AMERICAN BATTERY TECHNOLOGY Co - Quarter Report: 2020 March (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]

1

Table of Contents

2

PART I – FINANCIAL STATEMENTS

Operating results for the six months ended March 31, 2020 are not necessarily indicative of the results that can be expected for the year ending September 30, 2020.

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Financial Statements

For the Period Ended March 31, 2020 (unaudited)

3

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Balance Sheets

(unaudited)

Organization and Nature of Operations (note 1)

Subsequent Events (note 9)

(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 Statement of Stockholders’ Deficit

(unaudited)

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

7

AMERICAN BATTERY METALS CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

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

8

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

1. Organization and Nature of Operations 

The accompanying unaudited consolidated financial statements of American Battery Metals Corporation (formerly Oroplata Resources, Inc.) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended September 30, 2019, included in our Annual Report on Form 10-K for the year ended September 30, 2019. 

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 Lithortech Resources Inc., a Nevada company, as a wholly-owned subsidiary. The Company currently holds mineral rights in the Western Nevada Basin of Nye County in the state of Nevada.  

Going Concern

The recent outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company’s supply chain and operations. The COVID-19 pandemic has impacted and could further impact the Company’s operations and the operations of the Company’s suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company’s suppliers and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its potential impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time our business, liquidity, capital resources and financial results.

These unaudited 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 March 31, 2020, the Company has not earned revenue, has a working capital deficit of $4,767,984, and an accumulated deficit of $60,351,589. 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.

9

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

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 condensed 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 condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL, Lithortech Resources Inc., and ABMC AG, LLC. All inter-company accounts and transactions have been eliminated on consolidation.

3. Convertible Notes Payable 

(a)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 March 31, 2020, the Company issued 1,568,017 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, 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, 2019 - $31,405).  

(b)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 March 31, 2020, the Company issued 1,562,033 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, 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, 2019 - $31,405).  

(c)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. During the period ended March 31, 2020, the Company issued 20,886,476 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $22,805), the unamortized discount on the note is $nil (September 30, 2019 - $302,195), accrued interest of $nil (September 30, 2019 - $13,451) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $284,348).  

(d)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. During the period ended March 31, 2020, the Company issued 19,024,857 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $22,805), the unamortized discount on the note is $nil (September 30, 2019 - $302,195), accrued interest of $nil (September 30, 2019 - $13,451l) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $284,348).  

10

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(e)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. During the period ended March 31, 2020, the Company issued 17,116,458 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020,, the carrying value of the note payable is $nil (September 30, 2019 - $16,726), the unamortized discount on the note is $nil (September 30, 2019 - $308,274), accrued interest of $nil (September 30, 2019 - $10,924) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $289,004).  

(f)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 March 31, 2020, the Company issued 2,903,221 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, 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).  

(g)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. During the period ended March 31, 2020, the Company issued 7,021,366 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $35,868), the unamortized discount on the note is $nil (September 30, 2019 - $69,142), accrued interest of $nil (September 30, 2019 - $3,179) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $93,716).  

(h)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 March 31, 2020, the Company issued 3,646,544 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $3,075), the unamortized discount on the note is $nil (September 30, 2019 - $51,925), accrued interest of $nil (September 30, 2019 - $1,980) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $46.520).  

(i)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 March 31, 2020, the Company issued 3,540,668 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $3,075), the unamortized discount on the note is $nil (September 30, 2019 - $51,925), accrued interest of $nil (September 30, 2019 - $1,980) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $46,520).  

(j)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. During the period ended March 31, 2020, the Company issued 6,421,298 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $2,862), the unamortized discount on the note is $nil (September 30, 2019 - $72,138), accrued interest of $nil (September 30, 2019 - $2,229) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $71,671).  

11

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(k)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. On March 24, 2020, the Company issued 5,082,065 common shares for the settlement of note payable of $90,000 and accrued interest of $6,657.53. As at March 31, 2020, the carrying value of the note payable is $156,669 (September 30, 2019 - $56,011), the unamortized discount on the note is $23,331 (September 30, 2019 - $241,602), accrued interest of $20,825 (September 30, 2019 - $7,425) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $234,622 (September 30, 2019 - $239,317).  

(l)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. During the period ended March 31, 2020, the Company issued 6,467,394 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $2.692), the unamortized discount on the note is $nil (September 30, 2019 - $95,308), accrued interest of $nil (September 30, 2019 - $2,532) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $91,469).  

(m)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. During the period ended March 31, 2020, the Company issued 3,659,524 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $1,798), the unamortized discount on the note is $nil (September 30, 2019 - $56,202), accrued interest of $nil (September 30, 2019 - $1,798) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $59,759).  

