Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

or

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

For the transition period from to

Commission File number: 001-41811

AMERICAN BATTERY TECHNOLOGY COMPANY

(Exact name of registrant as specified in its charter)

Nevada		33-1227980
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 Washington Street, Suite 100, Reno, NV 89503

(Address of principal executive offices, including zip code)

(775) 473-4744

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common stock, $0.001 par value		ABAT		The NasdaqStock Market LLC

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter quarter that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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 quarter 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 the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	☐	Accelerated filer	☐
	Non-accelerated filer	☒	Smaller reporting company	☒
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition quarter for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares of common stock outstanding as of November 8, 2024 was 74,521,669.

American Battery Technology Company and Subsidiaries

Index to Form 10-Q

Part I - Financial Information (unaudited)
Item 1	Unaudited Financial Statements	3
	Condensed Consolidated Balance Sheet as of September 30, 2024 and June 30, 2024	3
	Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2024 and 2023	4
	Condensed Consolidated Statement of Stockholders' Equity for Three Months Ended September 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4	Controls and Procedures	24
Part II. Other Information
Item 1	Legal Proceedings	25
Item 1A	Risk Factors	25
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3	Defaults Upon Senior Securities	35
Item 4	Mine Safety Disclosure	35
Item 5	Other Information	35
Item 6	Exhibits	36
Signatures		37

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN BATTERY TECHNOLOGY COMPANY

Unaudited Condensed Consolidated Balance Sheets

		September 30, 2024			June 30, 2024
ASSETS
Cash		$	5,769,036			$	7,001,786
Accounts receivable			174,499				228,499
Inventory (Note 4)			255,897				154,320
Grants receivable (Note 5)			126,856				191,522
Prepaid expenses and deposits			645,675				1,813,050
Subscription receivable (Note 13)			102,743				608,333
Assets held-for-sale (Note 7)			8,408,538				8,408,538
Total current assets			15,483,244				18,406,048
Property, plant and equipment, net (Note 7)			45,420,627				46,314,966
Mining properties (Note 8)			8,392,977				8,392,977
Intangible assets (Note 9)			4,519,038				4,519,038
Right-of-use asset (Note 12)			16,842				42,103
Total assets		$	73,832,728			$	77,675,132
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities (Note 10)		$	7,403,557			$	9,350,937
Notes payable, current (Note 11)			2,560,302				6,447,361
Total current liabilities			9,963,859				15,798,298
Equity compensation liability (Note 15)			467,191				409,194
Long-term liabilities (Note 6)			4,057,082				-
Total liabilities			14,488,132				16,207,492
Commitments and contingencies (Note 17)			-				-
Temporary equity:
Series D Preferred Stock Authorized: 5preferred shares, par value of $0.001per share; Issued and outstanding: 5and nilpreferred shares as of September 30, 2024 and June 30, 2024.			100				-
Stockholders' Equity:
Series A Preferred Stock Authorized: 33,334preferred shares, par value of $0.001per share; Issued and outstanding: nilpreferred shares as of September 30, 2024 and June 30, 2024.			-				-
Series B Preferred Stock Authorized: 133,334preferred shares, par value of $10.00per share; Issued and outstanding: nilpreferred shares as of September 30, 2024 and June 30, 2024.			-				-
Series C Preferred Stock Authorized: 66,667preferred shares, par value of $10.00per share; Issued and outstanding: nilpreferred shares as of September 30, 2024 and June 30, 2024.			-				-
Common Stock Authorized: 80,000,000common shares, par value of $0.001per share; Issued and outstanding: 73,342,037and 64,061,763common shares as of September 30, 2024, and June 30, 2024, respectively			73,339				64,059
Additional paid-in capital			285,607,121				275,589,383
Common stock issuable (receivable)			(1,313,063	)			(857,470	)
Accumulated deficit			(225,022,901	)			(213,328,332	)
Total stockholders' equity			59,344,596				61,467,640
Total liabilities and stockholders' equity		$	73,832,728			$	77,675,132

