims, we hired industry veterans that bring us decades of experience, credibility and relationships. We intend to implement emerging direct lithium extraction (“DLE”) technologies to extract lithium and magnesium from the production of subsurface brines.
We own mineral rights on a total of 743 placer claims covering 14,320 acres (approximately 22 square miles), located in the Lisbon Valley of Utah. All claims are registered with the U.S. Department of the Interior Bureau of Land Management (“BLM”) and are in good standing. The property and acreage position includes nine previously drilled wells (plugged and abandoned) that could be re-entered to test the prospective brine-bearing strata within the Paradox Formation beneath the claims position. We are defined as an exploration stage issuer under Regulation S-K Subpart 1300 (“Regulation S-K Subpart 1300”) of the U.S. Securities and Exchange Commission (the “SEC”). An independent third-party technical report indicated that further investment and development in the claims was warranted, given the abundant evidence from oil, gas and potash wells drilled in the Paradox Basin that indicates that there is a high probability of identifying and producing super saturated brines from beneath the property position. The 1978 USGS Open File Report (Hite), which documented a brine sample from the Fed 88-21P potash well (located within the current Lisbon Valley Lithium Project area) containing 340 ppm lithium and an exceptional 74,400 ppm magnesium. However, no determination has been made whether we have any reserves of minerals or whether mineralization could be economically and legally produced or extracted yet. We have no mineral reserves as defined by Regulation S-K Subpart 1300 and have had no mining revenue to date.
Our Growth Strategy
Our strategic goal is to become a producer of lithium and magnesium in the United States. Currently, the U.S. has no domestic primary magnesium production since the last facility idled in 2020 amid high energy costs, stringent regulations, and competition from low-cost Chinese import, leaving the nation 100% import-dependent for primary magnesium metal. We are one of only three major domestic efforts underway to restart primary production: alongside startups like Magrathea Metals (developing seawater electrolysis tech with DoD backing) and Tidal Metals (pioneering zero-carbon electrical extraction from seawater brines), Our company is positioned to help rebuild a secure, sustainable U.S. supply chain for this critical mineral essential to defense, automotive lightweighting, and clean energy technologies.
We believe that a strategy centered on advanced brine extraction technologies, specifically Direct Lithium Extraction (DLE), a process that pumps lithium-rich brine to the surface and selectively extracts lithium on-site using sorbents, ion exchange, or membranes before reinjecting the lithium-depleted brine back into the subsurface, represents the most cost-effective, environmentally responsible, and capital-efficient pathway currently available for domestic lithium and magnesium production compared to traditional hard-rock mining or conventional solar evaporation. DLE enables accelerated production timelines (months rather than years), lithium recovery rates exceeding 90%, markedly lower water consumption, a minimal surface footprint, and the ability to co-produce high-value magnesium while reinjecting spent brine into the formation to maintain reservoir pressure and eliminate tailings entirely. By avoiding surface disturbance and permanent land deconstruction, this closed-loop approach aligns fully with our sustainability and ESG objectives. We intend to develop our projects on a measured timeline that balances near-term cash flow generation with long-term value maximization, delivering secure, low-carbon domestic supply of these critical minerals in a manner that is both economically superior and environmentally responsible.
We have been executing the necessary steps to determine analytical results for our technical report, which should provide current results, analytical, geotechnical modeling, aquifer modeling, recharge, flows and depth. We have engaged RESPEC Company LLC (“RESPEC”) as our geotechnical, engineering and resource management firm to assist in the exploration of the Lisbon Valley brine extraction project (the “Lisbon Valley Project”). Leveraging the expertise of both our management team and RESPEC, our plan is to focus on several initiatives, including:
| ● | advancement of geotechnical, engineering, geology and fieldwork to complete technical reports on the Lisbon Valley Project; |
| ● | understanding Lisbon Valley brines, on and around our owned leases; |
| ● | develop a well plan to re-enter, sample and test the Superior 88-21 Peterson Federal ST1 well, a potash well that has a historical lithium concentration of 340 ppm (parts per million) and 74,400 ppm of magnesium; |
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| ● | enter other prospective plugged and abandoned wells, taking brine samples and performing hydrological testing at each identified high potential zone to evaluate the properties of the clastic formation; |
| ● | as information collection and analysis advances, prepare technical reports following the Regulation S-K Subpart 1300’s standards of disclosure for mineral projects, including an initial assessment, preliminary feasibility study and feasibility study; |
| ● | not only test the collected brines for lithium and magnesium, but also for previously identified high value elements such as cobalt, manganese, suites of metals in the alkaline earth metals, transition metals and halogens group; and |
| ● | based on the results of the Superior 88-21 Peterson Federal ST1 well, develop area resource estimates. |
The Lisbon Valley of Utah provides a number of collaborative benefits to attain these initiatives, including:
| ● | an area historically rich with industrial and natural resource extraction; |
| ● | a developed infrastructure including access to high voltage electrical power as well as proximity to major roadways and rail spurs; and |
| ● | state and local agency support from the Utah Division of Oil, Gas and Mining (“UDOGM”) and the Trust Land Administration (“SITLA”). |
In order to achieve our current objectives at the Lisbon Valley Project, our estimated pre-production phase timelines and significant milestones include (i) the processing and approval by the BLM of our exploration permits to drill that was completed within the fourth quarter of 2024, (ii) the commencement of drilling exploration wells in the second quarter of 2026, (iii) the preparation of our Regulation S-K Subpart 1300 technical report on our exploration results in the third quarter of 2026, (iv) the selection of a DLE technology provider in the third quarter of 2026, (v) the development and building of a pilot lithium and magnesium extraction plant in the second half of 2026, and (vi) the commencement of drilling production wells by the first half of 2027. Our production phase, which primarily includes the building of a permanent lithium and magnesium extraction plant, is estimated to begin in 2028.
As part of our strategy for growth, our Lisbon Valley Project and other projects and strategic investments will be developed on measured timelines, and we will evaluate opportunities to further expand our resource base and production capacity. We understand that our estimated timelines and milestones are subject to a variety of operating, financial and regulatory risks and delays, including, without limitation, obtaining operating permits, government approvals and adequate funding. We are also focused on the implementation of DLE technologies, which we believe may have the potential to significantly increase the supply of lithium and magnesium from brine as other technologies have increased the supply of oil from shale.
We will also look to expand our holdings in the Lisbon Valley area with the acquisition of additional mineral claims and joint venture opportunities. We continue to explore and evaluate opportunities to further expand our resource base and production capacity through the possible acquisition of properties and projects in other areas of the United States and in South America.
To achieve our goal of becoming a producer of lithium and magnesium, we will rely on our competitive strengths and experienced management team to explore and consider opportunities to generate revenue and increase our projects, properties and assets, as well as explore potential funding options. Some opportunities for growth may be in the form of (i) strategic partnerships, (ii) off-take agreements, (iii) diversification of projects and properties, (iv) acquisitions of companies and technologies and (v) participation in related commercial development activities.
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Our Market Opportunity
Our Lisbon Valley Project is located in San Juan County, Utah, approximately 35 miles southeast of the city of Moab and part of the Paradox Basin geological formation. The Lisbon Valley Project consists of 743 placer mining claims staked on U.S. government land administered by the BLM covering 14,320 acres, part of a semi-contiguous group named the LVL Group. The map below shows the location of our Lisbon Valley Project, including the Superior 88-21 Peterson Federal ST1 well, and the approximate location of our claims.
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The original 102 placer claims that we acquired were staked by Plateau Ventures LLC and have been assigned to our wholly owned subsidiary, Mountain Sage Minerals, LLC. Our additional 641 placer claims are also registered in the name of Mountain Sage Minerals, LLC. All such claims have been registered and are currently in good standing with the BLM. All 743 claims have been staked, recorded and are in good standing with BLM until this year’s maintenance fee renewal on September 1, 2026. No other mineral, land or water rights have been applied, granted or permitted to or by Mountain Sage Minerals, LLC, on such properties. The diagram below is an overview of our claims which comprise our Lisbon Valley Project.
The maps above are referenced with Public Land Survey System (“PLSS”) and a latitude/longitude reference coordinate, accurate to 50 feet.
Our placer claims are plotted on the figures above, which is a PLSS map using Salt Lake City Prime Meridian. The claims are located in Southeast Utah in sections 17-18, 20-22, 25-29, 33-35 of Township 30 South and Range 25 East; sections 1, 3, 4, 8-15 of Township 31 South and Range 25 East; sections 31 of Township 30 South and Range 26 East and sections 5-9, 17 and 18 of Township 31 South and Range 26 East. The latitude and longitude of the southeast corner of Section 36, Township 30 South, 25 East noted on the figure is accurate to +/- 50 feet.
Oil and gas drilling and production, along with ranching, have made the area relatively accessible. There is a network of dirt and paved roads within the claims area, which service the oil and gas wells and the Lisbon Valley copper mine. The Lisbon Valley copper mine is in the heart of the Lisbon Valley and is currently producing copper cathode. Two existing natural gas pipelines traverse the claims. High voltage electrical power is supplied to the Lisbon Valley copper mine, also within the claim area, for use in the electrowinning copper recovery process. Nine wellbores (eight oil and gas and one potash) are available for re-entry and nearby water rights and private land are available for sale or lease.
The region has a history of mining, primarily uranium and vanadium, that dates back as far as 1881. Moab, Utah, the nearest population center to the property, is a city of 5,336 persons (2020 Census). It is located in a relatively remote portion of Utah but is easily accessed by U.S. Highway 191. Highway 191 intersects with Interstate 70 about 30 miles (48 kilometers) north of Moab, at Crescent Junction. Moab is a tourist destination and has numerous motels and restaurants. Moab is the nearest source of labor.
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There has been no exploration or drilling conducted on the property by ABM; however, historical drilling by oil, gas, and potash operators on ABM claims, as well as in the surrounding area, has contributed valuable data registered with the United States Geological Survey (USGS). It will be necessary for us to re-enter an existing well or drill a new well to obtain brine samples for further analysis and metallurgical testing. The exploration permit for the site has been obtained from both the Federal BLM and the State UDOGM. ABM is currently preparing for the operational drilling phase of the project subject to obtaining financing.
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The Lithium and Magnesium Market
Lithium and magnesium are on the list of the 35 minerals considered critical to the economic and national security of the United States, as first published by the U.S. Department of the Interior on May 18, 2018.
On March 20, 2025, President Donald J. Trump signed an Executive Order aimed at increasing American mineral production to enhance national security, reduce reliance on foreign minerals, and create jobs. The order directs federal agencies to expedite permitting for mineral projects, prioritize critical mineral deposits on federal lands, and utilize the Defense Production Act to expand domestic capacity. The Executive also establishes a critical minerals fund and encourages collaboration with private industry to secure a resilient supply chain for materials like rare earths, uranium, copper, and coal. Highlighting the strategic importance of critical minerals for emerging technologies and military readiness, the administration seeks to address the U.S.’s significant import dependence—particularly on China, which supplies 70% of rare earths— and signal a clear shift in focus toward U.S.-centric projects and national security. In an article from April 4, 2024, titled “US lithium demand predicted to grow nearly 500% by 2030”, Fastmarkets forecasts a significant growth in demand for lithium in the US of 487% to almost 412,000 tonnes of lithium carbonate equivalent by 2030.
In August 16, 2022, Section 45X Advanced Manufacturing Production Tax Credit (AMPTC) was enacted as part of the Inflation Reduction Act. For critical minerals listed under Section 45X(c)(6) (explicitly including lithium and magnesium) the credit delivers a 10% cash tax credit (or direct-pay equivalent for certain entities) on the taxpayer’s eligible costs of production. IRS final regulations issued October 28, 2024 clarified that the cost basis can include U.S.-based extraction costs and both direct and indirect material costs (even if sourced internationally), provided proper supplier certifications are obtained to prevent double-claiming. On July 4, 2025, President Trump signed H.R.1, the One Big Beautiful Bill Act (OBBBA), into law, introducing revisions to the Section 45X Advanced Manufacturing Production Tax Credit for critical minerals. The OBBBA eliminates this exemption, imposing a phasedown to 75% (7.5%) in 2031, 50% (5%) in 2032, and 25% (2.5%) in 2033 before full termination on December 31, 2033, limiting full access to pre-2032 operational projects.
In June 2021, the U.S. Department of Energy published a report titled “National Blueprint for Lithium Batteries 2021-2030” (the “NBLB Report”) which was developed by the Federal Consortium for Advanced Batteries (“FCAB”), a collaboration by the U.S. Departments of Energy, Defense, Commerce, and State. According to the Report, one of the main goals of this U.S. government effort is to “secure U.S. access to raw materials for lithium batteries”. The NBLB Report summarizes the U.S. government’s views on the need for lithium and the expected growth of the lithium battery market as follows:
● “A robust, secure, domestic industrial base for lithium-based batteries requires access to a reliable supply of raw, refined, and processed material inputs…”; and
● “The worldwide lithium battery market is expected to grow by a factor of 5 to 10 in the next decade.”
The magnesium market presents significant growth opportunities across multiple high-demand sectors. In the automotive industry, magnesium’s lightweight properties are essential for meeting stringent weight performance metrics in cars and trucks, enhancing fuel efficiency and performance. Similarly, in aerospace, magnesium’s exceptional strength-to-weight ratio, corrosion resistance, and efficient heat dissipation make it indispensable for cutting-edge applications. Furthermore, magnesium’s designation as a critical mineral by the U.S. Geological Survey (2022) qualifies it for Defense Production Act Title III support, bolstering domestic supply chains and reinforcing its strategic importance. The U.S. budget reconciliation bill’s allocation of $20 billion to domestic munitions production underscores the need for reliable magnesium supplies, critical for advanced weaponry. The U.S. now relies entirely on magnesium imports and recycling to meet domestic demand. Global primary magnesium production in 2023 was estimated at 940,000 metric tons, with China dominating at nearly 90% of the supply. The last remaining primary facility, US Magnesium LLC’s electrolytic plant in Rowley, Utah (which drew magnesium chloride brine from the Great Salt Lake) effectively ceased primary magnesium output in late 2019/early 2020 and has remained idled ever since.
The growth in electric vehicles (“EVs”) will provide the greatest needs for lithium-based batteries. The BloombergNEF Electric Vehicle Outlook 2024 presents an optimistic view of EV demand and sales growth, albeit not at the accelerated pace witnessed during 2020-2024. According to that report, global passenger EV sales are projected to climb from 13.9 million in 2023 to over 30 million by 2027, with the EV share of new vehicle sales reaching 33%, driven by declining battery costs—down 90% over the past decade—and innovative models from automakers. Meanwhile, the report notes that the commercial sector is accelerating, with electric vans and buses poised for significant gains; sales of electric light-duty delivery vans and trucks are spreading rapidly in China, South Korea, and Europe, approaching one-third of sales by 2030, while municipal buses are expected to exceed 60% of sales by the same year.
The U.S. EV market is showing promising growth, with Kelley Blue Book reporting in an article from January 14, 2025, titled “America Set EV Sales Record in 2024” that 1.3 million EVs were sold in 2024—a 7.3% rise from 2023—bolstered by a strong fourth quarter where sales grew over 15% compared to the previous year. Cox Automotive’s 2025 outlook offers a positive forecast, predicting EVs and hybrids will account for 25% of U.S. car sales, with full EVs expected to reach 10%, up from 7.5% last year, suggesting steady progress in electrification. Despite uncertainties around tariffs and potential changes to federal clean vehicle credits, EV adoption continues to climb—Rho Motion, in a press release from March 12, 2025 titled “Global EV Sales Up 50% in February 2025”, notes an encouraging 28% increase in sales for fully electric and plug-in hybrid models in the first two months of 2025 in the U.S. and forecast a 16% growth in U.S. and Canada in 2025 versus 2024, reflecting a resilient and growing interest in EVs among American buyers.
The Canaccord Genuity report from March 20, 2025, highlights that while EV sales are expected to grow at a slower pace —with a revised forecast showing more modest 10% CAGR to 2035, down from a 40% CAGR between 2020 and 2024—the burgeoning Battery Energy Storage Systems (BESS) market will help offset this decline. BESS installations have surged at a 150% CAGR since 2020, reaching 166 GWh in 2024, and are projected to grow to 2,100 GWh by 2035 at a 20% CAGR. This growth is driven not only by traditional grid and behind-the-meter applications but also by increasing integration with renewable energy sources for data centers, which are expected to account for 5% of global electricity demand by 2035 (up from 3%). This expansion in BESS capacity provides a robust counterbalance to the tempered EV market, supporting continued demand for battery materials despite the EV slowdown.
Despite current oversupply and low prices in battery raw material markets, in an article from January 7, 2025, titled “Battery minerals deficits continue to be expected within a decade”, Benchmark Minerals forecasts significant deficits within a decade, with lithium and nickel facing shortfalls of 572,000 tonnes and 839,000 tonnes by 2034—seven times larger than today’s surpluses. To meet 2030 battery demand, $514 billion in investment is needed, including $220 billion for upstream projects, with nickel ($66 billion) and lithium ($51 billion) requiring the most. Lithium is seen as the primary bottleneck, needing mined supply to jump from over 1 million tonnes in 2024 to 2.7 million tonnes by 2030, driven largely by EVs. Western efforts to reduce reliance on China, where costs are lower due to lax regulations, may increase this investment figure, while the slow pace of mine development (5-25 years) versus faster midstream/downstream projects (under 5 years) highlights a critical disconnect, underscoring the urgent need for upstream investment to support gigafactories and future EV growth.
While these figures are robust relative to historical data, there can be no guarantee that ultimate consumer adoption for EVs and plug-in-hybrid vehicles will drive lithium demand as predicted.
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Lithium and Magnesium Brine Deposits and Direct Lithium Extraction
Lithium and magnesium are mined from three different deposit types: brine deposits, pegmatite deposits (also referred to as “hard rock”) and sedimentary deposits (also referred to as clay deposits). Brine deposits are the most common, accounting for more than half of the world’s known lithium reserves and often contain magnesium as a significant co-occurring element. The economic focus in pegmatite and sedimentary deposits typically remains on lithium or other primary minerals. All of our current projects focus on brine deposits, where both lithium and magnesium are present, with magnesium often considered a key co-product or impurity. In 2023, Fastmarkets projected that by 2030, 13% of global lithium production will come from DLE, with Chile and Argentina currently leading in brine-based lithium production.
We intend to recover lithium, magnesium and other potential minerals from brine through DLE rather than evaporation ponds. We believe the DLE method has been gaining favor in the lithium industry over the last several years because it does not involve the use of evaporation ponds. DLE is more acceptable from an environmental standpoint because it requires a much smaller footprint and minimal water consumption. To date, we have not done any testing for the possibility of using DLE and will not be able to do any testing until samples of brine are acquired from the target formations. See “Risk Factors – Our success as a company producing lithium, magnesium and related products depends to a great extent on our research and development capabilities for direct lithium extraction and our ability to secure capital for the implementation of brine processing plants.”
Direct extraction technologies isolate lithium and magnesium out of brine using filters, membranes, ceramic beads or other equipment, which is often housed in a small warehouse, significantly shrinking the environmental footprint of evaporation ponds used to produce commercial quantities of lithium and magnesium. In DLE, subsurface lithium and magnesium from brine is pumped to a processing unit where an adsorption, resin or membrane material is used to extract only the lithium and magnesium from the brine, while spent brine can be reinjected into the basin aquifers. The extracted solution is then polished of impurities to yield battery-grade lithium or magnesium chloride product suitable for sale in the global market for batteries and other applications. The more rapid production timeframe and possible brine reinjection into the aquifer is a key environmental differentiator between the DLE process and traditional lithium process that uses evaporation ponds.
Removing magnesium from brines prior to the DLE process significantly enhances its efficiency by addressing the challenges posed by high Mg/Li ratios, which often exceed 40:1 in natural brines. Implementing a dedicated magnesium extraction (DME) package before DLE reduces this ratio, enabling higher lithium selectivity and recovery rates by minimizing magnesium’s interference with sorbents or extractants. This pretreatment also prolongs the lifespan of adsorbents by preventing magnesium-induced fouling or scaling, which can degrade equipment performance and increase maintenance costs. By reducing these operational costs through lower maintenance and reagent consumption, magnesium stripping further optimizes the process. Additionally, if pH adjustments are required during DLE, removing magnesium first allows the resulting solid waste to be repurposed as magnesia salt, creating a value-added byproduct stream that enhances the process’s economic viability. By streamlining lithium extraction and mitigating operational issues, magnesium stripping optimizes DLE efficiency and supports sustainable, cost-effective lithium production.
There are several technologies to extract lithium and magnesium, broadly grouped into four main categories: adsorption, ion exchange, solvent extraction and chemical precipitation:
| ● | Adsorption physically absorbs lithium chloride (“LiCl”) or magnesium chloride (“MgCl2”) molecules onto the surface of a sorbent from a loaded solution, with the lithium and magnesium then stripped from the surface of the sorbent using water. |
| ● | Ion exchange takes lithium or magnesium ions from the solution and replaces them with a different positively charged cation that is contained in the sorbent material. An acidic (or basic) solution is required to strip the lithium and magnesium from the material and regenerate the sorbent material. |
| ● | Solvent extraction removes lithium and magnesium ions from solution by contacting the solution with an immiscible fluid (i.e., oil or kerosene) that contains an extractant that attaches to lithium and magnesium ions and brings them into the immiscible fluid, with the lithium and magnesium then stripped from the fluid with water or chemical treatment. This is the most effective direct extraction technology for magnesium and reduces the Mg/Li ratio in the brine, facilitating easier lithium extraction. | |
| ● | Chemical precipitation is a physical-chemical process that uses a water-soluble salt that reacts with dissolved Li or Mg ions generating an insoluble salt that is removed from solution by filtration. This typically occurs in the pH adjustment of brines or for the isolation of magnesium from seawater and brine. |
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Our identification as an “environmentally minded” business is evidenced by our commitment to deploy DLE rather than the typical extraction techniques of hard-rock mining or underground brine water. Unlike those traditional methods for producing lithium and magnesium, DLE uses filters, membranes or resin materials to extract the mineral from brine water, resulting in:
| ● | usage of less water; |
| ● | recycling of the majority of the brine water used; |
| ● | consumption of less fossil fuels; |
| ● | reduction in the need for additional processing and alternative mining sources; and |
| ● | leaving an anticipated smaller physical and environmental footprints than would be required for the use of evaporation ponds. |
Traditionally, lithium and magnesium produced from brine water is stored in evaporation ponds. As the water evaporates, the other elements of the brine such as magnesium or calcium precipitate out, leaving the brine more concentrated to produce lithium carbonate or magnesium chloride. The evaporation process can take from 9 to 18 months depending on the type of project and weather conditions. With DLE, that process can be shortened to days or even hours. DLE also reduces the amount of land required for the pond evaporation process, while the potential to reinject the remaining brine water after the process further reduces the environmental impact.
The BLM Permit Process
We filed our initial applications in August 2023 with the UDOGM and the BLM. We received UDOGM approval in April 2024 and BLM final approval in November 2024, conditional on the payment of the surety bond. The federal authorization pathway for activities on BLM-managed lands consists of two interconnected processes: (1) the Plan of Operations (POO) review and (2) the National Environmental Policy Act (NEPA) analysis. These processes run concurrently in several areas and together determine the overall permitting timeline.
The POO process begins with project identification, refinement of technical details, and the completion of required civil, cultural, biological, and environmental surveys. Survey results form the baseline information for agency review. After survey work is complete, the initial POO is submitted to the BLM, followed by onsite evaluations and revisions. Bonding and reclamation documentation proceed in parallel. Once all required updates and bonding materials are submitted, the BLM completes its application and bond review before issuing a final approval.
The NEPA process begins with BLM’s Notice of Intent and public scoping. Kickoff meetings with the BLM interdisciplinary team and cooperating agencies establish issues to be analyzed, define alternatives, and outline analytical requirements. Draft environmental documents are prepared and reviewed, followed by a 45 to 60-day public comment period. Comments are addressed, the analysis is updated, and BLM prepares the final environmental documentation, typically including a Finding of No Significant Impact (FONSI) and a Decision Record. A 30-day appeal period may follow, depending on the determination.
The combined timeline for the POO and NEPA processes typically ranges from approximately 6 to 8 months. This includes survey execution, onsite reviews, POO revisions, bonding, NEPA scoping, environmental analysis, the public comment period, and final agency review. Actual durations depend on data readiness, complexity of alternatives, and scheduling coordination across required steps.
There has been no exploration or drilling conducted on the property by ABM; however, historical drilling by oil, gas and potash operators on ABM claims, as well as in the surrounding area, has contributed valuable data registered with the USGS. It will be necessary for us to re-enter an existing well or drill a new well to obtain brine samples for further analysis and metallurgical testing. The exploration permit for the site has been obtained from both the Federal BLM and the State UDOGM. ABM is currently preparing for the operational drilling phase of the project subject to obtaining financing.
We believe there is evidence from oil, gas and potash wells drilled in the Paradox Basin indicating a high probability of identifying and producing super saturated brines from beneath the Project. The geology of the area of the Project and of the Paradox Basin as a whole is complex, although zones have been targeted and proven, and they are mappable within and beyond the claims area. It is not likely that the same zones vary significantly in terms of reservoir quality and thickness as evidenced by log analysis; however, these parameters have not been confirmed by actual testing by us.
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We have not calculated mineral and resource estimation and have no revenue being generated from the subject property. The only way to determine if the lithium and magnesium enriched brines exist and can be economically produced from the target zones is to drill exploration wells to produce and test brine from the targeted zones. We, through our wholly owned operating company Mountain Sage Minerals, LLC, intend to drill two appraisal wells on the subject property to evaluate reservoir properties (porosity, permeability and pressure), flow rates and in situ mineral concentrations. Information from the two wells will be used to assess the resource potential and devise a detailed development plan. The subsurface data collected from the two wells will be used to refine our proprietary subsurface model. The development model will include a proprietary 3D seismic survey to refine the subsurface model and delineate reservoir(s) continuity below the subject property and allow the team to select optimal spacing of future well locations and the network of production and injection wells required to fully develop potential mineral (brine) resources. Based on the studies, referenced in our technical report, regarding brine analysis within the Paradox Basin, we believe there is a high probability that lithium and magnesium mineralization in brines occurs beneath the Project. This confidence is anchored by the 1978 USGS Open File Report (Hite), which documented a brine sample from the Fed 88-21P potash well—located within the current Lisbon Valley Lithium Project area—containing 340 ppm lithium and an exceptional 74,400 ppm (7.44 %) magnesium. These grades are among the strongest ever recorded in U.S. brines, with lithium comparable to operating benchmarks and magnesium significantly richer than Great Salt Lake or Dead Sea feedstocks.
We have retained a third-party consulting firm to assist with drilling, completion and review of test results for the two appraisal wells. Any extracted brines should be tested to determine lithium, magnesium and other important mineral concentrations and to prove the economic viability of a pilot and permanent production program. We have identified an appraisal and development program that is proprietary. This information will be disclosed in an advanced technical report after the appraisal wells are drilled and individual zones are identified and fully evaluated. Cost estimates and authority for expenditures for both well tests and the 3D Survey are currently in process.
The Technical Report Summary on the Lisbon Valley Project prepared by Bradley C. Peek, MSc. of CPG Peek Consulting, Inc., in accordance with Regulation S-K Subpart 1300, is included as an exhibit to this registration statement of which this prospectus forms a part. The effective date of the report is October 31, 2023.
Selected Risks Associated with Our Business
An investment in our common stock involves a high degree of risk. Our ability to execute on our growth strategies is also subject to certain risks. The risks described under the heading “Risk Factors” immediately following this prospectus summary may have an adverse effect on our business, cash flows, financial condition and results of operations or may cause us to be unable to execute all or part of these strategies successfully. Below are the principal factors that make an investment in our company speculative or risky:
| ● | Our future performance is difficult to evaluate because we have a limited operating history in the lithium and magnesium industry. |
| ● | We have a history of losses and expect to continue to incur losses in the future. |
| ● | There is substantial doubt about our ability to continue as a going concern. |
| ● | We are an exploration stage issuer and there is no guarantee that our development will result in the commercial extraction of mineral deposits. |
| ● | We face numerous risks related to exploration, construction and extraction of mineral deposits. |
| ● | The mineral and chemical processing industry is intensely competitive. |
| ● | Our long-term success will depend ultimately on our ability to generate revenues, achieve and maintain profitability and develop positive cash flows from our lithium activities. |
| ● | Our growth strategy depends on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial markets may limit our ability to meet our liquidity needs and long-term commitments, fund our ongoing operations, execute our business plan or pursue investments that we may rely on for future growth. |
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| ● | We are dependent upon key management employees, whose loss may have an adverse effect on our performance. |
| ● | Our ability to manage growth will have an impact on our business, financial condition and results of operations. |
| ● | Lawsuits may be filed against us and an adverse ruling in any such lawsuit may adversely affect our business, financial condition or liquidity or the market price of our common stock. |
| ● | Our success as a company producing lithium, magnesium and related products depends to a large extent on our research and development capabilities for direct lithium extraction and our ability to secure capital for the implementation of brine processing plants. |
| ● | The development of non-lithium battery technologies could adversely affect our company. |
| ● | Our business is subject to cybersecurity risks. |
| ● | We will be required to obtain governmental permits and approvals in order to conduct development and extraction operations, a process that is often costly and time-consuming. There is no certainty that all necessary permits and approvals for our planned operations will be granted. |
| ● | Our operations face substantial regulation governing worker health and safety. |
| ● | Compliance with environmental regulations and litigation based on environmental regulations could require significant expenditures. |
| ● | Lithium and magnesium prices are subject to unpredictable fluctuations. |
| ● | Changes in technology or other developments could adversely affect demand for lithium and magnesium compounds or result in preferences for substitute products. | |
| ● | An active trading market for our common stock may not develop and you may be unable to resell your shares at or above the public offering price. | |
| ● | Our officers and directors have significant voting power and may take actions that may not be in the best interests of other stockholders. | |
| ● | Future sales and issuances of our common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall. |
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Corporate and Background Information
We are a Delaware corporation. Our corporate office is located at 500 West Putnam Avenue, Suite 400, Greenwich, Connecticut 06830. Our telephone number is (800) 998-7962. We maintain one active website, www.americanbatterymaterials.com, which serves as our corporate website and contains information about our company and business.
We were originally incorporated in the State of Delaware on March 26, 2007 under the name Internet Media Services, Inc. On April 9, 2010, we filed a Form S-1 registration statement with the SEC in order to become an SEC reporting company. On January 7, 2014, we entered into an Exchange of Securities Agreement with U-Vend Canada, Inc., under which we acquired all outstanding shares of U-Vend in exchange for shares of our common stock. While the transaction did not result in a change of control of our company, it did result in a new line of business for us. On April 15, 2014, we filed a certificate of amendment to change the name of our company to U-Vend Inc. On February 26, 2018, we filed a Certificate of Amendment to change the name of our company to BoxScore Brands, Inc. On October 20, 2022, we filed an amendment to our certificate of incorporation to, among other things, change the name of our company from BoxScore Brands, Inc. to American Battery Materials Inc. The name change was processed by FINRA and became effective as of May 1, 2023.
Channels for Disclosure of Information
Investors and others should note that we use social media to communicate about our company, our recent business developments and other matters with the public. Any information we consider to be material to an evaluation of our company will be included in filings on the SEC website, http://www.sec.gov and may also be disseminated using our investor relations website, which can be found at http://www.americanbatterymaterials.com and press releases. However, we encourage investors, the media and others interested in our company also to review our social media channels.
The information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
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Summary of the Offering
| Common stock offered | 2,004,009 shares (2,304,611 shares if the underwriters exercise their option to purchase additional shares in full). | |
| Common stock to be outstanding immediately after this offering and note conversion | 9,004,597 shares (9,305,199 shares if the underwriters’ option to purchase additional shares is exercised in full).(1) | |
| Underwriters’ option to purchase additional shares | We have granted a 45-day option to the underwriters to purchase up to an aggregate of 300,602 additional shares of common stock from us at the assumed public offering price, less underwriting discounts, on the same terms as set forth in this prospectus. | |
| Use of proceeds | We estimate that our net proceeds from the sale of shares of our common stock in this offering will be approximately $8,735,004, or $10,092,508 if the underwriters’ option to purchase additional shares is exercised in full, based on the assumed public offering price of $4.99 per share and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
We intend to use a significant portion of the net proceeds from this offering to fund the development and operation of our Lisbon Valley Project, including the pre-production drilling, permitting and geological work on the 14,320-acre land position. We may also use a portion of the net proceeds to expand our mineral rights through acquisitions of land and claims and joint venture opportunities. The remainder of the net proceeds will be used for working capital and other general corporate purposes. See the section titled “Use of Proceeds” for additional information. | |
| Risk Factors | You should carefully read the “Risk Factors” section of this prospectus for a discussion of factors that you should consider before deciding to invest in our common stock. | |
| OTC Pink Open Market symbol | BLTH
We have applied to list our common stock for trading on the NYSE American and expect such listing to occur concurrently with this offering. A NYSE American listing is a condition to completing this offering. |
| (1) | The number of shares of Common Stock to be outstanding after this offering set forth above is based on 3,727,085 shares of Common Stock outstanding as of March 26, 2026 and excludes: |
| ● | 3,273,503 shares of common stock issuable upon the automatic conversion of all outstanding convertible notes, including accrued interest, totaling approximately $16,334,692 as of March 26, 2026 (based on the assumed public offering price of $4.99 per share), which will occur upon the effectiveness of this offering; and | |
| ● | 533,987 shares of common stock issuable upon the exercise of outstanding stock options. |
Unless otherwise indicated, this prospectus reflects and assumes the following:
| ● | no exercise by the underwriters of their over-allotment option to purchase additional shares of our common stock; and | |
| ● | no exercise of the representative’s warrants to be issued upon consummation of this offering at an exercise price equal to 125% of the offering price of our common stock. |
All shares and per share information in this prospectus reflects and where appropriate, is restated for, a 1-for-300 and a 1-for-5 reverse stock split of our outstanding shares of common stock, which were processed by FINRA on December 8, 2023 and January 24, 2025, respectively.
