AMERICAN BATTERY TECHNOLOGY Co - Annual Report: 2022 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

Commission File number: 000-55088

(Exact name of registrant as specified in its charter)

(Former name, former address and former fiscal year, if changed since last report)

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 ☒ 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 ☒ 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” in 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 ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed fiscal year: 644,138,631 as of June 30, 2022

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 644,138,631 shares of common stock as of September 9, 2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K (this “Report”) contains forward-looking statements. The forward-looking statements are contained principally in the “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this Report. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates”, “believes”, “seeks”, “could”, “estimates”, “expects”, “intends”, “may”, “plans”, “potential”, “predicts”, “projects”, “should”, “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Such statements may include, but are not limited to, information related to: anticipated operating results; relationships with our customers; consumer demand; financial resources and condition; changes in revenues; changes in profitability; changes in accounting treatment; cost of sales; selling, general and administrative expenses; interest expense; the ability to produce the liquidity or enter into agreements to acquire the capital necessary to continue our operations and take advantage of opportunities; legal proceedings and claims. Also, forward-looking statements represent our estimates and assumptions only as of the date of this Report. You should read this Report and the documents that we reference and file or furnish as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

PRESENTATION OF INFORMATION

Except as otherwise indicated by the context, references in this Report to “ABTC”, “we”, “us”, “our” and the “Company” are to the combined business of American Battery Technology Company and its consolidated subsidiaries.

This Report includes our audited consolidated financial statements as of and for the fiscal years ended June 30, 2022 and June 30, 2021. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). All financial information in this Report is presented in US dollars, unless otherwise indicated, and should be read in conjunction with our audited consolidated financial statements and the notes thereto included in this Report.

TABLE OF CONTENTS

PART I

Item 1. Business

Introduction

American Battery Technology Company (“ABTC”, “the Company”, or “we”) is a technology development and commercialization company in the lithium-ion battery industry. The Company is working to increase the domestic US production of critical battery metals. To do so, we are engaged in (i) the exploration of new primary resources of battery metals, (ii) the development and commercialization of new technologies for the extraction and refining of these battery metals from primary resources, and (iii) the commercialization of an internally-developed integrated process for the recycling of lithium-ion batteries for the recovery of battery metals. Through this three-pronged approach we are working to both increase the domestic production of these battery metals through the acquisition and exploration of mining claims and to ensure that as these materials reach their end of lives that the constituent elemental metals are returned to the domestic manufacturing supply chain in a closed-loop fashion.

ABTC’s corporate headquarters are in Reno, Nevada, USA. The Company is constructing the ABTC Pilot Plant (“ABTC Pilot Plant” or “Pilot Plant”) for recycling lithium-ion batteries in Fernley, Nevada, USA, and its exploration office is located in Tonopah, Nevada, USA.

Company History

The Company was incorporated as Oroplata Resources, Inc. 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. 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. On August 12, 2021, the Company filed a Certificate of Amendment with the State of Nevada to change its name to American Battery Technology Company, which better aligns with the Company’s current business activities and future objectives. The Company has limited operating history and has not yet generated or realized revenues from its primary business activities.

Industry Overview

Lithium-ion batteries have become the rechargeable battery of choice in cell phones, computers, electric vehicles, and large scale electric stationary storage systems. Global production capacity of lithium-ion batteries was approximately 1,040 gigawatt hours per year (“GWh/yr”) at the end of 2021 and is forecasted to grow to approximately 6,700 GWh/yr by 2031, primarily driven by demand for electric vehicles. There are significant regulatory and social tailwinds driving demand growth for electric vehicles and large-format energy storage. This, in turn, is driving significant demand for battery metals and precursor materials, primarily lithium, cobalt, nickel, and manganese.

Lithium-ion batteries are designed in a variety of form-factors and chemistries. Current cell-level form-factors utilized are primarily cylindrical, prismatic, and pouch geometries. The most common battery cathode chemistries that have emerged are lithiated nickel cobalt aluminum oxide (“NCA”), lithiated nickel manganese cobalt oxide (“NMC”), lithiated cobalt oxide (“LCO”), and lithiated iron phosphate (“LFP”). The most common battery anode chemistries consist of graphite, silicon, and lithium metal. These chemistries are expected to evolve based on the development of new technologies and the availability, cost, and life-cycle environmental footprint of required minerals.

The current manufacturing supply chain for lithium-ion batteries is segmented and is organized into sub-industries that operate in series in a closed-loop fashion:

Battery material providers can be classified into two categories: primary producers who explore for and extract virgin resources, and secondary producers who extract minerals from scrap and end-of-life products for re-sale into the lithium-ion battery supply chain. ABTC intends to operate in the battery material supply segment, which is discussed in greater detail below.

