AMERICAN BATTERY TECHNOLOGY Co - Quarter Report: 2019 December (Form 10-Q)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[X] No [   ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

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 definition of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” Rule 12b-2 of the Exchange Act.

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 pursuant to Section 13(a) of the Exchange Act [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes[  ] No [X]

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Table of Contents

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PART I – FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 

The accompanying unaudited consolidated balance sheets of American Battery Metals Corporation at December 31, 2019 (with comparative figures as at September 30, 2019), the consolidated statements of operations and stockholders’ deficit for the three months ended December 31, 2019 and 2018, and the consolidated statements of cash flows for the three months ended December 31, 2019 and 2018 have been prepared by the Company's management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the three months ended December 31, 2019 are not necessarily indicative of the results that can be expected for the year ended September 30, 2020.

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Financial Statements

For the Period Ended December 31, 2019 (unaudited)

3

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Balance Sheets

(unaudited)

Organization and Nature of Operations (note 1)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

4

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Statements of Operations

(unaudited)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

5

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Statement of Stockholders’ Deficit

(unaudited)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

6

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(The accompanying notes are an integral part of these condensed consolidated financial statements)

7

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

1. Organization and Nature of Operations 

American Battery Metals Corporation (“the Company”) was incorporated under the laws of the state of Nevada on October 6, 2011 for the purpose of acquiring and developing mineral properties. The Company has a wholly-owned subsidiary called Oroplata Exploraciones E Ingenieria SRL, which was incorporated in the Dominican Republic on January 10, 2012.On July 26, 2016, the Company incorporated LithiumOre Corporation (formerly Lithortech Resources Inc.), a Nevada company, as a wholly-owned subsidiary. On July 5, 2019, the Company incorporated ABMC AG, LLC, a Nevada company as a wholly-owned subsidiary. The Company currently holds mineral rights in the Dominican Republic and in the Western Nevada Basin of Nye County in the state of Nevada.

Going Concern

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2019, the Company has not earned revenue, has a working capital deficit of $5,989,208, and an accumulated deficit of $52,838,603. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. If the Company is able to obtain financing, there is no certainty that terms will be favorable to the Company. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Summary of Significant Accounting Policies 

(a)Basis of Presentation 

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

(b)Principles of Consolidation 

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL and LithiumOre Corporation (formerly Lithortech Resources Inc) and ABMC AG, LLC. All inter-company accounts and transactions have been eliminated on consolidation.

3. Convertible Notes Payable 

(a)On January 2, 2019, the Company issued a convertible note payable for $55,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum, and is due on June 18, 2019. The note is also convertible into common shares of the Company at 65% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 2,982,920 common shares to settle the remaining principal balance and accrued interest on the note payable. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $32,538), the unamortized discount on the note is $nil (September 30, 2019 - $5,087), accrued interest of $nil (September 30, 2018 - $4,015) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $57,213). 

(b)On January 3, 2019, the Company issued a convertible note payable for $54,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum, and is due on January 3, 2020. The note is also convertible into common shares of the Company at 66% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. On November 1, 2019, the Company issued 815,396 common shares to settle the remaining principal balance and accrued interest as well as a $13,647 default penalty. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $6,234), accrued interest of $nil (September 30, 2019 - $1,388) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $6,168). 

8

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(c)On January 9, 2019, the Company issued a convertible note payable for $220,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum, and is due on January 9, 2020. The note is also convertible into common shares of the Company at 66% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. On October 10, 2019, the Company issued 2,036,114 common shares for the settlement of the remaining principal balance and accrued interest. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $33,549), the unamortized discount on the note is $nil (September 30, 2018 - $21,451), accrued interest of $nil (September 30, 2019 - $4,088) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2018 - $48,047).  

(d)On January 9, 2019, the Company issued a convertible note payable for $220,000 which is unsecured, bears interest at 10% per annum, and is due on January 9, 2020. The note is also convertible into common shares of the Company at 66% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 3,597,204 common shares to settle the remaining principal balance and accrued interest on the note payable. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $55,054), the unamortized discount on the note is $nil (September 30, 2018 - $44,946), accrued interest of $nil (September 30, 2019 - $7,211) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2018 - $98,753).  

(e)On March 18, 2019, the Company issued a convertible note payable for $270,000 which is unsecured, bears interest at 10% per annum and is due on March 18, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 5,010,899 common shares for the settlement of $105,000 of note payable and $7,431 of accrued interest. As at December 31, 2019, the carrying value of the note payable is $102,084 (September 30, 2019 - $33,264), the unamortized discount on the note is $62,916 (September 30, 2018 - $236,736), accrued interest of $12,929 (September 30, 2019 - $14,475) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $177,812 (September 30, 2019 - $240,091).  

(f)On March 18, 2019, the Company issued a convertible note payable for $270,000 which is unsecured, bears interest at 10% per annum and is due on March 18, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 4,066,144 common shares for the settlement of $80,000 of notes payable and $5,677 of accrued interest. As at December 31, 2019, the carrying value of the note payable is $87,047 (September 30, 2019 - $33,264), the unamortized discount on the note is $102,953 (September 30, 2019 - $236,736), accrued interest of $15,001 (September 30, 2018 - $14,475) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $200,663 (September 30, 2019 - $240,091).  

(g)On April 8, 2019, the Company issued a convertible note payable for $38,500 which is unsecured, bears interest at 10% per annum which increases to 24% per annum if the note is in default, and is due on January 8, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 1,568,017 common shares for the settlement of the principal balance and accrued interest. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $5,208), the unamortized discount on the note is $nil (September 30, 2018 - $33,292), accrued interest of $nil (September 30, 2019 - $1,839) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $31,405).  

(h)On April 8, 2019, the Company issued a convertible note payable for $38,500 which is unsecured, bears interest at 10% per annum which increases to 24% per annum if the note is in default, and is due on January 8, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 1,562,033 common shares for the settlement of the principal balance and accrued interest. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $5,208), the unamortized discount on the note is $nil (September 30, 2019 - $33,292), accrued interest of $nil (September 30, 2019 - $1,839) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2018 - $31,405).  