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SUMMARY CONSOLIDATED FINANCIAL DATA
Our consolidated balance sheet data as of December 31, 2025 and December 31, 2024, consolidated statements of operations data and consolidated statement of cash flow data for the years ended December 31, 2025 and December 31, 2024 are derived from our audited financial statements, included elsewhere in this prospectus. This summary of historical financial data should be read together with the financial statements and the related notes, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in this prospectus.
Year Ended December 31, 2025 | Year Ended December 31, 2024 | |||||||
| Income Statement Data | ||||||||
| Revenue | $ | - | $ | - | ||||
| Loss from operations | $ | (1,863,256 | ) | $ | (1,568,707 | ) | ||
| Net loss | $ | (6,410,564 | ) | $ | (4,306,918 | ) | ||
| Loss per share, basic | $ | (2.30 | ) | $ | (1.81 | ) | ||
| Loss per share, diluted | $ | (2.30 | ) | $ | (1.81 | ) | ||
| Weighted average common shares outstanding, basic | 2,806,083 | 2,377,691 | ||||||
| Weighted average common shares outstanding, diluted | 2,806,083 | 2,377,691 | ||||||
| As of December 31, 2025 | Pro Forma As Adjusted for Note Conversion and this Offering(1) | |||||||
| Balance Sheet Data | ||||||||
| Cash | $ | 3,480 | $ | 9,153,484 | ||||
| Working capital | $ | (10,502,348 | ) | $ | 7,951,793 | |||
| Total assets | $ | 396,365 | $ | 9,546,369 | ||||
| Total liabilities | $ | 10,692,713 | $ | 1,388,577 | ||||
| Total stockholders’ equity (deficit) | $ | (10,296,348 | ) | $ | 8,157,793 | |||
| (1) | Reflects (a) the automatic conversion into approximately 3,273,503 shares of common stock of all outstanding convertible notes, including accrued interest, totaling approximately $16,334,692 as of March 26, 2026 (based on the assumed public offering price of $4.99 per share), which will occur upon the effectiveness of this offering, and (b) our sale of 2,004,009 shares of common stock offered by this prospectus at the assumed public offering price of $4.99 per share. |
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RISK FACTORS
You should carefully review and consider the risk factors described below and the other information contained in this prospectus, including the financial statements and notes to the financial statements and matters addressed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have an adverse effect on our business, cash flows, financial condition and results of operations. We may face additional risks and uncertainties that are not presently known to us or that we currently deem immaterial, which may also harm our business, financial condition, results of operations and prospects.
Risks Related to Our Business
Our future performance is difficult to evaluate because we have a limited operating history in the lithium and magnesium industry.
We entered the lithium industry in November 2021. We have not realized any revenues to date from the sale of lithium or magnesium and our operating cash flow needs have been financed primarily through issuances of debt and equity securities and not through cash flows derived from our operations. As a result, we have little historical financial and operating information from our lithium and magnesium business to help you evaluate our performance.
We have a history of losses and expect to continue to incur losses in the future.
We have an accumulated deficit of approximately $31 million as of December 31, 2025. We expect to continue to incur losses unless and until such time as our Lisbon Valley Project or one of our future acquired properties enters into commercial production and generates sufficient revenues to fund continuing operations and we are able to develop at least one economic deposit. We recognize that if we are unable to generate cash flows from our operations, we will not be able to earn profits or continue operations. At this early stage of our lithium and magnesium operations, we also expect to face the risks, uncertainties, expenses and difficulties encountered by companies at the mineral exploration stage. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition.
There is uncertainty regarding our ability to implement our business plan and to grow our operations with our existing financial resources without additional financing. Our ability to implement our business plan is dependent on us generating cash from operations, the sale of our capital stock and/or obtaining debt financing. Historically, we have funded our operations primarily through the issuance of debt and equity securities. Management’s plan to fund our capital requirements and ongoing operations includes the generation of revenue from our lithium operations and projects. Management’s secondary plan to cover any shortfall is selling our equity securities and obtaining debt financing. There is no assurance that we will be successful in implementing our business plan or that we will be able to generate sufficient cash from operations, sell securities or borrow funds on favorable terms, or at all. Our inability to generate significant revenue or obtain additional financing could have a material adverse effect on our ability to fully implement our business plan and grow our business to a greater extent than we can with our existing financial resources.
There is substantial doubt about our ability to continue as a going concern.
Our independent registered public accounting firm has included an explanatory paragraph in their report in our audited financial statements for the year ended December 31, 2025 to the effect that our recurring losses since inception and failure to achieve profitable operations raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern within one year after the date that these financial statements were issued. We may be required to limit or curtail operations which could result in our stockholders losing all or almost all of their investment.
We are an exploration stage issuer and there is no guarantee that our development will result in the commercial extraction of mineral deposits.
As defined under Regulation S-K Subpart 1300, we are defined as an exploration stage issuer because we have no known mineral reserves, and we have had no mining revenue to date. Accordingly, we cannot assure you that we will ever realize any profits. Any profitability in the future from our business will be dependent upon the development of an economic deposit of minerals and further exploration and development of other economic deposits of minerals, each of which is subject to numerous risk factors. Further, we cannot assure you that any of our property interests can be commercially mined or that any exploration programs will result in profitable commercial mining operations. In addition, there is a risk of business failure relating to pre-revenue exploration stage issuers. The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time, which may or may not be reduced or eliminated through a combination of careful evaluation, experience and skilled management. While discovery of additional ore-bearing deposits may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to construct processing facilities and to establish reserves.
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Our exploration prospects may not contain any reserves and any funds spent on evaluation and exploration may be lost. We do not know with certainty that economically recoverable lithium or magnesium exists on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties.
Exploration and development projects like ours have no operating history upon which to base estimates of future operating costs and capital requirements. Actual operating costs and economic returns of any and all exploration projects may materially differ from the costs and returns estimated and, accordingly, our financial condition, results of operations and cash flows may be negatively affected.
We may be exposed to certain regulatory and financial risks related to climate change.
Growing concerns about climate change may result in the imposition of additional regulations or restrictions to which we may become subject. Climate changes include changes in rainfall and in storm patterns and intensities, water shortages, significantly changing sea levels and increasing atmospheric and water temperatures, among others. A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to climate change, including regulating greenhouse gas emissions and the SEC’s recently adopted rules that require public companies to make additional climate change and greenhouse gas emissions related disclosures. Potentially, additional U.S. federal regulation will be forthcoming with respect to greenhouse gas emissions (including carbon dioxide) and/or legislation that could impact our operations.
The outcome of new legislation or regulation in the United States may result in new or additional requirements, additional charges to fund energy efficiency activities and fees or restrictions on certain activities. While certain climate change initiatives may result in new business opportunities for us by increasing the demand for EVs and lithium-ion batteries, compliance with these initiatives may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced emission allowances or additional restrictions on production or operations. Adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us or our industry could harm us. We may not be able to recover the cost of compliance, depending on the extent and scope of new or more stringent laws and regulations, which could adversely affect our business and negatively impact our growth. Furthermore, the potential impact of climate change and related regulation on our customers is highly uncertain and there can be no assurance that it will not have an adverse effect on our financial condition and results of operations.
Historical presence of lithium and magnesium recorded in brine waters at previously drilled Paradox Basin sites may not be indicative of the potential for future development or revenue.
The historical presence of lithium and magnesium recorded in brine waters from existing oil and gas wells encompassed under our Paradox Basin claims, including the Superior 88-21 Peterson Federal ST1 well, cannot be relied upon as an indication that such sites will have commercially feasible lithium and magnesium reserves. Investors in this offering should not rely on historical operations as an indication that sufficient mineral reserves exist to support commercial production of lithium and magnesium. There is no assurance that our properties will be of merit since our exploration programs are based on historical data. We expect to incur losses unless and until such time as the properties enter into commercial production and generate sufficient revenue to fund our continuing operations.
We face numerous risks related to exploration, construction and extraction of mineral deposits.
Our level of profitability, if any, in future years will depend to a great degree on lithium and magnesium prices and whether our properties can be brought into production. Exploration and development of lithium and magnesium resources are highly speculative in nature and it is impossible to ensure that any of our existing properties will establish reserves. Whether it will be economically feasible to extract lithium and magnesium depends on a number of factors, including, but not limited to: (i) the particular attributes of the deposit, such as size, grade and proximity to infrastructure; (ii) lithium prices; (iii) extraction, processing and transportation costs; (iv) the willingness of lenders and investors to provide project financing; (v) labor costs and possible labor strikes; (vi) non-issuance of permits; and (vii) governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation and reclamation and closure obligations.
We are also subject to the risks normally encountered in the lithium and magnesium industry, which include:
| ● | the discovery of unusual or unexpected geological formations; |
| ● | accidental fires, floods, earthquakes, severe weather, seismic activity or other natural disasters; |
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| ● | unplanned power outages and water shortages; |
| ● | construction delays and higher than expected capital costs due to, among other things, supply chain disruptions, higher transportation costs and inflation; |
| ● | the ability to obtain suitable or adequate machinery, equipment or labor; |
| ● | shortages in materials or equipment and energy and electrical power supply interruptions or rationing; |
| ● | environmental liability; and |
| ● | other unknown risks involved in the conduct of lithium and magnesium exploration and operations. |
The nature of these risks is such that liabilities could exceed any applicable insurance policy limits or could be excluded from coverage. There are also risks against which we cannot insure or against which we may elect not to insure. The potential costs, which could be associated with any liabilities not covered by insurance or in excess of insurance coverage, or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting our future earnings, competitive position and potentially our financial viability.
The mineral and chemical processing industry is intensely competitive.
The mineral and chemical processing industry is intensely competitive. We may be at a competitive disadvantage because we must compete with other companies, many of which have greater financial resources, operational experience and technical capabilities than we do. Increased competition could adversely affect our ability to attract necessary capital funding or acquire suitable exploration properties. We may also encounter increasing competition from other mineral and chemical processing companies in our efforts to locate acquisition targets, hire experienced mining professionals and acquire exploration resources.
Our success as a company producing lithium, magnesium and related products depends to a large extent on our research and development capabilities for direct lithium extraction and our ability to secure capital for the implementation of brine processing plants.
Our success as a producer of lithium, magnesium and related products is dependent on our ability to develop and implement more efficient production capabilities based on mineral rich brine and implementation of DLE technologies, which while having the potential to significantly increase the supply of lithium and magnesium from brine projects, the technology for DLE remains subject to many questions.
A number of DLE technologies are emerging and being tested at scale, with a handful of projects already in commercial construction. However, there remain challenges around scalability and water consumption/ brine reinjection. We expect to make significant investment in research and development of the DLE process and we will need to continue to invest heavily to scale our manufacturing to ultimately produce sufficient amounts of lithium and magnesium. We cannot assure you that our future research and development projects and financing efforts will be successful or be completed within the anticipated timeframe or budget. As it is often difficult to project the timeframe for developing new technologies and the duration of the market window for these technologies, there is a substantial risk that we may have to abandon potential technologies that is no longer commercially viable, even after we have invested significant resources in the development of such technologies and our facilities. If we fail in our technologies launching efforts, our business, prospects, financial condition and results of operations may be materially and adversely affected.
The development of non-lithium battery technologies could adversely affect us.
The development and adoption of new battery technologies that rely on inputs other than lithium compounds could significantly impact our prospects and future revenues. Current and next generation high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. Alternative materials and technologies are being researched with the goal of making batteries lighter, more efficient, faster charging and less expensive and some of these could be less reliant on lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and on what time horizon. Commercialized battery technologies that use no, or significantly less, lithium could materially and adversely impact our prospects and future revenues.
Lithium and magnesium prices are subject to unpredictable fluctuations.
We expect to derive revenues, if any, from the extraction and sale of lithium and magnesium. The prices of lithium and magnesium may fluctuate widely and are affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities, increased production due to new extraction developments and improved extraction and production methods and technological changes in the markets for the end products. The effect of these factors on the prices of lithium, magnesium and byproducts and therefore the economic viability of any of our exploration properties, cannot accurately be predicted.
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Changes in technology or other developments could adversely affect demand for lithium compounds or result in preferences for substitute products.
Lithium and its derivatives are preferred raw materials for certain industrial applications, such as rechargeable batteries. For example, current and future high energy density batteries for use in electric vehicles will rely on lithium compounds as a critical input. The pace of advancements in current battery technologies, development and adoption of new battery technologies that rely on inputs other than lithium compounds, or a delay in the development and adoption of future high nickel battery technologies that utilize lithium could significantly impact our prospects and future revenues. Many materials and technologies are being researched and developed with the goal of making batteries lighter, more efficient, faster charging and less expensive, some of which could be less reliant on lithium or other lithium compounds. Some of these technologies, such as commercialized battery technologies that use no, or significantly less, lithium compounds, could be successful and could adversely affect demand for lithium batteries in personal electronics, electric and hybrid vehicles and other applications. We cannot predict which new technologies may ultimately prove to be commercially viable and on what time horizon. In addition, alternatives to industrial applications dependent on lithium compounds may become more economically attractive as global commodity prices shift. Any of these events could adversely affect demand for and market prices of lithium, thereby resulting in a material adverse effect on the economic feasibility of extracting any mineralization we may discover and reducing or eliminating any reserves we may identify.
Our quarterly and annual operating and financial results and any future revenue are likely to fluctuate significantly in future periods.
Our quarterly and annual operating and financial results are difficult to predict and may fluctuate significantly from period to period. Our future revenues, net income and results of operations may fluctuate as a result of a variety of factors that are outside our control including, but not limited to, lack of sufficient working capital, equipment malfunction and breakdowns, inability to timely find spare machines or parts to fix the broken equipment, regulatory or licensing delays and severe weather phenomena.
Our long-term success will depend ultimately on our ability to generate revenues, achieve and maintain profitability and develop positive cash flows from our lithium and magnesium activities.
Our ability to acquire additional lithium and magnesium projects and initiate and continue exploration, development and commissioning of lithium and magnesium ultimately depends on our ability to generate revenues, achieve and maintain profitability and generate positive cash flow from our operations. The economic viability of our future extraction activities has many risks and uncertainties including:
| ● | significant, prolonged decrease in the market price of lithium and magnesium; |
| ● | significantly higher than expected construction and extraction costs; |
| ● | significantly lower than expected lithium and magnesium extraction; |
| ● | significant delays, reductions or stoppages in lithium extraction activities; |
| ● | significant shortages of adequate and skilled labor or a significant increase in labor costs; |
| ● | significantly more stringent regulatory laws and regulations; and |
| ● | significant difficulty in marketing and/or selling lithium carbonate or magnesium chloride. |
It is common for a new lithium and magnesium extraction operation to experience unexpected costs, problems and delays during construction, commissioning and start-up. Most similar projects suffer delays during these periods due to numerous factors, including the factors listed above. Any of these factors could result in changes to economic returns or cash flow estimates of the project or have other negative impacts on our financial position. There is no assurance that our projects will commence commercial production on schedule, or at all, or will result in profitable operations. If we are unable to develop our projects into commercial operating mines, our business and financial condition will be materially adversely affected. Moreover, even if a feasibility study or technical report supports a commercially viable project, there are many additional factors that could impact the project’s development, including terms and availability of financing, cost overruns, litigation or administrative appeals concerning the project, delays in development and any permitting changes, among other factors.
Our future lithium and magnesium extraction activities may change as a result of any one or more of these risks and uncertainties. We cannot assure you that any of our activities will result in achieving and maintaining profitability and developing positive cash flows.
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We depend on our ability to successfully access the capital and financial markets. Any inability to access the capital or financial markets may limit our ability to meet our liquidity needs and long-term commitments, fund our ongoing operations, execute our business plan or pursue investments that we may rely on for future growth.
Until commercial production is achieved from our planned projects, we will continue to incur operating and investing net cash outflows associated with maintaining and acquiring exploration properties, undertaking exploration activities and the development of our planned projects. As a result, we rely on access to capital markets as a source of funding for our capital and operating requirements. We require additional capital to meet our liquidity needs related to expenses for our various corporate activities, including the costs related to our status as a publicly traded company, fund our ongoing operations, explore and define lithium mineralization and establish any future lithium operations. We cannot assure you that such additional funding will be available to us on satisfactory terms, or at all.
To finance our future ongoing operations and future capital needs after we use the net proceeds of this offering, we may require additional funds through the issuance of additional equity or debt securities. Depending on the type and terms of any financing we pursue, stockholders’ rights and the value of their investment in our common stock could be reduced. Any additional equity financing will dilute shareholdings. If the issuance of new securities results in diminished rights to holders of our common stock, the market price of our common stock could be negatively impacted. New or additional debt financing, if available, may involve restrictions on financing and operating activities. In addition, if we issue secured debt securities, the holders of the debt would have a claim to our assets that would be prior to the rights of stockholders until the debt is paid. Interest on such debt securities would increase costs and negatively impact operating results.
If we are unable to obtain additional financing, as needed, at competitive rates, our ability to fund our current operations and implement our business plan and strategy will be affected. These circumstances may require us to reduce the scope of our operations and scale back our exploration, development and extraction programs. There is, however, no guarantee that we will be able to secure any additional funding or be able to secure funding to provide us with sufficient funds to meet our objectives, which may adversely affect our business and financial position.
We are dependent upon key management employees, whose loss may have an adverse effect on our performance.
The responsibility of overseeing the day to day operations and the strategic management of our business depends substantially on our senior management. Loss of any such personnel may have an adverse effect on our performance. The success of our operations will depend upon numerous factors, many of which, in part, are beyond our control, including our ability to attract and retain additional key personnel in mining operations, technical support and finance. Certain areas in which we operate are highly competitive and competition for qualified personnel is significant. We may be unable to hire suitable field personnel for our technical team or there may be periods of time where a particular position remains vacant while a suitable replacement is identified and appointed. We may not be successful in attracting and retaining the personnel required to grow and operate our business profitably.
Our ability to manage growth will have an impact on our business, financial condition and results of operations.
Future growth may place strains on our financial, technical, operational and administrative resources and cause us to rely more on project partners and independent contractors, potentially adversely affecting our financial position and results of operations. Our ability to grow will depend on a number of factors, including:
| ● | our ability to develop existing prospects; |
| ● | our ability to identify and acquire or lease new exploratory prospects; |
| ● | our ability to maintain or enter into new relationships with project partners and independent contractors; |
| ● | our ability to continue to retain and attract skilled personnel; |
| ● | our access to capital; |
| ● | the market price for lithium and magnesium products; and |
| ● | our ability to enter into agreements for the sale of lithium products. |
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Lawsuits may be filed against us and an adverse ruling in any such lawsuit may adversely affect our business, financial condition or liquidity or the market price of our common stock.
We may become involved in, named as a party to, or be the subject of, various legal proceedings, including regulatory proceedings, tax proceeding and legal actions relating to personal injuries, property damage, property taxes, land rights, the environment and contract disputes. The outcome of future legal proceedings cannot be predicted with certainty and may be determined adversely to us and, as a result, could have a material adverse effect on our assets, liabilities, business, financial condition or results of operations. Even if we prevail in any such legal proceeding, the proceedings could be costly, time-consuming and may divert the attention of management and key personnel from our business operations, which could adversely affect our financial condition.
Our business is subject to cybersecurity risks.
Our operations depend on effective and secure information technology systems. Threats to information technology systems, such as cyberattacks and cyber incidents, continue to increase. Cybersecurity risks include, but are not limited to, malicious software, attempts to gain unauthorized access to our data and the unauthorized release, corruption or loss of our data and personal information, as well as interruptions in communication and operations. It is possible that our business, financial and other systems could be compromised, which could go unnoticed for a prolonged period of time. We have not experienced a material breach of our information technologies. Nevertheless, we continue to take steps to mitigate these risks by employing a variety of measures, including employee training, technical security controls and maintenance of backup and protective systems. Despite these mitigation efforts, cybersecurity attacks and other threats exist and continue to increase, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Risks Related to Regulation
We will be required to obtain governmental permits and approvals in order to conduct development and extraction operations, a process that is often costly and time-consuming. There is no certainty that all necessary permits and approvals for our planned operations will be granted.
We are required to obtain and renew governmental permits and approvals for our exploration and development activities and, prior to extracting any mineralization we discover, we will be required to obtain additional governmental permits and approvals that we do not currently possess. Obtaining and renewing any of these governmental permits is a complex, time consuming and uncertain process involving numerous jurisdictions, public hearings and possibly costly undertakings. The timeliness and success of permitting efforts are contingent upon many variables not within our control, including the interpretation of approval requirements administered by the applicable governmental authority.
We may not be able to obtain or renew permits or approvals that are necessary to our planned operations, or we may discover that the cost and time required to obtain or renew such permits and approvals exceeds our expectations. Any unexpected delays, costs or conditions associated with the governmental approval process could delay our planned exploration, development and extraction operations, which in turn could materially adversely affect our prospects, revenues and profitability. In addition, our prospects may be adversely affected by the revocation or suspension of permits or by changes in the scope or conditions to use of any permits obtained.
Private parties, such as environmental activist organizations, frequently attempt to intervene in the permitting process to persuade regulators to deny necessary permits or seek to overturn permits that have been issued. These third-party actions can materially increase the costs, cause delays in the permitting process and could cause us not to proceed with the development or operation of a property. In addition, our ability to successfully obtain key permits and approvals to explore for, develop, operate and expand operations will likely depend on our ability to undertake such activities in a manner consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be required by law. Our ability to obtain permits and approvals and to successfully operate in particular communities may be adversely affected by real or perceived detrimental events associated with our activities.
Our operations face substantial regulation governing worker health and safety.
Our operations are subject to extensive and complex laws and regulations governing worker health and safety across our operating regions and our failure to comply with applicable legal requirements can result in substantial penalties. Future changes in applicable laws, regulations, permits and approvals or changes in their enforcement or regulatory interpretation could substantially increase costs to achieve compliance, lead to the revocation of existing or future exploration or mining rights or otherwise have an adverse impact on our results of operations and financial position.
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Our mining claims are inspected on a regular basis by government regulators who may issue citations and orders when they believe a violation has occurred under local mining regulations. If inspections result in an alleged violation, we may be subject to fines, penalties or sanctions and our mining operations could be subject to temporary or extended closures.
In addition to potential government restrictions and regulatory fines, penalties or sanctions, our ability to operate (including the effect of any impact on our workforce) and thus, our results of operations and our financial position (including because of potential related fines and sanctions), could be adversely affected by accidents, injuries, fatalities or events detrimental (or perceived to be detrimental) to the health and safety of our employees, the environment or the communities in which we operate.
Compliance with environmental regulations and litigation based on environmental regulations could require significant expenditures.
Environmental regulations mandate, among other things, the maintenance of air and water quality standards, land development and land reclamation and set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Environmental legislation is evolving in a manner that may require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for mining companies and their officers, directors and employees. We may incur environmental costs that could have a material adverse effect on financial condition and results of operations. Any failure to remedy an environmental problem could require us to suspend operations or enter into interim compliance measures pending completion of the required remedy.
Moreover, governmental authorities and private parties may bring lawsuits based upon damage to property and injury to persons resulting from the environmental, health and safety impacts of prior and current operations. These lawsuits could lead to the imposition of substantial fines, remediation costs, penalties and other civil and criminal sanctions, as well as reputational harm, including damage to our relationships with customers, suppliers, investors, governments or other stakeholders. Such laws, regulations, enforcement, or private claims may have a material adverse effect on our financial condition, results of operations or cash flows.
Land reclamation and exploration restoration requirements may be burdensome and costly.
Land reclamation and exploration restoration requirements are generally imposed on mineral exploration companies, such as ours, which require us, among other things, to minimize the effects of land disturbance. Such requirements may include controlling the discharge of potentially dangerous effluents from a site and restoring a site’s landscape to its pre-exploration form. The actual costs of reclamation and exploration restoration requirements are uncertain and planned expenditures may differ from the actual expenditures required. Therefore, the amount that we are required to spend could be materially higher than any current or future estimates. Any additional amounts required to be spent on reclamation and exploration restoration may have a material adverse effect on our financial performance, financial position and results of operations and may cause us to alter our operations. Should we develop an operating mine, we will also be required to reclaim and restore future mining operations once the mine has closed. Such amounts may be significant and could have a material adverse effect on our financial performance, financial position and results of operations and may cause us to alter our operations.
We also may be required to maintain financial assurances, such as letters of credit, to secure reclamation obligations under certain laws and regulations. The failure to acquire, maintain or renew such financial assurances could subject us to fines and penalties or suspension of our operations. Letters of credit or other forms of financial assurance may represent only a portion of the total amount of money that will be spent on reclamation over the life of a mine’s operation. Although we expect to include liabilities for estimated reclamation, exploration restoration, and mine closure costs in our financial statements, it may be necessary to spend more than what we projected to fund required reclamation, exploration restoration and mine closure activities.
Risks Related to this Offering and Ownership of Our Common Stock
An active trading market for our common stock may not develop and you may be unable to resell your shares at or above the public offering price.
Trading of our common stock has not been historically active. Although we applied to list our common stock for trading on the NYSE American, an active trading market for our shares may never develop or be sustained following this offering. No assurance can be given that our common stock will be accepted to trade on the NYSE American. The public offering price of our common stock will be determined through negotiations between us and the underwriters. This public offering price may not be indicative of the market price of our common stock after the offering. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the public offering price or at the time that they would like to sell.
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Our stock price may be volatile and the market price of our common stock after this offering may drop below the price you pay due to a variety of factors, many of which are beyond our control.
The market price of our common stock could be subject to significant fluctuations after this offering and it may decline below the public offering price. Market prices for securities of early-stage companies have historically been particularly volatile. As a result of this volatility, you may not be able to sell your common stock at or above the public offering price. Some of the factors that may cause the market price of our common stock to fluctuate include:
| ● | fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to our company; |
| ● | changes in estimates of our financial results or recommendations by securities analysts; |
| ● | failure of our business to achieve or maintain market acceptance in the lithium industry; |
| ● | changes in market valuations of similar companies; |
| ● | success of competitive offerings or technologies; |
| ● | changes in our capital structure, such as future issuances of securities or the incurrence of debt; |
| ● | announcements by us or our competitors of significant contracts, acquisitions or strategic alliances; |
| ● | regulatory developments in the United States and foreign countries, or both; |
| ● | litigation involving our company; |
| ● | additions or departures of key personnel; |
| ● | investors’ general perception of us; and |
| ● | other events or factors, including those resulting from macroeconomic conditions, geopolitical crises, outbreak of hostilities or acts of war such as the Russian invasion of Ukraine, the Israeli-Hamas hostilities and Houthi rebel ship attacks in the Red Sea, incidents of terrorism, global pandemics such as the Covid-19 pandemic, natural disasters and similar events, as well as responses to these and similar events. |
In addition, if the market for lithium, magnesium and technology sector stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
Purchasers in this offering may experience substantial dilution in the book value of their investment.
In the future, your percentage ownership in our company may be diluted if we issue additional shares of our common stock or convertible debt securities in connection with acquisitions, capital market transactions or other corporate purposes, including equity awards that we may grant to our directors, officers and employees.
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the currently intended purposes described in the section entitled “Use of Proceeds.” Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management may not apply our cash from this offering in ways that ultimately increase the value of any investment in our securities or enhance stockholder value. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply our cash in ways that enhance stockholder value, we may fail to achieve expected financial results, which may result in a decline in the price of our shares of common stock, and, therefore, may negatively impact our ability to raise capital, invest in or expand our business, acquire additional products or licenses, commercialize our product, or continue our operations.
Our executive officers and directors have significant voting power and may take actions that may not be in the best interests of other stockholders.
Prior to this offering, our executive officers and directors beneficially own in the aggregate approximately 44.1% of our outstanding shares of common stock. Upon the completion of this offering, our executive officers and directors will beneficially own significantly fewer shares, or approximately 29.0% of our outstanding shares. No one executive officer or director (or ownership group of such persons) beneficially owns more than 50% of our shares; but if the executive officers and directors act together, they will be able to exert significant influence over our management and affairs requiring stockholder voting approval, including approval of significant corporate transactions. This concentration of ownership and voting power may potentially have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock. This concentration of ownership and voting power may not be in the best interests of all our stockholders.
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After the completion of this offering, we do not expect to declare any dividends in the foreseeable future.
After the completion of this offering, we do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.
Indemnification of our officers and directors and limitations on their liability could limit our recourse against them.
Our certificate of incorporation and bylaws contain broad indemnification and liability limiting provisions regarding our officers, directors and employees, including the limitation of liability for certain violations of fiduciary duties. Stockholders therefore will have only limited recourse against these individuals.
If we fail to implement and maintain proper and effective internal controls and disclosure controls and procedures, our ability to produce accurate and timely financial statements and public reports could be impaired, which could adversely affect investors’ views of our company.
Section 404 of the Sarbanes-Oxley Act of 2002 requires our company to evaluate the effectiveness of our internal control over financial reporting as of the end of each year and to include a management report assessing the effectiveness of our internal control over financial reporting in each Annual Report on Form 10-K.
We have identified our disclosure controls and procedures were not effective and that material weaknesses exist in our internal control over financial reporting. The material weaknesses consist of an insufficient complement of qualified accounting personnel and controls associated with segregation of duties and ineffective controls associated with identifying and accounting for complex and non-routine transactions in accordance with U.S. generally accepted accounting principles. Due to the material weaknesses in internal control over financial reporting and disclosure controls and procedures, there may be errors in our consolidated financial statements and in the accompanying footnote disclosures that could require restatements. Investors may lose confidence in our reported financial information and disclosure, which could negatively impact our stock price.
We do not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports about our business, our stock price and trading volume may decline.
The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us, our business, our markets and our competitors. We do not control these analysts. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect the market price of our common stock. Further, if one or more of the analysts who do cover us downgrade our stock or if those analysts issue other unfavorable commentary about us or our business, our stock price would likely decline. If one or more of these analysts cease coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our stock could decrease, which in turn could cause our stock price or trading volume to decline and may also impair our ability to develop our business.
Future sales and issuances of our common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall.
We expect that significant additional capital will be needed in the future to continue our planned operations, including hiring new personnel, developing our properties, and continuing activities as an operating public company. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.
We may be at risk of securities class action litigation.
We may be at risk of securities class action litigation. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and results in a decline in the market price of our common stock.
Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters.
As a publicly traded company we incur significant additional legal, accounting and other expenses. The obligations of being a public company in the U.S. require significant expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the NYSE American. These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with. Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are a “smaller reporting company.” Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.
Our Certificate of Incorporation and Bylaws and Delaware law may have anti-takeover effects that could discourage, delay or prevent a change in control, which may cause our stock price to decline.
Our Certificate of Incorporation and Bylaws and Delaware law could make it more difficult for a third party to acquire us, even if closing such a transaction would be beneficial to our stockholders. We are authorized to issue up to 10 million shares of preferred stock. This preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further action by stockholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock, and therefore, reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by the present management.
Provisions of our Certificate of Incorporation and our Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable. Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. In particular, our Certificate of Incorporation and Bylaws and Delaware law, as applicable, among other things:
| ● | provide the board of directors with the ability to alter our Bylaws without stockholder approval; | |
| ● | place limitations on the removal of directors; and | |
| ● | provide that vacancies on the board of directors may be filled by a majority of directors in office, although less than a quorum. |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Information set forth in this prospectus may contain various “forward-looking statements.” All information relative to future lithium markets and trends in and anticipated levels of, revenue and expenses, as well as other statements containing words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “target,” “should” and “will” and other similar expressions constitute forward-looking statements. These forward-looking statements are subject to business, economic and other risks and uncertainties, both known and unknown and actual results may differ materially from those contained in the forward-looking statements. Examples of risks and uncertainties that could cause actual results to differ materially from historical performance and any forward-looking statements include, but are not limited to, the risks described under the section titled “Risk Factors.”
Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date such forward-looking statements are made. You should read carefully this prospectus and any related free writing prospectuses that we have authorized for use in connection with this offering, completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify all of our forward-looking statements by these cautionary statements. Except as required by U.S. federal securities law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
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USE OF PROCEEDS
We estimate that the net proceeds to us from this offering will be approximately $8,735,004 (or approximately $10,092,508 if the underwriters exercise in full their option to purchase up to 300,602 additional shares of common stock), based on the assumed public offering price of $4.99 per share, after deducting underwriting discounts and estimated offering expenses payable by us.
The principal purposes of this offering are to obtain additional capital to support our mining operations, to create a public market for our common stock and to facilitate our future access to the public equity markets.