Chemical refiners source battery-grade materials from suppliers to manufacture into cell components, including cathodes, anodes, electrolytes, and separators. The majority of global refining capacity is currently located in Asia.

Cell manufacturers source cell components and assemble those components into modules and packs, which are then sold to Original Equipment Manufacturers (“OEM” or “OEMs”). Cell manufacturing is currently concentrated in China, with the country accounting for over 75% of global cell manufacturing capacity.

The OEM segment is the final step to manufacturing an end-use product. OEM manufacturing capacity for electric vehicles, stationary storage, and consumer electronics is distributed globally.

Each segment of the lithium-ion battery supply chain has seen disparate quantities of investment, with those variations further pronounced with specific geographies. Investment in battery material suppliers, both primary and secondary, and chemical refining capacity, has been far outpaced by investments in cell manufacturing and end-use OEMs, with anticipated battery production capacity forecasted to be ~10x the forecasted capacity for precursor metal refining. This disconnect in available feedstock and refining capacity has caused significant imbalances in the global supply chain, with those imbalances even more pronounced within the USA. Further, while there is significant cell manufacturing and OEM manufacturing capacity in the USA, less than 1% of global battery materials needed to supply these facilities are sourced within the USA, resulting in a severe domestic capacity imbalance. This risk in the security and cost of supply has resulted in numerous issues for industries reliant on lithium-ion batteries and has the potential to setback the adoption of electric vehicles and renewable energy storage.

Overview of Battery Materials Supply

Supply of battery materials is dominated by primary production, with primary supply forecasted to account for ~75% or more of global production of each of the critical materials necessary for the manufacturing of lithium-ion batteries. Development of new sources of primary supply are typically subject to long lead times and high capital costs, putting further constraints on the supply of these materials. In addition, the majority of primary production is concentrated in high geopolitical risk locations. Each of the primary minerals discussed are traded on a number of global commodity exchanges and market pricing for each is readily available. Additional details on the primary development of the main critical materials are discussed below:

Lithium: Primary lithium is extracted from lithium brines, hard rock deposits, and lithium-bearing claystone resources. Lithium brine deposits are accumulations of saline groundwater that are enriched in dissolved lithium. These deposits can be found in salt flats (such as those in South America), geothermal deposits (such as the Salton Sea in California), and oil fields. Extraction of lithium from brines typically involves large-scale evaporation techniques, thus consuming large amounts of water and energy. Hard rock sources of lithium are typically found in spodumene pegmatite deposits and are mined using conventional mining and processing techniques. Extraction of lithium from claystone resources is a relatively new technique with various extraction technologies currently under development. Brine extraction currently accounts for the largest share of primary lithium production and is primarily sourced from South America.

Nickel: Primary nickel is mined from both surface and underground operations. Traditional processing techniques for nickel involve crushing, leaching, and floatation techniques. The primary competing source of demand for nickel is the steel industry, for both a steel alloy and in plating of stainless steel. Supply is currently dominated by production from Indonesia.

Cobalt: Cobalt is typically mined from open pit and underground operations using traditional mining and processing techniques. The majority of cobalt production is a by-product of copper or nickel production. The competing source of demand for cobalt is steel production where cobalt is utilized as a high-strength steel alloy. Concentration of supply from the Democratic Republic of Congo has given rise to significant environmental, social, and governance (“ESG”) concerns over the supply of primary cobalt resources.

Manganese: Manganese is typically mined from open pit surface mines using traditional mining and processing techniques. As with the previously mentioned minerals, the primary competing source of demand is steel production, where manganese is used as an alloy and to deoxidize steel. South Africa is the world’s largest producer of manganese, followed by Australia, and China.

Secondary supply of feedstock, or recycling, is a relatively new market segment that has seen limited investment compared to the other segments of the battery supply chain. Current recycling techniques can be classified into two categories: High temperature thermal processes and mechanical crushing/simple hydrometallurgy processes. Both techniques process the feedstock batteries into an intermediate compound, a metal matte or black mass, which is then processed through a refining process to extract the constituent metals. Both processes mainly focus on the recovery of nickel and cobalt. The majority of these operations are located in China, the USA, and Europe.