9

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(i)On May 1, 2019, the Company issued a convertible note payable for $325,000 which is unsecured, bears interest at 10% per annum and is due on May 1, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. On December 24, 2019, the Company issued 1,561,157 common shares for the settlement of $25,000 of note payable and $1,646 of accrued interest. As at December 31, 2019, the carrying value of the note payable is $68,590 (September 30, 2019 - $22,805), the unamortized discount on the note is $231,410 (September 30, 2019 - $302,195), accrued interest of $19,972 (September 30, 2019 - $13,451) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $319,752 (September 30, 2019 - $284,348).  

(j)On May 1, 2019, the Company issued a convertible note payable for $325,000 which is unsecured, bears interest at 10% per annum and is due on May 1, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $70,983 (September 30, 2019 - $22,805), the unamortized discount on the note is $254,017 (September 30, 2019 - $302,195), accrued interest of $21,576 (September 30, 2019 - $13,451) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $346,576 (September 30, 2019 - $284,348).  

(k)On May 29, 2019, the Company issued a convertible note payable for $325,000 which is unsecured, bears interest at 10% per annum and is due on May 29, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $59,522 (September 30, 2019 - $16,726), the unamortized discount on the note is $265,478 (September 30, 2018 - $308,274), accrued interest of $19,049 (September 30, 2019 - $10,924) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $329,482 (September 30, 2019 - $289,004).  

(l)On June 3, 2019, the Company issued a convertible note payable for $55,000 which is unsecured, bears interest at 12% per annum which increases to 22% per annum if the note is in default, and is due on March 30, 2020. The note is also convertible into common shares of the Company at 61% of the lowest trading price of the Company’s common share for the ten trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 2,903,221 common shares for the settlement of the principal balance and accrued interest. As at December 31, 2019, the carrying value of the note payable is $nil (September 30, 2019 - $3,488), the unamortized discount on the note is $nil (September 30, 2019 - $51,512), accrued interest of $nil (September 30, 2019 - $2,145) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $56,840).  

(m)On June 11, 2019, the Company issued a convertible note payable for $105,000 which is unsecured, bears interest at 10% per annum and is due on June 11, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $53,152 (September 30, 2019 - $35,868), the unamortized discount on the note is $51,848 (September 30, 2019 - $69,142), accrued interest of $5,804 (September 30, 2019 - $3,179) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $106,725 (September 30, 2019 - $93,716).  

(n)On June 12, 2019, the Company issued a convertible note payable for $55,000 which is unsecured, bears interest at 12% per annum which increases to 22% per annum if the note is in default, and is due on March 12, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 1,464,799 common shares for the settlement of $21,000 of notes payable and $3,006 of accrued interest. As at December 31, 2019, the carrying value of the note payable is $13,466 (September 30, 2019 - $3,075), the unamortized discount on the note is $41,534 (September 30, 2019 - $51,925), accrued interest of $589 (September 30, 2019 - $1,980) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $35,005 (September 30, 2019 - $46.520).  

10

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(o)On June 12, 2019, the Company issued a convertible note payable for $55,000 which is unsecured, bears interest at 12% per annum which increases to 22% per annum if the note is in default, and is due on March 12, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. During the period ended December 31, 2019, the Company issued 1,986,853 common shares for the settlement of $33,500 of notes payable. As at December 31, 2019, the carrying value of the note payable is $7,901 (September 30, 2018 - $3,075), the unamortized discount on the note is $13,599 (September 30, 2018 - $51,925), accrued interest of $3,509 (September 30, 2019 - $1,980) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $25,310 (September 30, 2019 - $46,520).  

(p)On June 13, 2019, the Company issued a convertible note payable for $75,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum which increases to 15% per annum if the note is in default, and is due on June 17, 2020. The note is also convertible into common shares of the Company at 65% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $9,853 (September 30, 2019 - $2,862), the unamortized discount on the note is $65,147 (September 30, 2018 - $72,138), accrued interest of $4,104 (September 30, 2019 - $2,229) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $98,455 (September 30, 2019 - $71,671).  

(q)On June 21, 2019, the Company issued a convertible note payable for $270,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on June 17, 2020. The note is also convertible into common shares of the Company at 68% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $98,663 (September 30, 2019 - $56,011), the unamortized discount on the note is $171,337 (September 30, 2018 - $213,989), accrued interest of $14,250 (September 30, 2019 - $7,425) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $332,843 (September 30, 2019 - $239,317).  

(r)On June 27, 2019, the Company issued a convertible note payable for $98,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on June 27, 2020. The note is also convertible into common shares of the Company at 66% of the lowest trading price of the Company’s common share for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $10,374 (September 30, 2018 - $2.692), the unamortized discount on the note is $87,626 (September 30, 2019 - $95,308), accrued interest of $4,982 (September 30, 2018 - $2,532) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $125,922 (September 30, 2019 - $91,469).  

(s)On June 27, 2019, the Company issued a convertible note payable for $58,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on June 27, 2020. The note is also convertible into common shares of the Company at 61% of the lowest trading price of the Company’s common shares for the ten trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $9,072 (September 30, 2018 - $1,798), the unamortized discount on the note is $48,928 (September 30, 2019 - $56,202), accrued interest of $3,538 (September 30, 2019 - $1,798) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $65,614 (September 30, 2019 - $59,759).  

(t)On July 9, 2019, the Company issued a convertible note payable for $160,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on July 9, 2020. The note is also convertible into common shares of the Company at 60% of the lowest closing bid price of the Company’s common shares for the fifteen trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $14,422 (September 30, 2019 - $3,600), the unamortized discount on the note is $145,578 (September 30, 2018 - $156,400), accrued interest of $7,600 (September 30, 2019 - $3,600) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $200,497 (September 30, 2019 - $169,527).  

11

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(u)On July 11, 2019, the Company issued a convertible note payable for $50,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on July 11, 2020. The note is also convertible into common shares of the Company at 60% of the lowest trading price of the Company’s common shares for the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $5,040 (September 30, 2019 - $1,317), the unamortized discount on the note is $44,960 (September 30, 2019 - $48,863), accrued interest of $2,817 (September 30, 2019 - $1,317) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $63,227 (September 30, 2019 - $54,669).  