We currently intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:
| ● | An aggregate of approximately $5,740,000 to fund the development and operation of our Lisbon Valley Project, including the pre-production drilling, permitting, claim re-registration and related geological work on the 14,320-acre land position. To achieve our current objectives at the Lisbon Valley Project, our estimated pre-production phase timelines and significant milestones include (i) the processing by the BLM of additional exploration permits to drill, for which we expect to spend up to $100,000, (ii) the commencement of drilling exploration wells by the second quarter of 2026, for which we expect to spend up to $4,740,000, (iii) the preparation of our Regulation S-K Subpart 1300 technical report on our exploration results in the third quarter of 2026, for which we expect to spend up to $250,000, (iv) the selection of a DLE technology provider in the third quarter of 2026, for which we expect to spend up to $50,000, (v) the development and building of a pilot lithium and magnesium extraction plant in the second half of 2026, for which we expect to spend up to $600,000. Our production phase, which primarily includes the building of a permanent lithium and magnesium extraction plant, is estimated to begin in 2028. We anticipate the need to raise additional equity financing in 2027 for our production phase through the sale of our shares. | |
| ● | Approximately $995,004 to fund potential expansion of our mineral rights through acquisitions of land and claims. However, we currently have no binding commitments with respect to any acquisitions and joint ventures. | |
| ● | Approximately $2,000,000 for working capital and general corporate purposes, including amounts required to pay for research and development expenses, possible joint venture opportunities, salaries, professional fees, public reporting costs, office-related expenses and other corporate expenses. |
Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors. We may find it necessary or advisable to use the net proceeds for other purposes and our management will have broad discretion in the application of the net proceeds and investors will be relying on our judgment regarding the application of the net proceeds from this offering.
Pending these uses, we intend to invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities.
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DIVIDEND POLICY
We did not pay dividends during the years ended December 31, 2025, 2024 and 2023. We have never declared or paid any cash dividends or distributions on our common stock and intend to retain future earnings, if any, to support our operations and to finance expansion. Therefore, we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
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CAPITALIZATION
The following table summarizes our cash, short-term debt and capitalization as of December 31, 2025, (a) on an actual basis, and (b) on a pro forma as adjusted basis to reflect the issuance of approximately 3,273,503 shares of common stock upon the automatic conversion of all outstanding convertible notes, including accrued interest, totaling approximately $16,334,692 as of March 26, 2026 (based on the assumed public offering price of $4.99 per share), which will occur upon the effectiveness of this offering, and the issuance and sale of 2,004,009 shares of our common stock in this offering based on the assumed public offering price of $4.99 per share.
| As of December 31, 2025 | ||||||||
| Actual | Pro Forma As Adjusted for Note Conversion and this Offering | |||||||
| Cash | $ | 3,480 | $ | 9,153,484 | ||||
| Debt, current portion | $ | 10,692,713 | $ | 1,388,577 | ||||
| Long-term debt, net of current portion | $ | - | $ | - | ||||
| Stockholders’ equity (deficit) | $ | (10,296,348 | ) | $ | 8,157,793 | |||
| Common stock, $0.001 par value, 100,000,000 shares authorized, 3,142,371 and 9,004,597 shares issued and outstanding, respectively | $ | 3,142 | $ | 9,004 | ||||
| Additional paid-in capital | $ | 20,657,631 | $ | 48,427,028 | ||||
| Accumulated deficit | $ | (30,957,121 | ) | $ | (37,987,677 | ) | ||
| Total stockholders’ equity (deficit) | $ | (10,296,348 | ) | $ | 8,157,793 | |||
| Total capitalization | $ | (10,296,348 | ) | $ | 8,157,793 | |||
As of December 31, 2025, there were 3,142,371 shares of common stock outstanding, which excludes (a) 3,273,503 shares of common stock issuable upon the automatic conversion of all outstanding convertible notes, including accrued interest, totaling approximately $16,334,692 as of March 26, 2026 (based on the assumed public offering price of $4.99 per share), which will occur upon the effectiveness of this offering, and (b) 533,987 shares of common stock issuable upon the exercise of outstanding stock options.
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DILUTION
If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the public offering price per share and the pro forma, as adjusted net tangible book value per share of our common stock immediately after this offering. Net tangible book value per share is determined by dividing our total tangible assets less total liabilities by the number of outstanding shares of common stock.
As of December 31, 2025, we had a net tangible book value of $(10,502,348) or $(3.34) per share of common stock. Our pro forma net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the total number of shares of our common stock outstanding as of December 31, 2025.
Investors participating in this offering will incur immediate and substantial dilution. After giving effect to the issuance and sale of 2,004,009 shares of our common stock in this offering based on the assumed public offering price of $4.99 per share, after deducting underwriting discounts and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 26, 2026, would have been approximately $(1,198,212), or $(0.17) per share of common stock. This represents an immediate increase in the pro-forma net tangible book value of $0.04. per share to existing stockholders and an immediate decrease of $5.12 per share to investors purchasing shares of our common stock in this offering. The following table illustrates this per share dilution on a per share basis:
| Amount | ||||
| Assumed public offering price per share of common stock | $ | 4.99 | ||
| Pro forma net tangible book value (deficit) before offering | $ | (0.17 | ) | |
| Increase in pro forma net tangible book value attributable to new investors | $ | 0.04 | ||
| Pro forma as adjusted net tangible book value after offering | $ | (0.13 | ) | |
| Dilution in pro forma net tangible book value to new investors | $ | 5.12 | ||
If the underwriters exercise their over-allotment option in full to purchase an additional 300,602 shares of common stock from us in this offering to cover over-allotments, if any, the pro forma as adjusted net tangible book value per share after the offering would be $1.00 per share, the increase in the pro forma net tangible book value per share to existing stockholders would be $1.17 per share and the dilution per share to new investors purchasing common stock in this offering would be $3.99 per share.
To the extent that we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of those securities could result in further dilution to our stockholders.
As of December 31, 2025, there were 3,142,371 shares of common stock outstanding, which excludes (a) 3,273,503 shares of common stock issuable upon the automatic conversion of all outstanding convertible notes, including accrued interest, totaling approximately $16,334,692 as of March 26, 2026 (based on the assumed public offering price of $4.99 per share), which will occur upon the closing of this offering, and (b) 533,987 shares of common stock issuable upon the exercise of outstanding stock options.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended to help you understand our results of operations and financial condition. This discussion and analysis is provided as a supplement to and should be read in conjunction with, the section entitled “Our Summary Consolidated Financial Data” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the sections entitled “Risk Factors” or “Cautionary Note Regarding Forward-Looking Statements” in other parts of this prospectus.
Cautionary Statement
The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this prospectus. Our actual results may differ materially from those anticipated in the following discussion, as a result of a variety of risks and uncertainties, including those described under “Risk Factors.”
Forward-Looking Statements
Certain statements contained herein constitute “forward-looking statements.” Except for the historical information contained herein, this prospectus contains forward-looking statements (identified by the words “estimate,” “project,” “anticipate,” “plan,” “expect,” “intend,” “believe,” “hope,” “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements, including, without limitation, those discussed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 19, 2026, and those described herein that could cause actual results to differ materially from the results anticipated in the forward-looking statements.
Factors That May Adversely Affect our Results of Operations
Our results of operations may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, any ongoing effects of the pandemic, including resurgences and the emergence of new variants and geopolitical instability, such as the military conflict in Ukraine and the Middle East. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude, or the extent to which they may negatively impact our business.
Objective
The objective of our Management’s Discussion and Analysis of Financial Condition and Results of Operations is to provide users of our financial statements with the following:
| ● | a narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results; |
| ● | useful context to the financial statements; and |
| ● | information that allows assessment of the relationship between our past performance and future performance. |
This section of our prospectus is a supplement to and should be read together with our financial statements, including notes, referenced elsewhere in this prospectus and is provided to enhance your understanding of our operations and financial condition. Due to rounding, some parts of this discussion may not sum or calculate precisely to the totals and percentages provided in the tables.
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The following discussion and analysis provide information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition and should be read in conjunction with the consolidated financial statements and footnotes that appear elsewhere in this prospectus.
Overview and Outlook
We are a U.S. based renewable energy company focused on the extraction, refinement and distribution of technical minerals in an environmentally responsible manner. We found ourselves with the unique opportunity to acquire mining claims that historically reported high levels of lithium and other technical minerals crucial to produce batteries used in many technology products and markets. Subsequent to acquiring such mining claims, we hired and affiliated ourselves with industry veterans that bring us decades of experience, credibility and relationships. We intend to implement emerging DLE technologies to extract lithium from the production of subsurface brines.
On November 5, 2021, we acquired the rights to 102 federal mining claims located in the Lisbon Valley of Utah for $100,000 plus the future payment of royalties based on a percentage of the net revenue from the sale of lithium produced from a portion of the mining property. The acquisition was driven by historical mineral data from seven previously drilled wells (plugged and abandoned). We are defined as an exploration stage issuer under Regulation S-K Subpart 1300. An independent third-party technical report indicated that further investment and development in the claims was warranted, given the abundant evidence from oil, gas and potash wells drilled in the Paradox Basin that indicates that there is a high probability of identifying and producing super saturated brines from beneath the property position. The 1978 USGS Open File Report (Hite), which documented a brine sample from the Fed 88-21P potash well (located within the current Lisbon Valley Lithium Project area) containing 340 ppm lithium and an exceptional 74,400 ppm magnesium. However, no determination has been made whether we have any reserves of minerals or whether mineralization could be economically and legally produced or extracted yet. We have no mineral reserves as defined by Regulation S-K Subpart 1300 and have had no mining revenue to date.
In July 2023, we acquired and staked an additional 641 lithium mining claims adjacent to our Lisbon Valley Project in Utah. The new claims have been registered with the BLM. We now own a total of 743 placer claims covering 14,320 acres (approximately 22 square miles) located in the Paradox Basin formation of Lisbon Valley in San Juan County, Utah, comprised of the 102 original mining claims and 641 new claims.
On April 25, 2023, we formed Mountain Sage Minerals, LLC, a Utah limited liability company. We plan to expand our holdings in the Lisbon Valley area with the acquisition of additional mineral claims and joint venture opportunities through this entity.
On June 1, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Seaport Global Acquisition II Corp. (“SGII”) and Lithium Merger Sub, Inc., a wholly owned subsidiary of SGII. SGII is a blank check company, also referred to as a special purpose acquisition company, formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. As a result of the Merger Agreement, we would have become a wholly owned subsidiary of SGII. Following material changes to the transaction proposed by SGII making the transaction untenable to us, on November 20, 2023, SGII notified us that it had elected to terminate the Merger Agreement.
On August 4, 2023, we filed an Amendment to the Certificate of Incorporation (the “Amendment”) in order to effect a reverse stock split in the ratio of 1-for-300 (the “Reverse Split”). The Company and its shareholders holding a majority of the issued and outstanding shares of stock of the Company entitled to vote previously approved a reverse stock split for not less than 1-for-10 and not more than 1-for-1,000, at any time prior to October 20, 2023, with the our Board having the discretion to determine whether or not the Reverse Split is to be effected, and if effected, the exact ratio for the Reverse Split within the above range. On August 1, 2023, our Board unanimously approved the Reverse Split and authorized the filing of the Amendment. On December 8, 2023, our company effectuated the reverse split of the common stock by a ratio of one-for-300. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect the Reverse Split.
On January 16, 2025, we filed a Certificate of Amendment with the Secretary of State of Delaware to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 5 shares outstanding prior to the effective date of the reverse stock split. The reverse stock split became effective on January 24, 2025. The total number of authorized shares of common stock was also reduced from 4,500,000,000 shares to 100,000,000 shares. The par value of the common stock remained the same at $0.001 per share. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect both reverse splits.
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We have been moving forward with our strategy of employing advanced brine extractive technology methodologies and have been in talks with numerous extraction providers. Selective mineral extraction is the most cost-effective and ESG friendly approach currently available. Technologies are being utilized that can extract the desired minerals and metals from the brine and then re-inject the brines back down into the aquifer. The prospective partners have been provided the analytical results from the technical reports, but will soon provide current results, analytical, geotech modeling, aquifer modeling, recharge, flows and depth. We will need funding to support continuing operations and support our growth strategy and we will need to finance operations by offering any combination of equity offerings, debt financing, collaborations, strategic alliances or other licensing arrangements. There is no assurance we will be able to raise sufficient capital to finance our operations.
Results of Operations
Year Ended December 31, 2025, compared to Year Ended December 31, 2024
Revenue
For the year ended December 31, 2025, and 2024, our company had no revenue.
Operating Expenses
General and administrative expenses for the year ended December 31, 2025, were $1,863,256, an increase of $294,549 or 19%, compared to $1,568,707 for the year ended December 31, 2024. The increase in operating expenses was mainly due to an increase in share-based compensation.
Gain (Loss) on Extinguishment
During the year ended December 31, 2025 and 2024, our company recorded a loss on extinguishment of debt of $1,744,906 and $1,842,273, respectively.
Fair Value of Stock Issued for Note Modification
During the year ended December 31, 2025 and 2024, the Company recorded a fair value of stock issued for note modification of $2,082,423 and $449,660, respectively.
Interest Expense
Interest expense for the year ended December 31, 2025, was $719,979, as compared to $446,278 during the year ended December 31, 2024.
Net Loss
As a result of the foregoing, the net loss for the year ended December 31, 2025, was $6,410,564 as compared to the net loss of $4,306,918 during the year ended December 31, 2024.
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Liquidity and Capital Resources
We require cash to fund our operating expenses and working capital requirements, including outlays for capital expenditures. The accompanying consolidated financial statements have been prepared on a going concern basis. Our company had a net loss of $6,410,564 during the year ended December 31, 2025, had accumulated losses totaling $30,957,121, and a working capital deficit of $10,502,348 as of December 31, 2025. These factors, among others, indicate that our company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Since we acquired our first mining claims in November 2021, we have faced an increasingly challenging liquidity situation that has limited our ability to execute our operating plan. Our company will need to raise additional financing in order to fund its operations for the next 12 months and to allow us to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, we will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that our company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing.
Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all and we may not obtain the capital we require by other means. Unless we can attract additional investment, our operating as a going concern is in doubt.
If we are unable to obtain sufficient amounts of additional capital, we may have to cease filing the required reports and cease operations completely. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock.
Cash Flows from Operating Activities
During the year ended December 31, 2025, our company used $499,416 of cash in operating activities as a result of our net loss of $6,410,564, offset by gain (loss) on extinguishment of debt of $1,744,906, fair value of stock issued for note modification of $2,082,423, share-based compensation of $838,358, accrued interest of $698,990, and net changes in operating assets and liabilities of $546,471.
During the year ended December 31, 2024, our company used $750,311 of cash in operating activities as a result of our net loss of $4,306,918, offset by gain (loss) on extinguishment of debt of $1,842,273 and amortization of debt discount of $28,497, fair value of stock issued for note modification of $449,660, share-based compensation of $67,586, accrued interest of $364,879 and net changes in operating assets and liabilities of $ 803,712.
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Cash Flows from Investing Activities
During the years ended December 31, 2025 and 2024, our company had no investing activities.
Cash Flows from Financing Activities
During the year ended December 31, 2025, financing activities provided $490,000, resulting from $480,000 in proceeds from convertible notes and $10,000 in proceeds from promissory notes.
During the year ended December 31, 2024, financing activities provided $755,831, resulting from $210,000 in proceeds from convertible notes and $770,831 in proceeds from promissory notes, and offset by repayment of promissory notes of $225,000.
Amendments to Outstanding Promissory Notes
On various dates from April 1 to April 8, 2024, with an effective date as of March 29, 2024, we entered into the following transactions regarding our outstanding promissory notes:
| ● | Pursuant to a Convertible Note Amendment Agreement with each of five investors holding convertible notes in the aggregate principal amount of $1,750,000 with accrued interest of $125,646, each of these investors agreed to (a) extend the maturity date of their note to the earlier of (i) September 30, 2024 or (ii) the closing of an “uplisting” transaction in which our common stock is traded on a national securities exchange and (b) impose a limitation on their conversions so that the investor will not effect a conversion under its note until the earlier of (i) the uplisting transaction closing or (ii) July 1, 2024. Subsequently, the maturity dates of these notes were further extended to March 31, 2025, and the company engaged in negotiations to facilitate additional extensions. |
| ● | Pursuant to a Convertible Note Amendment Agreement with one investor holding a convertible note in the principal amount of $50,000 with accrued interest of $3,583, the investor agreed to: (a) extend the maturity date of its note to the earlier of (i) March 31, 2025 or (ii) the closing of an uplisting transaction and (b) impose a limitation on its conversions so that the investor will not effect a conversion under its note until the earlier of (i) the uplisting transaction closing or (ii) the maturity date. The company engaged in negotiations to facilitate an additional extension. |
| ● | Pursuant to a Promissory Note Amendment Agreement with one investor holding a promissory note in the principal amount of $25,000 with accrued interest of $2,971, the investor agreed to: (a) extend the maturity date of its note to the earlier of (i) March 31, 2025 or (ii) the closing of an uplisting transaction and (b) impose a limitation on conversions so that the investor will not effect a conversion under its note until the earlier of (i) the uplisting transaction closing or (ii) the maturity date. Subsequently, the maturity dates of this note was further extended to March 31, 2025, and the Company is presently engaged in negotiations to facilitate an additional extension. Subsequently, the maturity date of this note was further extended to March 31, 2025, and the company engaged in negotiations to facilitate an additional extension. |
In consideration for the extensions of the maturity date and agreement not to convert their notes, the principal amount due under each note was increased by 30% and the interest rate of each note was increased to 10% beginning on the effective date of March 29, 2024. We negotiated the note amendments with the investors, all of whom are unaffiliated with our company, on an arm’s-length basis. As additional consideration for each note amendment, we also issued to the investors a total of 237,250 shares of our common stock on a pro rata basis.
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On May 16, June 18, July 11, August 19, August 28 and December 18, 2024, Mr. Graber made additional loans to us pursuant to convertible promissory notes in the principal amounts of $99,182, $80,000, $200,000, $150,000, $35,000 and $99,098 respectively. Of the proceeds of the July 11, 2024 note, $150,000 were used to retire a portion of a note held by Dallas Salazar, while the remaining proceeds of the notes were used to support our short-term working capital requirements. The notes from May 16, June 18, July 11, August 19 and August 28, 2024 were consolidated into a new convertible promissory note on September 30, 2024, extending the maturity date from September 30, 2024 to March 31, 2025 in exchange of 30% additional principal and an increase in interest rate from 8% to 10%.
Between April 23, 2025 and April 30, 2025, our company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to July 31, 2025. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 89,856 shares, and the aggregate principal amount increase was $561,553.
Most Favored Nation Adjustment: One promissory note with an original maturity date of August 6, 2025, and an outstanding principal of $39,000, received terms consistent with the extension agreements, including a 10% increase in principal (to $42,900) and 624 additional shares of common stock, pursuant to a Most Favored Nation Adjustment clause. The maturity date of this note has been extended to January 31, 2026.
Between August 1, 2025 and August 6, 2025, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to October 31, 2025. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 171,715 shares, and the aggregate principal amount increase was $646,498.
Most Favored Nation Adjustment: Three convertible promissory notes with original maturity dates of August 1, 2025, August 6, 2025 and August 6, 2025, and outstanding principal of $15,721.27, $50,000 and $50,000, respectively, received terms consistent with the extension agreements, including a 10% increase in principal and 378, 1,200 and 1,200 additional shares of common stock, respectively, pursuant to a Most Favored Nation clause. The maturity date of the notes has been extended to January 31, 2026.
On October 31, 2025, our company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to January 31, 2026. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 196,557 shares, and the aggregate principal amount increase was $731,377.
On October 31, 2025, two convertible promissory notes with original maturity dates of January 31, 2026, and outstanding principal of $200,000 and $34,200, respectively, received terms consistent with the extension agreements, including a 10% increase in principal (aggregate amount of $23,420) and 4,811 and 823 additional shares of common stock, respectively, pursuant to a Most Favored Nation clause. The maturity date of the notes remains January 31, 2026.
On March 16, 2026, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to June 30, 2026. In consideration for the extensions, the noteholders received a 12.5% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 542,066 shares, and the aggregate principal increase was $1,045,346.
None of the promissory or convertible notes are in default as of March 26, 2026, nor has there been a prior event of default.
Critical Accounting Policies
Fair Value of Financial Instruments
For certain of our financial instruments, including cash and equivalents, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to our short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by us. ASC Topic 825, “Financial Instruments,” defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. |
| ● | Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that we value using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. |
| ● | Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). |
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by us contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.
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BUSINESS
Overview of Our Company
We operate as a U.S. based renewable energy company focused on the extraction, refinement and distribution of technical minerals in an environmentally responsible manner. In November 2021, we found ourselves with the unique opportunity to acquire mining claims that historically reported high levels of lithium and other tech minerals crucial to produce batteries used in many technology products and markets. Subsequent to acquiring such mining claims, we hired and affiliated ourselves with industry veterans that bring us decades of experience, credibility and relationships. We intend to implement emerging direct lithium extraction (“DLE”) technologies to extract lithium and magnesium from the production of subsurface brines.
On November 5, 2021, we acquired the rights to 102 federal mining claims located in the Lisbon Valley of Utah for $100,000 plus the future payment of royalties based on a percentage of the net revenue from the sale of lithium produced from a portion of the mining property. The acquisition was driven by historical mineral data from seven previously drilled wells (plugged and abandoned). We are defined as an exploration stage issuer under Regulation S-K Subpart 1300. An independent third-party technical report indicated that further investment and development in the claims was warranted, given the abundant evidence from oil, gas and potash wells drilled in the Paradox Basin that indicates that there is a high probability of identifying and producing super saturated brines from beneath the property position. The 1978 USGS Open File Report (Hite), which documented a brine sample from the Fed 88-21P potash well (located within the current Lisbon Valley Lithium Project area) containing 340 ppm lithium and an exceptional 74,400 ppm magnesium. However, no determination has been made whether we have any reserves of minerals or whether mineralization could be economically and legally produced or extracted yet. We have no mineral reserves as defined by Regulation S-K Subpart 1300 and have had no mining revenue to date.
In July 2023, we acquired and staked an additional 641 lithium mining claims adjacent to our Lisbon Valley Project in Utah. The new claims have been registered with the BLM. We now own a total of 743 placer claims covering 14,320 acres (approximately 22 square miles) located in the Lisbon Valley of Utah within the Paradox Basin formation, comprised of the 102 original mining claims and 641 new claims.
Our Growth Strategy
Our strategic goal is to become a producer of lithium and magnesium in the United States. Currently, the U.S. has no domestic primary magnesium production since the last facility idled in 2020 amid high energy costs, stringent regulations, and competition from low-cost Chinese import, leaving the nation 100% import-dependent for primary magnesium metal. We are one of only three major domestic efforts underway to restart primary production: alongside startups like Magrathea Metals (developing seawater electrolysis tech with DoD backing) and Tidal Metals (pioneering zero-carbon electrical extraction from seawater brines), Our company is positioned to help rebuild a secure, sustainable U.S. supply chain for this critical mineral essential to defense, automotive lightweighting, and clean energy technologies.
We believe that a strategy centered on advanced brine extraction technologies, specifically Direct Lithium Extraction (DLE), represents the most cost-effective, environmentally responsible, and capital-efficient pathway currently available for domestic lithium and magnesium production compared to traditional hard-rock mining or conventional solar evaporation. DLE enables accelerated production timelines (months rather than years), lithium recovery rates exceeding 90%, markedly lower water consumption, a minimal surface footprint, and the ability to co-produce high-value magnesium while reinjecting spent brine into the formation to maintain reservoir pressure and eliminate tailings entirely. By avoiding surface disturbance and permanent land deconstruction, this closed-loop approach aligns fully with our sustainability and ESG objectives. We intend to develop our projects on a measured timeline that balances near-term cash flow generation with long-term value maximization, delivering secure, low-carbon domestic supply of these critical minerals in a manner that is both economically superior and environmentally responsible.
We have been executing the necessary steps to determine analytical results for our technical report, which should provide current results, analytical, geotechnical modeling, aquifer modeling, recharge, flows and depth. We have engaged RESPEC as our geotechnical, engineering and resource management firm to assist in the exploration of the Lisbon Valley brine extraction project. Leveraging the expertise of both our management team and RESPEC, our plan is to focus on several initiatives, including:
| ● | advancement of geotechnical, engineering, geology and fieldwork to complete technical reports on the Lisbon Valley Project; |
| ● | understanding Lisbon Valley brines, on and around our owned leases; |
| ● | develop a well plan to re-enter, sample and test the Superior 88-21 Peterson Federal ST1 well, a potash well that has a historical lithium concentration of 340 ppm (parts per million) and 74,400 ppm of magnesium; |
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| ● | enter other prospective plugged and abandoned wells, taking brine samples and performing hydrological testing at each identified high potential zone to evaluate the properties of the clastic formation; |
| ● | as information collection and analysis advances, prepare technical reports following the Regulation S-K Subpart 1300’s standards of disclosure for mineral projects, including an initial assessment, preliminary feasibility study and feasibility study; |
| ● | not only test the collected brines for lithium and magnesium, but also for previously identified high value elements such as cobalt, manganese, suites of metals in the alkaline earth metals, transition metals and halogens group; and |
| ● | based on the results of the Superior 88-21 Peterson Federal ST1 well, develop area resource estimates. |
The Lisbon Valley of Utah provides a number of collaborative benefits to attain these initiatives, including:
| ● | an area historically rich with industrial and natural resource extraction; |
| ● | a developed infrastructure including access to high voltage electrical power, as well as proximity to major roadways and rail spurs; and |
| ● | state and local agency support from UDOGM and SITLA. |
In order to achieve our current objectives at the Lisbon Valley Project, our estimated pre-production phase timelines and significant milestones include (i) the processing and approval by the BLM of our exploration permits to drill that was completed within the fourth quarter of 2024, (ii) the commencement of drilling exploration wells in the second quarter of 2026, (iii) the preparation of our Regulation S-K Subpart 1300 technical report on our exploration results in the third quarter of 2025, (iv) the selection of a DLE technology provider in the third quarter of 2026, (v) the development and building of a pilot lithium and magnesium extraction plant in the second half of 2026, and (vi) the commencement of drilling production wells by the first half of 2027. Our production phase, which primarily includes the building of a permanent lithium and magnesium extraction plant, is estimated to begin in 2028.
As part of our strategy for growth, our Lisbon Valley Project and other projects and strategic investments will be developed on measured timelines, and we will evaluate all opportunities to further expand our resource base and production capacity. We understand that our timelines are subject to a variety of operating, financial and regulatory risks and delays, including, without limitation, obtaining operating permits, government approvals and adequate funding. We are also focused on the implementation of DLE technologies, which we believe have the potential to significantly increase the supply of lithium from brine as other technologies have increased the supply of oil from shale.
We will also look to expand our holdings in the Lisbon Valley area with the acquisition of additional mineral claims and joint venture opportunities. We continue to explore and evaluate opportunities to further expand our resource base and production capacity through the possible acquisition of properties and projects in other areas of the United States and in South America.
To achieve our goal of becoming a producer of lithium and magnesium, we will rely on our competitive strengths and experienced management team to explore and consider opportunities to generate revenue and increase our projects, properties and assets, as well as explore potential funding options. Some opportunities for growth may be in the form of (i) strategic partnerships, (ii) off-take agreements, (iii) diversification of projects and properties, (iv) acquisitions of companies and technologies and (v) participation in related commercial development activities.
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Our Market Opportunity
Our Lisbon Valley Project is located in San Juan County, Utah, approximately 35 miles southeast of the city of Moab and part of the Paradox Basin geological formation. The Lisbon Valley Project consists of 743 placer mining claims staked on U.S. government land administered by the BLM covering 14,320 acres, part of a semi-contiguous group named the LVL Group. The map below shows the approximate location of our Lisbon Valley Project, including the Superior 88-21 Peterson Federal ST1 well, and the approximate location of our claims.
The original 102 placer claims that we acquired were staked by Plateau Ventures LLC and have been assigned to our wholly owned subsidiary, Mountain Sage Minerals, LLC. Our additional 641 placer claims are also registered in the name of Mountain Sage Minerals, LLC. All such claims have been registered and are currently in good standing with the BLM. All 743 claims have been staked, recorded and are in good standing with BLM until next year’s maintenance fee renewal on September 1, 2026. No other mineral, land or water rights have been applied, granted or permitted to or by Mountain Sage Minerals, LLC on such properties. The diagram below is an overview of our claims which comprise our Lisbon Valley Project.
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The maps above are referenced with PLSS and a latitude/longitude reference coordinate, accurate to 50 feet.
Our placer claims are plotted on the figures above, which is a PLSS map using Salt Lake City Prime Meridian. The claims are located in Southeast Utah in sections 17-18, 20-22, 25-29, 33-35 of Township 30 South and Range 25 East; sections 1, 3, 4, 8-15 of Township 31 South and Range 25 East; sections 31 of Township 30 South and Range 26 East and sections 5-9, 17 and 18 of Township 31 South and Range 26 East. The latitude and longitude of the southeast corner of Section 36, Township 30 South, 25 East noted on the figure is accurate to +/- 50 feet.
Oil and gas drilling and production, along with ranching, have made the area relatively accessible. There is a network of dirt and paved roads within the claims area, which service the oil and gas wells and the Lisbon Valley copper mine. The Lisbon Valley copper mine is in the heart of the Lisbon Valley and is currently producing copper cathode. Two existing natural gas pipelines traverse the claims. High voltage electrical power is supplied to the Lisbon Valley copper mine, also within the claim area, for use in the electrowinning copper recovery process. Nine wellbores (eight oil and gas and one potash) are available for re-entry and nearby water rights and private land are available for sale or lease.
The region has a history of mining, primarily uranium and vanadium, that dates back as far as 1881. Moab, Utah, the nearest population center to the property, is a city of 5,336 persons (2020 Census). It is located in a relatively remote portion of Utah but is easily accessed by U.S. Highway 191. Highway 191 intersects with Interstate 70 about 30 miles (48 kilometers) north of Moab, at Crescent Junction. Moab is a tourist destination and has numerous motels and restaurants. Moab is the nearest source of labor.
There has been no exploration or drilling conducted on the property by ABM; however, historical drilling by oil, gas, and potash operators on ABM claims, as well as in the surrounding area, has contributed valuable data registered with the United States Geological Survey (USGS). It will be necessary for us to re-enter an existing well or drill a new well to obtain brine samples for further analysis and metallurgical testing. The exploration permit for the site has been obtained from both the Federal BLM and the State UDOGM. ABM is currently preparing for the operational drilling phase of the project subject to financing.
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The Lithium and Magnesium Market
Lithium and magnesium are on the list of the 35 minerals considered critical to the economic and national security of the United States, as first published by the U.S. Department of the Interior on May 18, 2018.
On March 20, 2025, President Donald J. Trump signed an Executive Order aimed at increasing American mineral production to enhance national security, reduce reliance on foreign minerals, and create jobs. The order directs federal agencies to expedite permitting for mineral projects, prioritize critical mineral deposits on federal lands, and utilize the Defense Production Act to expand domestic capacity. The Executive Order also establishes a critical minerals fund and encourages collaboration with private industry to secure a resilient supply chain for materials like rare earths, uranium, copper, and coal. Highlighting the strategic importance of critical minerals for emerging technologies and military readiness, the administration seeks to address the U.S.’s significant import dependence—particularly on China, which supplies 70% of rare earths— and signal a clear shift in focus toward U.S.-centric projects and national security. In an article from April 4, 2024, titled “US lithium demand predicted to grow nearly 500% by 2030”, Fastmarkets forecasts a significant growth in demand for lithium in the US of 487% to almost 412,000 tonnes of lithium carbonate equivalent by 2030.
In August 16, 2022, Section 45X Advanced Manufacturing Production Tax Credit (AMPTC) was enacted as part of the Inflation Reduction Act. For critical minerals listed under Section 45X(c)(6) (explicitly including lithium and magnesium) the credit delivers a 10% cash tax credit (or direct-pay equivalent for certain entities) on the taxpayer’s eligible costs of production. IRS final regulations issued October 28, 2024 clarified that the cost basis can include U.S.-based extraction costs and both direct and indirect material costs (even if sourced internationally), provided proper supplier certifications are obtained to prevent double-claiming. On July 4, 2025, President Trump signed H.R.1, the One Big Beautiful Bill Act (OBBBA), into law, introducing revisions to the Section 45X Advanced Manufacturing Production Tax Credit for critical minerals. The OBBBA eliminates this exemption, imposing a phasedown to 75% (7.5%) in 2031, 50% (5%) in 2032, and 25% (2.5%) in 2033 before full termination on December 31, 2033, limiting full access to pre-2032 operational projects.
In June 2021, the U.S. Department of Energy published a report titled “National Blueprint for Lithium Batteries 2021-2030” (the “NBLB Report”) which was developed by the Federal Consortium for Advanced Batteries (“FCAB”), a collaboration by the U.S. Departments of Energy, Defense, Commerce, and State. According to the NBLB Report, one of the main goals of this U.S. government effort is to “secure U.S. access to raw materials for lithium batteries”. The NBLB Report summarizes the U.S. government’s views on the need for lithium and the expected growth of the lithium battery market as follows:
● “A robust, secure, domestic industrial base for lithium-based batteries requires access to a reliable supply of raw, refined, and processed material inputs…”; and
● “The worldwide lithium battery market is expected to grow by a factor of 5 to 10 in the next decade.”
The magnesium market presents significant growth opportunities across multiple high-demand sectors. In the automotive industry, magnesium’s lightweight properties are essential for meeting stringent weight performance metrics in cars and trucks, enhancing fuel efficiency and performance. Similarly, in aerospace, magnesium’s exceptional strength-to-weight ratio, corrosion resistance, and efficient heat dissipation make it indispensable for cutting-edge applications. Furthermore, magnesium’s designation as a critical mineral by the U.S. Geological Survey (2022) qualifies it for Defense Production Act Title III support, bolstering domestic supply chains and reinforcing its strategic importance. The U.S. budget reconciliation bill’s allocation of $20 billion to domestic munitions production underscores the need for reliable magnesium supplies, critical for advanced weaponry. The U.S. now relies entirely on magnesium imports and recycling to meet domestic demand. Global primary magnesium production in 2023 was estimated at 940,000 metric tons, with China dominating at nearly 90% of the supply. The last remaining primary facility, US Magnesium LLC’s electrolytic plant in Rowley, Utah (which drew magnesium chloride brine from the Great Salt Lake) effectively ceased primary magnesium output in late 2019/early 2020 and has remained idled ever since.