High temperature thermal processes currently account for the majority of current recycling operations. Batteries are placed into high-temperature furnaces and melted. A number of the key battery minerals are lost in the high temperature processing and smelting phase, including lithium, graphite, and aluminum. The remaining metal matte is then processed through a hydrometallurgical refining process. The high temperature processing can present challenges to refining the metal matte from this process into products that meet the high purity specifications required for battery cathode manufacturing. Further, the process is energy intensive and causes substantial air and water pollution.

The mechanical crushing/simple hydrometallurgy approach involves placing batteries into large shredding/grinding machines. The resulting shredded material is then processed to produce a black mass. This resulting back mass is then processed through a bulk hydrometallurgical process designed to remove impurities and extract the high-value minerals. The high level of impurities in the black mass resulting from the shredding/grinding process makes the recovery of battery grade materials challenging. Additionally, the solvents used in the extraction process have adverse environmental impacts and significantly increase the costs associated with the recycling process.

The black mass resulting from the recycling process has become a readily tradable commodity. However, the quality and value of the black mass is highly variable based on the chemistry of the battery (NCA, NMC, LCO, LFP, etc.) that is being processed and the amount of remaining impurities in the material. Metal refiners are developing processes to extract battery-grade materials from the various forms of black mass. The market, and thus pricing, for black mass is still developing.

The overall market and pricing for battery feedstock materials will be driven by the supply/demand balance of each commodity. Chemical refiners require specific purity and quality standards for the inputs for their manufacturing processes. Competition will be based on the ability of producers, both primary and secondary, to deliver reliable quantities of materials that meet the specifications required in the battery manufacturing process, while maintaining cash costs that are below the marginal cost of supply.

Our Business

Lithium-Ion Battery Recycling

ABTC has developed a universal lithium-ion battery recycling system that is able to recycle batteries of a wide range of form factors (packs, modules, cylindrical cells, prismatic cells, pouch cells, defect and intermediate waste cells, metal scraps, slurries, and powders) and of a wide range of cathode chemistries (lithiated cobalt oxide, lithiated nickel-cobalt-aluminum oxide, lithiated nickel-cobalt-manganese oxide, lithiated nickel-cobalt-manganese-aluminum oxide, lithiated nickel-oxide, and lithiated manganese-oxide) of various relative weighting of transition metals.

The ABTC recycling process is a two-phase process: an automated de-manufacturing process followed by a targeted chemical extraction train to separate the individual high-value metals. The Company intends to commission each phase in sequence. Phase 1, the automated de-manufacturing process, separates the components of battery feedstock material into its constituent components, including scrap metals and cathode and anode powders in the form of black mass filter cake. Scrap metals are then sold as byproducts under various offtake agreements or into the open scrap market. The black mass filter cake produced in this phase will also be sold under offtake contracts or into the open market. Upon commissioning of Phase 2, the black mass produced in Phase 1 will be fed into a proprietary chemical extraction train to extract lithium, nickel, cobalt, and manganese elemental metals and upgrade them to the battery cathode grade specifications demanded by high energy density cathode manufacturers. The commissioning of Phase 1 is expected to occur in the first half of calendar year 2023 and the commissioning of Phase 2 in the first half of calendar year 2024.

ABTC has leveraged the experience of certain members of its leadership team who worked on the design, construction, commissioning, and optimization of one of the largest lithium-ion battery manufacturing factories in the world. This experience has enabled the team to leverage their knowledge of the failure mechanisms that can cause battery components, cells, and modules to fail leading to the development an automated deconstruction process combined with a targeted hydrometallurgical, non-smelting process that deconstructs battery packs to modules, modules to cells, cells to subcell components, and then sorting and separating those subcell components in a strategic fashion. Because of our uniquely pioneered recycling process, we are able to realize greater net benefits than current conventional methods. These benefits include:

Additional details regarding the ABTC Pilot Plant are discussed in Item 2. Properties.

Industry Collaborations

In September 2019, ABTC was selected as the sole winner of the battery recycling portion of the Circularity Challenge hosted by BASF, Stanley Black & Decker, and Greentown Labs. BASF is one of the largest high-energy density cathode manufacturing companies in the USA and one of the largest global purchasers of lithium-ion battery metal materials. The challenge was developed to encourage new, innovative technologies for the recycling of large-format lithium-ion batteries, with an ultimate goal to establish a circular economy in the battery supply chain. Participants were asked to demonstrate their ability to recycle an end-of-life lithium-ion battery into battery grade minerals that could then be used for the manufacture of new lithium-ion batteries. As the winner, ABTC received seed funding, access to the Greentown Labs facilities (see Item 2. Properties), and the exploration of partnership agreements with the host companies. ABTC and BASF continue to explore several avenues of collaboration to accelerate the commercialization of ABTC’s lithium-ion battery recycling technology.