(n)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. During the period ended March 31, 2020, the Company issued 11,220,902 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $3,600), the unamortized discount on the note is $nil (September 30, 2019 - $156,400), accrued interest of $nil (September 30, 2019 - $3,600) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $169,527).  

(o)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. During the period ended March 31, 2020, the Company issued 2,688,172 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $1,317), the unamortized discount on the note is $nil (September 30, 2019 - $48,863), accrued interest of $nil (September 30, 2019 - $1,317) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $54,669).  

(p)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. On January 28, 2020, the Company repaid the principal balance of $53,000 and accrued interest of $3,162. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $1,078), the unamortized discount on the note is $nil (September 30, 2019 - $51,922), accrued interest of $nil (September 30, 2019 - $1,078) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $55,136).  

12

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(q)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. On February 3, 2020, the Company partially repaid the note balance of $96,370 and accrued interest of $11,618. On February 6, 2020, the Company issued 5,026,425 common shares for the settlement of note payable of $78,630 and accrued interest of $4,375. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $34,136), the unamortized discount on the note is $nil (September 30, 2019 - $140,864), accrued interest of $nil (September 30, 2019 - $2,868) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $158,571).  

(r)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. During the period ended March 31, 2020, the Company issued 6,151,284 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $1,517), the unamortized discount on the note is $nil (September 30, 2019 - $103,483), accrued interest of $nil (September 30, 2019 - $1,517) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $113,820).  

(s)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. On February 7, 2020, the Company repaid the principal balance of $105,000 and accrued interest of $5,104. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $1,400), the unamortized discount on the note is $nil (September 30, 2019 - $103,600), accrued interest of $nil (September 30, 2019 - $1,400) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $113,725).  

(t)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. During the period ended March 31, 2020, the Company issued 2,049,666 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $375), the unamortized discount on the note is $nil (September 30, 2019 - $34,825), accrued interest of $nil (September 30, 2019 - $375) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $35,083).  

(u)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. During the period ended March 31, 2020, the Company issued 2,104,577 common shares for the settlement of the principal balance and accrued interest. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $5,869), the unamortized discount on the note is $nil (September 30, 2019 - $29,331), accrued interest of $nil (September 30, 2019 - $375) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $30,617).  

13

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(v)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. On February 21, 2020, the Company repaid the principal balance of $110,000 and accrued interest of $5,286. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $978), the unamortized discount on the note is $nil (September 30, 2019 - $109,022), accrued interest of $nil (September 30, 2019 - $978) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $121,624).  

(w)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 March 31, 2020, the carrying value of the note payable is $20,124 (September 30, 2019 - $nil), the unamortized discount on the note is $154,876 (September 30, 2019 - $nil), accrued interest of $9,625 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $235,589 (September 30, 2019 - $nil).  

(x)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. On March 10, 2020, the Company repaid the principal balance of $150,000 and accrued interest of $7,208. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $92), the unamortized discount on the note is $nil (September 30, 2019 - $54,908), accrued interest of $nil (September 30, 2019 - $542) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $152,239).  

(y)On September 24, 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. On March 20, 2020, the Company repaid the principal balance of $55,000 and accrued interest of $2,689. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $96), the unamortized discount on the note is $nil (September 30, 2019 - $54,908), accrued interest of $nil (September 30, 2019 - $96) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $59,287).  

(z)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. On March 18, 2020, the Company repaid the principal balance of $48,000 and accrued interest of $2,784. As at March 31, 2020, the carrying value of the note payable is $nil (September 30, 2019 - $96), the unamortized discount on the note is $nil (September 30, 2019 - $47,904), accrued interest of $nil (September 30, 2019 - $96) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $nil (September 30, 2019 - $56,217).  

(aa)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 March 31, 2020, the carrying value of the note payable is $4,386 (September 30, 2019 - $nil), the unamortized discount on the note is $47,614 (September 30, 2019 - $nil), accrued interest of $2,398 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $73,856 (September 30, 2019 - $nil).  

14

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(bb)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 March 31, 2020, the carrying value of the note payable is $2,786 (September 30, 2019 - $nil), the unamortized discount on the note is $26,364 (September 30, 2019 - $nil), accrued interest of $1,573 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $46,291 (September 30, 2019 - $nil).  

(cc)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 March 31, 2020, the carrying value of the note payable is $2,818 (September 30, 2019 - $nil), the unamortized discount on the note is $26,332 (September 30, 2019 - $nil), accrued interest of $1,613 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $46,352 (September 30, 2019 - $nil).  

(dd)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 March 31, 2020, the carrying value of the note payable is $3,496 (September 30, 2019 - $nil), the unamortized discount on the note is $39,504 (September 30, 2019 - $nil), accrued interest of $2,150 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $69,888 (September 30, 2019 - $nil).  