The growth in electric vehicles (“EVs”) will provide the greatest needs for lithium-based batteries. The BloombergNEF Electric Vehicle Outlook 2024 presents an optimistic view of EV demand and sales growth, albeit not at the accelerated pace witnessed during 2020-2024. According to that report, global passenger EV sales are projected to climb from 13.9 million in 2023 to over 30 million by 2027, with the EV share of new vehicle sales reaching 33%, driven by declining battery costs—down 90% over the past decade—and innovative models from automakers. Meanwhile, the report notes that the commercial sector is accelerating, with electric vans and buses poised for significant gains; sales of electric light-duty delivery vans and trucks are spreading rapidly in China, South Korea, and Europe, approaching one-third of sales by 2030, while municipal buses are expected to exceed 60% of sales by the same year.
The U.S. electric vehicle (EV) market is showing promising growth, with Kelley Blue Book reporting in an article from January 14, 2025 titled “America Set EV Sales Record in 2024” that 1.3 million EVs were sold in 2024—a 7.3% rise from 2023—bolstered by a strong fourth quarter where sales grew over 15% compared to the previous year. Cox Automotive’s 2025 outlook offers a positive forecast, predicting EVs and hybrids will account for 25% of U.S. car sales, with full EVs expected to reach 10%, up from 7.5% last year, suggesting steady progress in electrification. Despite uncertainties around tariffs and potential changes to federal clean vehicle credits, EV adoption continues to climb—Rho Motion, in a press release from March 12, 2025 titled “Global EV Sales Up 50% in February 2025”, notes an encouraging 28% increase in sales for fully electric and plug-in hybrid models in the first two months of 2025 in the U.S. and forecast a 16% growth in U.S. and Canada in 2025 versus 2024, reflecting a resilient and growing interest in EVs among American buyers.
The Canaccord Genuity report from March 20, 2025, highlights that while EV sales are expected to grow at a slower pace —with a revised forecast showing more modest 10% CAGR to 2035, down from a 40% CAGR between 2020 and 2024—the burgeoning Battery Energy Storage Systems (BESS) market will help offset this decline. BESS installations have increased at a 150% compounded annual growth rate (CAGR) since 2020, reaching 166 GWh in 2024, and are projected to grow to 2,100 GWh by 2035 at a 20% CAGR. This growth is driven not only by traditional grid and behind-the-meter applications but also by increasing integration with renewable energy sources for data centers, which are expected to account for 5% of global electricity demand by 2035 (up from 3%). This expansion in BESS capacity provides a robust counterbalance to the tempered EV market, supporting continued demand for battery materials despite the EV slowdown.
Despite current oversupply and low prices in battery raw material markets, in an article from January 7th, 2025 titled “Battery minerals deficits continue to be expected within a decade”, Benchmark Minerals forecasts significant deficits within a decade, with lithium and nickel facing shortfalls of 572,000 tonnes and 839,000 tonnes by 2034—seven times larger than today’s surpluses. To meet 2030 battery demand, $514 billion in investment is needed, including $220 billion for upstream projects, with nickel ($66 billion) and lithium ($51 billion) requiring the most. Lithium is seen as the primary bottleneck, needing mined supply to jump from over 1 million tonnes in 2024 to 2.7 million tonnes by 2030, driven largely by EVs. Western efforts to reduce reliance on China, where costs are lower due to lax regulations, may increase this investment figure, while the slow pace of mine development (5-25 years) versus faster midstream/downstream projects (under 5 years) highlights a critical disconnect, underscoring the need for upstream investment to support gigafactories and future EV growth.
While these figures are robust relative to historical data, there can be no guarantee that ultimate consumer adoption for EVs and plug-in-hybrid vehicles will drive lithium demand as predicted.
Lithium and Magnesium Brine Deposits and Direct Lithium Extraction
Lithium and magnesium are mined from three different deposit types: brine deposits, pegmatite deposits (also referred to as “hard rock”) and sedimentary deposits (also referred to as clay deposits). Brine deposits are the most common, accounting for more than half of the world’s known lithium reserves and often contain magnesium as a significant co-occurring element. The economic focus in pegmatite and sedimentary deposits typically remains on lithium or other primary minerals. All of our current projects focus on brine deposits, where both lithium and magnesium are present, with magnesium often considered a key co-product or impurity. In 2023, Fastmarkets projected that by 2030, 13% of global lithium production will come from direct lithium extraction (DLE), with Chile and Argentina currently leading in brine-based lithium production.
We intend to recover lithium, magnesium and other potential minerals from brine through DLE rather than evaporation ponds. We believe the DLE method has been gaining favor in the lithium industry over the last several years because it does not involve the use of evaporation ponds. DLE is more acceptable from an environmental standpoint because it requires a much smaller footprint and minimal water consumption. To date, we have not done any testing for the possibility of using DLE and will not be able to do any testing until samples of brine are acquired from the target formations. See “Risk Factors – Our success as a company producing lithium, magnesium and related products depends to a great extent on our research and development capabilities for direct lithium extraction and our ability to secure capital for the implementation of brine processing plants.”
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Direct extraction technologies isolate lithium and magnesium out of brine using filters, membranes, ceramic beads, or other equipment, which is often housed in a small warehouse, significantly shrinking the environmental footprint of evaporation ponds used to produce commercial quantities of lithium and magnesium. In DLE, subsurface lithium and magnesium from brine are pumped to a processing unit where an adsorption, resin or membrane material is used to extract only the lithium and magnesium from the brine, while spent brine can be reinjected into the basin aquifers. The extracted solution is then polished of impurities to yield battery-grade lithium or magnesium chloride product suitable for sale in the global market for batteries and other applications. The more rapid production timeframe and possible brine reinjection into the aquifer is a key environmental differentiator between the DLE process and traditional lithium process that uses evaporation ponds.
Removing magnesium from brines prior to the Direct Lithium Extraction (DLE) process significantly enhances its efficiency by addressing the challenges posed by high Mg/Li ratios, which often exceed 40:1 in natural brines. Implementing a dedicated magnesium extraction (DME) package before DLE reduces this ratio, enabling higher lithium selectivity and recovery rates by minimizing magnesium’s interference with sorbents or extractants. This pretreatment also prolongs the lifespan of adsorbents by preventing magnesium-induced fouling or scaling, which can degrade equipment performance and increase maintenance costs. By reducing these operational costs through lower maintenance and reagent consumption, magnesium stripping further optimizes the process. Additionally, if pH adjustments are required during DLE, removing magnesium first allows the resulting solid waste to be repurposed as magnesia salt, creating a value-added byproduct stream that enhances the process’s economic viability. By streamlining lithium extraction and mitigating operational issues, magnesium stripping optimizes DLE efficiency and supports sustainable, cost-effective lithium production.
There are several technologies to extract lithium and magnesium, broadly grouped into four main categories: adsorption, ion exchange, solvent extraction and chemical precipitation
| ● | Adsorption physically absorbs lithium chloride (“LiCl”) or magnesium chloride (“MgCl2”) molecules onto the surface of a sorbent from a loaded solution. The lithium and magnesium are then stripped from the surface of the sorbent using water. | |
| ● | Ion exchange takes lithium or magnesium ions from the solution and replaces them with a different positively charged cation that is contained in the sorbent material. An acidic (or basic) solution is required to strip the lithium and magnesium from the material and regenerate the sorbent material. | |
| ● | Solvent extraction removes lithium and magnesium ions from solution by contacting the solution with an immiscible fluid (i.e., oil or kerosene) that contains an extractant that attaches to lithium and magnesium ions and brings them into the immiscible fluid. The lithium and magnesium are then stripped from the fluid with water or chemical treatment. This is the most effective direct extraction technology for magnesium and reduces the Mg/Li ratio in the brine, facilitating easier lithium extraction. | |
| ● | Chemical precipitation is a physical-chemical process that uses a water-soluble salt that reacts with dissolved Li or Mg ions generating an insoluble salt that is removed from solution by filtration. This typically occurs in the pH adjustment of brines or for the isolation of magnesium from seawater and brine. |
Our identification as an “environmentally minded” business is evidenced by our commitment to deploy DLE rather than the typical extraction techniques of hard-rock mining or underground brine water. Unlike those traditional methods for producing lithium and magnesium, DLE uses filters, membranes or resin materials to extract the mineral from brine water, resulting in:
| ● | usage of less water; |
| ● | recycling of the majority of the brine water used; |
| ● | consumption of less fossil fuels; |
| ● | reduction in the need for additional processing and alternative mining sources; and |
| ● | leaving an anticipated smaller physical and environmental footprints than would be required for the use of evaporation ponds. |
Traditionally, lithium and magnesium produced from brine water is stored in evaporation ponds. As the water evaporates, the other elements of the brine such as magnesium or calcium precipitate out, leaving the brine more concentrated to produce lithium carbonate or magnesium chloride. The evaporation process can take from 9 to 18 months depending on the type of project and weather conditions. With DLE, that process can be shortened to days or even hours. DLE also reduces the amount of land required for the pond evaporation process, while the potential to reinject the remaining brine water after the process further reduces the environmental impact.
The BLM Permit Process
We filed our initial applications in August 2023 with the UDOGM and the BLM. We received UDOGM approval in April 2024 and BLM final approval in November 2024, conditional on the payment of the surety bond. The federal authorization pathway for activities on BLM-managed lands consists of two interconnected processes: (1) the Plan of Operations (POO) review and (2) the National Environmental Policy Act (NEPA) analysis. These processes run concurrently in several areas and together determine the overall permitting timeline.
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The POO process begins with project identification, refinement of technical details, and the completion of required civil, cultural, biological, and environmental surveys. Survey results form the baseline information for agency review. After survey work is complete, the initial POO is submitted to the BLM, followed by onsite evaluations and revisions. Bonding and reclamation documentation proceed in parallel. Once all required updates and bonding materials are submitted, the BLM completes its application and bond review before issuing a final approval.
The NEPA process begins with BLM’s Notice of Intent and public scoping. Kickoff meetings with the BLM interdisciplinary team and cooperating agencies establish issues to be analyzed, define alternatives, and outline analytical requirements. Draft environmental documents are prepared and reviewed, followed by a 45–60-day public comment period. Comments are addressed, the analysis is updated, and BLM prepares the final environmental documentation, typically including a Finding of No Significant Impact (FONSI) and a Decision Record. A 30-day appeal period may follow, depending on the determination.
The combined timeline for the POO and NEPA processes typically ranges from approximately 6 to 8 months. This includes survey execution, onsite reviews, POO revisions, bonding, NEPA scoping, environmental analysis, the public comment period, and final agency review. Actual durations depend on data readiness, complexity of alternatives, and scheduling coordination across required steps.
There has been no exploration or drilling conducted on the property by ABM; however, historical drilling by oil, gas, and potash operators on ABM claims, as well as in the surrounding area, has contributed valuable data registered with the United States Geological Survey (USGS). It will be necessary for us to re-enter an existing well or drill a new well to obtain brine samples for further analysis and metallurgical testing. The exploration permit for the site has been obtained from both the Federal BLM and the State UDOGM. With permits in hand, ABM is currently preparing for the operational drilling phase of the project subject to obtaining financing.
We believe there is evidence from oil, gas and potash wells drilled in the Paradox Basin indicating a high probability of identifying and producing super saturated brines from beneath the Project. The geology of the area of the Project and of the Paradox Basin as a whole is complex, although zones have been targeted and proven, and they are mappable within and beyond the claims area. It is not likely that the same zones vary significantly in terms of reservoir quality and thickness as evidenced by log analysis; however, these parameters have not been confirmed by actual testing by us.
We have not calculated mineral and resource estimation and have no revenue being generated from the subject property. The only way to determine if the lithium and magnesium enriched brines exist and can be economically produced from the target zones is to drill exploration wells to produce and test brine from the targeted zones. We, through our wholly owned operating company Mountain Sage Minerals, LLC, intend to drill two appraisal wells on the subject property to evaluate reservoir properties (porosity, permeability and pressure), flow rates and in situ mineral concentrations. Information from the two wells will be used to assess the resource potential and devise a detailed development plan.
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We have retained a third-party consulting firm to assist with drilling, completion and review of test results for the two appraisal wells. Any extracted brines should be tested to determine lithium, magnesium and other important mineral concentrations and to prove the economic viability of a pilot and permanent production program. We have identified an appraisal and development program that is proprietary. This information will be disclosed in an advanced technical report after the appraisal wells are drilled and individual zones are identified and fully evaluated. Cost estimates and authority for expenditures for both well tests and the 3D Survey are currently in process.
The Technical Report Summary on the Lisbon Valley Project prepared by Bradley C. Peek, MSc. of CPG Peek Consulting, Inc., in accordance with Regulation S-K Subpart 1300, is included as an exhibit to the registration statement of which this prospectus forms a part. The effective date of the report is October 31, 2023.
Internal Controls
Even though we have yet to establish mineral resource and reserve estimates, we have established internal controls for reviewing and documenting the information we intend to use to support mineral reserve and mineral resource estimates. We have engaged third party service providers and specialists in geosciences and data and engineering for exploration and mine productivity and efficiency. A review of all progress on the development of our mineral resources and reserves estimates, including related assumptions, is undertaken and finalized by our qualified person (“QP”).
When determining resources and reserves, as well as the differences between resources and reserves, our QP will develop specific criteria, each of which must be met to qualify as a resource or reserve, respectively. The QP and our management must agree on the reasonableness of the criteria for the purposes of estimating resources and reserves. These criteria, such as demonstration of economic viability, points of reference and grade, must be specific and attainable. All estimates require a combination of historical data and key assumptions and parameters. When possible, historical data and resources, data from public information and generally accepted industry sources will be used to develop these estimations.
We have developed quality control and quality assurance (QC/QA) procedures at our Lisbon Valley property, which were reviewed by our QP to ensure the process for developing mineral resource and reserve estimates is sufficiently accurate. QC/QA procedures include independent checks on samples by third party laboratories and duplicate sampling, among others. In addition, our QP will review the consistency of historical production as part of its analysis of the QC/QA procedures.
We recognize the risks inherent in mineral resource and reserve estimates, such as the geological complexity, interpretation and extrapolation of data, changes in operating approach, macroeconomic conditions and new data, among others. Overestimated resources and reserves resulting from these risks could have a material effect on future profitability.
Raw Materials
We do not have any material dependence on any raw materials or raw material suppliers. All the raw materials that we need are available from numerous suppliers and at market-driven prices.
Intellectual Property
We do not own or license any intellectual property which we consider to be material.
Sales and Marketing
We currently do not have commercial capabilities required to market and distribute lithium and magnesium. There is no assurance that we will be able to attain the necessary sales and marketing capabilities or secure the services of a firm to provide those capabilities, to achieve our sales expectations.
Customers
As we are not yet in production, we have no customers and have no off-take agreements with customers.
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Future Production and Sales
We expect the demand for our lithium and magnesium, if and when in production, to be facilitated by increasing global demand for these products and by the U.S government focus on developing a local supply chain to reduce dependency on imports from foreign countries. We intend on utilizing intermediaries for sales in order to focus on our core competencies of exploration and extraction.
Competition and Market Barriers
We compete with other mineral and chemical processing companies in connection with the acquisition of suitable exploration properties and the engagement of qualified personnel. Many of our competitors possess greater financial resources and technical facilities than we do. Although our mission is to be a leading lithium and magnesium producer, the lithium and magnesium mining and chemical industries are fragmented. We are one of many participants in these sectors. Many of our competitors, as compared to us, have been in business longer, have established more strategic partnerships and relationships and have greater financial accessibility.
While we compete with other exploration companies in acquiring suitable properties, we believe there will be readily available purchasers of lithium and magnesium chemical products or other industrial minerals if they are produced from any of our owned or leased properties. The price of our planned products may be affected by factors beyond our control, including fluctuations in the market prices for lithium and magnesium, supplies of lithium and magnesium, demand for lithium and magnesium, and mining activities of others. If we identify lithium mineralization that is determined to be of economic grade and in sufficient quantity to justify production, additional capital would be required to develop, mine and sell that production.
Government Regulation
Exploration and development activities for our projects are subject to extensive laws and regulations, which are overseen and enforced by multiple U.S. federal, state and local authorities as well as foreign jurisdictions. These applicable laws govern exploration, development, production, exports, various taxes, labor standards, occupational and mine health and safety, waste disposal, protection and remediation of the environment, protection of endangered and protected species and other matters. Various permits from government bodies are required for drilling, mining, or manufacturing operations to be undertaken and we cannot be assured such permits will be received. Environmental laws and regulations may also, among other things:
| ● | require notice to stakeholders of proposed and ongoing exploration, drilling, environmental studies, mining or production activities; |
| ● | require the installation of pollution control equipment; |
| ● | restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with exploration, drilling, mining, lithium and magnesium manufacturing or other production activities; |
| ● | limit or prohibit drilling, mining, lithium and magnesium manufacturing or other production activities on lands located within wetlands, areas inhabited by endangered species and other protected areas, or otherwise restrict or prohibit activities that could impact the environment, including water resources; |
| ● | impose substantial liabilities for pollution resulting from current or former operations on or for any preexisting environmental impacts from our projects; |
| ● | require significant reclamation obligations in the future as a result of our extraction and chemical operations; and |
| ● | require preparation of an environmental assessment or an environmental impact statement. |
Compliance with environmental laws and regulations may impose substantial costs on us, subject us to significant potential liabilities and have an adverse effect on our capital expenditures, results of operations, or competitive position. Violations and liabilities with respect to these laws and regulations could result in significant administrative, civil or criminal penalties, remedial clean-ups, natural resource damages, permit modifications and/or revocations, operational interruptions and/or shutdowns and other liabilities, as well as reputational harm, including damage to our relationships with customers, suppliers, investors, governments or other stakeholders. The costs of remedying such conditions may be significant and remediation obligations could adversely affect our business, results of operations and financial condition. Federal, state and local legislative bodies and agencies frequently revise environmental laws and regulations and any changes in these regulations, or the interpretations thereof, could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on our business operations. As of December 31, 2025, we have not been required to spend material amounts on compliance regarding environmental regulations.
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Permits
Obtaining and renewing governmental permits is a complex and time-consuming process and involves numerous jurisdictions, public hearings and possibly costly undertakings. The timeliness and success of permitting efforts are contingent upon many variables not within our control, including the interpretation of permit approval requirements administered by the applicable permitting authority. We may not be able to obtain or renew permits that are necessary for our planned operations, or the cost and time required to obtain or renew such permits may exceed our expectations. Any unexpected delays or costs associated with the permitting process could delay the exploration, development and/or operation of our projects.
Environmental, Social and Corporate Governance
We are committed to ESG causes. As we start to hire employees for our projects, our hiring efforts will focus on hiring workers from communities near our project areas. Many of these communities have high levels of unemployment.
Human Capital Management
As of March 26, 2026, we had three full-time employees, who are our executive officers. We also utilize four independent contractors, two to provide us with accounting support and two for geological expertise. We are committed to diversity, equity and inclusion as part of our growth strategy. We will treat each employee and job applicant without regard to race, color, age, sex, religion, national origin, citizenship, sexual orientation, gender identity, ancestry, veteran status or any other category protected by law. We believe in allocating resources and establishing, in an equitable manner, policies and procedures that are fair, impartial and just. To provide a diverse and inclusive workplace, we will focus our efforts on creating a culture where all employees can contribute their skills and talents and be themselves.
Legal Proceedings
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
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MANAGEMENT
Information about Executive Officers and Directors
The following table sets forth certain information regarding our executive officers and directors as of the date of this prospectus:
| Name | Age | Position | Director/Officer Since | |||
| David E. Graber | 54 | Chairman and Chief Executive Officer | February 2017 | |||
| Sebastian Lux | 54 | President, Chief Operating Officer and Director | July 2022 | |||
| Agustin Cabo | 40 | Chief Financial Officer | March 2024 | |||
| Dylan Glenn | 56 | Director | May 2023 | |||
| Jared Levinthal | 53 | Director | December 2018 | |||
| Adam C. Lipson, M.D. | 53 | Director | July 2022 | |||
| Andrew Suckling | 54 | Director | August 2022 | |||
| Justin Vorwerk | 66 | Director | August 2022 |
The principal occupations for at least the past five years of each of our directors and executive officers are as follows:
David E. Graber was appointed as the sole Chief Executive Officer of our company in March 2024, previously serving as our co-Chief Executive Officer since March 2023, and appointed as our Chairman of the Board in March 2023. He has served as a member of our Board since July 2022 and was the Chief Executive Officer and a director of our company from February 2017 to November 2018. As the Chairman and Chief Executive Officer, Mr. Graber guides our company’s strategic direction and leads our company’s mergers and acquisitions and capital markets activities. Mr. Graber has also been the managing principal of Cobrador Capital Advisors, LLC, an investment advisory firm focused on the consumer sector and energy transition, since 2010. Prior to founding Cobrador Capital Advisors, Mr. Graber was Managing Director, investment banking at New Century Capital Partners (from 2011 to 2014) and National Securities Corporation (from 2009 to 2010), where he focused on natural resources and energy transportation sectors. From 1994 to 2005, Mr. Graber was a senior vice president and director in the equities division of Donaldson, Lufkin & Jenrette and subsequently, Credit Suisse First Boston (CSFB) in New York and Los Angeles. Mr. Graber holds dual Master of Business Administration (MBA) from Columbia University Graduate School of Business in New York City and London Business School in the United Kingdom. He also holds a B.A. degree in Psychology from Tulane University. Mr. Graber brings extensive natural resource industry knowledge to our company and a deep background in growth companies and corporate finance and governance, making him well qualified as a member of the Board.
Sebastian Lux was appointed President and Chief Operating Officer of our company in March 2024, previously serving as our co-Chief Executive Officer and interim Chief Financial Officer since March 2023, in addition to being elected to our Board of Directors. He was our Chief Executive Officer from July 2022 to March 2023. Mr. Lux is responsible for the day-to-day operational leadership of our Utah mining operations and logistics chain for lithium and magnesium, from permitting and geological studies to well testing and extraction. Prior to joining us in July 2022, Mr. Lux served as co-founder and director of supply chain solutions of Blue Duck Data, a cloud-based analytical solutions provider for end-to-end supply chain analysis, from August 2020. Prior to that position, Mr. Lux served from August 2015 to November 2020 as co-founder and director of supply chain and logistics operations for Genuine Origin, an e-commerce specialty coffee company that is a U.S. division of Volcafe/ED&F Man Commodities Ltd. He is a multilingual professional experienced in strategic planning for international operations, data analytics, financial modeling, logistics, purchasing, product development, supplier partnership management, process improvements, negotiations, e-business and franchise development. Mr. Lux earned an MBA in Entrepreneurship from Babson’s F.W. Olin Graduate School of Business, an MSAS in E-Commerce from Boston University and a B.A. degree in Economics from Roanoke College. In addition to his operational leadership of our company, Mr. Lux has more than 25 years of experience in entrepreneurial ventures in the United States, Europe and South America, where he developed international supply chains for the distribution of coffee, food goods and after-market auto-parts, as well as having created multiple market entry programs and brand development projects for new and existing companies, making him well qualified as a member of the Board.
Agustin Cabo was appointed to serve as our Chief Financial Officer in March 2024, previously serving as Director of Finance of our company from June 2023 to March 2024. Prior to this, he was the Chief Financial Officer at Americhem Sales Company (2020-2023). Mr. Cabo served as an Associate of Strategic Business Development at Scientific Games International (2018-2020) and he worked as a Senior Research Analyst at Crisil Limited, an S&P company (2010-2016). He holds an M.B.A. from Emory University’s Goizueta Business School, where he graduated in May 2018 as an Acosta International Scholar, and a B.A. in Economics from the University of Buenos Aires. Mr. Cabo is a Chartered Financial Analyst (CFA) and a member of the CFA Institute, having earned his certification in September 2015 and a Certified Management Accountant (CMA) and member of the Institute of Management Accountants (IMA), certified in January 2024.
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Dylan Glenn became a director of our company in May 2023. He has been a Principal at Eldridge Industries, a diversified holding company headquartered in Greenwich, Connecticut, since December 2023, and previously served as a Senior Director at Eldridge from October 2021 to December 2023. He is the former Chairman of Guggenheim KBBO Partners, Ltd., a Dubai-based joint venture partnership between the KBBO Group and Guggenheim Partners. Prior to this role, Mr. Glenn was Senior Managing Director of Guggenheim Partners, where he worked for nearly 15 years. While at Guggenheim Partners, Mr. Glenn worked mostly in two capacities. First, he coordinated the joint venture, Guggenheim KBBO Partners, Ltd., a merchant banking business which leveraged Guggenheim’s investment banking and asset management capabilities with an important strategic partner in the Middle East. Additionally, he led Guggenheim’s Government Relations effort in Washington and was a Member of the Guggenheim Partners Public Affairs Committee. Prior to joining Guggenheim, Mr. Glenn served as Deputy Chief of Staff to Governor Sonny Perdue of Georgia. As a Deputy Chief of Staff, Mr. Glenn was responsible for all External Affairs. Mr. Glenn also served in the White House in Washington, D.C. as Special Assistant for President George W. Bush for Economic Policy. He was a member of the National Economic Council team advising the President on various economic issues. Mr. Glenn is a director of the George W. Bush Presidential Center. Mr. Glenn is a Director of the Renewable Energy Group, a leading global producer and supplier of renewable fuels like biodiesel, renewable diesel, renewable chemicals and other products. He is also a Director of Intellicheck, Inc., a leading authentication services company, since March 2020. Additionally, he serves on the Board of Managers of Stonebriar Commercial Finance based in Plano, Texas. Mr. Glenn is a Trustee of Davidson College, where he earned his B.A. degree and is also a Trustee of the Episcopal High School at Alexandria, Virginia. Mr. Glenn’s extensive experience in finance and economics, insight into regulatory affairs and his expertise in oversight and governance gained through service in the public sector, bring unique and valuable perspective to our Board and make him well qualified to be a member of the Board.
Jared Levinthal has served as a director of our company since December 2018. Mr. Levinthal, an attorney, is a partner with Lightfoot Franklin & White, PLLC in Houston, Texas. Mr. Levinthal is a graduate, with Honors, Order of the Coif, from the University of Texas School of Law. Mr. Levinthal is a graduate of Tulane University with a B.A. degree and is a member of the Texas Bar. Mr. Levinthal is well qualified to serve as a director due to his substantial knowledge and working knowledge in corporate governance and controls.
Adam C. Lipson, M.D. was elected to our Board of Directors in July 2022. Dr. Lipson is a world-renowned neurosurgeon, serving for more than the past five years as managing partner of IGEA Brain, Spine & Orthopedics in New York City and New Jersey, a private medical practice generating $30-40 million annual revenue with 75 employees. He has over a decade of experience as a private investor in over 20 biotechnology and biomedical device companies. He has co-founded several other companies, including IGEA Ventures and STRYDD. He is passionate about finding technologies that facilitate advances in energy transition, biomedical devices and cancer therapeutics. Dr. Lipson is a graduate of Dartmouth College with a B.A. degree in Chemistry and History and M.D. degree from Harvard Medical School, Honors Society in Neuroscience and was a Fulbright Fellow at Karolinska Institute in Stockholm, Sweden. Dr. Lipson’s leadership of numerous medical and other technology growth companies and as an investor in many early-stage companies make him well qualified as a member of the Board.
Andrew Suckling has served as a director of our company since August 2022. Mr. Suckling has over 25 years’ experience in the commodity industry and is currently the non-executive chairman of Cadence Minerals (AIM: KDNC), the non-executive director of Macarthur Minerals (TSX-V: MMS, ASX: MIO). Mr. Suckling started his professional career in 1994 as a trader on the London Metal Exchange and subsequently became a founding partner, research analyst and trader with the multibillion fund management group, Ospraie. Mr. Suckling is a graduate of Brasenose College, Oxford University, earning a B.A. (Hons) in Modern History and an MA in Modern History. Mr. Suckling’s in-depth knowledge of the mining industry and the broad range of mineral companies in the industry make him well qualified as a member of the Board.
Justin Vorwerk has served as a director of our company since August 2022. For more than the past five years, Mr. Vorwerk has had a distinguished career in finance and capital markets, holding positions as a managing director in investment banking with Goldman Sachs, The Royal Bank of Scotland and Deutsche Bank Securities, as well as Donaldson, Lufkin & Jenrette and Credit Suisse, where he co-headed the financial sponsors group. Mr. Vorwerk also served as head of investment banking and capital markets at CRT Capital Group, where he structured debt and equity products and advised on mergers and acquisitions. Mr. Vorwerk holds an MBA from The University of Pennsylvania (Wharton) and attended Princeton University, where he earned an A.B. degree in Economics. Mr. Vorwerk has extensive knowledge of capital markets, making his input invaluable to the Board’s discussions of our capital raising initiatives.
Term of Office
Directors are elected to hold office until the next annual meeting of stockholders and until their successors are elected and qualified. Annual meetings of the stockholders, for the selection of directors to succeed those whose terms expire, are held at such time each year as designated by the Board of Directors. Our officers are elected by the Board of Directors, which is required to consider that subject at its first meeting after every annual meeting of shareholders. Each officer holds office until his successor is elected and qualified or until his earlier resignation or removal.
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Board of Directors and Corporate Governance
When considering whether directors have the experience, qualifications, attributes and skills to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board of Directors focuses primarily on the information discussed in each of the directors’ individual biographies as set forth above. With regard to Messrs. Graber and Lux, the Board considered their day-to-day operational leadership of our company and in-depth knowledge of our lithium and magnesium exploration assets. In the cases of Messrs. Glenn, Levinthal, Suckling and Vorwerk and Dr. Lipson, the Board has considered their substantial experience in both the mining and minerals industry and operational areas that will assist our corporate governance. The Board of Directors periodically reviews relationships that directors have with our company to determine whether the directors are independent. Directors are considered “independent” as long as they do not accept any consulting, advisory or other compensatory fee (other than director fees) from us, are not an affiliated person of our company or our subsidiaries (e.g., an officer or a greater than 10% stockholder) and are independent within the meaning of applicable United States laws, regulations and the NYSE American listing rules.
The Board of Directors has determined that, of our directors, Messrs. Glenn, Levinthal, Suckling and Vorwerk are independent within the meaning of the listing rules of the NYSE American. In the cases of Messrs. Graber and Lux, their positions as executive officers of our company, together with Mr. Graber’s and Dr. Lipson’s beneficial ownership of more than 10% of our outstanding common stock, preclude them from being considered independent within the meaning of the listing rules of the NYSE American.
Board Committees
Upon the closing of this offering, our Board of Directors will have an Audit Committee, Compensation Committee, and Nomination and Corporate Governance Committee. The Audit Committee will be composed of Messrs. Vorwerk (Chairman), Glenn and Suckling. The Compensation Committee will be composed of Messrs. Glenn (Chairman) and Vorwerk. The Nomination and Corporate Governance Committee will be composed of Messrs. Levinthal (Chairman) and Suckling.
Our Audit Committee, Compensation Committee, and Nomination and Corporate Governance Committee each comply with the listing rules of the NYSE American. At least one member of the Audit Committee will be an “audit committee financial expert,” as that term is defined in Item 407(d)(5)(ii) of Regulation S-K, and each member will be “independent” as that term is defined in the listing rules of the NYSE American. Our Board of Directors has determined that Mr. Vorwerk will meet those requirements.
Code of Ethics
We have adopted a written code of ethics that applies to all our directors, officers and employees in accordance with the rules of the NYSE American and the SEC. Prior to the closing of this offering, we will post a copy of our code of ethics, and intend to post amendments to this code, or any waivers of its requirements, on our company website.
Advisory Board
We have established an advisory board with experience in the mining, exploration and drilling businesses, which is currently comprised of five members. Our advisory board meets periodically with our board of directors and management to discuss matters relating to our business activities and to establishing commercial business alliances and working projects with industry participants. Members of our advisory board will be reimbursed by us for out-of-pocket expenses incurred in serving on our advisory board.
To date, none of our advisory board members has served as a consultant to us and we have not entered into any consulting agreements with any of them. To our knowledge, none of our advisory board members has any conflict of interest between their obligations to us and their obligations to others. Companies with which advisory board members are involved may in the future have commercial relationships with us.
The current members of our advisory board and his primary professional affiliations are as follows:
Bradley C. Peek is a geologist with a background in mineral exploration and consulting. He has more than 35 years of experience in various aspects of mineral exploration, including personnel management, government interaction, budgeting, geologic interpretation, sample analysis, and database management. He was previously the Vice President-Exploration at Noram Lithium Corp and is a member of the Society of Economic Geologists and the American Institute of Professional Geologists. Mr. Peek received his undergraduate degree from the University of Nebraska (BSc in Geology) and graduate degree from the University of Alaska (MSc in Geology).
Chris McClanahan possesses extensive experience in the oilfield service industry that spans more than 30 years. Mr. McClanahan has been the President and Chief Executive Officer of Coastal Drilling Company, LLC, an operator of inland barge drilling rigs in the South Louisiana and Gulf Coast regions, since 2001. Mr. McClanahan also acted as the Chairman and Chief Executive Officer of Iron Horse Tools, LLC, a company that designs, tests, rents and services pressure control equipment that enhances drilling performance, from 2008 to 2020.
Creighton Reed is a U.S. Marine Corps veteran with extensive experience in government affairs, national security, and public-sector advisory roles. Mr. Reed provides advisory support on initiatives involving defense, industrial policy, federal programs, and public-private partnerships. His background enables effective engagement with regulatory and policy frameworks relevant to federal initiatives supporting domestic critical mineral development. Mr. Reed holds an MBA from Stanford Graduate School of Business and a BA from Harvard University.