In October 2021, ABTC, as a co-grantee, received a competitively bid $2 million contract award from the US Advanced Battery Consortium (“USABC”). USABC is a subsidiary of the United States Council for Automotive Research LLC and enabled by a cooperative agreement with the U.S. Department of Energy. The member companies include General Motors, Ford Motor Company, and Stellantis NV. USABC’s mission is to develop electrochemical energy storage technologies that advance commercialization of next generation electrified vehicle applications. The objective of the contract award is for the commercial-scale development and demonstration of an integrated lithium-ion battery recycling system, the production of battery cathode grade metal products, the synthesis of high energy density active cathode material from these recycled battery metals by cathode producer and lithium-ion battery recycler BASF, and then the fabrication of large format automotive battery cells from these recycled materials and the testing of these cells against otherwise identical cells made from virgin sourced metals by cell technology developer C4V. The demonstration of the entire closed-loop battery manufacturing supply chain within a single project is meant to foster the establishment of a domestic low-cost and low-environmental impact battery recycling infrastructure.

Competition

ABTC expects to recover several types of byproducts as well as battery cathode grade lithium, nickel, cobalt, and manganese products through its recycling process and will compete with two categories of producers of these commodities: Competing recycling process and facilities and primary producers of the battery materials ABTC recovers as part of its recycling process.

Competing recycling processes and facilities are primarily located in the USA, Europe, and China and employ various techniques for extraction of the contained battery metals. In general, processes that employ high-temperature thermal processes or shredding/solvent extraction techniques focus on the recovery of nickel and cobalt, with limited ability to recover lithium, manganese, or other metals. ABTC’s process to extract each of the battery components enables the Company to extract additional value from the same amount of feedstock to enable low-cost and low-environmental operations.

Primary producers of lithium, nickel, cobalt, and manganese are distributed globally. Lithium production is largely located in the Americas, Australia, and Asia. Approximately two-thirds of cobalt production is sourced from the Democratic Republic of Congo. Nickel production is dominated by Indonesia, China, and Australia. Manganese production is concentrated in South Africa, Australia, and China.

The commodities and specialty chemicals that are ultimately used by cathode manufacturers are required to meet stringent specifications, whether that mineral is sourced from a primary or a secondary resource. Thus, the competition in these markets will be based on product quality and reliability of supply.

Primary Resource Development & Refining

ABTC has been designing and optimizing our internally developed sustainable lithium extraction process for the manufacturing of battery cathode grade lithium hydroxide from Nevada-based sedimentary claystone primary resources. We are currently conducting exploratory drilling programs on over 10,000 acres as part of our Tonopah Flats Lithium Exploration Project. (See Item 2. Properties for additional information).

ABTC is currently conducting geological mapping, sampling, geochemical analysis, and proprietary extraction trials to characterize the resource and to quantify the performance of the lithium extraction and manufacturing operations. In parallel with the current exploration activities, the Company is designing and constructing a multi-tonne per day pilot scale facility to process sedimentary resource from the project. This facility is intended to demonstrate the commercial viability of ABTC’s extraction and refining processes. The Company will continue to analyze the economic competitiveness of the project throughout the demonstration phases.

ABTC’s in-house developed extraction technologies do not require the harmful and inefficient evaporation ponds associated with conventional lithium-from-brine mining. Our extraction process utilizes a selective leaching process for the low-cost extraction of lithium from claystone sedimentary resources that allows for significantly lower consumption of acid, lower levels of contaminants in the generated leach liquor, and lower overall costs of production.

Industry Collaborations

In October 2021, ABTC, as the primary grantee, with DuPont Water Solutions as a sub-grantee, was awarded a $4.5 million competitive grant through the US Department of Energy’s Advanced Manufacturing Office, Critical Materials Innovation program to advance the research, development, and commercialization of its technologies for the manufacturing of battery grade lithium hydroxide from its lithium-bearing claystone deposits. The grant provided partial funding for the development of a multi-tonne per day processing facility to implement its lithium refining technology at pilot facility scale.

Competition

Primary lithium production is concentrated in the Americas, Australia, and Asia. The lithium that is ultimately used by cathode manufacturers is required to meet stringent specifications, whether that mineral is sourced from a primary or a secondary resource. Thus, the competition in these markets will be based on product quality and reliability of supply.

Item 1A. Risk Factors

Not required.

Item 1B. Unresolved Staff Comments

Not required.