(v)On July 29, 2019, the Company issued a convertible note payable for $53,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on June 15, 2020. The note is also convertible into common shares of the Company at 61% of the lowest trading price of the Company’s common shares for the ten trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $5,097 (September 30, 2018 - $1,078), the unamortized discount on the note is $47,903 (September 30, 2019 - $51,922), accrued interest of $2,668 (September 30, 2019 - $1,078) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $64,904 (September 30, 2019 - $55,136).  

(w)On August 1, 2019, the Company issued a convertible note payable for $175,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on August 1, 2020. The note is also convertible into common shares of the Company at 68% of the lowest closing bid price of the Company’s common shares for the twenty prior trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $57,052 (September 30, 2019 - $34,136), the unamortized discount on the note is $117,948 (September 30, 2019 - $140,864), accrued interest of $7,243 (September 30, 2019 - $2,868) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $179,811 (September 30, 2019 - $158,571).  

(x)On August 8, 2019, the Company issued a convertible note payable for $105,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on August 8, 2020. The note is also convertible into common shares of the Company at 60% of the lowest trading price of the Company’s common shares for the prior fifteen trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $6,777 (September 30, 2019 - $1,517), the unamortized discount on the note is $98,233 (September 30, 2019 - $103,483), accrued interest of $4,142 (September 30, 2019 - $1,517) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $129,979 (September 30, 2019 - $113,820).  

(y)On August 12, 2019, the Company issued a convertible note payable for $105,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on August 12, 2020. The note is also convertible into common shares of the Company at 60% of the lowest trading price of the Company’s common shares for the prior fifteen trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $6,453 (September 30, 2019 - $1,400), the unamortized discount on the note is $98,547 (September 30, 2019 - $103,600), accrued interest of $4,025 (September 30, 2019 - $1,400) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $130,041 (September 30, 2018 - $113,725).  

(z)On August 28, 2019, the Company issued a convertible note payable for $35,200. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on May 28, 2020. The note is also convertible into common shares of the Company at 62% of the lower of the lowest trading price of the Company’s common stock in the twenty trading days prior to the date of conversion and the lowest trading price of the Company’s common stock in the twenty days prior to the date of issuance. As at December 31, 2019, the carrying value of the note payable is $2,600 (September 30, 2019 - $375), the unamortized discount on the note is $32,600 (September 30, 2019 - $34,825), accrued interest of $1,431 (September 30, 2019 - $375) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $40,573 (September 30, 2018 - $35,083).  

12

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(aa)On August 28, 2019, the Company issued a convertible note payable for $35,200. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on May 28, 2020. The note is also convertible into common shares of the Company at 68% of the lower of the lowest trading price of the Company’s common stock in the twenty trading days prior to the date of conversion and the lowest trading price of the Company’s common stock in the twenty days prior to the date of issuance. As at December 31, 2019, the carrying value of the note payable is $11,820 (September 30, 2019 - $5,869), the unamortized discount on the note is $23,380 (September 30, 2019 - $29,331), accrued interest of $1,431 (September 30, 2019 - $375) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $35,034 (September 30, 2019 - $30,617).  

(bb)On August 28, 2019, the Company issued a convertible note payable for $110,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on August 28, 2020. The note is also convertible into common shares of the Company at 60% of the lowest trading price of the Company’s common stock in the twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $5,355 (September 30, 2019 - $978), the unamortized discount on the note is $104,645 (September 30, 2019 - $109,022), accrued interest of $3,728 (September 30, 2019 - $978) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $136,853 (September 30, 2019 - $121,624).  

(cc)On September 13, 2019, the Company issued a convertible note payable for $175,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on September 13, 2020, of which the proceeds were not received until October 2019. The note is also convertible into common shares of the Company at the lower of the closing common stock price and 68% of the lowest trading price in the prior twenty trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $5,250 (September 30, 2019 - $nil), the unamortized discount on the note is $169,750 (September 30, 2019 - $nil), accrued interest of $4,292 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $214,595 (September 30, 2019 - $nil).  

(dd)On September 17, 2019, the Company issued a convertible note payable for $150,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on January 17, 2021. The note is also convertible into common shares of the Company at the lower of the closing common stock price and 68% of the lowest trading price in the prior twenty trading days on which at least 100 common shares of the Company were traded including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $4,819 (September 30, 2019 - $92), the unamortized discount on the note is $145,181 (September 30, 2019 - $54,908), accrued interest of $4,292 (September 30, 2019 - $542) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $161,627 (September 30, 2019 - $152,239).  

(ee)On September 22, 2019, the Company issued the second tranche of the convertible note payable dated June 13, 2019 for $55,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on September 24, 2020. The note is also convertible into common shares of the Company at the lower of the closing common stock price and 65% of the lowest trading price in the prior twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $1,633 (September 30, 2018 - $96), the unamortized discount on the note is $53,367 (September 30, 2018 - $54,908), accrued interest of $1,467 (September 30, 2019 - $96) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $71,384 (September 30, 2019 - $59,287).  

(ff)On September 24, 2019, the Company issued a convertible note payable for $48,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on September 24, 2020. The note is also convertible into common shares of the Company at the lower of the closing common stock price and 61% of the lowest trading price in the prior twenty trading days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $1,702 (September 30, 2019 - $96), the unamortized discount on the note is $46,298 (September 30, 2019 - $47,904), accrued interest of $1,536 (September 30, 2019 - $96) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $61,748 (September 30, 2019 - $56,217).  

13

(gg)On October 15, 2019, the Company issued a convertible note payable for $52,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on October 15, 2020. The note is also convertible into common shares of the Company at the lower of the closing common stock price and 66% of the lowest trading price in the prior twenty trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $1,098 (September 30, 2019 - $nil), the unamortized discount on the note is $50,902 (September 30, 2019 - $nil), accrued interest of $1,098 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $65,662 (September 30, 2019 - $nil).  