Reza Ehsani brings over 27 years of experience in project management, consulting, and engineering across industries such as mining, petrochemical, power, and infrastructure and a wealth of expertise in managing large-scale, multi-billion-dollar projects. His background includes risk management, value engineering, and technical due diligence on assets in regions such as Canada, Brazil, and Greenland, across commodities including lithium, nickel, iron, copper, and rare earths. He previously held senior roles at various mining and engineering companies, managing projects in North America and internationally. He is a licensed Professional Engineer in Ontario and a Project Management Professional (PMP). Ehsani holds an MSc in Earthquake Engineering from Iran University of Science & Technology and a BSc in Civil Engineering from Sharif University of Technology.
Ryan Zarkesh brings extensive experience as a scientist and technical writer with over 15 years as a chemist in industrial and academic settings. He has published over 30 peer-reviewed papers and technical reports. In addition, Dr. Zarkesh was the co-founder and principal scientist of Lilac Solutions, a lithium extraction company that discovered, evaluated, and scaled up production of unique composite ion exchange materials for the extraction of lithium from continental brines. Dr. Zarkesh is currently Senior Chemist at Synthio Chemicals, Inc., a chemical manufacturing, and engineering services firm that specializes in the application of process intensification techniques to industrial-scale synthesis of fine chemicals. He holds a Ph.D. in Inorganic Chemistry from University of California, Irvine, and a B.S. in Chemistry from the Colorado School of Mines.
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table discloses compensation received by our named executive officers, David E. Graber, Sebastian Lux and Agustin Cabo, for the years ended December 31, 2024 and 2025.
The following table also sets forth information regarding all cash and non-cash compensation earned by or paid to the executive officers of our company who served during the years ended December 31, 2024 and 2025, for services in all capacities to our company.
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||
| David Graber | 2024 | 240,000 | 1,668 | 81,052 | 321,052 | |||||||||||||||||||||
| CEO | 2025 | 240,000 | 240,000 | |||||||||||||||||||||||
| Sebastian Lux | 2024 | 240,000 | 24,168 | 44,579 | 284,579 | |||||||||||||||||||||
| President, COO | 2025 | 240,000 | 240,000 | |||||||||||||||||||||||
| Agustin Cabo | 2024 | 126,000 | 22,500 | 36,474 | 162,474 | |||||||||||||||||||||
| CFO | 2025 | 126,000 | 126,000 | |||||||||||||||||||||||
Employment Arrangements
Messrs. Graber and Lux, in consultation with our independent directors, have agreed to receive a monthly salary as our Chief Executive Officer and President, respectively, at a rate of $20,000. Of this amount, $15,000 is payable in cash and $5,000 is accrued until such time as we are able to make the payment. Both Messrs. Graber and Lux work full-time for our company and there is no set term for their employment. Mr. Cabo became our Chief Financial Officer in March 2024 and was previously our Director of Finance. He works full-time for our company and there is no set term for his employment. He currently receives a monthly salary of $10,500.
Directors Compensation
Our non-employee directors do not currently receive cash compensation for their services as directors although they are provided reimbursement for out-of-pocket expenses incurred in attending Board meetings.
Equity Incentive Plan
On July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the 2011 Plan. The Plan provides for the grant of options intended to qualify as “incentive stock options” and “non-statutory stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, together with the grant of bonus stock and stock appreciation rights, at the discretion of our Board of Directors. Incentive stock options are issuable only to our eligible officers, directors and key employees. Non-statutory stock options are issuable only to our non-employee directors and consultants. Upon stockholder approval of the Plan, a total of 16,667 shares of common stock or appreciation rights may be issued under the Plan. The Plan will be administered by our full Board of Directors. Under the Plan, the Board will determine which individuals shall receive options, grants or stock appreciation rights, the time period during which the rights may be exercised, the number of shares of common stock that may be purchased under the rights and the option price. As of December 31, 2023, the Company had no stock options outstanding under this Plan to named executive officers, employees, directors or outside consultants.
On November 16, 2017, the Company’s Board of Directors approved the increase of the 33,333 shares reserved under the 2011 Plan. On November 22, 2017, stockholders of the Company holding a majority of the outstanding shares of the Company’s common stock approved, by written consent, an increase in the number of shares reserved under the 2011 Plan by 33,333 shares. After this increase of 33,333 shares, the total number of shares of common stock reserved under the Plan totals 50,000 shares. The 2011 Plan expired in 2021.
On August 13, 2024, the Board of Directors adopted the American Battery Materials Inc. 2024 Incentive Compensation Plan, which was deemed desirable and in the best interests of the Corporation, authorizing the executive officers to implement and administer this new plan, reserving 800,000 shares of Common Stock for issuance. As of December 31, 2025, the Company had stock options outstanding to purchase 566,000 shares of common stock under the Plan held by employees, directors and outside consultants.
In October 15, 2025, following approval by our Board of Directors and by written consent of stockholders holding a majority of our outstanding common stock, we amended our 2024 Incentive Compensation Plan to provide for an automatic share reserve mechanism equal to 17.5% of the Company’s issued and outstanding shares of common stock on a fully diluted basis. Under this provision, the number of shares available for issuance under the plan automatically increases upon each issuance of common stock or convertible securities by an amount necessary to maintain the 17.5% reserve (calculated on a fully diluted basis), with no downward adjustment if the Company’s capitalization subsequently decreases. This amendment was designed to provide equity-based awards to an increasing employee pool.
We have agreed with the representative of the underwriters that we will not issue shares of common stock (or options or other rights to acquire shares of common stock) under our 2024 Incentive Compensation Plan such that we would have in excess of 1,200,000 shares of common stock issued or issuable thereunder in the aggregate (subject to appropriate adjustment for stock splits, stock dividends, recapitalizations or similar events), and that any such additional issuances under the plan after this offering will not have an exercise price that is less than the public offering price in this offering. In the future, we may adopt a new incentive compensation plan with stockholder approval without these limitations.
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Limitation on Liability and Indemnification of Officers and Directors
Our certificate of incorporation provides that no director will be liable to our company or our stockholders for monetary damages for breach of fiduciary duty acting in his/her capacity as a director, except for liability (i) for any breach of the duty of loyalty to us or our stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the Delaware General Corporation Law (the “DGCL”); or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize corporate action further limiting or eliminating the personal liability of a director, then the liability of a director to us shall be limited or eliminated to the fullest extent permitted by the DGCL, as so amended from time to time.
Our certificate of incorporation and bylaws provide that we will indemnify any director, officer, employee, fiduciary, or agent of our company (each a “Covered Person”) who was or is made or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), other than a Proceeding by or in the right of our company, by reason of the fact that such person is or was a Covered Person, or, while a Covered Person, or is or was serving at the request of our company as a Covered Person of another corporation, partnership, joint venture, trust or other enterprise, against all liability and loss suffered and expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of our company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of our company and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful. We will also have the power to indemnify our Covered Persons as set forth in the DGCL or other applicable law.
Our certificate of incorporation and bylaws also provide that we will indemnify any person who was or is made a party or is threatened to be made a party to any Proceeding by or in the right of our company to procure a judgment in its favor by reason of the fact that such person is or was a Covered Person of our company or is or was serving at the request of our company as a Covered Person of another corporation, partnership, joint venture, trust or other enterprise, against all liability and loss suffered and expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of our company and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to our company unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper. Notwithstanding the foregoing, our company shall be required to indemnify a person in connection with a Proceeding (or part thereof) commenced by such person only if the commencement of such Proceeding (or part thereof) by such person was authorized in the specific case by the Board.
Our bylaws provide that, to the extent that a Covered Person has been successful on the merits or otherwise in defense of any Proceeding referred to above, or in defense of any claim, issue or matter therein, we will indemnify such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
Expenses actually and reasonably incurred by a Covered Person in defending a civil or criminal Proceeding may be paid by our company in advance of the final disposition of such Proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by our company. Such expenses may be so paid upon such terms and conditions, if any, as the Board deems appropriate.
We may purchase and maintain insurance on behalf of any person who is or was a Covered Person, or is or was serving at the request of our company as a Covered Person of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of his status as such, whether or not our company would have the power to indemnify such person against such liability under the provisions of our bylaws.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 26, 2026, certain information with regard to the record and beneficial ownership of our common stock by (i) each person known to us to be the record or beneficial owner of more than 5% of our common stock; (ii) each director of our company; (iii) each of our named executive officers; and (iv) all executive officers and directors of our company as a group.
| Immediately Prior to this Offering | Immediately After this Offering | |||||||||||||||
| Number of Shares | Percentage of | Number of Shares | Percentage of | |||||||||||||
| Name and Address of Beneficial Owner(1) | Beneficially Owned(2) | Outstanding Shares(3) | Beneficially Owned(2) | Outstanding Shares | ||||||||||||
| Executive Officers and Directors: | ||||||||||||||||
| David E. Graber | 1,102,650 | 27.6 | % | 1,695,525 | (4) | 18.3 | % | |||||||||
| Sebastian Lux | 87,293 | 2.2 | % | 87,293 | (5) | 0.9 | % | |||||||||
| Agustin Cabo | 52,500 | 1.3 | % | 52,500 | (6) | 0.6 | % | |||||||||
| Dylan Glenn | 26,697 | 0.7 | % | 56,591 | (7) | 0.6 | % | |||||||||
| Jared Levinthal | 33,257 | 0.8 | % | 75,721 | (8) | 0.8 | % | |||||||||
| Adam C. Lipson, M.D. | 365,038 | 9.1 | % | 449,412 | (9) | 4.8 | % | |||||||||
| Andrew Suckling | 30,889 | 0.8 | % | 78,694 | (10) | 0.8 | % | |||||||||
| Justin Vorwerk | 63,829 | 1.6 | % | 189,842 | (11) | 2.0 | % | |||||||||
| All Executive Officers and Directors as a Group (8 persons) | 1,762,153 | 44.1 | % | 2,184,496 | 29.0 | % | ||||||||||
| 5% Shareholders: | ||||||||||||||||
| Marilyn Kane | 296,818 | 7.4 | % | 334,767 | (12) | 3.6 | % | |||||||||
| Traverse Opportunity Fund LP | 271,047 | 6.8 | % | 796,739 | 8.6 | % | ||||||||||
| (1) | The mailing address for each officer and director is c/o American Battery Materials Inc., 500 West Putnam Avenue, Suite 400, Greenwich, Connecticut 06830. The address for Marilyn Kane is 650 West Avenue, Miami Beach, Florida 33139. |
| (2) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Beneficial ownership also includes shares of stock subject to convertible notes and warrants convertible or exercisable currently or within 60 days of March 26, 2026. In determining the percent of common stock owned by a person or entity as of March 26, 2026, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on conversion or exercise of convertible notes and warrants; and (b) the denominator is the sum of (i) the total shares of common stock outstanding as of Mach 26, 2026, which is 3,727,085 and (ii) the total number of shares that the beneficial owner may acquire upon exercise of the derivative securities. Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares. |
| (3) | Based on (i) 3,727,085 shares of common stock outstanding as of March 26, 2026, and (ii) 270,477 shares of common stock that may be acquired upon the exercise of stock options. |
| (4) | Includes (i) 694,250 shares of common stock owned by Cobrador Multi-Strategy Partners, LLC, of which Mr. Graber is the managing partner, (ii) 592,875 shares of common stock issuable upon the conversion of two promissory notes and a convertible note in the aggregate outstanding principal amount of $2,958,442 at the closing of this offering (assuming a public offering price of $4.99 per share) and (iii) 94,447 shares of common stock underlying options which can be currently exercised at his discretion. |
| (5) | Includes (i) 51,947 shares of common stock underlying options which can be currently exercised at his discretion. |
| (6) | Includes (i) 42,500 shares of common stock underlying options which can be currently exercised at his discretion. |
| (7) | Includes (i) 12,572 shares of common stock owned by Quail Run Holding LLC, of which Mr. Glenn is the managing partner (ii) 29,894 shares of common stock issuable upon the conversion of promissory note in the outstanding principal amount of $149,168 at the closing of this offering (assuming a public offering price of $4.99 per share) (iii) 7,559 shares of common stock underlying options which can be currently exercised at his discretion. |
| (8) | Includes (i) 42,464 shares of common stock issuable upon the conversion of three convertible notes in the outstanding principal amount of $211,891 at the closing of this offering (assuming a public offering price of $4.99 per share) and (ii) 7,559 shares of common stock underlying options which can be currently exercised at his discretion. |
| (9) | Includes (i) 84,374 shares of common stock issuable upon the conversion of one promissory note and four convertible notes in the outstanding principal amount of $421,023 at the closing of this offering (assuming a public offering price of $4.99 per share) and (ii) 7,559 shares of common stock underlying options which can be currently exercised at his discretion. |
| (10) | Includes (i) 47,805 shares of common stock issuable upon the automatic conversion of one convertible note in the outstanding principal amount of $238,543 at the closing of this offering (assuming a public offering price of $4.99 per share) and (ii) 7,559 shares of common stock underlying options which can be currently exercised at his discretion. |
| (11) | Includes (i) 126,013 shares of common stock issuable upon the automatic conversion of two convertible notes in the outstanding principal amount of $628,804 at the closing of this offering (assuming a public offering price of $4.99 per share) and (ii) 7,559 shares of common stock underlying options which can be currently exercised at his discretion. |
| (12) | Includes (i) 178,756 shares of common stock owned by (i) Automated Retail Leasing Partners, LP, of which Ms. Kane is the managing partner, and (ii) AJS Properties LLC, of which Ms. Kane is the manager. Mr. Graber owns a non-controlling interest in Automated Retail Leasing Partners (ii) 37,949 shares of common stock issuable upon the automatic conversion of one convertible note in the outstanding principal amount of $189,364 at the closing of this offering (assuming a public offering price of $4.99 per share). |
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Transactions with Related Parties
We currently comply with applicable state law with respect to transactions (including business opportunities) involving potential conflicts. Applicable state corporate law requires that all transactions involving our company and any director or executive officer (or other entities with which they are affiliated) are subject to full disclosure and approval of the majority of the disinterested independent members of our Board of Directors, approval of the majority of our stockholders or the determination that the contract or transaction is intrinsically fair to us. More particularly, our current policy is to have any related party transactions (i.e., transactions involving a director, an officer or an affiliate of our company) be approved solely by a majority of the disinterested independent directors serving on the Board of Directors. We have four independent directors serving on the Board of Directors (consisting of Messrs. Glenn, Levinthal, Suckling and Vorwerk) and intend to maintain a Board of Directors consisting of a majority of independent directors in accordance with NYSE American listing rules.
Upon the closing of this offering, our board of directors intends to adopt a written related party transaction policy to set forth the policies and procedures for the review and approval or ratification of related party transactions. Related parties include any executive officer, director or a holder of more than 5% of our common stock, including any of their immediate family members and any entity owned or controlled by such persons. Related party transactions refer to any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which (i) we were or are to be a participant, (ii) the amount involved exceeds the lesser of $120,000 or 1% of our total assets at year-end for the last two completed fiscal years, and (iii) a related party had or will have a direct or indirect material interest. Related party transactions include, without limitation, purchases of goods or services by or from the related party or entities in which the related party has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related party, in each case subject to certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act.
We expect that the policy will provide that in any related party transaction, our audit committee and board of directors will consider all of the available material facts and circumstances of the transaction, including: the direct and indirect interests of the related parties; in the event the related party is a director (or immediate family member of a director or an entity with which a director is affiliated), the impact that the transaction will have on a director’s independence; the risks, costs and benefits of the transaction to us; and whether any alternative transactions or sources for comparable services or products are available. After considering all such facts and circumstances, our audit committee and board of directors will determine whether approval or ratification of the related party transaction is in our best interests. For example, if our audit committee determines that the proposed terms of a related party transaction are reasonable and at least as favorable as could have been obtained from unrelated third parties, it will recommend to our board of directors that such transaction be approved or ratified. In addition, if a related party transaction will compromise the independence of one of our directors, our audit committee may recommend that our board of directors reject the transaction if it could affect our ability to comply with securities laws and regulations or NYSE American listing requirements.
Each transaction described below was entered into prior to the adoption of our audit committee charter and the foregoing proposed policy.
Transactions with Directors, Officers and 5% Stockholders
David E. Graber, our Chairman and Chief Executive Officer, and Justin Vorwerk and Jared Levinthal, directors of our company, have made loans to us pursuant to convertible promissory notes in connection with our convertible note private placement transactions. The notes held by Messrs. Graber and Vorwerk were issued on March 21 and 22, 2024, respectively, and the note held by Mr. Levinthal was issued on January 16, 2024. As of September 25, 2024, the respective original and outstanding principal amounts of their notes were $254,713, $138,074 and $30,000. The notes held by Messrs. Graber and Vorwerk accrue interest at 7.5% per annum and the note held by Mr. Levinthal accrues interest at 8.0% per annum, payable at maturity. The notes held by Messrs. Graber and Vorwerk mature on March 21 and 22, 2025, respectively, and the note held by Mr. Levinthal matured on October 16, 2024 and was extended to January 31, 2026. Jared Levinthal was issued a new convertible promissory note on October 21, 2024, with a principal of $25,000, an interest rate of 10% per annum and maturity date of March 31, 2025. We have not made any payments to reduce the balances of these notes. All of the principal and accrued interest under the notes will automatically convert into shares of our common stock upon the effectiveness of this offering. For more information with respect to promissory notes payable and convertible notes payable to related parties, see Note 4 – Debt to Notes to Consolidated Financial Statements for the years ended December 31, 2025 and 2024.
On May 16, June 18, July 11, August 19, August 28 and December 18, 2024, Mr. Graber made additional loans to us pursuant to convertible promissory notes in the principal amounts of $99,182, $80,000, $200,000, $150,000, $35,000 and $99,098 respectively. Of the proceeds of the July 11, 2024 note, $150,000 were used to retire a portion of a note held by Dallas Salazar, while the remaining proceeds of the notes were used to support our short-term working capital requirements. The notes from May 16, June 18, July 11, August 19 and August 28, 2024 were consolidated into a new convertible promissory note on September 30, 2024, extending the maturity date from September 30, 2024 to March 31, 2025 in exchange of 30% additional principal and an increase in interest rate from 8% to 10%. We have not made any payments to reduce the balances of these notes.
On February 10, February 11, February 27 and March 7, 2025, the Company issued convertible promissory notes to Jared Levinthal, Justin Vorwerk, Adam Lipson and Andrew Suckling, respectively. The respective original and outstanding principal amounts of their notes were $10,000, $10,000, $10,000 and $50,000. The notes accrue interest at 10% per annum and mature on January 31, 2026. Between April 23, 2025 and April 30, 2025, the Company entered into extension agreements with these noteholders. Under the terms of these agreements, the maturity dates of the notes were extended to January 31, 2026. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock
On April 7, 2025, the company issued a convertible promissory note to Andrew Suckling for a principal value of $50,000. The note accrues interest at 10% per annum and matures on January 31, 2026.
On August 1, 2025, a new convertible promissory note was issued to Adam Lipson in the principal amount of $15,721.27.
On August 28, 2025, a new convertible promissory note was issued to Adam Lipson in the principal amount of $50,000.
On October 23, 2025, the Company issued a convertible promissory note to David Graber in the principal amount of $200,000 for accrued payroll.
On October 23, 2025, the Company issued a convertible promissory note to Adam Lipson in the principal amount of $34,200 for accrued expenses.
On December 17, 2025, the Company issued a promissory note to Adam Lipson in the principal amount of $10,000.
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DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is a summary only. This summary is subject to the DGCL and the complete text of our Certificate of Incorporation and Bylaws.
General
Under our Certificate of Incorporation, we are currently authorized to issue up to 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. As of March 26, 2026, we have 3,727,085 shares of common stock outstanding and no shares of preferred stock outstanding.
On August 2023, we filed a certificate of amendment of our Certificate of Incorporation to effect a 1-for-300 reverse stock split of our outstanding common stock. The reverse stock split was processed by FINRA as of December 8, 2023.
On January 16, 2025, we filed a Certificate of Amendment with the Secretary of State of Delaware to effect a reverse stock split of the issued and outstanding shares of our common stock at a ratio of one share for every 5 shares outstanding prior to the effective date of the reverse stock split. The reverse stock split became effective on January 24, 2025. The total number of authorized shares of common stock was also reduced from 4,500,000,000 shares to 100,000,000 shares. The par value of the class common stock remained the same at $0.001 per share. The 10,000,000 authorized shares of preferred stock will not change.
Common Stock
Voting Rights. The holders of our common stock are entitled to one vote per share on all matters on which stockholders are generally entitled to vote; provided, however, that, except as otherwise required by law, holders of common stock, as such, are not entitled to vote on any amendment to our Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to our Certificate of Incorporation. Holders of our common stock do not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of the combined voting power of our common stock could, if they so choose, elect all the directors.
Dividends. Subject to the rights of the holders of any outstanding series of preferred stock, holders of common stock are entitled to receive any dividends to the extent permitted by law when, as and if declared by our board of directors.
Liquidation. Upon our dissolution, liquidation or winding up, subject to the rights of the holders of any outstanding series of preferred stock, the holders of shares of common stock are entitled to receive the assets of our company available for distribution to its stockholders ratably in proportion to the number of shares held by them.
Other Matters. Our Certificate of Incorporation does not entitle holders of our common stock to preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to our common stock. The common stock may be subdivided or combined in any manner unless the other class is subdivided or combined in the same proportion. All outstanding shares of our common stock are fully paid and non-assessable.
Anti-Takeover Effects of Delaware Law, Our Certificate of Incorporation and Our Bylaws
Certain provisions of the DGCL, our Certificate of Incorporation and our Bylaws could make the acquisition of our company more difficult and could delay, defer or prevent a tender offer or other takeover attempt that a stockholder might consider to be in its best interest, including takeover attempts that might result in the payment of a premium to stockholders over the market price for their shares. These provisions also may promote the continuity of our management by making it more difficult for a person to remove or change the incumbent members of our board of directors.
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Authorized but Unissued Shares; Undesignated Preferred Stock
The authorized but unissued shares of our common stock are available for future issuance without stockholder approval except as required by law or by any stock exchange on which our common stock may be listed. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions and employee benefit plans. In addition, our board of directors may authorize, without stockholder approval, the issuance of undesignated preferred stock with voting rights or other rights or preferences designated from time to time by our board of directors. The existence of authorized but unissued shares of common stock or preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise.
No Cumulative Voting
Holders of our common stock do not have cumulative voting rights in the election of directors.
Requirements for Notice of Stockholder Director Nominations and Stockholder Business
Under our Bylaws, nominations for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors who complies with the applicable notice and other requirements set forth in our Bylaws. If a stockholder wishes to bring any business before an annual or special meeting or nominate a person for election to our Board of Directors, our Bylaws contain certain procedures that must be followed for the advance timing required for delivery of stockholder notice of such nomination or other business and the information that such notice must contain.
Exchange Listing
We have applied to list our common stock for trading on the NYSE American and expect such listing to occur concurrently with this offering. There is no assurance, however, that our common stock will be listed on the NYSE American or any other national securities exchange. A NYSE American listing is a condition to completing this offering.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Transfer Online, Inc., 512 SE Salmon Street, Portland, Oregon 97214.
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SHARES ELIGIBLE FOR FUTURE SALE
The sale, or availability for sale, of a substantial number of shares of common stock in the public market subsequent to this offering pursuant to Rule 144 of the Securities Act or otherwise could materially adversely affect the market price of our common stock and could impair our ability to raise additional capital through the sale of equity securities or debt financing. Upon completion of this offering, there will be approximately 9,004,597 shares of common stock issued and outstanding. Of these shares, approximately 2,831,695 shares would be freely transferable. Our executive officers and directors would beneficially own approximately 2,685,578 shares, or 29.0% of our outstanding common stock after the completion of this offering, which would be eligible for resale subject to the volume and manner of sale limitations of Rule 144 of the Securities Act. An additional 3,487,324 shares are “restricted securities,” as that term is defined in Rule 144 and are eligible for sale under the provisions of Rule 144.
The shares of common stock outstanding that are deemed to be “restricted securities” (as that term is defined under Rule 144) or that are owned by our affiliates may only be sold pursuant to an effective registration statement under the Securities Act, in compliance with the exemption provisions of Rule 144 or pursuant to another exemption under the Securities Act. Restricted shares and shares of common stock held by our affiliates that are not “restricted” will be eligible for sale, under Rule 144, subject to certain volume and manner of sale limitations prescribed by Rule 144. In general, under Rule 144 as currently in effect, a person (or persons whose shares are required to be aggregated), including a person who may be deemed an “affiliate” of the company, who has beneficially owned restricted securities for at least six months may sell, within any three-month period, a number of shares that does not exceed the greater of: (1) 1% of the then outstanding shares of common stock or (2) the average weekly trading volume of the common stock during the four calendar weeks preceding the date on which notice of such sale was filed under Rule 144. Sales of shares held by our affiliates that are not “restricted” are subject to such volume limitations but are not subject to the holding period requirement. Sales under Rule 144 are also subject to certain requirements as to the manner of sale, notice and availability of current public information about our company. A person who is not deemed to have been an affiliate of our company at any time during the 90 days preceding a sale by such person and who has beneficially owned the restricted shares for at least six months, is entitled to sell such shares under Rule 144 without regard to any of the restrictions described above.
Following this offering, we cannot predict the effect, if any, that the availability for sale of shares held by our current stockholders will have on the market price from time to time. Nevertheless, sales by our current stockholders of a substantial number of shares of common stock in the public market could materially and adversely affect the market price for our common stock. In addition, the availability for sale of a substantial number of shares of our common stock acquired through the exercise of outstanding stock options or warrants could materially adversely affect the market price of our common stock.
Lock-Up Agreements
We and our stockholders holding more than 5% of our outstanding common stock have agreed for a period of three months after the date of this prospectus, and our directors, officers and convertible note holders have agreed for a period of six months after the date of this prospectus, without the prior written consent of the representative, not to directly or indirectly:
| ● | issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock; or | |
| ● | in the case of us, file or cause the filing of any registration statement under the Securities Act with respect to any shares of common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock; or | |
| ● | in the case of us, complete any offering of debt securities of the Company, other than entering into a line of credit, term loan arrangement or other debt instrument with a traditional bank; or | |
| ● | enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, whether any transaction described in any of the foregoing bullet points is to be settled by delivery of our common stock or other capital stock, other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing. |
In addition, we have agreed that we will not, for a period of 24 months after the date of this prospectus, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of our Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of our Company, directly or indirectly, in any variable rate transaction, without the prior written consent of the representative. This agreement is subject to certain exemptions, as set forth in the section entitled “Underwriting.”
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UNDERWRITING
ThinkEquity LLC is acting as representative of the underwriters of this offering. We have entered into an underwriting agreement dated , 2026, with the representative. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed to purchase from us, at the public offering price per share less the underwriting discounts set forth on the cover page of this prospectus, the number of shares of common stock listed next to its name in the following table:
| Underwriter | Number
of Shares | |||
| ThinkEquity LLC | ||||
| Total | 2,004,009 | |||
The underwriters are committed to purchase all the shares of common stock offered by the Company, other than those covered by the over-allotment option to purchase additional shares of common stock described below. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, the underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the shares offered by us in this prospectus are subject to various representations and warranties and other customary conditions specified in the underwriting agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.
We have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect thereof.
The underwriters are offering the shares of common stock subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Over-Allotment Option
We have granted the representative an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the representative to purchase up to an aggregate of 300,602 additional shares of common stock (equal to 15% of the total number of shares sold in this offering) at the assumed public offering price per share, less the underwriting discounts and commissions, solely to cover over-allotments, if any. If the underwriters exercise this option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of common stock in proportion to their respective commitments set forth in the prior table.
Discounts, Commissions and Reimbursements
The representative has advised us that the underwriters propose to offer the shares of common stock to the public at the public offering price per share set forth on the cover page of this prospectus. Any shares sold by the underwriter to securities dealers may be sold at a discount of 8.5% per share from the public offering price. After the offering to the public, the public offering price and other selling terms may be changed by the representative.
The following table summarizes the underwriting discounts and commissions and proceeds, before expenses, to us assuming both no exercise and full exercise by the underwriters of their over-allotment option:
| Total | ||||||||||||
| Per Share | Total Without Over-Allotment Option | Total With Over-Allotment Option | ||||||||||
| Public offering price | $ | $ | $ | |||||||||
| Underwriting discounts and commissions (8.5%) | $ | $ | $ | |||||||||
| Non-accountable expense allowance (1%) | $ | $ | $ | |||||||||
| Total | $ | $ | $ | |||||||||
| Proceeds, before expenses, to us | $ | $ | $ | |||||||||
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We have paid an advance of $50,000 to the representative, which will be applied against the actual out-of-pocket accountable expenses that will be paid by us to the underwriters in connection with this offering, and will be reimbursed to us to the extent not incurred.
In addition, we have also agreed to pay the following expenses of the underwriters relating to the offering: (a) all filing fees and expenses associated with the review of this offering by FINRA; (b) all fees, expenses and disbursements relating to the registration, qualification or exemption of securities offered under the securities laws of foreign jurisdictions designated by the underwriter; (c) $29,500 for the underwriters’ use of Ipreo’s book-building, prospectus tracking and compliance software for this offering; (d) the fees and expenses of the representatives’ legal counsel incurred in connection with this offering in an amount up to $125,000; (f) up to $10,000 of the representative’s actual accountable road show expenses for the offering; (g) $10,000 for data services and communications expenses; (h) up to $10,000 of the representative’s market making and trading, and clearing firm settlement expenses, and (i) the costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee will provide within a reasonable time after the Closing in such quantities as ThinkEquity may reasonably request, in an amount not to exceed $5,000.
We estimate that the total expenses of the offering payable by us, excluding the total underwriting discounts and commissions and non-accountable expense allowance, will be approximately $315,000.
Representative’s Warrants
We have agreed to issue warrants to ThinkEquity LLC, as representative of the underwriters, upon the closing of this offering, which entitle it to purchase up to 5% of the total number of shares of common stock being sold in this offering (the “Representative’s Warrants”). The exercise price of the Representative’s Warrants is equal to $6.24 per share, or 125% of the offering price of the common stock offered hereby (assuming a public offering price of $4.99). The Representative’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing six months from the effective date of this registration statement. The Representative’s Warrants are deemed underwriter compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The representative (or permitted assignees under the rules of FINRA) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of this offering. In addition, the Representative’s Warrants provide for registration rights upon request at the Company’s expense, in certain cases. The one-time demand registration right provided will not be greater than five years from the effective date of this offering in compliance with FINRA Rule 5110(g)(8)(B) and (C), and any other applicable sections under FINRA Rule 5110. The unlimited piggyback registration right provided will not be greater than seven years from the effective date of this offering in compliance with FINRA Rule 5110(g)(8)(D). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Representative’s Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the Representative’s Warrants may be adjusted in certain circumstances including in the event of a stock dividend or our recapitalization, reorganization, merger, or consolidation. However, neither the Representative Warrant exercise price, nor the number of shares of common stock underlying such warrants, will be adjusted for issuances of shares of common stock by the Company at a price below the exercise price of the Representative’s Warrants.
Right of First Refusal
Until 24 months from the closing date of this offering the representative will have an irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the representative’s sole discretion, for each and every future public and private equity and debt offering of the Company, or any successor to or any subsidiary of the Company, including all equity linked financings, on terms customary to the representative. The representative will have the sole right to determine whether or not any other broker-dealer will have the right to participate in any such offering and the economic terms of any such participation.
Stabilization, Short Positions and Penalty Bids
In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.
Stabilizing transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress.
Over-allotment transactions involve sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing shares in the open market.
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Syndicate covering transactions involve purchases of shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared with the price at which they may purchase shares through exercise of the over-allotment option. If the underwriters sell more shares than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely affect investors who purchase in the offering.
Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our shares of common stock or preventing or retarding a decline in the market price of our shares of common stock. As a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may be effected on Nasdaq, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.
Pricing of this Offering
The public offering price has been negotiated between us and the representative. Among the factors considered in these negotiations are: the history of and prospects for, us and the industry in which we compete; our past and present financial performance; an assessment of our management; the present state of our development; the prospects for our future earnings; the prevailing conditions of the applicable United States securities market at the time of this offering; previous trading prices for our common stock in the private market and market valuations of publicly traded companies that we and the representative believe to be comparable to us.
Lock-up Agreements
We and our stockholders holding more than 5% of our outstanding common stock have agreed for a period of three months after the date of this prospectus, and our directors, officers and convertible debt holders have agreed for a period of six months after the date of this prospectus, without the prior written consent of the representative, not to directly or indirectly:
| ● | issue (in the case of us), offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock; or | |
| ● | in the case of us, file or cause the filing of any registration statement under the Securities Act with respect to any shares of common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock; or | |
| ● | in the case of us, complete any offering of debt securities of the Company, other than entering into a line of credit, term loan arrangement or other debt instrument with a traditional bank; or | |
| ● | enter into any swap or other agreement, arrangement, hedge or transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of our common stock or other capital stock or any securities convertible into or exercisable or exchangeable for our common stock or other capital stock, whether any transaction described in any of the foregoing bullet points is to be settled by delivery of our common stock or other capital stock, other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing. |
In addition, we have agreed that we will not, for a period of 24 months after the date of this prospectus, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of our Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of our Company, directly or indirectly, in any variable rate transaction, without the prior written consent of the representative.