Item 2. Properties

The Company is engaged in the construction of a pilot plant to recycle end-of-life lithium-ion batteries and in the exploration of its lithium-bearing claystone unpatented mining claims. To do so, the Company owns or holds long-term leases on multiple properties, all located within the USA, along with leases on laboratory facilities that support our research and development functions. In addition, the Company holds rights to certain assets, which facilitate the effective use of our properties. We believe that all of our properties and facilities are well maintained, effectively used, and are adequate to operate our business. Information regarding significant properties operated by us is outlined below.

Corporate Headquarters

The Company currently leases executive offices located at 100 Washington Street, Suite 100 in Reno, Nevada, USA.

Recycling Operations

ABTC Pilot Plant – Fernley, Nevada, USA

On August 14, 2020, the Company purchased approximately 12.44 acres of undeveloped industrial land in Fernley, Nevada in a Qualified Opportunity Zone (QOZ). The Company is currently constructing the ABTC Pilot Plant on this site; a first-of-its-kind lithium-ion battery recycling facility. The plant will be constructed in two phases: 1) construction of an approximately 30,000 square foot plant for the de-manufacturing of lithium-ion batteries and the production of scrap metals and black mass (in the form of filter cake products) and an approximately 20,000 square foot lab and office building, and 2) construction of an approximately 30,000 square foot facility that will process black mass produced in Phase 1 into battery-grade minerals for sale into the lithium-ion battery supply chain. The Pilot Plant is expected to process 20,000 metric tonnes of battery feedstock annually.

As of June 30, 2022, the Company has invested approximately $10.8 million in capital expenses for the construction of Phase 1, excluding the acquisition price of the land. Construction work completed to date includes full clearing/grubbing of the site, pouring of the Phase 1 concrete foundation, construction of the Phase 1 core and shell, and completion of the Phase 2 concrete foundation. Additional designs for off-site improvements and other required elements are complete and pending construction permit review. The Company expects construction portion of Phase 1 to be substantially complete by January 2023.

ABTC Feedstock Storage – Fernley, Nevada, USA

On July 23, 2021, the Company purchased 11.55 acres of industrial-zoned land in Fernley, Nevada. The Company intends to construct a supplemental storage facility for recycled battery feedstock on this site. The property is adjacent to the Pilot Plant operations. The City of Fernley has approved the City Use Permit for the site. The Company is currently progressing on the design of the facility, with construction expected to be completed in 2023.

Land for Supplemental Storage – McCarran, Nevada, USA

On June 28, 2021, the Company purchased approximately 13.87 acres of industrial-zoned land in McCarran, Nevada. The Company intends to construct a supplemental storage facility to store feedstock on this site. Currently the Company leases the land to a third-party and has included the lease income in other income for the fiscal year ended June 30, 2022.

Water Rights

To date, the Company has purchased water rights in the City of Fernley, Nevada for $3.9 million. The water rights will be used to ensure the Company’s lithium-ion battery recycling plant will have adequate water to operate at full capacity once construction is complete. These water rights have an indefinite life upon assignment to the property through use of a will-serve.

Laboratory Facilities

To support the development of both its lithium-ion battery recycling and battery metal extraction technologies, the Company operates out of two laboratory facilities: The Center for Applied Research at the University of Nevada, Reno in Reno, Nevada, USA and Greentown Labs in Somerville, Massachusetts, USA. The Company has developed long-standing partnerships with the operators of these facilities and all leases are in good standing. The Company is currently in the design phase to construct primary lab facilities at the Pilot Plant in Fernley, Nevada, USA.

Nevada Center for Applied Research - Reno, Nevada, USA

The Company leases laboratory and office space from the University of Nevada, Reno. As of June 30, 2022, the Company occupies five laboratories totaling over 3,000 square feet. All laboratory and office space is housed in the Nevada Center for Applied Research (NCAR). The laboratory space is used to advance ABTC’s in-house, first-of-kind developed battery metals extraction technologies for both the recycling of spent batteries and for the manufacturing of primary battery metals from domestic-US based resources.

Greentown Labs - Somerville, Massachusetts, USA

The Company occupies office and wet chemistry laboratory space in Greentown Labs, which is the largest clean technology incubator in North America. The Company has access to both desk and lab space at the facility. The Company was afforded this opportunity by winning the Greentown Labs Circularity Challenge, an accelerator program for start-ups developed in partnership with BASF, one of the world’s leading chemical companies. The program intends to advance innovative ideas to disrupt the plastics, energy storage, and recycling value chains to enable a circular economy. The Company is utilizing Greentown Labs to advance their metal extraction techniques and lithium-ion battery recycling technologies.