(ee)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 March 31, 2020, the carrying value of the note payable is $1,407 (September 30, 2019 - $nil), the unamortized discount on the note is $18,593 (September 30, 2019 - $nil), accrued interest of $833 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $29,785 (September 30, 2019 - $nil).  

(ff)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 March 31, 2020, the carrying value of the note payable is $7,679 (September 30, 2019 - $nil), the unamortized discount on the note is $105,321 (September 30, 2019 - $nil), accrued interest of $4,614 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $185,787 (September 30, 2019 - $nil).  

(gg)On November 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 November 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 $2,455 (September 30, 2019 - $nil), the unamortized discount on the note is $43,745 (September 30, 2019 - $nil), accrued interest of $1,802 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $67,148 (September 30, 2019 - $nil).  

(hh)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 March 31, 2020, the carrying value of the note payable is $2,318 (September 30, 2019 - $nil), the unamortized discount on the note is $44,982 (September 30, 2019 - $nil), accrued interest of $1,766 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $78,036 (September 30, 2019 - $nil).  

15

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(ii)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 lowest trading price of the Company’s common stock in the ten trading days prior to notice of conversion. As at March 31, 2020, the carrying value of the note payable is $3,255 (September 30, 2019 - $nil), the unamortized discount on the note is $39,745 (September 30, 2019 - $nil), accrued interest of $1,405 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $69,549 (September 30, 2019 - $nil).  

(jj)On January 31, 2020, the Company issued a convertible note payable for $147,250. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on January 31, 2021. 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 prior twenty trading days including the date of conversion. As at March 31, 2020, the carrying value of the note payable is $2,454 (September 30, 2019 - $nil), the unamortized discount on the note is $144,796 (September 30, 2019 - $nil), accrued interest of $2,454 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $243,199 (September 30, 2019 - $nil).  

(kk)On January 31, 2020, the Company issued a convertible note payable for $147,250. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on January 31, 2021. The note is also convertible into common shares of the Company at 40% of the lowest trading price of the Company’s common stock in the prior twenty trading days including the date of conversion. As at March 31, 2020, the carrying value of the note payable is $2,454 (September 30, 2019 - $nil), the unamortized discount on the note is $144,796 (September 30, 2019 - $nil), accrued interest of $2,454 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $384,774 (September 30, 2019 - $nil).  

(ll)On February 7, 2020, the Company issued a convertible note payable for $177,200. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on February 7, 2021. 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 prior twenty trading days including the date of conversion. As at March 31, 2020, the carrying value of the note payable is $2,658 (September 30, 2019 - $nil), the unamortized discount on the note is $174,542 (September 30, 2019 - $nil), accrued interest of $2,658 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $292,461 (September 30, 2019 - $nil).  

(mm)On February 14, 2020, the Company issued a convertible note payable for $83,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on December 1, 2020. The note is also convertible into common shares of the Company at 61% of the lowest trading price of the Company’s common stock in the ten trading days prior to date of conversion. As at March 31, 2020, the carrying value of the note payable is $1,084 (September 30, 2019 - $nil), the unamortized discount on the note is $81,916 (September 30, 2019 - $nil), accrued interest of $1,084 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $133,650 (September 30, 2019 - $nil).  

(nn)On February 14, 2020, 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 and is due on February 14, 2021. The note is also convertible into common shares of the Company at 65% of the lower of lowest closing bid or lowest trading price of the Company’s common stock in the twenty trading days prior to date of conversion. As at March 31, 2020, the carrying value of the note payable is $979 (September 30, 2019 - $nil), the unamortized discount on the note is $74,021 (September 30, 2019 - $nil), accrued interest of $979 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $112,662 (September 30, 2019 - $nil).  

16

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

3. Convertible Notes Payable (continued) 

(oo)On February 18, 2020, 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 February 18, 2021. The note is also convertible into common shares of the Company at the lesser of (i) 61% multiplied by the lowest trading price during the previous twenty trading days before the "Issue Date" of the note or (ii) 61% multiplied by the market price ( the lowest trading price for the common stock during the twenty trading-day period ending on the last complete trading day prior to the conversion date). As at March 31, 2020, the carrying value of the note payable is $1,314 (September 30, 2019 - $nil), the unamortized discount on the note is $108,686 (September 30, 2019 - $nil), accrued interest of $1,314 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $176,090 (September 30, 2019 - $nil).  