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Additional Issuances under Incentive Compensation Plan
In the Underwriting Agreement, we have agreed with the representative of the underwriters that we will not issue shares of common stock (or options or other rights to acquire shares of common stock) under our 2024 Incentive Compensation Plan such that we would have in excess of 1,200,000 shares of common stock issued or issuable thereunder in the aggregate (subject to appropriate adjustment for stock splits, stock dividends, recapitalizations or similar events), and that any such additional issuances under the plan after this offering will not have an exercise price (or strike price) that is less than the public offering price in this offering.
Other Relationships
Certain of the underwriters and their affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates for which they may in the future receive customary fees.
Electronic Offer, Sale and Distribution of Securities
A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members. The representative may agree to allocate a number of securities to underwriters and selling group members for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should not be relied upon by investors.
Listing
We have applied to list our common stock for trading on the NYSE American and expect such listing to occur concurrently with this offering. There is no assurance, however, that our common stock will be listed on the NYSE American or any other national securities exchange. A NYSE American listing is a condition to completing this offering.
Offer restrictions outside the United States
Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
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Australia
This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (“NI 33-105”), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
China
The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”
European Economic Area-Belgium, Germany, Luxembourg and Netherlands
The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.
An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:
| ● | to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | |
| ● | to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements); | |
| ● | to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of the Company or any underwriter for any such offer; or | |
| ● | in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. |
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France
This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-1 ;and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1; and D.764-1 of the French Monetary and Financial Code and any implementing regulation.
Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.
Ireland
The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.
Israel
The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.
Italy
The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Societ-$$-Aga e la Borsa, “CONSOB” pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other than:
| ● | to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and | |
| ● | in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. |
Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
| ● | made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and | |
| ● | in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
| 59 |
Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.
Japan
The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.
Portugal
This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.
Sweden
This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority.
This document is personal to the recipient only and not for general circulation in Switzerland.
United Arab Emirates
Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered within the United Arab Emirates by the Company.
No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
United Kingdom
Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.
Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company.
In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together “relevant persons”). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
| 60 |
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Pursuant to our Certificate of Incorporation and Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his or her position, if he or she acted in good faith and in a manner he or she reasonably believed to be in our best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him or her against all expenses incurred, including attorney’s fees.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
| 61 |
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon for the issuer by Olshan Frome Wolosky LLP, New York, New York. The underwriters have been represented in connection with this offering by Reed Smith LLP, New York, New York.
EXPERTS
The consolidated financial statements of American Battery Materials Inc. as of December 31, 2025 and 2024 have been audited by GreenGrowth CPAs, an independent registered public accounting firm, as stated in their report appearing herein and elsewhere in the Registration Statement to which this prospectus forms a part (which report expresses an unqualified opinion on the financial statements and includes explanatory paragraphs referring to conditions that raise substantial doubt about American Battery Materials Inc.’s ability to continue as a going concern for one year from the issuance of the financial statements). Such financial statements have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock we are offering by this prospectus. For further information pertaining to us and our common stock, you should refer to the registration statement and to its exhibits. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
We are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports and other information with the SEC. You can read our SEC filings, including the registration statement, at the SEC’s website at www.sec.gov. We also maintain a website at www.americanbatterymaterials.com. You may access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
| 62 |
AMERICAN BATTERY MATERIALS INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
of American Battery Materials, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of American Battery Materials, Inc. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended and the related notes (collectively referred to as the financial statements).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Considerations
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception and has not achieved profitable operations, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-2 |
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| I. | Accounting for Convertible Notes |
Critical Audit Matter Description
As discussed in Note 4 to the consolidated financial statements, the Company issued multiple convertible notes during 2025, which contained embedded features. Under ASC 815, Derivatives and Hedging, management is required to assess whether these embedded features should be bifurcated and accounted for separately as derivative liabilities.
The auditing of the Company’s convertible notes involved especially challenging auditor judgment due to the complexity of the embedded features and the application of complex accounting guidance and consideration of various terms and conditions within the convertible note agreements.
Audit Response
Our audit procedures to address the accounting of the convertible notes included the following, among others:
| - | We obtained and read the terms and conditions of all convertible notes issued to understand the various features associated with the convertible notes. |
| - | We assessed whether the embedded features met the bifurcation criteria under ASC 815, including the evaluation of whether these features were clearly and closely related to the debt host. |
| - | We evaluated management’s application of ASC 815-15 and ASC 480 to determine whether the identified embedded features should be classified as derivatives and assessed the appropriateness of their conclusions. |
| - | We evaluated the competency and objectivity of management’s expert engaged by the Company to assist in the accounting analysis of the convertible notes. |
March 19, 2026
GreenGrowth CPAs
We have served as the Company’s auditor since 2023.
Los Angeles, California
PCAOB ID Number 6580
| F-3 |
AMERICAN BATTERY MATERIALS INC.
Consolidated Balance Sheets
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses and other assets | ||||||||
| Total current assets | ||||||||
| Noncurrent assets | ||||||||
| Mineral claims | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Promissory notes payable, net of discount | ||||||||
| Promissory notes payable – related party | ||||||||
| Convertible notes payable, net of discount | ||||||||
| Convertible notes payable – related party | ||||||||
| Current capital lease obligation | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $ par value, shares authorized, shares issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-4 |
AMERICAN BATTERY MATERIALS INC.
Consolidated Statements of Operations
| Year Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Operating Expenses | ||||||||
| General and administrative | $ | $ | ||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other Expenses / Income | ||||||||
| Gain (loss) on extinguishment of debt | ( | ) | ( | ) | ||||
| Fair value of stock issued for note modification | ( | ) | ( | ) | ||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expenses / income | ( | ) | ( | ) | ||||
| Income (loss) from operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Net loss per share – basic and diluted | $ | ) | $ | ) | ||||
| Weighted average common shares – basic and diluted | ||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-5 |
AMERICAN BATTERY MATERIALS INC.
Consolidated Statements of Changes in Stockholders’ Deficit
Years Ended December 31, 2025 and 2024
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity/(Deficit) | ||||||||||||||||||||||
| Preferred stock | Common stock | Additional Paid in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity/(Deficit) | ||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Shares issued for services | - | |||||||||||||||||||||||||||
| Shares issued for note modification | - | |||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Shares issued for services | - | |||||||||||||||||||||||||||
| Shares issued for note modification | - | |||||||||||||||||||||||||||
| Share-based compensation | - | - | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-6 |
AMERICAN BATTERY MATERIALS INC.
Consolidated Statements of Cash Flows
| Year Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock based compensation | ||||||||
| Accrued interest | ||||||||
| Gain (loss) on extinguishment of debt | ||||||||
| Fair value of stock issued for note modification | ||||||||
| Amortization of debt discount | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from convertible notes | ||||||||
| Proceeds from convertible notes – related party | ||||||||
| Proceeds from promissory notes | ||||||||
| Proceeds from promissory notes – related party | ||||||||
| Repayment of promissory notes | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| - | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Supplemental disclosures of non-cash items: | ||||||||
| Accounts payable and accrued payable exchanged for convertible note | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| F-7 |
AMERICAN BATTERY MATERIALS INC.
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2025 and 2024
Note 1 - Nature of the Business
American
Battery Materials Inc. (the “Company”) is a US based renewable energy company focused on the extraction, refinement and distribution
of technical minerals in an environmentally responsible manner. On November 5, 2021, the Company acquired the rights to 102 Federal Mining
Claims located in the Lisbon Valley of Utah for $
On
April 25, 2023, the Company formed Mountain Sage Minerals, LLC, a Utah limited liability company, of which it is the
On May 1, 2023, FINRA completed the processing of our application for a name change, and our name was officially changed to American Battery Materials Inc. At the same time, the Company’s trading symbol was changed to BLTH. These changes better reflect the business of the Company.
On June 1, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Seaport Global Acquisition II Corp., a Delaware corporation (“SGII”), and Lithium Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of SGII (“Merger Sub”). SGII is a blank check company, also referred to as a special purpose acquisition company, formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. Following material changes to the transaction proposed by SGII making the transaction untenable to us, on November 20, 2023, SGII notified us that it had elected to terminate the Merger Agreement.
On January 16, 2025, the Company filed a Certificate of Amendment with the Secretary of State of Delaware to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 5 shares outstanding prior to the effective date of the reverse stock split. The reverse stock split became effective on January 24, 2025. The total number of authorized shares of common stock was reduced from shares to shares. The par value of the class Common Stock will remain the same at $ per share. The authorized shares of the Corporation’s preferred stock, par value $ per share will not change. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect the Reverse Split.
The Company has been moving forward with its strategy of employing advanced brine extractive technology methodologies and has been in talks with numerous extraction providers. Selective mineral extraction is clearly the most cost-effective and ESG friendly approach currently available. Technologies are being utilized that can extract the desired minerals and metals from the brine and then re-inject the brines back down into the aquifer. The prospective partners have been provided the analytical results from the technical reports, but will soon provide current results, analytical, geotech modeling, aquifer modeling, recharge, flows and depth.
Note 2 - Going Concern
The
accompanying consolidated financial statements have been prepared on a going concern basis. The Company had a net loss of $
| F-8 |
Until the Company can generate significant cash from operations, its ability to continue as a going concern is dependent upon obtaining additional financing. The Company hopes to raise additional financing, potentially through the sale of debt or equity instruments, or a combination, to fund its operations for the next 12 months and allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. These conditions have raised substantial doubt as to the Company’s ability to continue as a going concern for one year from the issuance of the financial statements, which has not been alleviated.
Note 3 - Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The Company’s fiscal year end is December 31.
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating, therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired, or as additional information is obtained.
Property and Equipment
Property
and equipment are stated at cost less depreciation. Depreciation is provided using the straight-line method over the estimated useful
life of the assets. Equipment has estimated useful lives between
Impairment of Long-lived Assets
Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated future undiscounted cash flows expected to be generated by the asset group. If it is determined that an asset group is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.
Mineral Rights and Properties
The
Company capitalizes acquisition costs until the Company determines the economic viability of the property. Since the Company does not
have proven and probable reserves as defined by Securities and Exchange Commission (“SEC”) Regulation S-K Item 1300, exploration
expenditures are expensed as incurred. The Company expenses mineral lease costs and repair and maintenance costs as incurred. The Company
reviews the carrying value of our properties for impairment, including mineral rights, upon the occurrence of events or changes in circumstances
that indicate the related carrying amounts may not be recoverable. During the period ending December 31, 2023, the Company took action
to expand on its rights to 102 federal mining claims located in the Lisbon Valley of Utah that it purchased on November 5, 2021, for
$
The Company presents basic and diluted earnings per share in accordance with ASC 260, “Earnings per Share.” Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss period, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.
| F-9 |
As of December 31, 2025 and 2024, there were approximately and shares respectively, potentially issuable under convertible debt agreements, options, warrants and preferred stock that could dilute basic earnings per share if converted that were excluded from the years ended December 31, 2025 and 2024 because their inclusion would have been anti-dilutive due to the Company’s net losses.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks.
Fair Value of Financial Instruments
For certain of the Company’s financial instruments, including cash and equivalents, prepaid expenses and other assets, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows:
| ● | Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| ● | Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. | |
| ● | Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2. |
The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation,” which requires all stock-based awards granted to employees, directors and non-employees to be measured at grant date fair value of the equity instrument issued and recognized as expense. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the award, which is generally equivalent to the vesting period. The fair value of each stock option granted is estimated using the Black-Scholes option pricing model. The measurement date for the non-forfeitable awards to non-employees that vest immediately is the date the award is issued.
Revenue Recognition
We recognize revenue under ASC 606, “Revenue from Contracts with Customers,” the core principle of which is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue recognition principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue as the performance obligations are satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable readers of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
The
Company recognized $
| F-10 |
Convertible Debt
The Company issues convertible notes as part of its financing strategy, which may contain embedded features such as conversion options, redemption provisions, and contractual adjustments like most favored nations clauses. Convertible debt is accounted for under ASC 470, Debt, as amended by ASU 2020-06, Debt—Debt with Conversion and Other Options, adopted by the Company effective January 1, 2024. This standard simplifies the accounting by eliminating certain separation models for convertible instruments, requiring the Company to evaluate the debt as a single instrument unless bifurcation of embedded derivatives is required under ASC 815, Derivatives and Hedging.
Convertible notes are initially recorded at their principal amount, net of issuance costs or discounts, and classified as liabilities unless specific features mandate equity classification. Interest expense is recognized using the effective interest method over the notes’ terms.
The Company’s convertible debt instruments are debt host financial instruments containing embedded features, some of which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC Topic 815, Derivatives and Hedging. Embedded features are assessed to determine if they require bifurcation as derivatives. Features are bifurcated if their economic characteristics and risks are not clearly and closely related to the debt host, the hybrid instrument is not remeasured at fair value through earnings, and the feature would qualify as a standalone derivative. Bifurcated derivatives are recorded at fair value, with subsequent changes recognized in earnings. However, features contingent on events with low probability (e.g., uplisting or an event of default) are assigned immaterial value. The Company continues to monitor its facts and circumstances in each reporting period to evaluate whether each immaterial embedded feature’s fair value or change to it is significant and would therefore need to be ascribed value.
Common stock issued with convertible notes are treated as freestanding equity instruments under ASC 815-40, recorded at fair value in additional paid-in capital, with proceeds allocated between the debt and shares using the relative fair value method. The fair value of the shares issued are treated as a discount to the value of the convertible debt issued.
Debt issuance costs are capitalized and amortized as additional interest expense over the debt term, unless allocated to bifurcated derivatives, in which case they are expensed immediately if material.
Refinancings of convertible and promissory notes previously issued by the Company are evaluated under ASC 470-50, Modifications and Extinguishments, or ASC 470-60, Troubled Debt Restructurings by Debtors. A refinancing is accounted for as an extinguishment if the present value of cash flows under the new terms differs by at least 10% from the original terms or if a substantive conversion option is added or eliminated. When an extinguishment occurs, the original debt is derecognized and the new debt is recorded at fair value, recognizing any gain or loss in earnings. If not extinguished, a refinancing is treated as a modification with no gain or loss recognition. If the Company were to experience multiple changes to the same debt within a one-year period, and the first of those changes were determined to be a modification, the Company would then evaluate the changes within the one-year period on a cumulative basis.
A refinancing is classified as a troubled debt restructuring (TDR) if the Company is experiencing financial difficulty and the creditor grants a concession (e.g., reduced effective interest rate). For TDRs, the carrying amount is adjusted only if undiscounted future cash flows fall below the net carrying value of the original debt. When the undiscounted future cash flows of refinanced debt fall below the net carrying value of the original debt, the Company would record a gain for the difference. It would further adjust the carrying value of the debt to the future undiscounted cash flow amount with no interest expense recorded going forward. All future interest payments would then reduce the carrying value of the respective debt modified. If the undiscounted future cash flows are greater than the carrying value of the original debt, no gain would be recorded. The Company would then calculate a new effective interest rate based upon the carrying value of the original debt and the revised future cash flows under the terms of the new debt.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances disclosure requirements related to income taxes, including rate reconciliation and taxes paid by jurisdiction. This standard is effective for fiscal years beginning after December 15, 2024. We will adopt ASU 2023-09 in our Annual Report on Form 10-K for the fiscal year ending December 31, 2026. We are currently evaluating the impacts of the improvements to income tax disclosure.
In November 2024, the FASB issued ASU No. 2024-03, Liabilities—Joint Venture Formations (Subtopic 405-50): Recognition and Initial Measurement, clarifying accounting by a joint venture upon formation and requiring fair value measurement of contributed assets and liabilities. This guidance is effective for fiscal years beginning after December 31, 2024, and interim periods beginning after December 15, 2027. The Company does not expect a material impact upon adoption.
| F-11 |
In April 2024, the FASB issued ASU No. 2024-04, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method, expanding the use of this method to additional tax credit structures. This guidance is effective for fiscal years beginning after December 15, 2025. The Company does not expect a material impact upon adoption.
In January 2025, the FASB issued ASU No. 2025-01, Income Taxes (Topic 740): Disclosure Framework—Changes to Income Tax Disclosure Requirements, which further refines disclosure requirements to improve consistency and comparability. This standard is effective for fiscal years beginning after December 15, 2025. The Company is evaluating the impact of this guidance.
In July 2025, the FASB issued ASU No. 2025-07, Leases (Topic 842): Disclosures about Leasing Arrangements, which enhances qualitative and quantitative lease disclosures. This guidance is effective for fiscal years beginning after December 15, 2026. The Company does not expect the adoption to have a material effect on its consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify and reorganize existing interim reporting guidance, including the scope of Topic 270 and interim disclosure requirements, and introduce a disclosure principle requiring entities to disclose material events or changes occurring since the most recent annual reporting period. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11 on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-12, Accounting Standards Codification Improvements, which clarifies guidance and makes minor improvements across various topics, including earnings per share, receivables, revenue, income taxes, and equity. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and disclosures.
The Company has examined recent accounting pronouncements and determined that they will not have a material impact on its financial position, results of operations, or cash flows.
Note 4 – Debt
Promissory Notes Payable and Promissory Notes Payable - Related Party
In
2014 and 2016, the Company issued two promissory notes in the total principal amount of $
During
the year ended December 31, 2016, the Company issued two additional unsecured promissory notes and borrowed an aggregate amount of $
Accrued
interest at December 31, 2023, on these notes totaled $
During
the year ended December 31, 2024, the above-mentioned promissory notes were forgiven. The principal in the amount of $
During
the year ended December 31, 2022, the Company entered into 5 promissory note agreements in the aggregate amount of $
During the year ended December 31, 2024:
| ● | On
March 21, 2024, two (2) promissory note agreements with the related party in the aggregate amount of $ | |
| ● | On
March 22, 2024, one (1) promissory note in the aggregate amount of $ | |
| ● | On
March 22, 2024, one (1) promissory note agreement with the related party in the aggregate amount of $ |
| F-12 |
| ● | On
March 28, 2024, one (1) promissory note agreement in the aggregate amount of $ |
| ● | Between
May 16 and August 28, 2024, five (5) short-term promissory notes in the aggregate amount of $ |
During the year ended December 31,
2023, the Company entered into short-term promissory note agreement in the amount of $
During
the year ended December 31, 2024, short-term promissory note in the amount of $
During
the year ended December 31, 2025, the Company entered into 4 promissory note agreements in the aggregate amount of $
Convertible Notes Payable and Convertible Notes Payable – Related Party
In
February 2023, the Company entered into a convertible promissory note agreement in the amount of $
| F-13 |
During
the year ended December 31, 2023, the Company entered into Note Purchase Agreements with seven investors not affiliated with the Company
(the “Purchasers”) pursuant to which the Purchasers purchased from the Company convertible notes (the “Convertible
Notes”) with an aggregate principal amount of $
The
Convertible Notes provide for a maturity of
(a) The Convertible Notes automatically convert into Conversion Shares upon the shares of the Company’s common stock being listed on a higher exchange due to the (i) pricing and funding of an S-1 registration statement; or, (ii) the closing of a transaction resulting in the uplist (either, a “Triggering Transaction”). The conversion price for the Conversion Shares in an automatic conversion shall be equal to:
(1)
(2)
(3)
(b)
The Purchasers have the right to convert into Conversion Shares, in whole or in part, at any time after 180-days following the Issuance
Date. The conversion price for the Conversion Shares in a voluntary conversion shall be equal to
During
the year ended December 31, 2024, notes with six investors not affiliated with the Company were amended with an increase in principal
from $
Conditions
of the note with one (1) purchaser were amended several times (once under the MFN provision) resulting in an increase in principal from
$
During
the year ended December 31, 2024, the Company entered into ten convertible promissory note agreements in the aggregate amount of $
During the year ended December 31, 2025:
| ● | The
company entered into five convertible promissory note agreements in the aggregate amount of $ | |
| ● | The
company entered into seven convertible promissory note agreements in the aggregate amount of $ |
| F-14 |
| ● | The
company entered into seven short-term convertible promissory note agreements in the aggregate amount of $ |
Scheduled maturities of debt remaining as of December 31, 2025, for each respective fiscal year end are as follows:
Schedule of Maturities of Debt
| 2026 | ||||
| Total | $ |
Note 5 - Capital Lease Obligations
During
the year ended December 31, 2018, the Company entered into various capital lease agreements. The leases expire at various points through
the year ended December 31, 2023. The remaining balance of $
Note 6 - Capital Stock
On January 16, 2025, the Company filed a Certificate of Amendment with the Secretary of State of Delaware to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 5 shares outstanding prior to the effective date of the reverse stock split. The reverse stock split became effective on January 24, 2025. The total number of authorized shares of common stock was reduced from shares to shares. The par value of the class Common Stock will remain the same at $ per share. The authorized shares of the Corporation’s preferred stock, par value $ per share will not change.
The
Company filed a certificate of amendment to its certificate of incorporation, which effectuated as of December 8, 2023, a reverse split
of the Company’s common stock by a ratio of
On October 20, 2022 the Company, following receipt of written approval from stockholders acting without a meeting and holding at least the minimum number of votes that would be necessary to authorize or take such action at a meeting, filed an amendment to its Certificate of Incorporation to (i) change the name of the Company to “American Battery Materials, Inc.” (the “Name Change”); and (ii) increase the total number of authorized shares of the Company’s common stock, par value $ per share, from to (the “Authorized Share Increase”). The Authorized Share Increase was effective as of October 20, 2022. The Name Change was processed by FINRA and was effective as of May 1, 2023, at which time the Company’s trading symbol was changed to BLTH.
On
October 20, 2022, in addition to the Name Change and the Authorized Share Increase, the holder of
| 1. | Future amendment of the Company’s Certificate of Incorporation to implement a decrease in the authorized shares of the Company’s Common Stock from to a number of not less than and not more than (the “Authorized Share Reduction”), at any time prior to October 20, 2023 (the “Anniversary Date”), with the Board having the discretion to determine whether or not the Authorized Share Reduction is to be effected, and if effected, the exact number of the Authorized Share Reduction within the above range. | |
| 2. | Future
amendment of the Company’s Certificate of Incorporation to implement a reverse stock split of the Company’s Common Stock
by a ratio of not less than |
| F-15 |
Preferred Stock
The Company has authorization for preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to common stock. As of December 31, 2025, and December 31, 2024, there were shares of preferred stock authorized, and shares issued and outstanding.
Common Stock
The Company has authorized shares of common stock, with and shares issued and outstanding at December 31, 2025 and December 31, 2024.
During
the year ended December 31, 2025, the Company issued shares
of common stock for services valued at $
During
the year ended December 31, 2024, the Company issued shares
of common stock for services valued at $
Warrants
As
of December 31, 2025, the Company had
Schedule of Warrant Activity
| Post-split | Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | |||||||||
| Balance outstanding at December 31, 2024 | $ | |||||||||||
| Granted | - | |||||||||||
| Exercised | - | |||||||||||
| Cancelled | - | |||||||||||
| Expired | ( | ) | - | |||||||||
| Balance outstanding at December 31, 2025 | $ | - | ||||||||||
| Exercisable at December 31, 2025 | $ | - | ||||||||||
Options
Stock
options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the Equity
Incentive Plan and are generally granted with an exercise price equal to the market price of the Company’s common stock at the
date of grant. The aggregate fair value of these stock options granted by the Company during the year ended December 31, 2025, was determined
to be $
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||
| Balance outstanding at December 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeited | - | |||||||||||
| Cancelled or expired | - | |||||||||||
| Balance outstanding at December 31, 2025 | $ | |||||||||||
| Exercisable at December 31, 2025 | $ | |||||||||||
| F-16 |
Equity Incentive Plan
On July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of shares. On November 16, 2017, the Board of Directors approved an increase of shares to be made available for issuance under the Plan. Accordingly, the total number of shares of common stock available for issuance under the Plan is shares. On August 13, 2024, the Board of Directors adopted the American Battery Materials Inc. 2024 Incentive Compensation Plan, which was deemed desirable and in the best interests of the Corporation, authorizing the executive officers to implement and administer this new plan, reserving shares of Common Stock for issuance. Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time of grant as either incentive stock options or non-qualified stock options. Stock-based compensation includes expense charges related to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options that vest over three years and expire in to years. As of December 31, 2025, all outstanding awards have been granted under the Plan.
Earnings per share calculations are performed in accordance with ASC 260, ‘Earnings Per Share’. Basic earnings per share is calculated using the weighted average number of common shares issued and outstanding during the period, which were and for the year ended December 31, 2025, and December 31, 2024, respectively. Diluted earnings per share includes the dilutive effect of potential common shares, such as those issuable under convertible debt agreements, stock options, warrants, and preferred stock, unless their inclusion is anti-dilutive. For the years ended December 31, 2025, and December 31, 2024, approximately and potential common shares, respectively, were excluded from the diluted earnings per share calculation due to the Company’s reported net losses, as their inclusion would have reduced the loss per share, rendering them anti-dilutive. The determination of anti-dilution was based on the application of the treasury stock method for options and warrants and the if-converted method for convertible debt and preferred stock, as applicable.
Note 9 - Segment Information
The
Company operates and manages its business as
For the fiscal year ended December 31, 2025, the CODM regularly receives and reviews the Company’s net income, and significant operating expenses categories, which are integral to the measure of operating performance. The significant expense categories include employee compensation, office operations and professional services. These expenses are presented below as they are included in the net income measure used by the CODM:
Schedule of Segment Information
| Year Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| General and administrative | ||||||||
| Wages and related | $ | ( | ) | $ | ( | ) | ||
| Office operations | ( | ) | ( | ) | ||||
| Professional services | ( | ) | ( | ) | ||||
| Other operating expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Other Expenses / Income | ||||||||
| Gain (loss) on extinguishment of debt | ( | ) | ( | ) | ||||
| Fair value of stock issued for note modification | ( | ) | ( | ) | ||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other expenses / income | ( | ) | ( | ) | ||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| F-17 |
Note 10 - Income Taxes
Loss from operations before provision (benefit) for income taxes and associated tax provision (benefit) are summarized in the following table:
Schedule of Loss from Operations Before Provision (Benefit) for Income Taxes and Associated Tax Provision (Benefit)
| Net Income (Loss) | 2025 | 2024 | ||||||
| Years ended December 31, | ||||||||
| Net Income (Loss) | 2025 | 2024 | ||||||
| Domestic | $ | ( | ) | $ | ( | ) | ||
| Foreign | ||||||||
| Net Income (Loss) | $ | ( | ) | $ | ( | ) | ||
| Current | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Foreign | ||||||||
| Total Current | $ | $ | ||||||
| Deferred | ||||||||
| Federal | $ | $ | ( | ) | ||||
| State | ( | ) | ||||||
| Foreign | ||||||||
| Total Deferred | ( | ) | ||||||
| Less Increase in Allowance | ( | ) | ||||||
| Net Deferred | $ | $ | ||||||
| Total Income Tax Provision (Benefit) | $ | $ | ||||||
The significant components of the deferred tax assets and liabilities are summarized below:
Schedule of Deferred Tax Assets and Liabilities
| 2025 | 2024 | |||||||
| Years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred Tax Assets (Liabilities): | ||||||||
| Net Operating Loss Carry-Forwards | $ | $ | ||||||
| Depreciable and Amortizable Assets | ( | ) | ||||||
| Stock Based Compensation | ||||||||
| Amortization of debt discount | ||||||||
| Loss Reserve | ||||||||
| Accrued Compensation | ||||||||
| Other | ||||||||
| Total | ||||||||
| Less Valuation Allowance | ( | ) | ( | ) | ||||
| Net Deferred Tax Assets (Liabilities) | $ | $ | ||||||
At
December 31, 2025 and 2024, the Company has available net operating loss carry-forwards for federal and state income tax purposes of
approximately $
| F-18 |
Internal Revenue Code Section 382 (“Section 382”) imposes limitations on the availability of a company’s net operating losses and other corporate tax attributes as certain significant ownership changes occur. As a result of the historical equity instrument issuances by the Company, a Section 382 ownership change may have occurred and a study will be required to determine the date of the ownership change, if any. The amount of the Company’s net operating losses and other tax attributes incurred prior to any ownership change may be limited based on the Company’s value. A full valuation allowance has been established for the Company’s deferred tax assets, including net operating losses and any other corporate tax attributes.
During the years ended December 31, 2025 and 2024, the Company had no unrecognized uncertain tax positions. The Company’s policy is to recognize interest accrued and penalties related to unrecognized uncertain tax positions in tax expense.
The Company files income tax returns in the U.S. federal jurisdiction. The tax years 2022-2025 generally remain open to examination by the U.S. federal and state taxing authorities.
A reconciliation of the income tax provision using the statutory U.S. income tax rate compared with the actual income tax provision reported on the consolidated statements of operations is summarized in the following table:
Schedule of Reconciliation of Income Tax Provision
| Years ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Statutory United States federal rate | % | % | ||||||
| State income tax, net of federal benefit | ||||||||
| Change in valuation allowance | ( | ) | ||||||
| Stock based compensation | ( | ) | ||||||
| Permanent differences | ||||||||
| Tax rate differential between jurisdictions | ||||||||
| Other | ( | ) | ||||||
| Foreign net operating loss adjustment | - | - | ||||||
| Effective tax rate benefit (provision) | ( | )% | ( | )% | ||||
Note 11 - Subsequent Events
| ● | On January 16, 2026, the Company issued shares of common stock for exercise of stock options. | |
| ● | On January 16, 2026, the Company issued shares of common stock for services provided. |
| ● | On
February 23, 2026, the Company issued a promissory note for the principal amount of $ | |
| ● | On March 16, 2026, the Company issued shares of common stock for services provided. | |
| ● | On
March 16, 2026, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under
the terms of these agreements, the maturity dates of the notes were extended to | |
| ● | On March 18, 2026, the Company
issued a promissory note for the principal amount of $ |
| F-19 |
2,004,009 Shares of Common Stock
American Battery Materials Inc.
PRELIMINARY PROSPECTUS
ThinkEquity
, 2026
Through and including , 2026 (the 25th day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
PART
II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the fees and expenses, other than underwriting discounts and commissions, payable in connection with the registration of the common stock hereunder. All amounts are estimates except the SEC registration fee.
| Item | Amount to be Paid | |||
| SEC registration fee | $ | 1,588 | ||
| FINRA filing fee | $ | 5,000 | ||
| NYSE American listing fee | $ | 60,000 | ||
| Printing and mailing expenses | $ | 8,000 | ||
| Legal fees and expenses | $ | 150,000 | ||
| Accounting fees and expenses | $ | 75,000 | ||
| Transfer agent and registrar fees and expenses | $ | 2,500 | ||
| Miscellaneous expenses | $ | 7,599 | ||
| Total | $ | 309,687 | ||
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the General Corporation Law of the State of Delaware, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Our certificate of incorporation provides that, pursuant to Delaware law, our directors shall not be liable for monetary damages for breach of the directors’ fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, for any transaction from which the director directly or indirectly derived an improper personal benefit and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director’s responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.
Our bylaws provide for the indemnification of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. We are not, however, required to indemnify any director or officer in connection with any (a) willful misconduct, (b) willful neglect, or (c) gross negligence toward or on behalf of us in the performance of his or her duties as a director or officer. We are required to advance, prior to the final disposition of any proceeding, promptly on request, all expenses incurred by any director or officer in connection with that proceeding on receipt of any undertaking by or on behalf of that director or officer to repay those amounts if it should be determined ultimately that he or she is not entitled to be indemnified under our bylaws or otherwise.