(hh)On October 15, 2019, the Company issued a convertible note payable for $29,150. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on October 15, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price in the twenty days prior to the issuance date or 61% of the lowest trading price in the prior twenty trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $738 (September 30, 2019 - $nil), the unamortized discount on the note is $28,412 (September 30, 2019 - $nil), accrued interest of $738 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $40,904 (September 30, 2019 - $nil).  

(ii)On October 15, 2019, the Company issued a convertible note payable for $29,150. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on October 15, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price in the twenty days prior to the issuance date or 61% of the lowest trading price in the prior twenty trading days including the date of conversion. As at December 31, 2019, the carrying value of the note payable is $738 (September 30, 2019 - $nil), the unamortized discount on the note is $28,412 (September 30, 2019 - $nil), accrued interest of $738 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $40,904 (September 30, 2019 - $nil).  

(jj)On October 31, 2019, the Company issued a convertible note payable for $43,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on October 31, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price in the ten days prior to the date of conversion. As at December 31, 2019, the carrying value of the note payable is $860 (September 30, 2019 - $nil), the unamortized discount on the note is $42,140 (September 30, 2019 - $nil), accrued interest of $860 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $60,302 (September 30, 2019 - $nil).  

(kk)On November 1, 2019, the Company issued a convertible note payable for $20,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on November 1, 2020. The note is also convertible into common shares of the Company at 65% of the lower of the lowest trading price or lowest closing bid of the Company’s common stock in the twenty trading days prior to notice of conversion. As at December 31, 2019, the carrying value of the note payable is $333 (September 30, 2019 - $nil), the unamortized discount on the note is $19,667 (September 30, 2019 - $nil), accrued interest of $333 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $25,780 (September 30, 2019 - $nil).  

(ll)On November 4, 2019, the Company issued a convertible note payable for $113,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on November 4, 2020. The note is also convertible into common shares of the Company at 60% of the lowest trading price of the Company’s common stock in the fifteen trading days prior to notice of conversion. As at December 31, 2019, the carrying value of the note payable is $1,789 (September 30, 2019 - $nil), the unamortized discount on the note is $111,211 (September 30, 2019 - $nil), accrued interest of $1,789 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $161,195 (September 30, 2019 - $nil).  

(mm)On December 4, 2019, the Company issued a convertible note payable for $46,200. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on December 4, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price or lowest closing bid of the Company’s common stock in the twenty trading days prior to notice of conversion. As at December 31, 2019, the carrying value of the note payable is $416 (September 30, 2019 - $nil), the unamortized discount on the note is $45,784 (September 30, 2019 - $nil), accrued interest of $416 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $65,220 (September 30, 2019 - $nil).  

14

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

3. Convertible Notes Payable (continued) 

(nn)On December 9, 2019, the Company issued a convertible note payable for $47,300. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on December 9, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price or lowest closing bid of the Company’s common stock in the twenty trading days prior to notice of conversion. As at December 31, 2019, the carrying value of the note payable is $347 (September 30, 2019 - $nil), the unamortized discount on the note is $46,953 (September 30, 2019 - $nil), accrued interest of $347 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $66,725 (September 30, 2019 - $nil).  

(oo)On December 23, 2019, the Company issued a convertible note payable for $43,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum and is due on December 23, 2020. The note is also convertible into common shares of the Company at 61% of the lower of the lowest trading price of the Company’s common stock in the ten trading days prior to notice of conversion. As at December 31, 2019, the carrying value of the note payable is $115 (September 30, 2019 - $nil), the unamortized discount on the note is $42,885 (September 30, 2019 - $nil), accrued interest of $115 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $59,740 (September 30, 2019 - $nil).  

4. Related Party Transactions 

(a)As of December 31, 2019, the Company owes $120,146 (September 30, 2019 - $120,146) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations. The amounts owing are unsecured, non-interest bearing, and due on demand. 

(b)As of December 31, 2019, the Company owes $85,500 (September 30, 2019 - $85,500) to the former Chief Executive Officer and Director of the Company for advances to the Company to fund day-to-day operations and accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand. 

(c)As of December 31, 2019, the Company owes $157,500 (September 30, 2019 - $221,898) to the Chief Executive Officer of the Company for accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand.  

(d)As of December 31, 2019, the Company owes $30,726 (September 30, 2019 – $30,726) to directors of the Company for accrued management fees. The amounts owing are unsecured, non-interest bearing, and due on demand.  

5. Investment in Joint Venture 

On October 8, 2018, the Company entered into a joint venture agreement with CINC Industries Inc. (“CINC”), a Nevada company, for a period of five years whereby the joint venture will propagate the sale of a new process for extraction of lithium salt from salt brine solutions using CINC’s existing and future processing equipment. As part of the joint venture, each of CINC and the Company holds a 50% interest in the joint venture.

CINC is responsible for completing testing on the pilot project, providing training to the Company for use of its processing equipment, manufacturing up to 20 test units, and support and product development, as well as shared costs on other personnel utilized in the joint venture company. The Company is responsible for the initial funding for all equipment and associated expenses, the cost of the lease space, and marketing and sales of the joint venture agreement.

The joint venture is committed to acquiring a minimum amount of processing equipment, goods, accessories, and/or materials totalling: (i) $1,000,000 by October 8, 2020; (ii) $3,000,000 by October 8, 2021; (iii) $6,000,000 by October 8, 2022; and (v) $10,000,000 by October 8, 2023.In the event that the joint venture fails to meet the minimum amounts above, the Company will lose the exclusive right to market, promote and sell the processing equipment provided by CINC. As part of the joint venture agreement, the Company issued 250,000 common shares to CINC.

15

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

6. Derivative Liabilities 

The Company records the fair value of the conversion price of the convertible debentures as disclosed in Note 4 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivatives was calculated using a multi-nominal lattice model. The fair value of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. For the period ended December 31, 2019, the Company recorded a loss on the change in the fair value of derivative liability of $876,960 (December 31, 2018 - $708,155). As at December 31, 2019, the Company recorded a derivative liability of $4,240,914 (September 30, 2019 - $3,437,200).