(pp)On February 18, 2020, 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 February 18, 2021. The note is also convertible into common shares of the Company at the lesser of (i) 61% multiplied by the lowest trading price during the previous twenty trading days before the "Issue Date" of the note or (ii) 61% multiplied by the market price ( the lowest trading price for the common stock during the twenty trading-day period ending on the last complete trading day prior to the conversion date). As at March 31, 2020, the carrying value of the note payable is $1,314 (September 30, 2019 - $nil), the unamortized discount on the note is $108,686 (September 30, 2019 - $nil), accrued interest of $1,314 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $176,090 (September 30, 2019 - $nil).  

(qq)On February 19, 2020, 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 February 19, 2021. The note is also convertible into common shares of the Company at 60% of the lowest closing bid price of the Company’s share for the fifteen trading days prior to date of conversion. As at March 31, 2020, the carrying value of the note payable is $2,567 (September 30, 2019 - $nil), the unamortized discount on the note is $217,433 (September 30, 2019 - $nil), accrued interest of $2,567 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $359,524 (September 30, 2019 - $nil).  

(rr)On March 17, 2020, the Company issued a convertible note payable for $520,000. Under the terms of the note, the amount owing is unsecured, bears interest at 10% per annum and is due on September 17, 2020. The note is also convertible into common shares of the Company at 63% of the lowest closing trading price of the Company’s share in the prior twenty trading days including date of conversion. As at March 31, 2020, the carrying value of the note payable is $2,022 (September 30, 2019 - $nil), the unamortized discount on the note is $517,978 (September 30, 2019 - $nil), accrued interest of $2,022 (September 30, 2019 - $nil) has been recorded in accounts payable and accrued liabilities, and had a derivative liability of $760,941 (September 30, 2019 - $nil).  

4. Related Party Transactions 

(a)As of March 31, 2020, 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 March 31, 2020, 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 March 31, 2020, the Company owes $326,077 (September 30, 2019 - $221,897) 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 March 31, 2020, 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.  

17

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

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. Refer to Note 7(b).

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 six months ended March 31, 2020, the Company recorded a loss on the change in the fair value of derivative liability of $3,623,387 (2019 - $944,008). As at March 31, 2020, the Company recorded a derivative liability of $3,776,294 (September 30, 2019 - $$3,437,200).

The following inputs and assumptions were used to value the derivative liabilities outstanding during the periods ended March 31, 2020 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.

18

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

7. Common Shares (Continued) 

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.

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.

19

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

7. Common Shares (Continued) 

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.

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.

On January 2, 2020, the Company issued 2,316,826 common shares with a fair value of $81,090 for the conversion of $40,000 of note payable, $3,167 of accrued interest, and $49,831 of derivative liability resulting in a gain on settlement of debt of $11,908.

20

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

7. Common Shares (Continued) 

On January 2, 2020, the Company issued 1,567,942 common shares with a fair value of $54,878 for the conversion of $25,000 of note payable, $1,708 of accrued interest, and $36,380 of derivative liability resulting in a gain on settlement of $8,210.

On January 2, 2020, the Company issued 892,857 common shares with a fair value of $31,250 for the conversion of $15,000 of note payable and $19,062 of derivative liability resulting in a gain on settlement of $2,812.

On January 3, 2020, the Company issued 1,553,815 common shares with a fair value of $49,722 for the conversion of $21,500 of note payable, $3,530 of accrued interest, $500 of fees, and $26,692 of derivative liability resulting in a gain on settlement of $2,500.

On January 3, 2020, the Company issued 2,000,000 common shares with a fair value of $64,000 for the conversion of $25,933 of note payable, $6,697 of accrued interest and $36,589 of derivative liability resulting in a gain on settlement of $5,219.

On January 3, 2020, the Company issued 892,857 common shares with a fair value of $28,572 for the conversion of $15,000 of note payable and $16,833 of derivative liability resulting in a gain on settlement of $3,261.

On January 6, 2020, the Company issued 860,000 common shares with a fair value of $25,800 for the conversion of $11,311 of note payable, $750 fees and $15,573 of derivative liability resulting in a gain on settlement of $1,834.

On January 6, 2020, the Company issued 1,264,782 common shares with a fair value of $37,944 for the conversion of $20,000 of note payable, $94 of accrued interest, $500 of fees and $19,661 of derivative liability resulting in a gain on settlement of $2,311.

On January 6, 2020, the Company issued 1,071,429 common shares with a fair value of $32,143 for the conversion of $18,000 of note payable and $17,815 of derivative liability resulting in a gain on settlement of $3,672.

On January 7, 2020, the Company issued 802,381 common shares with a fair value of $24,874 for the conversion of $10,000 of note payable, $3,622 of accrued interest and $14,098 of derivative liability resulting in a gain on settlement of $2,846.