We have been advised that, in the opinion of the SEC, any indemnification for liabilities arising under the Securities Act of 1933 is against public policy, as expressed in the Securities Act and is, therefore, unenforceable.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following is a summary of transactions since January 1, 2021 involving securities sold by our company which were not registered under the Securities Act. Included are sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities and new securities resulting from the modification of outstanding securities. All issuances were exempt under Section 4(a)(2) of the Securities Act unless otherwise noted. No underwriters were used in these transactions.
| ● | On January 4, 2022, Cobrador Multi-Strategy Partners converted convertible debt into 15,211,579 shares of common stock. | ||
| ● | On January 6, 2022, Dr. Adam Lipson, who is one of our Directors, converted convertible debt into 12,631,579 shares of common stock. | ||
| ● | On February 4, 2022, Cobrador Multi-Strategy Partners converted convertible debt into 11,295,526 shares of common stock. | ||
| ● | On February 10, 2022, Dr. Adam Lipson converted convertible debt into 10,650,681 shares of common stock. | ||
| ● | On August 23, 2022, we issued 50,000 shares of our Series A Preferred Convertible Stock in exchange for $50,000 of net proceeds from Dr. Adam Lipson. | ||
| ● | On November 21, 2022, in consideration of the payment of $25,000, we issued 6,578,947 shares of our common stock to Ciro Randazzo upon the exercise of a Warrant. | ||
| ● | On December 2, 2022, in consideration of the payment of $35,000, we issued 9,210,526 shares of our common stock to Brett Hawken upon the exercise of a Warrant. | ||
| ● | On December 14, 2022, in consideration of the payment of $25,000, we issued 6,578,947 shares of our common stock to Cobrador Multi-Strategy Partners upon the exercise of a Warrant. | ||
| II-1 |
| ● | On December 14, 2022, we converted a total of $8,987,027 held by noteholders under 99 convertible promissory notes into a total of 2,818,277,866 shares of common stock as follows: | ||
| ○ | 2,043,125,140 shares were issued to six holders (AJS Properties LLC, Automated Retail Leasing Partners, LP, Cobrador Multi-Strategy Partners, LP, David E. Graber, Marilyn Kane, Dr. Adam Lipson) under settlement agreements with each of the noteholders. | ||
| ○ | 655,868,191 shares were issued to 20 holders (26005 · NM Calicchia SPA, 26006 · EBY SPA, Brett Hawken, Brian Weinstein (Fastcorp Vending), Chris McClanahan, Ciro Randazzo, Daniel Harlin, David Poulad, Donald S Radcliffe, Inspiration Vending LLC, Kathleen Browne, Kevin & Barb Brady, Kevin Sheridan, Mark Chapman, Michael Dettelbach, Michael McKeever, Pamela R. Evans, Raymond Meyers, Tyler Humphrey, John E. Hentschel) under the forced conversion provision under each of the respective convertible promissory notes. | ||
| ○ | 119,284,531 shares were issued to six holders (Cobrador Multi-Strategy Partners, Marilyn Kane, Sebastian Lux, Quail Run Holding, Kamuran M. Tekin, Parker Tekin) as voluntary conversions by each holder under each of the respective convertible promissory notes. | ||
| ● | On December 26, 2022, we issued 7,500,000 shares to MZHCI in exchange for services rendered. | ||
| ● | On December 29, 2022, in consideration of the payment of $45,000, we issued 11,842,103 shares of our common stock to Kevin Sheridan upon the exercise of a Warrant. | |
| ● | On January 5, 2023, in consideration of the payment of $14,000, we issued 12,281 shares of our common stock to Cobrador Multi-Strategy Partners upon the cash exercise of a warrant. | |
| ● | On January 31, 2023, in consideration of the payment of $140,000, we issued 122,808 shares of our common stock to David Poulad upon the cash exercise of a warrant. | |
| ● | On February 28, 2023, we issued 8,987 shares of our common stock to Dr. Adam Lipson upon the cashless exercise of a warrant. | |
| ● | On March 27, 2023, in consideration of the payment of $35,000, we issued 30,702 shares of our common stock to Dr. Adam Lipson upon the exercise of a warrant. | |
| ● | On April 8, 2023, we issued 10,679 shares of our common stock to Dr. Adam Lipson upon the cashless exercise of a warrant. | |
| ● | On April 30, 2023, we issued 2,390 shares of our common stock to Brian Weinstein upon the cashless exercise of a warrant. | |
| ● | On April 30, 2023, we issued 833 shares of our common stock to Ryan Zarkesh as payment for services rendered. | |
| ● | On May 16, 2023, we issued 100,000 shares of our common stock to Kingdom Building Inc. as payment for services rendered. | |
| ● | On May 22, 2023, we issued 65,558 shares of our common stock as payment for services rendered. | |
| ● | On July 31, 2023, we issued 833 shares of our common stock to Ryan Zarkesh as payment for services rendered. | |
| ● | On August 7, 2023, we issued 22,945 shares of our common stock to Dr. Adam Lipson upon the cashless exercise of a warrant. | |
| ● | On August 15, 2023, we issued 10,998 shares of our common stock to Michael Crone upon the cashless exercise of a warrant. | |
| ● | On August 23, 2023, we issued 33,333 shares of our common stock to Dr. Adam Lipson to retire preferred stock. | |
| ● | On September 7, 2023, we issued 8,420 shares of our common stock to David R. Meyers related to the issuance of new convertible note. | |
| ● | On September 9, 2023, we issued 6,736 shares of our common stock to Alex Murdzhev related to the issuance of new convertible note. | |
| ● | On September 11, 2023, we issued 3,368 shares of our common stock to Justin Vorwerk in consideration for the extension of the maturity date of a convertible note. | |
| ● | On September 13, 2023, we issued 38,732 shares of our common stock to Kings Wharf Opportunities Fund, LP, Linda Shira, Candice Shira and Marvin Engle in consideration for the extension of the maturity date of three convertible notes. | |
| ● | On September 14, 2023, we issued 1,684 shares of our common stock to John Black in consideration for the extension of the maturity date of a convertible note. | |
| ● | On September 20, 2023, we issued 1,750 shares of our common stock to Kingdom Building Inc as payment for services rendered. | |
| ● | On September 21, 2023, we issued 11,667 shares of our common stock to Leviston Resources LLC in consideration for the extension of the maturity date of a convertible note. |
| II-2 |
| ● | On September 21, 2023, we issued 28,333 shares of our common stock to Leviston Resources LLC related to the issuance of a new convertible note. | |
| ● | On October 17, 2023, in consideration of the payment of $35,000, we issued 30,702 shares of our common stock to Raymond Meyers upon the cash exercise of a warrant. | |
| ● | On October 31, 2023, we issued 833 shares of our common stock to Ryan Zarkesh as payment for services rendered. | |
| ● | On January 16, 2024, a new convertible promissory note was issued to Jared Levinthal with a principal amount of $30,000. | |
| ● | On February 29, 2024, a new convertible promissory note was issued to Marilyn Thypin with a principal amount of $25,000. | |
|
● | On February 29, 2024, we executed an exchange agreement to substitute a promissory note originally valued at $175,000 with a new promissory note valued at $225,000 to Dallas Salazar. The additional principal of $50,000 was provided as non-cash consideration for extending the maturity date of the original note. |
| ● | On March 1, 2024, a new convertible promissory note was issued to Dallas Salazar with a principal amount of $225,000. | |
| ● | On March 21, 2024, a new convertible promissory note was issued to David E. Graber for a value of $254,713.44, including $50,000 in additional capital, cancellation of a $50,000 promissory note dated July 27, 2022, cancellation of a $25,000 promissory note dated November 8, 2022, cancellation of accrued salary amounting to $96,653.84 as of February 29, 2024 and cancellation of $30,350 due in unreimbursed advances. | |
| ● | On March 22, 2024, a new convertible promissory note was issued to Justin Vorwerk for a value of $138,073.94, involving the cancellation of a $25,000 promissory note dated February 28, 2022 and a $100,000 promissory note dated September 12, 2022. | |
| ● | On March 22, 2024, a new convertible promissory note was issued to Marilyn Kane for a value of $55,321.92, including the cancellation of a $50,000 promissory note dated September 14, 2022, which had a balance of $55,321.92. | |
| ● | On March 22, 2024, a new convertible promissory note was issued to InMotion Hosting for a value of $102,996.71, involving the cancellation of three promissory notes: a $40,000 note dated December 19, 2014, a $30,000 note dated March 29, 2016 and a $30,000 note dated September 23, 2016, with a combined current balance of $102,996.71. | |
| ● | On March 22, 2024, a new convertible promissory note was issued to Raymond Meyers for a value of $25,404.88, involving the cancellation of accrued expenses amounting to $25,404.88. | |
| ● | On March 28, 2024, a new convertible promissory note was issued to Brett Hawken with a principal amount of $35,471. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to King Wharf Opportunities Fund, LP, with a principal amount of $1,032,813. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to Leviston Resources LLC with a principal amount of $481,760. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to Linda Shira with a principal amount of $275,250. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to Candace Shira and Marvin Engle with a principal amount of $275,250. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to John Black with a principal amount of $68,583. | |
| ● | On March 29, 2024, a new convertible promissory note was issued to David R. Meyers with a principal amount of $335,573. | |
| ● | On May 16, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $99,182. | |
| ● | On June 18, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $80,000. | |
| ● | On July 11, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $200,000. | |
| ● | On July 11, 2024, the Company reached a settlement agreement involving the outstanding note held by Dallas Salazar. As part of this settlement, the Company paid off $150,000 of Salazar’s note, which had an original principal amount of $225,000 plus accrued interest. Concurrently, the Company issued a new promissory note to Dallas Salazar for the remaining balance of $107,551.37. | |
| ● | On August 6, 2024, a new convertible promissory note was issued to William Robinson, an unaffiliated party, with a principal amount of $30,000. | |
| ● | On August 19, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $150,000. | |
| ● | On August 28, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $35,000. |
| II-3 |
| ● | On October 7, 2024, the Company issued a convertible promissory note for the principal amount of $50,000. | |
| ● | On October 16, 2024, the non-binding letter of intent (LOI) between American Battery Materials Inc. (OTC Pink: BLTH) and a Nasdaq-listed special purpose acquisition company (SPAC) for a potential merger transaction expired without a completed agreement | |
| ● | On October 21, 2024, the Company issued a convertible promissory note to a related party for the principal amount of $25,000. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $82,937.50 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 71,879 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a promissory note was increased by $32,265.41 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 27,963 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $101,125.00 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 87,642 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $311,203.13 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 269,709 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $145,162.50 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 125,808 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a related party convertible note was increased by $9,000.00 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 7,800 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $60,000.00 in exchange for extending the maturity date of the note to March 31, 2025. Additionally, the Company issued 52,000 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of five promissory notes of a related party was increased by $169,254.50 in exchange for extending the maturity date of the consolidation promissory note to March 31, 2025. Additionally, the Company issued 146,687 shares of Common Stock to facilitate the extension of the maturity date. | |
| ● | On October 23, 2024, the principal of related party convertible note was increased by $76,414.03 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 66,225 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a related party convertible note was increased by $90,388.56 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 63,466 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $71,067.73 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 48,202 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a promissory note was increased by $10,641.37 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 9,223 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a related party convertible note was increased by $7,500.00 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 6,500 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $7,500.00 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 6,500 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $16,596.58 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 14,384 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $7,621.46 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 6,605 shares of Common Stock, in compliance with the MFN terms. |
| II-4 |
| ● | On October 23, 2024, the principal of a convertible note was increased by $20,575.00 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 17,832 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $9,000.00 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 7,800 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On October 23, 2024, the principal of a convertible note was increased by $15,000.00 under the Most Favored Nation (MFN) provision. Additionally, the Company issued 13,000 shares of Common Stock, in compliance with the MFN terms. | |
| ● | On December 18, 2024, a new convertible promissory note was issued to David E. Graber with a principal amount of $99,098. | |
| ● | On January 1, 2025, 2,000 warrants issued in 2020 for services, with an exercise price of $7.50 per share, expired in accordance with their original terms. As of December 31, 2024, these warrants were outstanding and had no intrinsic value, as the exercise price exceeded the market price of the company’s common stock. The expiration of these warrants does not impact the financial position or results of operations as presented in the accompanying financial statements, as no adjustments were required. | |
| ● | On January 16, 2025, the Company filed a Certificate of Amendment with the Secretary of State of Delaware to effect a reverse stock split of the issued and outstanding shares of its common stock at a ratio of one share for every 5 shares outstanding prior to the effective date of the reverse stock split. The reverse stock split became effective on January 24, 2025. The total number of authorized shares of common stock was reduced from 4,500,000,000 shares to 100,000,000 shares. The par value of the class Common Stock will remain the same at $0.001 per share. The 10,000,000 authorized shares of the Company’s preferred stock, par value $0.001 per share will not change. | |
| ● | On January 15, 2025, the Company issued a convertible promissory note for the principal amount of $25,000. | |
| ● | On February 10, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $10,000. | |
| ● | On February 11, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $10,000. | |
| ● | On February 27, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $10,000. | |
| ● | On April 7, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $50,000. | |
| ● | On April 15, 2025, the Company issued 25,000 shares of common stock to a party in exchange for services provided. | |
| ● | On April 15, 2025, the Company issued 25,000 shares of common stock to a party in exchange for services provided. | |
| ● | On April 15, 2025, the Company issued 15,000 shares of common stock to a party in exchange for services provided. | |
| ● | On April 21, 2025, the Company issued a convertible promissory for the principal amount of $25,000. | |
| ● | On April 25, 2025, the Company issued a convertible promissory for the principal amount of $25,000. | |
| ● | On May 6, 2025, the Company issued a convertible promissory note for the principal amount of $25,000. | |
| ● | On May 8, 2025, the Company issued a convertible promissory note for the principal amount of $50,000. | |
| ● | On May 19, 2025, the Company issued a convertible promissory note for the principal amount of $50,000. | |
| ● | On June 5, 2025, the Company issued a convertible promissory note for the principal amount of $20,000. | |
| ● | On August 1, 2025, a new convertible promissory note was issued to a related party, with a principal amount of $15,721.27 | |
| ● | On August 6, 2025, a new convertible promissory note was issued to a non-related party, with a principal amount of $50,000 | |
| ● | On August 6, 2025, a new convertible promissory note was issued to a non-related party, with a principal amount of $50,000 | |
| ● | Between August 1, 2025 and August 6, 2025, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to October 31, 2025. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 171,715 shares, and the aggregate principal increase was $646,498 | |
| ● | Most Favored Nation Adjustment: Three convertible promissory notes with original maturity dates of August 1, 2025, August 6, 2025 and August 6, 2025, and outstanding principal of $15,721.27, $50,000 and $50,000, respectively, received terms consistent with the extension agreements, including a 10% increase in principal and 378, 1,200 and 1,200 additional shares of common stock, respectively, pursuant to a Most Favored Nation clause. The maturity date of the notes is January 31, 2026. | |
| ● | On August 27, 2025, the company issued the 171,715 shares related to the note extensions and the 2,778 shares related to the Most Favored Nations clause. | |
| ● | On August 28, 2025, a new convertible promissory note was issued to a Adam Lipson, with a principal amount of $50,000. | |
| ● | On September 12, 2025, a new convertible promissory note was issued to a non-related party, with a principal amount of $25,000. | |
| ● | On October 23, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $200,000 for Accrued Payroll.
| |
| ● | On October 23, 2025, the Company issued a convertible promissory note to a related party for the principal amount of $34,200 for Accrued Expenses.
| |
| ● | On October 31, 2025, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to January 31, 2026. In consideration for the extensions, the noteholders received a 10% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 196,557 shares, and the aggregate principal increase was $731,377. As of March 26, 2026, none of the promissory or convertible notes were in default. | |
| ● | On October 31, 2025, two convertible promissory notes with original maturity dates of January 31, 2026, and outstanding principal of $200,000 and $34,200, respectively, received terms consistent with the extension agreements, including a 10% increase in principal (aggregate amount of $23,420) and 4,811 and 823 additional shares of common stock, respectively, pursuant to a Most Favored Nation clause. The maturity date of the notes remains January 31, 2026. As of March 26, 2026, none of the promissory or convertible notes were in default. | |
| ● |
On November 4, 2025, the Company issued 14,740 shares of common stock to three parties in exchange for services provided. | |
| ● | On January 16, 2026, the Company issued 35,013 shares of common stock for exercise of stock options. | |
| ● | On January 16, 2026, the Company issued 2,635 shares of common stock for services provided. | |
| ● | On February 23, 2026, the Company issued a promissory note for the principal amount of $50,000. | |
| ● | On March 16, 2026, the Company issued 5,000 shares of common stock for services provided. | |
| ● | On March 16, 2026, the Company entered into extension agreements with certain noteholders of its promissory and convertible notes. Under the terms of these agreements, the maturity dates of the notes were extended to June 30, 2026. In consideration for the extensions, the noteholders received a 12.5% increase in the principal amount of their notes and additional shares of common stock. The total additional shares issued in connection with these extensions amounted to 542,066 shares, and the aggregate principal increase was $1,045,346. As of March 26, 2026, none of the promissory or convertible notes were in default. | |
| ● | On March 18, 2026, the Company issued a promissory note for the principal amount of $25,000. |
| II-5 |
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
| (a) | Exhibits. |
Unless otherwise indicated, exhibits were previously filed.
| ** | Filed herewith. |
| # | Indicates management contract or compensatory plan. |
(b) Financial statements schedules.
The financial statements filed as part of this registration statement are listed in the index to the financial statements immediately preceding such financial statements, which index to the financial statements is incorporated herein by reference.
| II-6 |
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
| (1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. | |
| (2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
| II-7 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 9 to Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenwich, State of Connecticut, on March 26, 2026.
| AMERICAN BATTERY MATERIALS INC. | ||
| By: | /s/ David E. Graber | |
| Name: | David E. Graber | |
| Title: | Chairman and Chief Executive Officer | |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 9 to Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ David E. Graber | Chairman and Chief Executive Officer | March 26, 2026 | ||
| David E. Graber | (Principal Executive Officer) | |||
| /s/ Sebastian Lux | President, Chief Operating Officer and Director | March 26, 2026 | ||
| Sebastian Lux | ||||
| /s/ Agustin Cabo | Chief Financial Officer | March 26, 2026 | ||
| Agustin Cabo | (Principal Financial and Accounting Officer) | |||
| /s/ Dylan Glenn* | Director | March 26, 2026 | ||
| Dylan Glenn | ||||
| /s/ Jared Levinthal* | Director | March 26, 2026 | ||
| Jared Levinthal | ||||
| /s/ Adam C. Lipson, M.D.* | Director | March 26, 2026 | ||
| Adam C. Lipson, M.D. | ||||
| /s/ Andrew Suckling* | Director | March 26, 2026 | ||
| Andrew Suckling | ||||
| /s/ Justin Vorwerk* | Director | March 26, 2026 | ||
| Justin Vorwerk | ||||
| * By: | /s/ David E. Graber | |
| David E. Graber | ||
| Attorney-in-Fact |
| II-8 |
Exhibit 1.1
UNDERWRITING AGREEMENT
between
AMERICAN BATTERY MATERIALS INC.
and
THINKEQUITY LLC
as Representative of the Several Underwriters
AMERICAN BATTERY MATERIALS INC.
UNDERWRITING AGREEMENT
New York, New York
[●], 2026
ThinkEquity LLC
As Representative of the several Underwriters named on Schedule 1 attached hereto
17 State Street, 41st Fl
New York, NY 10004
Ladies and Gentlemen:
The undersigned, American Battery Materials, Inc., a Delaware corporatoin (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement (as hereinafter defined) as being subsidiaries or affiliates of American Battery Materials Inc., the “Company”), hereby confirms its agreement (this “Agreement”) with ThinkEquity LLC (hereinafter referred to as “you” (including its correlatives) or the “Representative”) and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other underwriters being collectively called the “Underwriters” or, individually, an “Underwriter”) as follows:
| 1. | Purchase and Sale of Shares. |
1.1 Firm Shares.
1.1.1. Nature and Purchase of Firm Shares.
(i) On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the several Underwriters, an aggregate of 2,004,009 shares (“Firm Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”).
(ii) The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on Schedule 1 attached hereto and made a part hereof at a purchase price of $[●] per share ([●]% of the per Firm Share offering price). The Firm Shares are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Shares Payment and Delivery.
(i) Delivery and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time, on the first (1st) Business Day following the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) (or the second (2nd) Business Day following the Effective Date if the Registration Statement is declared effective after 4:01 p.m., Eastern time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Reed Smith LLP, 599 Lexington Avenue, New York, NY 10022 (“Representative Counsel”), or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.”
(ii) Payment for the Firm Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery of the certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least one (1) full Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all of the Firm Shares. The term “Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.
1.2 Over-allotment Option.
1.2.1. Option Shares. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Company hereby grants to the Underwriters an option to purchase up to 300,602 additional shares of Common Stock, representing fifteen percent (15%) of the Firm Shares sold in the offering, from the Company (the “Over-allotment Option”). Such 300,602 additional shares of Common Stock, the net proceeds of which will be deposited with the Company’s account, are hereinafter referred to as “Option Shares.” The purchase price to be paid per Option Share shall be equal to the price per Firm Share set forth in Section 1.1.1 hereof. The Firm Shares and the Option Shares are hereinafter referred to together as the “Public Securities.” The offering and sale of the Public Securities is hereinafter referred to as the “Offering.”
1.2.2. Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within 45 days after the Effective Date. The Underwriters shall not be under any obligation to purchase any Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the “Option Closing Date”), which shall not be later than one (1) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of Representative Counsel or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Shares, subject to the terms and conditions set forth herein, (i) the Company shall become obligated to sell to the Underwriters the number of Option Shares specified in such notice and (ii) each of the Underwriters, acting severally and not jointly, shall purchase that portion of the total number of Option Shares then being purchased as set forth in Schedule 1 opposite the name of such Underwriter.
1.2.3. Payment and Delivery. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to you of certificates (in form and substance satisfactory to the Underwriters) representing the Option Shares (or through the facilities of DTC) for the account of the Underwriters. The Option Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least one (1) full Business Day prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative for applicable Option Shares. The Option Closing Date may be simultaneous with, but not earlier than, the Closing Date, and in the event that such time and date are simultaneous with the Closing Date, the term “Closing Date” share refer to the time and date of delivery of the Firm Shares and the Option Shares.
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1.3 Representative’s Warrants.
1.3.1. Purchase Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date and Option Closing Date, as applicable, an option (“Representative’s Warrant”) for the purchase of an aggregate number of shares of Common Stock representing 5% of the Public Securities, for an aggregate purchase price of $100.00. The Representative’s Warrant agreement, in the form attached hereto as Exhibit A (the “Representative’s Warrant Agreement”), shall be exercisable, in whole or in part, commencing on a date which is one hundred eighty (180) days after the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price per share of Common Stock of $[●], which is equal to 125% of the initial public offering price of the Firm Shares. The Representative’s Warrant Agreement and the shares of Common Stock issuable upon exercise thereof are hereinafter referred to together as the “Representative’s Securities.” The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant Agreement and the underlying shares of Common Stock during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant Agreement, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.
1.3.2. Delivery. Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may request.
2. Representations and Warranties of the Company. The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1 Filing of Registration Statement.
2.1.1. Pursuant to the Securities Act. The Company has filed with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement, and an amendment or amendments thereto, on Form S-1 (File No. 333-277021), including any related prospectus or prospectuses, for the registration of the Public Securities and the Representative’s Securities under the Securities Act of 1933, as amended (the “Securities Act”), which registration statement and amendment or amendments have been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”) and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations. Except as the context may otherwise require, such registration statement, as amended, on file with the Commission at the time the registration statement became effective (including the Preliminary Prospectus included in the registration statement, financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information deemed to be a part thereof as of the Effective Date pursuant to paragraph (b) of Rule 430A of the Securities Act Regulations (the “Rule 430A Information”)), is referred to herein as the “Registration Statement.” If the Company files any registration statement pursuant to Rule 462(b) of the Securities Act Regulations, then after such filing, the term “Registration Statement” shall include such registration statement filed pursuant to Rule 462(b). The Registration Statement has been declared effective by the Commission on the date hereof.
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Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “Preliminary Prospectus.” The Preliminary Prospectus, subject to completion, dated [●], 2026, that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus.” The final prospectus in the form first furnished to the Underwriters for use in the Offering is hereinafter called the “Prospectus.” Any reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the latest Preliminary Prospectus included in the Registration Statement.
“Applicable Time” means [TIME] [a.m./p.m.], Eastern time, on the date of this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the Securities Act Regulations) relating to the Public Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Public Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
“Pricing Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (File Number 000-[●]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the shares of Common Stock. The registration of the shares of Common Stock under the Exchange Act has been declared effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the shares of Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.
2.2 Stock Exchange Listing. The shares of Common Stock have been approved for listing on the NYSE American (the “Exchange”), and the Company has taken no action designed to, or likely to have the effect of, delisting the shares of Common Stock from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
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2.3 No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.
2.4 Disclosures in Registration Statement.
2.4.1. Compliance with Securities Act and 10b-5 Representation.
(i) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date (if any), did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus hereto does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus (the “Underwriters’ Information”); and
(iv) Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’ Information.
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2.4.2. Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations.
2.4.3. Prior Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons controlling, controlled by or under common control with the Company, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Preliminary Prospectus.
2.4.4. Regulations. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Offering and the Company’s business as currently contemplated are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.5 Changes After Dates in Registration Statement.
2.5.1. No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
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2.6 Independent Accountants. To the knowledge of the Company, GreenGrowth CPAs (the “Auditor”), whose report is filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
2.7 Financial Statements, etc. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present the financial position and the results of operations of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), consistently applied throughout the periods involved (provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all footnotes required by GAAP); and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein. Except as included therein, no historical or pro forma financial statements are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The pro forma and pro forma as adjusted financial information and the related notes, if any, included in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Securities Act Regulations and present fairly the information shown therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. All disclosures contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable. Each of the Registration Statement, the Pricing Disclosure Package and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) neither the Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement, the Pricing Disclosure Package and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital stock, (c) there has not been any change in the capital stock of the Company or any of its Subsidiaries, or, other than in the course of business, any grants under any stock compensation plan, and (d) there has not been any material adverse change in the Company’s long-term or short-term debt.
2.8 Authorized Capital; Options, etc. The Company had, at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no stock options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued shares of Common Stock of the Company or any security convertible or exercisable into shares of Common Stock of the Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible securities.
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2.9 Valid Issuance of Securities, etc.
2.9.1. Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission, rights of first refusal or rights of participation or similar rights with respect thereto or put rights, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights of participation or similar rights of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized shares of Common Stock conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding shares of Common Stock were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such Shares, exempt from such registration requirements.
2.9.2. Securities Sold Pursuant to this Agreement. The Public Securities and Representative’s Securities have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Public Securities and Representative’s Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public Securities and Representative’s Securities has been duly and validly taken. The Public Securities and Representative’s Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. All corporate action required to be taken for the authorization, issuance and sale of the Representative’s Warrant Agreement has been duly and validly taken; the shares of Common Stock issuable upon exercise of the Representative’s Warrant have been duly authorized and reserved for issuance by all necessary corporate action on the part of the Company and when paid for and issued in accordance with the Representative’s Warrant and the Representative’s Warrant Agreement, such shares of Common Stock will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; and such shares of Common Stock are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company.
2.10 Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in a registration statement to be filed by the Company.
2.11 Validity and Binding Effect of Agreements. This Agreement and the Representative’s Warrant Agreement have been duly and validly authorized by the Company, and, when executed and delivered, will constitute, the valid and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
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2.12 No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Representative’s Warrant Agreement and all ancillary documents, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the creation, modification, termination or imposition of any lien, charge, mortgage, pledge, security, interest, claim, preferential arrangement, encumbrance or restriction of any kind whatsoever upon any property or assets of the Company pursuant to the terms of any agreement or instrument, license or permit, to which the Company is a party, or to which any of its assets are bound; (ii) result in any violation of the provisions of the Company’s Articles of Incorporation (as the same may be amended or restated from time to time, the “Charter”) or the by-laws of the Company; or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof.
2.13 No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any term or provision of its Charter or by-laws, or in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity.
2.14 Corporate Power; Licenses; Consents.
2.14.1. Conduct of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has all requisite corporate power and authority, and has all necessary consents, authorizations, approvals, orders, licenses, certificates, qualifications, registrations and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.14.2. Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions and conditions hereof, and all consents, authorizations, approvals, orders, licenses, certificates, qualifications and registrations required in connection therewith have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance, sale and delivery of the Public Securities and the consummation of the transactions and agreements contemplated by this Agreement and the Representative’s Warrant Agreement and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state securities laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.15 D&O Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”) completed by each of the Company’s directors and officers immediately prior to the Offering (the “Insiders”) as supplemented by all information concerning the Company’s directors, officers and principal stockholders as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, as well as in the Lock-Up Agreement (as defined in Section 2.25 below), provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become materially inaccurate and incorrect.
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2.16 Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus or in connection with the Company’s listing application for the listing of the Public Securities on the Exchange.
2.17 Good Standing. The Company has been duly organized and is validly existing as a corporation and is in good standing under the laws of the State of Delaware as of the date hereof, and is duly qualified to do business and is in good standing in each other jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify, singularly or in the aggregate, would not have or reasonably be expected to result in a Material Adverse Change.
2.18 Insurance. The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks which the Company believes are adequate, including, but not limited to, directors and officers insurance coverage at least equal to $5,000,000 and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.
2.19 Transactions Affecting Disclosure to FINRA.
2.19.1. Finder’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any Insider with respect to the sale of the Public Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.19.2. Payments Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.19.3. Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
2.19.4. FINRA Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 10% or more of any class of the Company’s securities or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
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2.19.5. Information. All information provided by the Company in its, and, to the Company’s knowledge, all information provided by the Company’s officers and directors in their, FINRA questionnaire to Representative Counsel specifically for use by Representative Counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
2.20 Foreign Corrupt Practices Act. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, has, directly or indirectly, (i) given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that (a) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (b) if not given in the past, might have had a Material Adverse Change, (c) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company, or (d) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or regulation; (ii) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or (iii) received notice of any investigation, proceeding or inquiry by any Governmental Entity regarding any of the matters in clauses (i) or (ii) above; and the Company and, to the knowledge of the Company, the Company’s affiliates have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.21 Compliance with OFAC. None of the Company and its Subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company and its Subsidiaries or any other person acting on behalf of the Company and its Subsidiaries, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
2.22 Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Registration Statement, Disclosure Package or Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
2.23 Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
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2.24 Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to you or to Representative Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.25 Lock-Up Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and each owner of at least 5% (if a follow-on offering already listed on an exchange) of the Company’s outstanding shares of Common Stock (or securities convertible or exercisable into shares of Common Stock) (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Exhibit B (the “Lock-Up Agreement”), prior to the execution of this Agreement.
2.26 Subsidiaries. All direct and indirect Subsidiaries of the Company are duly organized and in good standing under the laws of the place of organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect on the assets, business or operations of the Company taken as a whole. The Company’s ownership and control of each Subsidiary is as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.27 Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required.
2.28 No Relationships with Customers and Suppliers. No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, officers, 5% or greater stockholders, customers or suppliers of the Company or any of the Company’s affiliates on the other hand, which is required to be described in the Pricing Disclosure Package and the Prospectus or a document incorporated by reference therein and which is not so described.
2.29 No Unconsolidated Entities. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s liquidity or the availability of or requirements for its capital resources required to be described in the Pricing Disclosure Package and the Prospectus or a document incorporated by reference therein which have not been described as required.
2.30 Board of Directors. The Board of Directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned “Management.” The qualifications of the persons serving as board members and the overall composition of the board comply with the Exchange Act, the Exchange Act Regulations, the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley Act”) applicable to the Company and the listing rules of the Exchange. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors qualify as “independent,” as defined under the listing rules of the Exchange.
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2.31 Sarbanes-Oxley Compliance.
2.31.1. Disclosure Controls. The Company has developed and currently maintains disclosure controls and procedures that will comply with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and such controls and procedures are effective to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act filings and other public disclosure documents.
2.31.2. Compliance. The Company is, or at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and taken reasonable steps to ensure the Company’s future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act.
2.32 Accounting Controls. The Company and its Subsidiaries maintain systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’ ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
2.33 No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
2.34 No Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent.
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2.35 Intellectual Property Rights. The Company and each of its Subsidiaries owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business of the Company and its Subsidiaries as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company or any of its Subsidiaries necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. Neither the Company nor any of its Subsidiaries has received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.35, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons.
To the Company’s knowledge, all licenses for the use of the Intellectual Property described in the Registration Statement, the Pricing Disclosure Package and the Prospectus are in full force and effect in all material respects and are enforceable by the Company and, to the Company’s knowledge, the other parties thereto, in accordance with their terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and the Company, has no knowledge, that any other party is in default thereunder and no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder.
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2.36 Taxes. Each of the Company and its Subsidiaries has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. The term “taxes” means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.37 ERISA Compliance. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
2.38 Compliance with Laws. The Company: (A) is and at all times has been in compliance with all statutes, rules, regulations, ordinances, judgments, orders and decrees of all Governmental Entities applicable to the Company’s business (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or notice from any other Governmental Entity alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, consents, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses all material Authorizations and such Authorizations are valid and in full force and effect and are not in material violation of any term of any such Authorizations; (D) has not received notice of any claim, action, suit, litigation, proceeding, hearing, enforcement, investigation, inquiry, arbitration or other action from any Governmental Entity or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, litigation, proceeding, hearing, enforcement, investigation, inquiry, arbitration or other action; (E) has not received notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such governmental authority is considering such action; (F) has filed, obtained, maintained or submitted all material reports, documents, forms, filings, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any recall, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the Company’s knowledge, no third party has initiated, conducted or intends to initiate any such notice or action.
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2.39 Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the time of effectiveness of the Registration Statement and any amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act Regulations) of the Public Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
2.40 Environmental Laws. The Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to their businesses (“Environmental Laws”), except where the failure to comply would not, singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge.
2.41 Real Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company and its Subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company and its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or its Subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.
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2.42 Contracts Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s or its Subsidiaries’ liquidity or the availability of or requirements for their capital resources required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described or incorporated by reference as required.
2.43 Loans to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company or its Subsidiaries to or for the benefit of any of the officers or directors of the Company, its Subsidiaries or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.44 Smaller Reporting Company. As of the time of filing of the Registration Statement, the Company was a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act Regulations.
2.45 Industry Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.46 Reserved.
2.47 Minute Books. The minute books of the Company have been made available to the Underwriters and counsel for the Underwriters, and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee) and stockholders of the Company (or analogous governing bodies and interest holders, as applicable), and each of its Subsidiaries since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes. There are no material transactions, agreements, dispositions or other actions of the Company that are not properly approved and/or accurately and fairly recorded in the minute books of the Company, as applicable.
2.48 Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.
2.49 No Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Securities.
2.50 Confidentiality and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the Company or be expected to result in a Material Adverse Change.
2.51 Reserved.
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2.52 Testing-the-Waters Communications. The Company has not (i) alone engaged in any Testing-the-Waters Communications, other than Testing-the-Waters Communications with the written consent of the Representative and with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company confirms that the Representative has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications other than those listed on Schedule 2-C hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.
2.53 Electronic Road Show. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) of the Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities Act Regulations) is required in connection with the Offering.
2.54 Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the shares of Common Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
| 3. | Covenants of the Company. The Company covenants and agrees as follows: |
3.1 Amendments to Registration Statement. The Company shall deliver to the Representative, prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.
3.2 Federal Securities Laws.
3.2.1. Compliance. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of the receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Securities and Representative’s Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Public Securities and Representative’s Securities. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
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3.2.2. Continued Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Public Securities as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representative notice of any filings made pursuant to the Exchange Act or the Exchange Act Regulations within 48 hours prior to the Applicable Time. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration of the Over-allotment Option specified in Section 1.2 hereof and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel for the Underwriters shall reasonably object.