Tonopah Flats Lithium Exploration Project

ABTC currently holds the rights to, or the rights to acquire, 517 Unpatented Lode Claims near Tonopah, Nevada, USA. In addition, the Company maintains an office to oversee these claims and the associated activity in Tonopah, Nevada, USA.

On September 1, 2021, the ABTC signed an exploration agreement with 1317038 Nevada Ltd which gave the Company exclusive access to explore 305 Unpatented Lode Claims in the Tonopah Mining District (“Tonopah Flats”) in Nye and Esmeralda Counties, Nevada, USA. The agreement gave ABTC the right to explore the claims for critical battery materials. The agreement also gave the Company the option to purchase the Claims upon expiration of the exploration agreement. The Company completed its preliminary surface sampling of the property in February 2022 and proceeded with an exploration drilling program. In July 2022, ABTC exercised the option to acquire the rights to those claims.

In addition to signing the exploration agreement mentioned, above, ABTC also staked additional claims in the region surrounding the claims included in the agreement. In total, the company holds approximately 10,340 acres in the region that it intends to explore for economic lithium deposits.

The Company commenced a surface sampling program on the claims in early 2022. After confirming the presence of lithium, ABTC completed an initial 16-hole exploration drill program. Based on the assay results from this program, the Company intends to continue the exploration of the deposit, including an additional drill program to advance these claims towards an inferred resource.

Geology, Infrastructure, and Permitting

The area where ABTC Tonopah Flats Lithium Exploration Project is located is known for its unique sedimentary claystone resources. ABTC is conducting geological mapping, sampling, geochemical analysis, and proprietary extraction trials to characterize these resources and to quantify the performance of the lithium extraction and manufacturing operations.

The project claims are located on land that is administered by the Bureau of Land Management (‘BLM’). ABTC will retain the surface and mineral rights to the claims as long as the claims remain in good standing with the BLM through the payment of annual maintenance fees.

The project is located near the town of Tonopah, Nevada, USA and is intersected by Highway 6. The project has other necessary infrastructure nearby including access to power, additional road access, and water. In addition, there is an available workforce in Tonopah and the surrounding area.

A map of the project is included in Figure 1 below.

Figure 1: Tonopah Flats Lithium Exploration Project

Other Mining Claims

As of June 30, 2022, the Company held 364 placer mining claims in Railroad Valley in Nye County, Nevada, USA. The Company has conducted various sampling programs on the claims and has determined that no economically recoverable quantities of lithium or other critical battery materials are present. The Company also owns a 120-acre parcel of private property with water rights, near the town of Currant, Nevada near Railroad Valley. The Company does not intend to renew these claims with the BLM as it intends to cease operations in this region. ABTC also holds 16 Placer mining claims in the Panamint mining district of California. The Company is currently evaluating strategic options related to these claims.

Item 3. Legal Proceedings

In June 2022, the Company settled an outstanding legal matter with a former CEO of the Company, Craig Alford, which resulted in the cancellation of previously issued shares.

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 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Market Information

Our shares of common stock are eligible for quotation on “OTCQB” operated by the OTC Markets Group under the symbol “ABML.”

On September 9, 2022, the closing price of our Common Stock as reported by the OTC Markets Group was $0.67 per share. 

Holders

As of August 29, 2022, we have approximately 125 shareholders of record, including our directors and officers. One such holder is Cede & Co., a nominee for Depository Trust Company, or DTC. Shares of common stock that are held by financial institutions as nominees for beneficial owners are deposited into participant accounts at DTC and are considered to be held of record by Cede & Co. as one stockholder.

Dividends

We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not intend to pay cash dividends on our common stock for the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our Board of Directors. The Nevada Revised Statutes, however, prohibits us from declaring dividends where, after giving effect to the distribution of the dividend:

Stock Options, Warrants and Rights

As of June 30, 2022, ABTC has 40,310,611 potentially issuable shares of common stock from share purchase warrants and restricted share units, including:

Penny Stock 

Our common stock is subject to the provisions of Section 15(g) of the Exchange Act and Rule 15g-9 thereunder, commonly referred to as the “penny stock rule”. Section 15(g) sets forth certain requirements for transactions in penny stock, and Rule 15g-9(d) incorporates the definition of “penny stock” that is found in Rule 3a51-1 of the Exchange Act. The SEC generally defines a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. We are subject to the SEC’s penny stock rules. Since our common stock is deemed to be penny stock, trading in the shares of our common stock is subject to additional sales practice requirements on broker dealers who sell penny stock to persons other than established customers and accredited investors. “Accredited investors” are generally persons with assets more than $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse. For transactions covered by these rules, broker dealers must make a special suitability determination for the purchase of securities and must have the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document prepared by the SEC relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information for penny stocks held in an account and information to the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealer to trade and/or maintain a market in our common stock and may affect the ability of our stockholders to sell their shares.