The following inputs and assumptions were used to value the derivative liabilities outstanding as at December 31, 2019 and September 30, 2019:

A summary of the activity of the derivative liability is shown below:

7. Common Shares 

The Company’s authorized common stock consists of 1,200,000,000 shares of common stock, with par value of $0.001, and authorized Series A preferred stock of 500,000 shares of preferred stock, with par value of $0.001. 

On October 1, 2019, the Company issued 300,000 Series A preferred stock to officers and directors of the Company for no consideration. The preferred stock has no conversion rights, not entitled to receive dividends, carries voting rights of 1,000 votes per share of preferred stock, and is redeemable at the option of the Company at par value of $0.001 per share.

On October 3, 2019, the Company issued 917,777 common shares with a fair value of $49,560 for the conversion of $30,000 of notes payable, $2,225 of accrued interest, and $23,675 of derivative liability resulting in a gain on settlement of debt of $6,340.

On October 8, 2019, the Company issued 577,496 common shares with a fair value of $31,185 for the conversion of $15,000 of notes payable, $500 of fees, and $17,800 of derivative liability resulting in a gain on settlement of debt of $2,115.

On October 10, 2019, the Company issued 2,036,114 common shares with a fair value of $97,733 for the conversion of $55,000 of notes payable, $4,129 of accrued interest, and $47,710 of derivative liability resulting in a gain on settlement of debt of $9,106.

On October 15, 2019, the Company issued 465,723 common shares with a fair value of $29,341 for the conversion of $12,000 of notes payable, $500 of fees, and $18,440 of derivative liability resulting in a gain on settlement of debt of $1,599.

On October 17, 2019, the Company issued 502,980 common shares with a fair value of $25,149 for the conversion of $13,000 of notes payable, $500 of fees, and $13,747 of derivative liability resulting in a gain on settlement of debt of $2,098.

On October 18, 2019, the Company issued 1,113,981 common shares with a fair value of $54,028 for the conversion of $30,000 of notes payable, $2,350 of accrued interest, and $27,088 of derivative liability resulting in a gain on settlement of debt of $5,410.

16

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

7. Common Shares (continued) 

On October 21, 2019, the Company issued 542,526 common shares with a fair value of $29,242 for the conversion of $12,000 of notes payable, $500 of fees, $2,061 of accrued interest, and $16,874 of derivative liability resulting in a gain on settlement of debt of $2,193.

On October 25, 2019, the Company issued 559,768 common shares with a fair value of $27,429 for the conversion of $14,500 of notes payable, $500 of fees, $24 of accrued interest, and $15,781 of derivative liability resulting in a gain on settlement of debt of $3,376.

On October 25, 2019, the Company issued 481,557 common shares with a fair value of $23,596 for the conversion of $10,500 of notes payable, $500 of fees, $1,925 of accrued interest and $13,570 of derivative liability resulting in a gain on settlement of debt of $2,899.

On October 28, 2019, the Company issued 2,996,985 common shares for the exercise of cashless warrants.

On October 30, 2019, the Company issued 744,949 common shares with a fair value of $36,503 for the conversion of $20,000 of notes payable, $1,633 of accrued interest, and $19,841 of derivative liability resulting in a gain on settlement of debt of $4,972.

On October 31, 2019, the Company issued 500,000 common shares with a fair value of $24,500 for the conversion of $9,500 of notes payable, $500 of fees, and $16,152 of derivative liability resulting in a gain on settlement of debt of $1,652.

On November 4, 2019, the Company issued 820,497 common shares with a fair value of $33,640 for the conversion of $20,000 of notes payable, $1,661 of accrued interest and derivative liability of $17,362 resulting in a gain on settlement of debt of $5,383.

On November 8, 2019, the Company issued 815,396 common shares with a fair value of $35,877 for the conversion of $6,234 of notes payable, $1,645 of accrued interest, $13,647 of finance penalties, and $19,231 of derivative liability resulting in a gain on settlement of debt of $4,880.

On November 8, 2019, the Company issued 5,560,000 common shares with a fair value of $233,520 for consulting services including 1,000,000 common shares with a fair value of $42,000 to a director of the Company.

On November 12, 2019, the Company issued 972,587 common shares with a fair value of $39,876 for the conversion of $25,000 of notes payable, $1,653 of accrued interest, and $20,360 of derivative liability resulting in a gain on settlement of debt of $7,137.

On November 20, 2019, the Company issued 994,354 common shares with a fair value of $35,797 for the conversion of $20,000 of notes payable, $1,367 of accrued interest, and $19,506 of derivative liability resulting in a gain on settlement of debt of $5,076.

On November 20, 2019, the Company issued 1,986,954 common shares with a fair value of $71,531 for the conversion of $40,000 of notes payable, $2,696 of accrued interest, and $37,954 of derivative liability resulting in a gain on settlement of debt of $9,119.

On November 21, 2019, the Company issued 850,000 common shares with a fair value of $34,000 for the conversion of $11,825 of notes payable, $500 of fees, and $23,375 of derivative liability resulting in a gain on settlement of debt of $1,700.

On November 29, 2019, the Company issued 996,680 common shares with a fair value of $37,874 for the conversion of $20,000 of notes payable, $1,417 of accrued interest, and $21,476 of derivative liability resulting in a gain on settlement of debt of $5,018.

On December 6, 2019, the Company issued 607,477 common shares with a fair value of $20,958 for the conversion of $13,000 of notes payable and $11,339 of derivative liability resulting in a gain on settlement of debt of $3,381.

On December 9, 2019, the Company issued 746,269 common shares with a fair value of $25,224 for the conversion of $15,000 of notes payable and $14,028 of derivative liability resulting in a gain on settlement of debt of $3,804.

On December 10, 2019, the Company issued 999,524 common shares with a fair value of $32,984 for the conversion of $20,000 of notes payable, $1,478 of accrued interest, and $16,607 of derivative liability resulting in a gain on settlement of debt of $5,101.

17

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited)

7. Common Shares (continued) 

On December 11, 2019, the Company issued 845,771 common shares with a fair value of $25,458 for the conversion of $17,000 of notes payable and $13,874 of derivative liability resulting in a gain on settlement of debt of $5,416.