3.2.3. Exchange Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its best efforts to maintain the registration of the shares of Common Stock under the Exchange Act. The Company shall not deregister the shares of Common Stock under the Exchange Act without the prior written consent of the Representative.
3.2.4. Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Public Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representative. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Underwriters as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Underwriters and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
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3.2.5. Testing-the-Waters Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
3.3 Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available to the Representative and counsel for the Representative, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the Underwriters, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.4 Delivery to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.5 Effectiveness and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall make every reasonable effort to obtain promptly the lifting of such order.
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3.6 Review of Financial Statements. For a period of five (5) years after the date of this Agreement, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s financial statements for each of the three fiscal quarters immediately preceding the announcement of any quarterly financial information.
3.7 Listing. The Company shall use its best efforts to maintain the listing of the shares of Common Stock (including the Public Securities) on the Exchange for at least three years from the date of this Agreement.
3.8 [Financial Public Relations Firm. As of the Effective Date, the Company shall have retained a financial public relations firm reasonably acceptable to the Representative and the Company, which shall initially be [●], which firm shall be experienced in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the Effective Date.] 1
3.9 Reports to the Representative.
3.9.1. Periodic Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Form 8-K prepared and filed by the Company; (iv) five copies of each registration statement filed by the Company under the Securities Act; and (v) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request; provided the Representative shall sign, if requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and Representative Counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1.
3.9.2. Transfer Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Transfer Online, Inc. is acceptable to the Representative to act as Transfer Agent for the shares of Common Stock.
3.9.3. Trading Reports. During such time as the Public Securities are listed on the Exchange, the Company shall provide to the Representative, at the Company’s expense, such reports published by Exchange relating to price trading of the Public Securities, as the Representative shall reasonably request.
1 Note to draft: Has the Company or does the company plan to engage a PR firm?
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3.10 Payment of Expenses
3.10.1. General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the shares of Common Stock to be sold in the Offering (including the Option Shares) with the Commission; (b) all Public Filing System filing fees associated with the review of the Offering by FINRA; (c) all fees and expenses relating to the listing of such Public Securities on the Exchange and such other stock exchanges as the Company and the Representative together determine, including any fees charged by The Depository Trust Company (DTC) for new securities; (d) all fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount not to exceed $15,000 in the aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification of the Public Securities under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate (including, without limitation, all filing and registration fees, it being agreed that if the Offering is commenced on the Exchange, the Company shall make a payment of $5,000 to such counsel at Closing, or if the Offering is commenced on the Over-the-Counter Bulletin Board, the Company shall make a payment of $15,000 to such counsel upon the commencement of “blue sky” work by such counsel and an additional $5,000 at Closing); (f) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Securities under the securities laws of such foreign jurisdictions as the Representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and delivering certificates representing the Public Securities; (j) fees and expenses of the transfer agent for the shares of Common Stock; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Underwriters; (l) to the extent approved by the Company in writing, the costs associated with post-Closing advertising the Offering in the national editions of the Wall Street Journal and New York Times; (m) the costs associated with one set of bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee shall provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request; (n) the fees and expenses of the Company’s accountants; (o) the fees and expenses of the Company’s legal counsel and other agents and representatives; (p) fees and expenses of the Representative’s legal counsel not to exceed $125,000; (q) the $29,500 cost associated with the Underwriter’s use of Ipreo’s book-building, prospectus tracking and compliance software for the Offering; (r) $10,000 for data services and communications expenses; (s) up to $10,000 of ThinkEquity’s actual accountable “road show” expenses; (t) up to $10,000 of ThinkEquity’s market making and trading, and clearing firm settlement expenses for the Offering and (u) up to $5,000 for costs associated with bound volumes of the public offering materials as well as commemorative mementos and tombstones, each of which the Company or its designee will provide within a reasonable time after the Closing Date in such quantities as the Representative may reasonably request. The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.
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3.10.2. Non-accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 3.10.1, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by the Company from the sale of the Firm Shares, less the Advance (as such term is defined in Section 8.3 hereof), provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Underwriters pursuant to Section 8.3 hereof.
3.11 Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
3.12 Delivery of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an earnings statement (which need not be certified by independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13 Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M of the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Securities.
3.14 Internal Controls. The Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
3.15 Accountants. As of the date of this Agreement, the Company shall retain an independent registered public accounting firm reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that the Auditor is acceptable to the Representative.
3.16 FINRA. The Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 5% or more of any class of the Company’s securities or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.17 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.
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3.18 Company Lock-Up Agreements.
3.18.1. Restriction on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 180 days after the date of this Agreement (the “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (ii) file or caused to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital stock of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital stock of the Company or such other securities, in cash or otherwise.
The restrictions contained in this Section 3.18.1 shall not apply to (i) the shares of Common Stock to be sold hereunder, (ii) the issuance by the Company of shares of Common Stock upon the exercise of a stock option or warrant or the conversion of a security outstanding on the date hereof, which is disclosed in the Registration Statement, Disclosure Package and Prospectus, provided that such options, warrants, and securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, or (iii) the issuance by the Company of stock options or shares of capital stock of the Company under any equity compensation plan of the Company, provided that in each of (ii) and (iii) above, the underlying shares shall be restricted from sale during the entire Lock-Up Period.
Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this Section 3.18.1 shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension; provided, however, that this extension of the Lock-Up Period shall not apply to the extent that FINRA has amended or repealed NASD Rule 2711(f)(4), or has otherwise provided written interpretive guidance regarding such rule, in each case, so as to eliminate the prohibition of any broker, dealer, or member of a national securities association from publishing or distributing any research report, with respect to the securities of an Emerging Growth Company prior to or after the expiration of any agreement between the broker, dealer, or member of a national securities association and the Emerging Growth Company or its shareholders that restricts or prohibits the sale of securities held by the Emerging Growth Company or its shareholders after the initial public offering date.
3.18.2. Restriction on Continuous Offerings. Notwithstanding the restrictions contained in Section 3.18.1, the Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the Representative, it will not, for a period of 24 months after the date of this Agreement, directly or indirectly in any “at-the-market” or continuous equity transaction, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company.
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3.19 Release of D&O Lock-up Period. If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in Section 2.25 hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20 Blue Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify the Public Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Public Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
3.21 Reporting Requirements. The Company, during the period when a prospectus relating to the Public Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Public Securities as may be required under Rule 463 under the Securities Act Regulations.
3.22 Emerging Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Public Securities within the meaning of the Securities Act and (ii) fifteen (15) days following the completion of the Lock-Up Period.
3.23 Additional Issuances under the Incentive Compensation Plan. The Company covenants and agrees that, it will not issue shares of Common Stock (or options or other rights to acquire shares of Common Stock) under its 2024 Incentive Compensation Plan or any other stock option or incentive plan or arrangement (collectively, the “Plan”) such that it would have in excess of 1,200,000 shares of Common Stock issued or issuable thereunder in the aggregate (subject to appropriate adjustment for stock splits, stock dividends, recapitalizations or similar events), and that any such additional issuances after the date hereof during the one (1) year period will not have an exercise price (or strike price) that is less than the per Firm Share offering price. Notwithstanding the foregoing, the Company may amend, modify or terminate the limitations set forth in the preceding sentence with the prior approval of its stockholders obtained in accordance with applicable law and the rules of NYSE American.
3.24 Sarbanes Oxley. The Disclosure Package and Prospectus, the Company shall at all times comply with all applicable provisions of the Sarbanes Oxley Act in effect from time to time.
4. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Public Securities, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
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4.1 Regulatory Matters.
4.1.1. Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:00 p.m., Eastern time, on the date of this Agreement or such later date and time as shall be consented to in writing by you, and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. The Prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) (without reliance on Rule 424(b)(8)) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
4.1.2. FINRA Clearance. On or before the date of this Agreement, the Representative shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange Stock Market Clearance. On the Closing Date, the Company’s shares of Common Stock, including the Firm Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance. On the first Option Closing Date (if any), the Company’s shares of Common Stock, including the Option Shares, shall have been approved for listing on the Exchange, subject only to official notice of issuance.
4.2 Company Counsel Matters.
4.2.1. Closing Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Olshan Frome Wolosky LLP, counsel to the Company, dated the Closing Date and addressed to the Representative, substantially in the form of Exhibit D attached hereto.
4.2.2. Reserved.
4.2.3. Option Closing Date Opinions of Counsel. On the Option Closing Date, if any, the Representative shall have received the favorable opinions of each counsel listed in Sections 4.2.1 and 4.2.2, dated the Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory to the Representative, confirming as of the Option Closing Date, the statements made by such counsels in their respective opinions delivered on the Closing Date.
4.2.4. Reliance. In rendering such opinions, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided that copies of any such statements or certificates shall be delivered to Representative Counsel if requested. The opinion of Olshan Frome Wolosky LLP and any opinion relied upon by Olshan Frome Wolosky LLP shall include a statement to the effect that it may be relied upon by Representative Counsel in its opinion delivered to the Underwriters.
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4.3 Comfort Letters.
4.3.1. Cold Comfort Letter. At the time this Agreement is executed you shall have received a cold comfort letter containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to you and to the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down Comfort Letter. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 4.3.1, except that the specified date referred to shall be a date not more than three (3) business days prior to the Closing Date or the Option Closing Date, as applicable.
4.4 Officers’ Certificates.
4.4.1. Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer, its President and its Chief Financial Officer stating that (i) such officers have carefully examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus, (iii) to the best of their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iv) there has not been, subsequent to the date of the most recent audited financial statements included or incorporated by reference in the Pricing Disclosure Package, any material adverse change in the financial position or results of operations of the Company, or any change or development that, singularly or in the aggregate, would involve a material adverse change or a prospective material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the Secretary of the Company, dated the Closing Date or the Option Date, as the case may be, respectively, certifying: (i) that each of the Charter and Bylaws is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
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4.5 No Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, properties, assets, prospects or financial condition or income of the Company, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6 Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, the Public Securities, the Registration Statement, the Disclosure Package and the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
4.7 Delivery of Agreements.
4.7.1. Lock-Up Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
4.7.2. Representative’s Warrant Agreement. On the Closing Date, the Company shall have delivered to the Representative executed copies of the Representative’s Warrant Agreement.
4.8 Additional Documents. At the Closing Date and at each Option Closing Date (if any) Representative Counsel shall have been furnished with such documents and opinions as they may require for the purpose of enabling Representative Counsel to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Securities and the Representative’s Securities as herein contemplated shall be satisfactory in form and substance to the Representative and Representative Counsel.
4.9 Reserved.
| - 28 - |
5. Indemnification.
5.1 Indemnification of the Underwriters.
5.1.1. General. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel, and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries (a “Claim”), (i) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, the Pricing Disclosure Package, any Preliminary Prospectus, the Prospectus, or in any Issuer Free Writing Prospectus or in any Written Testing-the-Waters Communication (as from time to time each may be amended and supplemented); (B) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (C) any application or other document or written communication (in this Section 5, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public Securities and Representative’s Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information or (ii) otherwise arising in connection with or allegedly in connection with the Offering. The Company also agrees that it will reimburse each Underwriter Indemnified Party for all fees and expenses (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) (collectively, the “Expenses”), and further agrees wherever and whenever possible to advance payment of Expenses as they are incurred by an Underwriter Indemnified Party in investigating, preparing, pursuing or defending any Claim.
5.1.2. Procedure. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the approval of such Underwriter Indemnified Party) and payment of actual expenses if an Underwriter Indemnified Party requests that the Company do so. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company, and shall be advanced by the Company. The Company shall not be liable for any settlement of any action effected without its consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Underwriters, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Underwriter Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Underwriter Indemnified Party, acceptable to such Underwriter Indemnified Party, from all liabilities, expenses and claims arising out of such action for which indemnification or contribution may be sought and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Underwriter Indemnified Party.
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5.2 Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Securities or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication.
5.3 Contribution.
5.3.1. Contribution Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the Offering of the Public Securities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total net proceeds from the Offering of the Public Securities purchased under this Agreement (before deducting expenses) received by the Company, as set forth in the table on the cover page of the Prospectus, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Common Stock purchased under this Agreement, as set forth in the table on the cover page of the Prospectus, on the other hand. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5.3.1 in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the Offering of the Public Securities exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
| - 30 - |
5.3.2. Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. Each Underwriter’s obligations to contribute pursuant to this Section 5.3 are several and not joint.
| 6. | Default by an Underwriter. |
6.1 Default Not Exceeding 10% of Firm Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Firm Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the Firm Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Firm Shares or Option Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default Exceeding 10% of Firm Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to more than 10% of the Firm Shares or Option Shares, you may in your discretion arrange for yourself or for another party or parties to purchase such Firm Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the Firm Shares or Option Shares, you do not arrange for the purchase of such Firm Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to you to purchase said Firm Shares or Option Shares on such terms. In the event that neither you nor the Company arrange for the purchase of the Firm Shares or Option Shares to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by you or the Company without liability on the part of the Company (except as provided in Sections 3.9 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Firm Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
| - 31 - |
6.3 Postponement of Closing Date. In the event that the Firm Shares or Option Shares to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel for the Underwriter may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such shares of Common Stock.
7. Additional Covenants.
7.1 Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members of the Board of Directors and the overall composition of the Board comply with the Sarbanes-Oxley Act, with the Exchange Act and with the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks to have its Public Securities listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at least one member of the Audit Committee of the Board of Directors qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m., Eastern time, on the first (1st) Business Day following (i) the later of the Option Closing Date and the twenty-fifth day after the Closing Date if the Over-allotment Option has been exercised in full, or (ii) the fortieth (40th) day after the Closing Date if the Over-allotment Option has not been exercised in full, other than normal and customary releases issued in the ordinary course of the Company’s business.
7.3 Right of First Refusal. Provided that the Firm Shares are sold in accordance with the terms of this Agreement, the Representative shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of twenty-four (24) months after the date the Offering is completed, to act as sole and exclusive investment banker, sole and exclusive book-runner, sole and exclusive financial advisor, sole and exclusive underwriter and/or sole and exclusive placement agent, at the Representative’s sole and exclusive discretion, for each and every future public and private equity and debt offering, including all equity linked financings (each, a “Subject Transaction”), during such twenty-four (24) month period, of the Company, or any successor to or subsidiary of the Company, on terms and conditions customary to the Representative for such Subject Transactions. For the avoidance of any doubt, the Company shall not retain, engage or solicit any additional investment banker, book-runner, financial advisor, underwriter and/or placement agent in a Subject Transaction without the express written consent of the Representative.
The Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction during the twenty-four (24) month period agreed to above.
| - 32 - |
8. Effective Date of this Agreement and Termination Thereof.
8.1 Effective Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.
8.2 Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in your opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange or the Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been declared by a New York State or federal authority; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Firm Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Public Securities or to enforce contracts made by the Underwriters for the sale of the Public Securities; or (ix) the Common Stock shall fail for any reason to open for trading on NYSE American by the end of regular trading hours on [●], 20262.
8.3 Expenses. Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of Representative Counsel) up to $300,000, inclusive of the $50,000 advance for accountable expenses previously paid by the Company to the Representative (the “Advance”) and upon demand the Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement. Notwithstanding the foregoing, any advance received by the Representative will be reimbursed to the Company to the extent not actually incurred in compliance with FINRA Rule 5110(g)(4)(A).
8.4 Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.
2 Note to draft: initial trading date.
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8.5 Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Securities.
9. Miscellaneous.
9.1 Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), personally delivered or sent by electronic mail transmission and confirmed and shall be deemed given when so delivered and confirmed or if mailed, two (2) days after such mailing.
If to the Representative:
ThinkEquity
17 State Street, 41st Fl
New York, NY 10004
Attn: Head of Investment Banking
Email: Notices@think-equity.com
with a copy (which shall not constitute notice) to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Anthony J. Marsico, Esq.
Email: AMarsico@reedsmith.com
If to the Company:
American Battery Materials Inc.
500 West Putnam Avenue, Suite 400
Greenwich, CT 06830
Attention: David Graber
Email: David@ambtm.com
with a copy (which shall not constitute notice) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Attention: Spencer G. Feldman, Esq.
Email: sfeldman@olshanlaw.com
9.2 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
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9.3 Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4 Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter between the Company and ThinkEquity LLC dated May 2, 2024, shall remain in full force and effect.
9.5 Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters.
9.6 Governing Law; Consent to Jurisdiction; Trial by Jury. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
9.7 Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.
9.8 Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature Page Follows]
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If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us.
| Very truly yours, | ||
| AMERICAN BATTERY MATERIALS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Confirmed as of the date first written above mentioned, on behalf of itself and as Representative of the several Underwriters named on Schedule 1 hereto: |
| THINKEQUITY LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page]
American Battery Materials, inc. – Underwriting Agreement
SCHEDULE 1
| Underwriter | Total Number of Firm Shares to be Purchased | Number of Option Shares to be Purchased if the Over-Allotment Option is Fully Exercised | ||||||
| ThinkEquity LLC . | 2,004,009 | 300,602 | ||||||
| TOTAL | ||||||||
| Sch. 1 - 1 |
SCHEDULE 2-A
Pricing Information
Number of Firm Shares: 2,004,009
Number of Option Shares: 300,602
Public Offering Price per Share: $[●]
Underwriting Discount per Share: $[●]
Underwriting Non-accountable expense allowance per Share: $[●]
Proceeds to Company per Share (before expenses): $[●]
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
[None.]
SCHEDULE 2-C
Written Testing-the-Waters Communications
[None.]
| Sch. 2 - 1 |
SCHEDULE 3
List of Lock-Up Parties
| Sch. 3 - 1 |
EXHIBIT A
Form of Representative’s Warrant Agreement
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) THINKEQUITY LLC, OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF THINKEQUITY LLC OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS [●]3. VOID AFTER 5:00 P.M., EASTERN TIME, [●]4.
WARRANT TO PURCHASE COMMON STOCK
AMERICAN BATTERY MATERIALS, INC.
Warrant Shares: _______
Initial Exercise Date: ______, 2026
THIS WARRANT TO PURCHASE COMMON STOCK (the “Warrant”) certifies that, for value received, [●] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after ____, 20265, (the “Initial Exercise Date”) and, in accordance with FINRA Rule 5110(g)(8)(A), prior to at 5:00 p.m. (New York time) on the date that is five (5) years following the Effective Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from American Battery Materials, Inc., a Delaware corporation (the “Company”), up to [●] shares (the “Warrant Shares”) of Common Stock, par value $0.001 per share, of the Company (the “Common Stock”), as subject to adjustment hereunder. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
3 Note to draft: 180 days from the effective date.
4 Note to date: date that is five years form the effective date of the offering.
5 Note to draft: Since not S-3 eligible, 180 days from the effective date.
| Ex. A-1 |
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Commission” means the United States Securities and Exchange Commission.
“Effective Date” means the effective date of the registration statement on Form S-1 (File No. 333-277021), including any related prospectus or prospectuses, for the registration of the Company’s Common Stock and the Warrant Shares under the Securities Act, that the Company has filed with the Commission.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading Day” means a day on which the New York Stock Exchange is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of a share of Common Stock for such date (or the nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if Common Stock is not then listed or quoted for trading on the OTCQB or OTCQX and if prices for Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of Common Stock so reported or (d) in all other cases, the fair market value of the Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
| Ex. A-2 |
Section 2. Exercise.
a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $_______6, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. In lieu of exercising this Warrant by delivering the aggregate Exercise Price by wire transfer or cashier’s check, at the election of the Holder this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; | |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and | |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
6 125% of the public offering price per share of common stock and warrant in the offering.
| Ex. A-3 |
If Warrant Shares are issued in such a “cashless exercise,” the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised, and the holding period of the Warrants being exercised may be tacked on to the holding period of the Warrant Shares. The Company agrees not to take any position contrary to this Section 2(c).
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by its transfer agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder, or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 and, in either case, the Warrant Shares have been sold by the Holder prior to the Warrant Share Delivery Date (as defined below), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is two (2) Trading Days after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). If the Warrant Shares can be delivered via DWAC, the transfer agent shall have received from the Company, at the expense of the Company, any legal opinions or other documentation required by it to deliver such Warrant Shares without legend (subject to receipt by the Company of reasonable back up documentation from the Holder, including with respect to affiliate status) and, if applicable and requested by the Company prior to the Warrant Share Delivery Date, the transfer agent shall have received from the Holder a confirmation of sale of the Warrant Shares (provided the requirement of the Holder to provide a confirmation as to the sale of Warrant Shares shall not be applicable to the issuance of unlegended Warrant Shares upon a cashless exercise of this Warrant if the Warrant Shares are then eligible for resale pursuant to Rule 144(b)(1)). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the second Trading Day following the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after the second Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise.
| Ex. A-4 |
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause its transfer agent to deliver to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise; provided, however, that the Holder shall be required to return any Warrant Shares or Common Stock subject to any such rescinded exercise notice concurrently with the return to Holder of the aggregate Exercise Price paid to the Company for such Warrant Shares and the restoration of Holder’s right to acquire such Warrant Shares pursuant to this Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
| Ex. A-5 |
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
viii. Signature. This Section 2 and the exercise form attached hereto set forth the totality of the procedures required of the Holder in order to exercise this Purchase Warrant. Without limiting the preceding sentences, no ink-original exercise form shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any exercise form be required in order to exercise this Purchase Warrant. No additional legal opinion, other information or instructions shall be required of the Holder to exercise this Purchase Warrant. The Company shall honor exercises of this Purchase Warrant and shall deliver Shares underlying this Purchase Warrant in accordance with the terms, conditions and time periods set forth herein.
| Ex. A-6 |
e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
| Ex. A-7 |
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. For the purposes of clarification, the Exercise Price of this Warrant will not be adjusted in the event that the Company or any Subsidiary thereof, as applicable, sells or grants any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents, at an effective price per share less than the Exercise Price then in effect.
b) [RESERVED]
c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
| Ex. A-8 |
d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend (other than cash dividends) or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable by holders of Common Stock as a result of such Fundamental Transaction for each share of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
| Ex. A-9 |
f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed a notice to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to provide such notice or any defect therein shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
| Ex. A-10 |
Section 4. Transfer of Warrant.
a) Transferability. Pursuant to FINRA Rule 5110(g)(1), neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of the offering pursuant to which this Warrant is being issued, except the transfer of any security:
i. by operation of law or by reason of reorganization of the Company;
ii. to any FINRA member firm participating in the offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;
iii. if the aggregate amount of securities of the Company held by the Holder or related person do not exceed 1% of the securities being offered;
iv. that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or
v. the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period.
| Ex. A-11 |
Subject to the foregoing restriction, any applicable securities laws and the conditions set forth in Section 4(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
d) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
| Ex. A-12 |
Section 5. Registration Rights.
5.1. Demand Registration.
5.1.1 Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holder(s) of at least 51% of the Warrants and/or the underlying Warrant Shares (“Majority Holders”), agrees to register, on one occasion, all or any portion of the Warrant Shares underlying the Warrants (collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with the Commission covering the Registrable Securities within thirty (30) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 5.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The demand for registration may be made at any time beginning on the Initial Exercise Date and expiring on the fifth anniversary of the Effective Date. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.
5.1.2 Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 5.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing required herein to become effective promptly and to qualify or register the Registrable Securities in such States as are reasonably requested by the Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such State or submit to general service of process in such State, or (ii) the principal stockholders of the Company to be obligated to escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right granted under Section 5.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the Warrant Shares covered by such registration statement, and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 5.1.2, the Holder shall be entitled to a demand registration under this Section 5.1.2 on only one (1) occasion and such demand registration right shall terminate on the fifth anniversary of the date of the Underwriting Agreement (as defined below) in accordance with FINRA Rules 5110(g)(8)(B) and 5110(g)(8)(C).
| Ex. A-13 |
5.2 “Piggy-Back” Registration.
5.2.1 Grant of Right. In addition to the demand right of registration described in Section 5.1 hereof, the Holder shall have the right, for a period of no more than two (2) years from the Initial Exercise Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or any equivalent form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Shares which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
5.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 5.2.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company during the two (2) year period following the Initial Exercise Date until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 5.2.2; provided, however, that such registration rights shall terminate on the second anniversary of the Initial Exercise Date.
| Ex. A-14 |
5.3 General Terms
5.3.1 Indemnification. The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20 (a) of the Exchange Act against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters and the Company, dated as of [●], 2026. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
5.3.2 Exercise of Warrants. Nothing contained in this Warrant shall be construed as requiring the Holder(s) to exercise their Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
5.3.3 Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.
5.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 5, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Warrant Shares and their intended methods of distribution.
| Ex. A-15 |
5.3.5 Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
5.3.6 Damages. Should the registration or the effectiveness thereof required by Sections 5.1 and 5.2 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.
Section 6. Miscellaneous.
a) No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
| Ex. A-16 |
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the underwriting agreement, dated [●], 2026, by and between the Company and ThinkEquity LLC as representatives of the underwriters set forth therein (the “Underwriting Agreement”).
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Underwriting Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
| Ex. A-17 |
h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Underwriting Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
| Ex. A-18 |
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| American Battery materials, inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Ex. A-19 |
NOTICE OF EXERCISE
TO: American battery materials inc.
_________________________
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. If the Warrant is being exercised via cash exercise, the undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended
[SIGNATURE OF HOLDER]
Name of Investing Entity: _______________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________
Name of Authorized Signatory: ___________________________________________________________
Title of Authorized Signatory: ____________________________________________________________
Date: ________________________________________________________________________________
| Ex. A-20 |
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder’s Signature: _____________________________
Holder’s Address: _____________________________
_____________________________
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
| Ex. A-21 |
EXHIBIT B
Lock-Up Agreement
[●], 2026
ThinkEquity LLC
17 State Street, 41st Floor
New York, NY 10004
As Representative of the several Underwriters named on Schedule 1 to the Underwriting Agreement referenced below
Ladies and Gentlemen:
The undersigned understands that ThinkEquity LLC (the “Representative”), proposes to enter into an Underwriting Agreement (the “Underwriting Agreement”) with American Battery Materials, Inc., a Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”) of shares of common stock, par value $0.001 per share, of the Company (the “Common Shares”).
To induce the Representative to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Representative, the undersigned will not, during the period commencing on the date hereof and ending 180 days after the date of the Underwriting Agreement relating to the Public Offering (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (4) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities. Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities without the prior written consent of the Representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; provided that no filing under Section 13 or Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of the undersigned or a family member (for purposes of this lock-up agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; (d) if the undersigned is a corporation, partnership, limited liability company or other business entity, (i) any transfers of Lock-Up Securities to another corporation, partnership or other business entity that controls, is controlled by or is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners, stockholders, subsidiaries or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned; (e) if the undersigned is a trust, to a trustee or beneficiary of the trust; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) (d) or (e), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the Representative a lock-up agreement substantially in the form of this lock-up agreement and (iii) no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made; (f) the receipt by the undersigned from the Company of Common Shares upon the vesting of restricted stock awards or stock units or upon the exercise of options to purchase the Company’s Common Shares issued under an equity incentive plan of the Company or an employment arrangement described in the Pricing Prospectus (as defined in the Underwriting Agreement) (the “Plan Shares”) or the transfer of Common Shares or any securities convertible into Common Shares to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the Company’s securities, in each case on a “cashless” or “net exercise” basis or to cover tax obligations of the undersigned in connection with such vesting or exercise, but
| Ex. B-1 |
only to the extent such right expires during the Lock-up Period, provided that no filing under Section 13 or Section 16(a) of the Exchange Act or other public announcement shall be required or shall be voluntarily made within 180 days after the date of the Underwriting Agreement, and after such 180th day, if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report to the effect that the purpose of such transfer was to cover tax withholding obligations of the undersigned in connection with such vesting or exercise and, provided further, that the Plan Shares shall be subject to the terms of this lock-up agreement; (g) the transfer of Lock-Up Securities pursuant to agreements described in the Pricing Prospectus under which the Company has the option to repurchase such securities or a right of first refusal with respect to the transfer of such securities, provided that if the undersigned is required to file a report under Section 13 or Section 16(a) of the Exchange Act reporting a reduction in beneficial ownership of Common Shares during the Lock-Up Period, the undersigned shall include a statement in such schedule or report describing the purpose of the transaction; (h) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Securities, provided that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment of such plan, such public announcement or filing shall include a statement to the effect that no transfer of Lock-Up Securities may be made under such plan during the Lock-Up Period; (i) the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement, provided that the transferee agrees to sign and deliver a lock-up agreement substantially in the form of this lock-up agreement for the balance of the Lock-Up Period, and provided further, that any filing under Section 13 or Section 16(a) of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that such transfer has occurred by operation of law; and (j) the transfer of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of the Common Shares involving a change of control (as defined below) of the Company after the closing of the Public Offering and approved by the Company’s board of directors; provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Lock-Up Securities owned by the undersigned shall remain subject to the restrictions contained in this lock-up agreement. For purposes of clause (k) above, “change of control” shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power of the voting stock of the Company. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.
If (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material news or material event, as applicable, unless the Representative waives, in writing, such extension.
| Ex. B-2 |
The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date hereof to and including the 34th day following the expiration of the Lock-Up Period, the undersigned will give notice thereof to the Company and will not consummate any such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period has expired.
If the undersigned is an officer or director of the Company, (i) the undersigned agrees that the foregoing restrictions shall be equally applicable to any issuer-directed or “friends and family” Securities that the undersigned may purchase in the Public Offering; (ii) the Representative agrees that, at least three (3) business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of Lock-Up Securities, the Representative will notify the Company of the impending release or waiver; and (iii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two (2) business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two (2) business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer of Lock-Up Securities not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this lock-up agreement to the extent and for the duration that such terms remain in effect at the time of such transfer.
The undersigned understands that the Company and the Representative are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.
The undersigned understands that, if the Underwriting Agreement is not executed by [●], 2026, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Shares to be sold thereunder, then this lock-up agreement shall be void and of no further force or effect.
| Ex. B-3 |
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Representative.
| Very truly yours, | |
| (Name - Please Print) | |
| (Signature) | |
| (Name of Signatory, in the case of entities - Please Print) | |
| (Title of Signatory, in the case of entities - Please Print) |
| Address: | ||
| Ex. B-4 |
EXHIBIT C
Form of Press Release
| Ex. C-1 |
EXHIBIT D
Form of Opinion of Counsel
| Ex. D-1 |
Exhibit 5.1
March 26, 2026
American Battery Materials, Inc.
500 West Putnam Avenue, Suite 400
Greenwich, Connecticut 06830
Ladies and Gentlemen:
We are acting as counsel to American Battery Materials, Inc., a Delaware corporation (the “Company”), in connection with the offer and sale by the Company of 2,004,009 shares (the “Offering Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”), plus an option to purchase from the Company up to 300,602 additional shares of Common Stock (the “Option Shares” and, together with the Offering Shares, the “Shares”) to cover over-allotments, if any, pursuant to the Registration Statement on Form S-1 (File No. 333-277021), originally filed by the Company with the Securities and Exchange Commission (the “Commission”) on February 12, 2024 (as amended, the “Registration Statement”), under the Securities Act of 1933, as amended (the “Act”) and (b) the Underwriting Agreement between the Company and ThinkEquity LLC, as representative of the several underwriters, relating to the Shares, the form of which has been filed as Exhibit 1.1 to the Registration Statement (the “Underwriting Agreement”).
In connection with this opinion letter, we have examined (a) the Registration Statement, (b) the Certificate of Incorporation of the Company, as amended to date, (c) the Bylaws of the Company, as amended to date, (d) the Underwriting Agreement, and (e) certain resolutions of the Board of Directors of the Company relating to the issuance, sale and registration of the Shares. In addition, we have examined and relied upon such corporate records of the Company, and have made such examination of law, as we have deemed necessary or appropriate for purposes of the opinions expressed below. As to certain factual matters, unless otherwise indicated, we have relied, to the extent we have deemed proper, on certificates of certain officers of the Company.
We have assumed for purposes of rendering the opinions set forth herein, without any verification by us, the genuineness of all signatures, the legal capacity of all natural persons to execute and deliver documents, the authenticity and completeness of documents submitted to us as originals, the completeness and conformity with authentic original documents of all documents submitted to us as copies, and that all documents, books and records made available to us by the Company are accurate and complete.
Based upon, subject to and limited by the foregoing, we are of the opinion that the Shares have been duly and validly authorized by the Company and, upon issuance, delivery and payment therefor in the manner contemplated by the Registration Statement and the Underwriting Agreement, will be legally issued, fully paid and nonassessable.
We are members of the Bar of the State of New York. We do not express any opinion as to the effect of any laws other than the laws of the State of New York and the General Corporation Law of the State of Delaware, and the federal laws of the United States of America, as in effect on the date hereof.
This letter speaks only at and as of its date and is based solely on the facts and circumstances known to us at and as of such date. We assume no obligation to revise or supplement this letter to reflect any facts or circumstances that may hereafter come to our attention or any changes in fact or law that may hereafter occur.
We hereby consent to the filing of this opinion in accordance with the requirements of Item 601(b)(5) of Regulation S-K promulgated under the Act with the Commission as an exhibit to the Registration Statement and to the use of our name in the prospectus forming a part of the Registration Statement under the caption “Legal Matters.” In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
| Very truly yours, | |
| /s/ Olshan Frome Wolosky LLP | |
| OLSHAN FROME WOLOSKY LLP |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of American Battery Materials, Inc.
We consent to the inclusion in the Form S-1 Registration Statement of American Battery Materials Inc. (Amendment No. 9). of our report dated March 19, 2026, relating to our audit of the consolidated balance sheets of American Battery Materials Inc. as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes.
We also consent to the reference to us on the cover page and under the caption “Experts” in the Registration Statement.
March 26, 2026
We have served as the Company’s auditor since 2023
Los Angeles, California
PCAOB ID Number 6580