Securities Authorized for Issuance under Equity Compensation Plans

The Company has 60,000,000 shares of common stock authorized to issue under its Employee Retention Plan, and has issued 1,891,930 shares as of June 30, 2022.

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and “Affiliated Purchasers”

We did not purchase any shares of our common stock or other securities during the year ended June 30, 2022.

ITEM 6. Selected Financial Data

Not required.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

Forward-Looking Statements

You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Form 10-K. 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-K.

Overview

ABTC is a startup company in the lithium-ion battery industry that is working to increase the domestic US production of battery materials, such as lithium, nickel, cobalt and manganese through its engagement in the exploration of new primary resources of battery metals, in the development and commercialization of new technologies for the extraction of these battery metals from primary resources, and in the commercialization of an internally developed integrated process for the recycling of lithium-ion batteries. Through this three-pronged approach ABTC is working to both increase the domestic production of these battery materials, and to ensure that as these materials reach their end of lives that the constituent elemental battery metals are returned to the domestic manufacturing supply chain in a closed-loop fashion.

To implement this business strategy, the Company is currently constructing its first integrated lithium-ion battery recycling facility, which will take in waste and end-of-life battery materials from the electric vehicle, stationary storage, and consumer electronics industries. The construction, commissioning, and operations of this facility are of the highest priority to the company, and as such it has significantly increased the resources devoted to its execution including the further internal hiring of technical staff, expansion of laboratory facilities, and purchasing of equipment. The Company has been awarded a competitively bid grant from the US Advanced Battery Consortium to accelerate the development and demonstration of this pre-commercial scale integrated lithium-ion battery recycling facility.

Additionally, the Company is accelerating the demonstration and commercialization of its internally developed low-cost and low-environmental impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada-based sedimentary claystone resources. The Company has been awarded a grant cooperative agreement from the US Department of Energy Advanced Manufacturing Office through the Critical Materials Innovation program to support the construction and operation of a multi-ton per day integrated continuous demonstration system to support the scale-up and commercialization of these technologies.

2022 Financial Highlights:

Components of Statements of Operations

Expenses

The Company recognized $33.7 million of operating expenses compared to $37.7 million of operating expenses during the fiscal years ended June 30, 2022 and 2021, respectively.

Research and development expenses for the fiscal year include salaries for laboratory staff, laboratory costs, and lease expenses for the laboratory space occupied at NCAR at the University of Nevada, Reno. The Company incurred $1.1 million and $0.9 million in research and development expenses for the fiscal years ended June 30, 2022 and June 30, 2021, respectively. The Company was awarded two grants in the fiscal year ended June 30, 2022. Income received from these grants was $0.1 million for the fiscal year ended June 30, 2022. The Company records any grant revenue as an offset to research and development expenses.

General and administrative expenses primarily consist of legal, office, consulting, salaries, and benefits expense. The Company recognized general and administrative expenses of $31.7 and $36.3 million for the fiscal years ended June 30, 2022 and 2021, respectively. Included within general and administrative expenses is a non-cash expense related to shares issued for professional services of $20.4 million and $29.4 million during the fiscal years ended June 30, 2022 and 2021, respectively. The Company has significantly reduced the use of shares for professional services to non-employees therefore, we expect to see a reduction in these expenses beginning July 1, 2022.

Exploration costs consist primarily of expenses related to the salaries, leasing and drill operations primarily associated with the exploration of new primary resources of battery metals. The Company recognized exploration costs of $0.9 million and $0.5 million for the fiscal years ended June 30, 2022 and 2021, respectively.

The Company recorded other income of $0.2 million during the fiscal year ended June 30, 2022 compared to other expenses of $4.0 million during the fiscal year ended June 30, 2021. The Company recognized a gain of $153,393 related to the sale of mining claims in Railroad Valley, NV during the fiscal year ended June 30, 2022.

Net Loss

During the fiscal year ended June 30, 2022, the Company incurred a net loss of $33.5 million or $0.05 loss per share compared to a net loss of $41.8 million or $0.08 loss per share during the fiscal year ended June 30, 2021.