On January 7, 2020, the Company issued 1,569,981 common shares with a fair value of $48,669 for the conversion of $25,000 of note payable, $1,743 of accrued interest and $27,445 of derivative liability resulting in a gain on settlement of $5,519.

On January 10, 2020, the Company issued 1,395,332 common shares for a fair value of $35,581 for the conversion of $20,000 of note payable, $1,014 of accrued interest and $21,671 of derivative liability resulting in a gain on settlement of $7,104.

On January 13, 2020, the Company issued 1,938,768 common shares for a fair value $52,347 for the conversion of $30,000 of note payable, $2,142 of accrued interest and $26,911 of derivative liability resulting in a gain on settlement of $6,706.

On January 14, 2020, the Company issued 1,340,000 common shares for a fair value of $45,560 for the conversion of $17,306 of note payable, $750 of fees and $31,041 of derivative liability resulting in a gain on settlement of $3,537.

On January 14, 2020, the Company issued 916,963 common shares for a fair value of $31,177 for the conversion of $14,000 of note payable, $600 of accrued interest, $500 of fees and $19,647 of derivative liability resulting in a gain on settlement of $3,570.

On January 14, 2020, the Company issued 5,021,366 common shares for a fair value of $170,726 for the conversion of $79,067 of note payable, $572 accrued interest and $114,349 of derivative liability resulting in a gain on settlement of $23,262.

On January 15, 2020, the Company issued 1,500,000 common shares for a fair value of $100,470 for the conversion of $19,462 of note payable, $750 of fees and $100,470 of derivative liability resulting in a gain on settlement of 21,212.

On January 15, 2020, the Company issued 4,649,492 common shares for a fair value of $311,422 for the conversion of $75,000 of note payable, $5,938 of accrued interest and $247,423 derivative liability resulting in a gain on settlement of $16,939.

On January 15, 2020, the Company issued 2,805,479 common shares for a fair value of $187,911 for the conversion of $40,000 of note payable, $2,082 of accrued interest and $154,571 of derivative liability resulting in a gain on settlement of $8,742.

21

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

7. Common Shares (Continued) 

On January 15, 2020, the Company issued 3,232,955 common shares for a fair value of $216,543 for the conversion of $50,000 of note payable, $3,597 of accrued interest and $168,041 of derivative liability resulting in a gain on settlement of $5,095.

On January 16, 2020, the Company issued 3,233,793 common shares for a fair value of $181,093 for the conversion of $50,000, accrued interest of $3,611 and derivative liability of $132,763 resulting in a gain on settlement of $5,281.

On January 17, 2020, the Company issued 5,263,014 common shares for a fair value of $302,623 for the conversion of $75,000 of note payable, $3,945 of accrued interest and $242,111 of derivative liability resulting in a gain on settlement of $18,433.

On January 22, 2020, the Company issued 2,591,056 common shares for a fair value of $82,914 for the conversion of $40,000 of note payable, $2,956 accrued interest and $53,413 of derivative liability resulting in a gain on settlement of $13,455.

On January 23, 2020, the Company issued 1,757,077 common shares for a fair value of $70,248 for the conversion of $25,000 of note payable, $1,295 accrued interest and $52,557 of derivative liability resulting in a gain of settlement of $8,604.

On January 23, 2020, the Company issued 3,761,200 common shares with a fair value of $150,448 for consulting services.

On January 23, 2020, the Company issued 3,475,000 common shares with a fair value of $139,000 for consulting services including 1,000,000 common shares with a fair value of $40,000 to a director of the Company.

On January 27, 2020, the Company issued 4,679,001 common shares with a fair value of $170,784 for the conversion of $75,000 of note payable, $6,793 of accrued interest and $150,648 of derivative liability resulting in a gain on settlement of $61,657.

On January 27, 2020, the Company issued 2,594,407 common shares with a fair value of $94,695 for the conversion of $40,000 of note payable, $3,011 of accrued liability and $59,353 of derivative liability resulting in a gain on settlement of $7,669.

On January 30, 2020, the Company issued 2,596,417 common shares with a fair value of $84,383 for the conversion of $40,000, $2,683 of accrued interest and $50,666 of derivative liability resulting in a gain on settlement of 8,966.

On February 4, 2020, the Company issued 6,467,394 common shares with a fair value of $239,293 for the conversion of $98,000 of note payable, $5,907 of accrued interest, $105 of fees and $166,151 of derivative liability resulting in a gain on settlement of $30,870.

On February 5, 2020, the Company issued 2,503,957 common shares with a fair value of $113,930 for the conversion of $40,000 of note payable, $3,589 of accrued interest and $72,495 of derivative liability resulting in a gain on settlement of $2,154.