On December 12, 2019, the Company issued 700,000 common shares with a fair value of $22,820 for the conversion of $9,650 of notes payable, $500 of fees, and $14,396 of derivative liability resulting in a gain on settlement of debt of $1,726.

On December 13, 2019, the Company issued 703,704 common shares with a fair value of $22,167 for the conversion of $10,000 of notes payable, $3,300 of accrued interest, and $12,107 of derivative liability resulting in a gain on settlement of debt of $3,240.

On December 13, 2019, the Company issued 822,281 common shares with a fair value of $25,902 for the conversion of $15,000 of notes payable, $500 of fees, and $12,103 of derivative liability resulting in a gain on settlement of debt of $1,701.

On December 16, 2019, the Company issued 2,079,180 common shares with a fair value of $62,375 for the conversion of $40,000 of notes payable, $2,981 of accrued interest, and $33,668 of derivative liability resulting in a gain on settlement of debt of $14,274.

On December 16, 2019, the Company issued 567,874 common shares with a fair value of $17,036 for the conversion of $7,000 of notes payable, $500 of fees, $2,872 of accrued interest, and $7,416 of derivative liability resulting in a gain on settlement of debt of $752.

On December 17, 2019, the Company issued 1,047,754 common shares with a fair value of $35,624 for the conversion of $20,000 of notes payable, $1,517 of accrued interest, and $16,552 of derivative liability resulting in a gain on settlement of debt of $2,444.

On December 24, 2019, the Company issued 932,920 common shares with a fair value of $38,670 for the conversion of $6,650 of notes payable, $500 of fees, and $29,558 of derivative liability resulting in a loss of settlement of debt of $1,962.

On December 24, 2019, the Company issued 1,561,157 common shares with a fair value of $64,710 for the conversion of $25,000 of notes payable, $1,646 of accrued interest, and $43,120 of derivative liability resulting in a gain on settlement of debt of $5,056.

On December 27, 2019, the Company issued 896,925 common shares with a fair value of $30,047 for the conversion of $14,000 of notes payable, $500 of fees, $133 of accrued interest, and $16,948 of derivative liability resulting in a gain on settlement of debt of $1,535.

On December 30, 2019, the Company issued 1,164,572 common shares with a fair value of $32,608 for the conversion of $18,500 of notes payable, $500 of fees, and $14,929 of derivative liability resulting in a gain on settlement of debt of $1,321.

During the period ended December 31, 2019, the Company received share subscriptions of $275,000 for the future issuance of private placement units at $0.04 per unit, where each unit is comprised of one common share of the Company and 0.8 share purchase warrant where each whole share purchase warrant can be exercised into one common share of the Company at $0.15 per share until October 31, 2024. As at the date of the filing, the private placement units have not been issued.

18

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended December 31, 2019

(unaudited

8. Share Purchase Warrants 

Additional information regarding share purchase warrants as of December 31, 2019, is as follows:

9. Subsequent Events 

(a)Between January 1, 2020 and February 11, 2020, the Company issued 87,507,730 common shares for the conversion of outstanding convertible notes payable. 

(b)On January 23, 2020, the Company issued 7,236,200 shares for consulting services. 

The Company has evaluated events occurring from December 31, 2019 through the date the financial statements were issued and determined that there are no additional events requiring disclosure.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

Forward-Looking Statements

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in the Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q.

Background

We are a start-up company, engaged in the exploration, mining, extraction and recycling of battery metals. We were incorporated under the laws of the State of Nevada on October 6, 2011 for the purpose of acquiring rights to mineral properties with the eventual objective of being a producing mineral company, if and when it ever occurs. We have limited operating history and have not yet generated or realized any revenues from our activities. Our principal executive offices are located at 930 Tahoe Blvd., Suite 802-16, Incline Village, NV 89451.

We are actively exploring and drilling for lithium-rich brines and deposits from the Company’s claims covering 30,000 acres in Railroad Valley, Nevada.

In our laboratory located in Silver Springs, Nevada, we have started developing a proprietary extraction technology to harvest lithium from brine for refinement into battery-grade lithium carbonate or lithium hydroxide.

In an incubator space provided by BASF Corporation and located in Greentown, Massachusetts, we began, in the first quarter of the 2020 fiscal year, to develop a closed-loop battery recycling process that separates and recovers each individual elemental metal from end-of-life batteries, as well as from defects and waste from battery manufacturing facilities. These recovered metals will be refined up to battery-grade specifications and then sold.

Currently, the Board of Directors (consisting of Mr. Douglas Cole, Mr. Douglas MacLellan and Mr. William Hunter) are involved in guiding the Company’s goals and objectives to solely focus on the exploration, extraction and recycling of Lithium (Li) and other battery metal deposits in the State of Nevada, primarily through new capital commitments which Mr. Cole is actively seeking.

On August 8, 2016, the Company formed Lithortech Resources Inc. as a wholly owned subsidiary of the Company to serve as its operating subsidiary for lithium resource exploration and development. On June 29, 2018, the Company changed the name of Lithortech Resources to LithiumOre Corp. (“LithiumOre”).

On May 3, 2019, the Company changed its name to American Battery Metals Corporation (“ABMC”) and reorganized into three divisions; Battery Metals Mining, Battery Metals Extraction and Battery Metals Recycling. ABMC currently has 1,300 mining claims on 30,000 acres in the area known as the Western Nevada Basin, situated in Railroad Valley in Nye County, Nevada (the “WNB Claim”). In the second half of 2017, we engaged experts to evaluate the region and the WNB Claim to target onsite exploration efforts and determined that the claims of the WNB Claim were appropriate for the Company’s planned exploration, which we began in the first half of 2019. With many features similar to Clayton Valley and with no exploration work targeting lithium to date, Railroad Valley represents a new and untested target for lithium brine. The Railroad Valley brine exploration can build on both the dense existing oil field data and the experiences at Clayton Valley and other Lithium brine basins to target potential brine aquifers. Please see the Company’s website for more information: www.batterymetals.com.

The growth in demand for lithium batteries is predicted by industry researchers to outpace lithium production in the coming decade. Lithium-ion batteries for the automotive industry are expected to advance demand beyond current supply. These industry trends support and validate the Company’s new business model.