Liquidity and Capital Resources

At June 30, 2022, the Company had cash of $29.0 million and total assets of $52.9 million compared to cash of $12.8 million and total assets of $21.3 million at June 30, 2021. The increase in cash is due to the Company having received net proceeds of $40.9 million from private placements and share purchases of common stock and $0.9 million of proceeds from exercises of share purchase warrants, partially offset by higher acquisition costs of property and equipment and intangible assets. The increase in total assets was due to the increase in cash of $16.1 million and increase in property and equipment and intangible assets of $13.4 million relating to additional acquisitions of land, construction in progress, equipment and water rights which will be used for the Company’s future pilot plant operations.

Liquidity and Capital Resources (continued)

The Company had total current liabilities of $3.1 million at June 30, 2022, compared to $1.8 million at June 30, 2021. The increase in current liabilities is due to an increase in accounts payable and accrued liabilities based on increased expenses in investing activities, an increase in accounts payable and accrued liabilities and day-to-day operating expenses.

As of June 30, 2022, the Company had working capital of $26.8 million compared to a working capital of $12.3 million at June 30, 2021. The increase in working capital was primarily attributed to the inflow of financing activity during the fiscal year ended June 30, 2022.

Cash Flows

Cash from Operating Activities.

During the fiscal year ended June 30, 2022, the Company used $10.2 million of cash for operating activities as compared to $7.8 million during the fiscal year ended June 30, 2021. The increase in the use of cash for operating activities was due to an increase in operating activities in the current period including an increase in a number of expenses including, employment and recruiting, research and development, exploration and reclamation, and professional fees and services.

Cash from Investing Activities

During the fiscal year ended June 30, 2022, the Company used $15.1 million on the construction, procurement of equipment, and water rights necessary to construct, commission, and operate its lithium-ion battery recycling Pilot Plant. This is in comparison to the cash used of $7.1 million for the fiscal year ended June 30, 2021. The increase in investing activities is due to the Company continuing to construct its Pilot Plant where necessary demonstrations are to occur. The Company also continues its acquisition of water rights and land in the Northern Nevada region to support further operations of the Company. The Company expects to see additional increases in investing activities as these projects progress to meet management expectations.

Cash from Financing Activities

During the fiscal year ended June 30, 2022, the Company had net cash provided by financing activities of $41.4 million compared to $26.9 million for the fiscal year ended June 30, 2021.

On September 27, 2021, the Company entered into a securities purchase agreement for the purchase and sale of an aggregate of 25,389,611 shares of the Company’s common stock and warrants to purchase an aggregate of up to 25,389,611 shares of common stock in a registered direct offering at a combined purchase price of $1.54 per share and warrant, for net proceeds to the Company of $36.9 million. The warrants are immediately exercisable and may be exercised at any time until September 29, 2026, at an exercise price of $1.75 per warrant.

The Company engaged a placement agent in connection with the offering and agreed to pay the placement agent a cash fee of 5% of the gross proceeds the Company receives in the offering. In addition, the Company agreed to issue to the placement agent warrants to purchase shares equal to 5% of the gross proceeds sold under the securities purchase agreement, or warrants to purchase up to an aggregate of 1,955,000 shares. The placement agent warrants generally will have the same terms as the investor warrants, except they will expire September 29, 2024, at an exercise price of $1.54 per warrant.

On August 5, 2021, the Company elected to exercise its rights pursuant to the Purchase Agreement dated April 2, 2021, to issue 3,000,000 shares for net proceeds to the Company of $4.0 million.

During the fiscal year ended June 30, 2022, the Company received $1.0 million of proceeds from the exercise of share purchase warrants.

Off-Balance Sheet Arrangements

As of June 30, 2022, we had no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenses or capital resources that are material to stockholders.

RESULTS OF OPERATIONS

Working Capital

Cash Flows

For the fiscal years ended June 30:

Future Financings

We will continue to rely on equity sales of our common shares to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

Item 7a. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 8. Financial Statements and Supplementary Data.

AMERICAN BATTERY TECHNOLOGY COMPANY

Consolidated Financial Statements

For the fiscal year ended June 30, 2022, and June 30, 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

American Battery Technology Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of American Battery Technology Company (the “Company”) as of June 30, 2022 and 2021, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor since 2021.

Costa Mesa, CA

September 12, 2022  

AMERICAN BATTERY TECHNOLOGY COMPANY

Consolidated Balance Sheets

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

AMERICAN BATTERY TECHNOLOGY COMPANY

Consolidated Statements of Operations

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

AMERICAN BATTERY TECHNOLOGY COMPANY

Consolidated Statements of Stockholders’ Equity

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

AMERICAN BATTERY TECHNOLOGY COMPANY
Consolidated Statements of Stockholders’ Equity (Deficit)