On February 5, 2020, the Company issued 670,000 common shares with a fair value of $30,485 for the conversion of $8,278 of note payable, $750 of fees and $22,106 of derivative liability resulting in a gain on settlement of $649.

On February 6, 2020, the Company issued 5,026,425 common shares with a fair value of $201,057 for the conversion of $78,630 of note payable, $4,375 of accrued interest and $134,206 of derivative liability resulting in a gain on settlement of $16,154.

On February 10, 2020, the Company issued 9,723,549 common shares with a fair value of $495,901 for the conversion of $150,000 of note payable, $11,096 of accrued interest, $105 of fees and $366,278 of derivative liability resulting in a gain on settlement of $31,578.

On February 10, 2020, the Company issued 1,118,568 common shares with a fair value of $57,047 for the conversion of $20,000 of note payable and $37,087 of derivative liability resulting in a gain on settlement of $40.

On February 10, 2020, the Company issued 7,834,840 common shares with a fair value of $399,577 for the conversion of $125,000 of note payable, $14,524 of accrued interest and $269,904 of derivative liability resulting in a gain on settlement of $9,851.

22

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

7. Common Shares (Continued) 

On February 11, 2020, the Company issued 2,051,298 common shares with a fair value of $137,355 for the conversion of $18,641 of note payable, $4,564 of accrued interest, $1,500 of fees and $108,919 of derivative liability resulting in a gain on settlement of $3,731.

On February 12, 2020, the Company issued 1,388,889 common shares with a fair value of $83,333 for the conversion of $25,000 of note payable and $65,150 of derivative liability resulting in a gain on settlement of $6,817.

On February 14, 2020, the Company issued 2,688,172 common shares with a fair value of $161,290 for the conversion of $50,000 of note payable, $3,550 of accrued interest and $127,306 of derivative liability resulting in a gain on settlement of $19,566.

On February 19, 2020, the Company issued 9,301,308 common shares with a fair value of $836,188 for the conversion of $175,000 of note payable, $14,529 of accrued interest, $105 of fees and $238,239 of derivative liability resulting in a loss on settlement on $408,315.

On February 19, 2020, the Company issued 3,643,827 common shares with a fair value of $327,580 for the conversion of $60,000 of note payable, $5,472 of accrued interest and $327,580 of derivative liability resulting in a gain on settlement of $65,472.

On February 24, 2020, the Company issued 10,000,000 common shares with a fair value of $400,000 for consulting services including 6,000,000 common shares with a fair value of $240,000 to three directors of the Company.

On February 24, 2020, the Company issued 9,206,396 common shares with a fair value of $535,996 for the conversion of $175,000 of note payable, $12,705 of accrued interest, $105 of fees and $398,306 of derivative liability resulting in a gain on settlement of $50,120.

On February 27, 2020, the Company issued 1,313,822 common shares for the exercise of cashless warrants.

On March 1, 2020, the Company issued 2,104,577 common shares with a fair value of $99,967 for the conversion of $35,200 of note payable, $2,147 of accrued interest, $500 fees and $68,868 of derivative liability resulting in a gain on settlement of 6,748.

On March 2, 2020, the Company issued 2,049,666 common shares with a fair value of $97,359 for the conversion of $35,200 of note payable, $2,159 of accrued interest, $500 of fees and $69,374 of derivative liability resulting in a gain on settlement of $9,874.

On March 4, 2020, the Company issued 7,910,062 common shares with a fair value of $514,154 for the conversion of $150,000 of note payable, $11,635 of accrued interest, $105 of fees and $390,342 of derivative liability resulting in a gain on settlement of $37,928.

On March 24, 2020, the Company issued 5,082,065 common shares with a fair value of $193,118 for the conversion of $90,000 of note payable. $6,657 of accrued interest, $105 of fees and $127,986 of derivative liability resulting in a gain on settlement of $31,630.

During the period ended March 31, 2020, the Company received share subscriptions of $1,125,000 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.

23

AMERICAN BATTERY METALS CORPORATION

Notes to the Condensed Consolidated Financial Statements

For the period ended March 31, 2020

(unaudited)

8. Share Purchase Warrants 

Additional information regarding share purchase warrants as of March 31, 2020, is as follows:

9. Subsequent Events 

(a) In April 2020, the Company received $400,000 of share subscriptions 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 

(b) Between April 1, 2020 and May 11, 2020, the Company issued 17,918,056 common shares for the conversion of outstanding convertible notes payable. 

The Company has evaluated events occurring from March 31, 2020 through the date the financial statements were issued and determined that there are no additional events requiring disclosure

24

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 laboratories located in Boston, Massachusetts, and Virginia City, Nevada, we have been developing and optimizing our proprietary extraction technologies to harvest nickel, cobalt, manganese, and lithium from recycled batteries for refinement into battery-grade metal feedstocks.