The Company is currently a pre-revenue organization and we do not anticipate earning revenues until such time as we have undertaken sufficient exploration work to identify lithium and or other battery metals reserves. Exploration work will take several years and there is no certainty we will ever reach a production stage. Our Company is considered to be in the exploration stage due to not having done exploration work which would result in a development decision.

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Employees

The company has eight employees: (a) two officers, Mr. Cole, and our Chief Technical Officer and (b) six other employees: Chief of Mining Operations, Lead Chemist, Head of Business Development, Finance Operations head, Corporate Communications head, and Office Assistant.

RESULTS OF OPERATIONS

American Battery Metals Corp. (“ABMC”) has not realized any revenue from its exploration activities on the Mogollon concession or the Nye County properties and it is extremely doubtful that the mineral property will be able to produce any revenue for many years. Without an ore reserve ABMC cannot seek substantial investors to further fund the Company so that production can be achieved. Not until commercial production is realized will ABMC have any chance of recognizing any form of revenue.

Results of Operations

Revenues

During the three months ended December 31, 2019 and 2018, the Company has not realized any revenues.

Expenses

Three Months Ended December 31, 2019

During the three months ended December 31, 2019, the Company incurred $1,083,131 of operating expenses compared to $1,162,216 of operating expenses during the three months ended December 31, 2018. Overall, the level of operations between the current year and the prior year was relatively consistent and primarily due to lower stock-based compensation as the Company issued fewer common shares to officers and directors of the Company in the current year compared to the prior year.

In addition to operating expenses, the Company incurred interest and accretion expense of $1,119,583 during the three months ended December 31, 2019 compared to $277,690 during the three months ended December 31, 2018. The increase in interest and accretion expense was due to the fact that the Company had more conversions of outstanding convertible notes in the current year compared to prior year which resulted in the acceleration of accretion on the debt discount that was originally derived due to the fair value of the convertibility features on the convertible notes. The Company also had an increase in the loss due to the change in the fair value of the derivative liability from $708,155 for the three months ended December 31, 2018 to $876,960 for the three months ended December 31, 2019 due to the fact that the Company had a more volatile share price during the current year which resulted in a wider spread between the fair value of the common stock and the discounted conversion rates for the convertible debentures. Finally, the Company recorded a gain on the settlement of debt of $127,863 compared to a loss on the settlement of debt of $421,745 during the three months ended December 31, 2018 due to the fact that the overall derivative liability amounts were higher which resulted in a more derivative liability being eliminated upon conversion of the debt with the issuance of common shares.

Net Loss

During the three months ended December 31, 2019, the Company incurred a net loss of $2,948,065 or $0.02 loss per share compared to a net loss of $2,569,806 or $0.03 loss per share during the three months ended December 31, 2018. The decrease in the loss per share is due to the fact that the Company has more common shares outstanding in the current year compared to the prior year.

Liquidity and Capital Resources

At December 31, 2019, the Company had cash of $19,563 and total assets of $104,886 compared to cash of $7,371 and total assets of $92,694 as at September 30, 2019. The increase in cash is due to the fact that the Company received $804,750 of financing during the current period which was not completely used. The increase in total assets is due to the increase in cash as there were no material changes in prepaid expenses or the carrying value of the Company’s investment in the CINC joint venture.

The Company had total current liabilities of $6,058,844 at December 31, 2019 compared to $4,879,614 at September 30, 2019. The increase in liabilities is due to an increase in the carrying value of notes payable of $324,496 due to an increase in the overall number and dollar value of outstanding convertible notes payable from $3,643,259 at September 30, 2019 to $3,645,700 at December 31, 2019. There was also an increase in derivative liabilities of $803,714 for the fair value of the conversion feature on convertible debentures due to an increase in the number of convertible notes issued compared to September 30, 2019, and an increase in accounts payable of $119,694 due to timing differences between expenditures incurred for operating activities compared to the payment of balances as they become due. The increases were offset by a decrease in amounts due to related parties of $64,397 as the Company repaid amounts owing to related parties during the period.

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As at December 31, 2019, the Company had a working capital deficit of $5,989,208 compared to a working capital deficit of $4,822,170 at September 30, 2019. The increase in the working capital deficit was due to the fact that the Company financed its operating costs, through the issuance of convertible debentures and did not earn any cash flow from operating activities.

During the three months ended December 31, 2019, the Company issued 5,560,000 common shares for services with a fair value of $233,520, issued 29,554,757 common shares to convert outstanding notes payable and accrued interest of $1,173,444, and issued 2,996,985 common shares for the exercise of cashless share purchase warrants that were previously issued to note holders as an inducement for the convertible note proceeds.

As at December 31, 2019 and 2018, the Company does not have any issued or outstanding stock options.

Cash Flows

Cash from Operating Activities.

During the three months ended December 31, 2019, the Company used $792,558 of cash for operating activities as compared to $518,802 during the three months ended December 31, 2018. The increase in the use of cash for operating activities was due to the fact that the Company raised more funding from financing activities which allowed them to incur more operating costs to further the Company’s development and operations.

Cash from Investing Activities

During the three months ended December 31, 2019 and 2018, the Company did not have any investing activities.

Cash from Financing Activities

During the three months ended December 31, 2019, the Company received $529,750 of funding from the issuance of convertible notes payable and $275,000 from share subscriptions received compared to proceeds received of $628,750 from convertible notes and the repayment of $180,000 of convertible notes payable during the three months ended December 31, 2018.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

In presenting the Company's financial statements in conformity with U.S. generally accepting accounting principles, or GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures.

Some of the estimates and assumptions the Company is required to make relate to matters that are inherently uncertain as they pertain to future events. The Company bases these estimates and assumptions on historical experience or on various other factors that it believes to be reasonable and appropriate under the circumstances. On an ongoing basis, the Company reconsiders and evaluates its estimates and assumptions. Actual results may differ significantly from these estimates.