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 completed construction of our first lithium-ion battery recycling facility. We do not anticipate earning revenues from our exploration and extraction businesses until 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.

25

Employees

The company has ten employees: (a) two officers, Mr. Cole, and our Chief Technical Officer and (b) eight other employees: Chief of Mining Operations, Principal Chemical Engineer, Lead Onsite Project Manager, 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 and six months ended March 31, 2020 and 2019, the Company did not realize any revenues.

Expenses

Three Months Ended March 31, 2020

During the three months ended March 31, 2020, the Company incurred $2,015,935 of operating expenses compared to $6,456,096 of operating expenses during the three months ended March 31, 2019. Overall, the decrease in operating expense was due to the fact that the Company issued 19,550,000 common shares for service with a fair value of $5,839,360 in fiscal 2019 compared to 17,236,200 common shares for fair value of $689,448 during fiscal 2020. The decrease in share-based compensation was offset by an increase of $223,875 for exploration costs due to additional costs incurred on the Company’s mineral rights and an increase of $238,000 in management fees to officers and directors of the Company.

In addition to operating expenses, the Company incurred interest and accretion expense of $2,503,804 during the three months ended March 31, 2020 compared to $439,474 during the three months ended March 31, 2019. 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 $235,853 for the three months ended March 31, 2019 to $3,558,652 for the three months ended March 31, 2020 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 $565,405 compared a gain of $568,218 during the three months ended March 31, 2019 due to the fact that the overall derivative liability amounts were higher which resulted in more derivative liability being eliminated upon conversion of the debt with the issuance of common shares.

Net Loss

During the three months ended March 31, 2020, the Company incurred a net loss of $7,512,986 or $0.03 loss per share compared to a net loss of $6,563,205 or $0.06 loss per share during the three months ended March 31, 2019. The increase in the net loss is due to the fact that the Company had a larger loss due to the change in fair value of derivative liabilities due to the increased use of convertible notes payable as a source of financing for the Company’s operations and 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.

Six Months Ended March 31, 2020

During the six months ended March 31, 2020, the Company incurred $3,099,066 of operating expenses compared to $7,618,312 of operating expenses during the six months ended March 31, 2019. Overall, the decrease in operating expense was due to the fact that the Company issued 22,750,000 common shares for service with a fair value of $6,328,360 in fiscal 2019 compared to 22,796,200 common shares for fair value of $922,968 during fiscal 2020. The decrease in share-based compensation was offset by an increase of $215,566 for exploration costs due to additional costs incurred on the Company’s mineral rights and an increase of $238,000 in management fees to officers and directors of the Company.

26

In addition to operating expenses, the Company incurred interest and accretion expense of $4,435,612 during the six months ended March 31, 2020 compared to $717,164 during the six months ended March 31, 2019. 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 $944,008 for the six months ended March 31, 2019 to $3,623,387 for the six months ended March 31, 2020 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 $693,268 compared a gain of $146,473 during the six months ended March 31, 2019 due to the fact that the overall derivative liability amounts were higher which resulted in more derivative liability being eliminated upon conversion of the debt with the issuance of common shares.

Net Loss

During the six months ended March 31, 2020, the Company incurred a net loss of $10,461,051 or $0.05 loss per share compared to a net loss of $9,133,011 or $0.09 loss per share during the six months ended March 31, 2019. 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 March 31, 2020, the Company had cash of $282,374 and total assets of $443,677 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 $2,243,491 of financing during the current period which was not completely used, including $1,125,000 of private placement subscriptions for shares to be issued and net financing of $1,118,491 from convertible notes. 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 $5,176,411 at March 31, 2020 compared to $4,879,614 at September 30, 2019. The increase is due to an increase in derivative liabilities of $339,094 due to an increased spread between the conversion rate of the convertible notes and the fair value of the Company’s common shares at March 31, 2020, and an increase in accounts payable and accrued liabilities of $27,632, and $104,180 increase in amounts due to related parties due to timing differences between the expenditures incurred and the payment of the outstanding balances. The increase was offset by a decrease in the carrying value of notes payable from $398,348 at September 30, 2019 compared to $224,239 at March 31, 2020. The decrease in the carrying value of notes payable was due to the repayment of convertible notes payable of $855,259 during fiscal 2020 and the conversion of outstanding convertible notes payable during the year. As at March 31, 2020, the Company had total face value of convertible debt outstanding of $2,367,500 compared to total face value of convertible debt of $3,493,259 as at September 30, 2019.