The Company believes that the critical accounting policies listed below involve its more significant judgments, assumptions and estimates and, therefore, could have the greatest potential impact on its financial statements. In addition, the Company believes that a discussion of these policies is necessary to understand and evaluate the financial statements contained in this filing.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

Mineral claim acquisition and exploration costs

The cost of acquiring mineral properties or claims is initially capitalized and then tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Mineral exploration costs are expensed as incurred.

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Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

Recent Accounting Pronouncements

The Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

Not Applicable.

ITEM 4.  CONTROLS AND PROCEDURES. 

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In addition, The Company contracts with an independent firm to review and test its internal controls. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

As of December 31, 2019, the Company’s management carried out an evaluation of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934. Based on that evaluation, it was concluded the disclosure controls and procedures were not effective as of December 31, 2019.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS 

In January 2018, the Company filed a complaint in Nevada seeking the return or cancellation of 16 million common shares which the Company believes were fraudulently issued as well as claims against the former CEO of the Company, Craig Alford. As a result, the Company entered into agreements to cancel eleven million shares (of which ten million shares have already been cancelled). The remaining five million shares were cancelled and reissued after the Company determined that the recipients provided proper consideration for such shares. The litigation continues against Alford and certain other relief defendants. Alford has filed a counterclaim against the Company for amounts allegedly owed to him that the Company believes is entirely without merit.

In March 2019, a shareholder of the Company filed a lawsuit against the Company seeking removal of a securities law restrictive legend and damages related thereto. The Company is defending the claim. Other than the preceding, to the best of our knowledge, we are not currently a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.

We are required by Section 78.090 of the Nevada Revised Statutes (the "NRS") to maintain a registered agent in the State of Nevada. Our registered agent for this purpose is United Corporate Services, Inc., 2520 St Rose Pkwy Suite 319, Henderson, NV 89074. All legal process and any demand or notice authorized by law to be served upon us may be served upon our registered agent in the State of Nevada in the manner provided in NRS 14.020(2).

ITEM 1A.  RISK FACTORS. 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

On October 10, 2019, the Company issued a 10% Convertible Promissory Note in the principal amount of $175,000 with a purchase price of $170,000 to Auctus Fund, LLC. The note is due September 13, 2020. The holder shall have the right from time to time, and at any time during the period beginning on the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 68% of the lowest trading price of common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 135% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 24% per annum.

On October 15, 2019, the Company issued a 10% Convertible Promissory Note in the principal amount $52,000 with a purchase price of $52,000 to GS Capital Partners, LLC. The note is due October 15, 2020. The holder shall have the right from time to time, and at any time convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 66% of the lowest trading price of the Company’s common stock during the prior twenty (20) trading day period ending on the conversion date. The note may be prepaid without penalty until 30 days from the issuance date. After the 31^st day and until the 181^st day the note may be prepaid at a price of 115% - 130% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 24% per annum.

On October 15, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount of $29,150 with a purchase price of $26,500 to BHP Capital NY Inc. The note is due October 15, 2020. The holder shall have the right from time to time, and at any time during the period beginning on the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 135% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum.

On October 15, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount of $29,150 with a purchase price of $26,500 to Jefferson Street Capital LLC. The note is due October 15, 2020. The holder shall have the right from time to time, and at any time during the period beginning on the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 135% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum.

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On October 28, 2019, the Company issued 2,996,985 common shares for the exercise of cashless warrants.

On October 31, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount $43,000 with a purchase price of $43,000 to Power Up Lending Group Ltd. The note is due October 31, 2020. The holder shall have the right from time to time, and at any time during the period beginning one hundred seventy (170) days from the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 170 days from the issuance date at a price of 115% - 140% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum

On November 4, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount $113,000 with a purchase price of $113,000 to JSJ Investments Inc. The note is due November 4, 2020. The holder shall have the right from time to time, and at any time after the date which is one hundred eighty (180) days from the issue date to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 60% of the lowest trading price of common stock during the fifteen (15) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 120% - 140% of the face amount plus any accrued interest as of the date of prepayment. After such time the note may only be prepaid with the holder’s written consent at a price of 150% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 18% per annum.

On November 8, 2019, the Company issued 5,560,000 common shares with a fair value of $233,520 for consulting services including 1,000,000 common shares with a fair value of $42,000 to a director of the Company.

On December 4 2019, the Company issued a 12% Convertible Promissory Note in the principal amount of $46,200 with a purchase price of $42,000 to BHP Capital NY Inc. The note is due December 4, 2020. The holder shall have the right from time to time, and at any time during the period beginning on the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 135% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum.

On December 9, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount of $47,300 with a purchase price of $43,000 to Jefferson Street Capital LLC. The note is due December 9, 2020. The holder shall have the right from time to time, and at any time during the period beginning on the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 135% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum.

On December 23, 2019, the Company issued a 12% Convertible Promissory Note in the principal amount $43,000 with a purchase price of $43,000 to Power Up Lending Group Ltd. The note is due December 23, 2020. The holder shall have the right from time to time, and at any time during the period beginning one hundred seventy (170) days from the issue date and ending on the later of (i) the maturity date and (ii) the date of payment the date of payment of the default amount, each in respect of the remaining outstanding principal amount of this note to convert all or any amount of the outstanding and unpaid principal amount of the note into fully paid and non-assessable shares of common stock. The conversion price is equal to 61% of the lowest trading price of common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. The note may be prepaid until 170 days from the issuance date at a price of 115% - 140% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 22% per annum.

From October 1, 2019 through December 31, 2019, the Company issued $29,554,757 common shares for the conversions of $638,092 in principal of convertible notes and $38,713 of accrued interest.

The foregoing securities were issued under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D under the Securities Act. In the case of the promissory notes, each investor represented that it was an accredited investor, as defined in Rule 501 of Regulation D, and that it was acquiring the securities for its own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act. Any proceeds issued from the above issuances were used for working capital purposes of the Company.

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ITEM 3.  DEFAULTS UPON SENIOR SECURITIES  

None

ITEM 4.  MINE SAFETY DISCLOSURE 

Not Applicable

ITEM 5.  OTHER INFORMATION 

None

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ITEM 6.  EXHIBITS 

(a) (3) Exhibits

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:

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SIGNATURES

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