As at March 31, 2020, the Company had a working capital deficit of $4,767,984 compared to a working capital deficit of $4,822,170 at September 30, 2019. Overall, the working capital deficit was consistent to September 30, 2019 as the Company converted or repaid outstanding notes payable and replaced them with new convertible debentures as well as $1,125,000 of cash was received for share subscriptions which was used for operating expenses and for repayment of outstanding convertible notes payable.

During the six months ended March 31, 2020, the Company issued 22,796,200 common shares for services with a fair value of $922,968, issued 168,633,740 common shares to convert outstanding notes payable and accrued interest of $8,314,497, and issued 4,310,807 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 March 31, 2020 and 2019, the Company does not have any issued or outstanding stock options.

Cash Flows

Cash from Operating Activities.

During the six months ended March 31, 2020, the Company used $1,968,488 of cash for operating activities as compared to $966,484 during the six months ended March 31, 2019. The increase in the use of cash for operating activities was due to the fact that the Company raised more funding from financing activities, including $1,125,000 from share subscriptions, which allowed it to incur more operating costs to further the Company’s development and operations.

Cash from Investing Activities

During the six months ended March 31, 2020 and 2019, the Company did not have any investing activities.

27

Cash from Financing Activities

During the six months ended March 31, 2020, the Company received $2,243,491 of financing, which included $1,973,750 of funding from the issuance of convertible notes payable less repayments of $855,259 on the convertible notes during the period, and $1,125,000 from share subscriptions received. Comparatively, for the six months ended March 31, 2019, the Company received $1,191,264 of funding from financing activities which was primarily from the funding and repayment of outstanding convertible notes.

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.

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.

28

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 March 31, 2020, 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 March 31, 2020.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

29

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. Alford has filed a counterclaim against the Company for amounts allegedly owed to him that the Company believes is entirely without merit. The litigation continues against Alford and certain other relief defendants but has been delayed due to Covid -19 restrictions.

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. This claim has been resolved and is no longer outstanding. 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.

On January 23, 2020, the Company issued 3,761,200 common shares for consulting services.

On January 23, 2020, the Company issued 3,475,000 common shares for consulting services including 1,000,000 common shares to a director of the Company.

On January 31, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $147,250 with a purchase price of $137,250 to Eagle Equities, LLC. The note is due January 31, 2021. The holder shall have the right from time to time, and at any time 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 prior twenty (20) trading day period ending on 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 January 31, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $177,200 with a purchase price of $164,200 to GS Capital Partners, LLC. The note is due January 31, 2021. The holder shall have the right from time to time, and at any time 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 40% of the lowest trading price of common stock during the prior twenty (20) trading day period ending on 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 February 7, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $147,250 with a purchase price of $137,250 to GS Capital Partners, LLC. The note is due February 7, 2021. The holder shall have the right from time to time, and at any time 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 prior twenty (20) trading day period ending on 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.

30

On February 14, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $83,000 with a purchase price of $83,000 to Power Up Lending Group Ltd. The note is due December 1, 2020. The holder shall have the right from time to time, and at any time during the period beginning one hundred eighty (180) 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 180 days from the issuance date at a price of 112% - 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 February 18, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $110,000 with a purchase price of $100,000 to BHP Capital NY Inc. The note is due February 18, 2021. 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 110% - 130% 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 February 18, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $110,000 with a purchase price of $100,000 to Jefferson Street Capital LLC. The note is due February 18, 2021. 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 110% - 130% 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 February 19, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $220,000 with a purchase price of $200,000 to Odyssey Capital, LLC. The note is due February 19, 2021. The holder shall have the right from time to time, and at any time 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 closing bid price of common stock during the prior fifteen (15) trading day period ending on 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. The default rate on the note is 24% per annum.

On February 24, 2020, the Company issued 10,000,000 common shares for consulting services including 6,000,000 common shares to three directors of the Company.

On February 27, 2020, the Company issued 1,313,822 common shares for the exercise of cashless warrants.

On March 17, 2020, the Company issued a 10% Convertible Promissory Note in the principal amount of $520,000 with a purchase price of $510,000 to GS Capital Partners, LLC. The note is due September 17, 2020. The holder shall have the right from time to time, and at any time 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 63% of the lowest trading price of common stock during the prior twenty (20) trading day period ending on the conversion date. The note may be prepaid until 180 days from the issuance date at a price of 115% - 128% of the face amount plus any accrued interest as of the date of prepayment. The default rate on the note is 24% per annum.

From January 1, 2020 through March 31, 2020, the Company issued 139,078,983 common shares for the conversions of $2,250,528 in principal of convertible notes and $163,709 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.

31

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 

None

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable

ITEM 5. OTHER INFORMATION

None

32

(a) (3) Exhibits

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

33

SIGNATURES

34