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERICAN BATTERY TECHNOLOGY COMPANY

Unaudited Condensed Consolidated Statements of Operations

		Three months ended September 30, 2024			Three months ended September 30, 2023
Revenue		$	201,960			$	-
Cost of goods sold			2,542,641				-
Gross loss			(2,340,681	)			-
Expenses:
General and administrative		$	5,009,841			$	3,053,998
Research and development			2,032,135				3,613,852
Exploration costs			420,507				1,349,920
Total operating expenses			7,462,483				8,017,770
Net loss before other income (expense)			(9,803,164	)			(8,017,770	)
Other income (expense)
Interest expense			(4,575	)			(134,989	)
Amortization and accretion of financing costs			(1,172,349	)			(732,896	)
Unrealized gain (loss) on investment			-				(6,322	)
Change in fair value of derivative liability			705,184				-
Loss on debt extinguishment			(675,648	)			-
Loss on private placement			(567,161	)			-
Change in fair value of liability-classified equity-linked contracts			(241,288	)			-
Other income			64,432				-
Total other expense			(1,891,405	)			(874,207	)
Net loss		$	(11,694,569	)		$	(8,891,977	)
Deemed dividend on warrant modifications			(85,637	)			-
Net loss available to common stockholders		$	(11,780,206	)		$	(8,891,977	)
Net loss per share, basic and diluted		$	(0.17	)		$	(0.19	)
Weighted average shares outstanding			69,519,432				46,129,507

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERICAN BATTERY TECHNOLOGY COMPANY

Unaudited Condensed Consolidated Statements of Stockholders' Equity

Three months ended September 30, 2024:

		Preferred Stock			Common Stock			Additional Paid-In			Common Stock			Accumulated
		Shares			Amount			Shares			Amount			Capital			Issuable			Deficit			Total
Balance, June 30, 2024			-				-				64,061,763			$	64,059			$	275,589,383				(857,470	)		$	(213,328,332	)		$	61,467,640
Shares issued upon vesting of share-based awards			-				-				353,221				353				(353	)			-				-				-
Stock-based compensation expense			-				-				-				-				2,420,747				-				-				2,420,847
Shares issued pursuant to share purchase agreement, net of issuance costs			-				-				5,938,786				5,939				6,218,486				102,743				-				6,327,168
Settlement of receivable pursuant to share purchase agreement			-				-				487,838				488				607,848				(608,336	)			-				-
Reclassification of equity-linked contracts to liabilities			-				-				-				-				(502,627	)			-				-				(502,627	)
Issuance of Series D Redeemable Preferred shares			5				100				-				-				-				-				-				100
Issuance of common shares and warrants pursuant to subscription agreements			-				-				1,774,213				1,774				533,623				-				-				535,397
Shares issued pursuant to debt extinguishment			-				-				726,216				726				740,014				-				-				740,740
Settlement of receivable pursuant to share purchase agreement (Tysadco)			-				-				-				-				-				50,000				-				50,000
Net loss for the period			-				-				-				-				-				-				(11,694,569	)			(11,694,569	)
Balance, September 30, 2024			5			$	100				73,342,037			$	73,339			$	285,607,121			$	(1,313,063	)		$	(225,022,901	)		$	59,344,596

Three months ended September 30, 2023:

		Preferred Stock			Common Shares			Additional Paid-In			Common Stock Issuable			Accumulated
		Shares			Amount			Number			Amount			Capital			(receivable)			Deficit			Total
Balance, June 30, 2023			-				-				45,888,131			$	45,887			$	223,134,798			$	(1,484,693	)		$	(160,826,508	)		$	60,869,484
Shares issued for professional services			-				-				1,326				1				15,174				(15,307	)			-				(132	)
Vesting of share-based awards			-				-				132,142				135				(135	)			-				-				-
Stock-based compensation expense			-				-				-				-				3,369,269				-				-				3,369,269
Shares issues pursuant to rounding of reverse stock split			-				-				59,164				59				(59	)			-				-				-
Shares reclaimed pursuant to asset acquisition			-				-				(128,206	)			(128	)			(1,255,650	)			1,500,000				-				244,222
Shares issued pursuant to a share purchase agreement, net of issuance costs			-				-				306,252				306				3,009,694				-				-				3,010,000
Shares issued pursuant to warrant expense			-				-				45,545				46				(46	)			37,500				-				37,500
Net loss for the period			-				-				-				-				-				-				(8,891,977	)			(8,891,977	)
Balance, September 30, 2023			-				-				46,304,354			$	46,306			$	228,273,045			$	37,500			$	(169,718,485	)		$	58,638,366

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERICAN BATTERY TECHNOLOGY COMPANY

Unaudited Condensed Consolidated Statements of Cash Flows

		Three months ended. September 30, 2024			Three months ended. September 30, 2023
Cash Flows From Operating Activities:
Net loss		$	(11,694,569	)		$	(8,891,977	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense			1,264,138				36,502
Accretion of financing costs			1,172,349				282,624
Amortization of right-of-use asset			25,261				25,264
Unrealized loss on investment			-				6,322
Stock-based compensation			3,171,116				3,369,269
Shares issued for professional services			-				(132	)
Change in fair value of derivative liability			(705,184	)			-
Change in fair value of conversion option			250,304				-
Change in fair value of liability-classified equity-linked contracts			(9,016	)			-
Loss on extinguishment of debt			675,648				-
Loss on private placement			567,161
Changes in operating assets and liabilities:
Accounts receivable			54,000				-
Inventory			(101,577	)			(246,571	)
Grants receivable			64,666				(270,783	)
Prepaid expenses and deposits			1,167,375				788,140
Other current assets			-				(242,850	)
Accounts payable and accrued liabilities			(1,454,022	)			385,208
Net Cash Used in Operating Activities			(5,552,350	)			(4,758,984	)
Cash Flows From Investing Activities:
Other acquisition deposits			-				(693,667	)
Acquisition of property, equipment, and water rights			(863,158	)			(6,477,131	)
Purchase of water rights/intangible assets			-				(101,300	)
Net Cash Used in Investing Activities			(863,158	)			(7,272,098	)
Cash Flows From Financing Activities:
Proceeds from issuance of common shares through At-The-Market offering			6,882,758				-
Proceeds from subscription agreements (Note 13)			1,900,000				-
Proceeds from exercise of share purchase warrants			-				37,500
Proceeds from notes payable, net of issuance costs			-				20,472,496
Principal paid on notes payable			(3,600,000	)			(7,800,000	)
Proceeds from share purchase agreement, net of issuance costs						2,380,050
Net Cash Provided by Financing Activities			5,182,758				15,090,046
Increase (decrease) in Cash			(1,232,750	)			3,058,964
Cash - Beginning of Period			7,001,786				2,320,149
Cash - End of Period		$	5,769,036			$	5,379,113
Supplemental disclosures (Note 16)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Nature of Operations

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

The Company was incorporated under the laws of the State of Nevada on October 6, 2011, for the purpose of acquiring rights to mineral properties with the eventual objective of being a producing mineral company. We have a limited operating history and generated our initial revenue in the fourth quarter of fiscal 2024. Our principal executive offices are located at 100 Washington Ave., Suite 100, Reno, Nevada 89503.

2. Liquidity and Going Concern

During the three months ended September 30, 2024, the Company incurred a net loss of $11.8million and used cash of $5.6million for operating activities. At September 30, 2024, the Company has a cash balance of $5.8million and an accumulated deficit of $225.0million.

The continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain debt or equity financing. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain them on favorable terms, which could limit its operations. Any such financing activities are subject to market conditions. These uncertainties cause substantial doubt to exist as to the Company's ability to continue as a going concern for 12 months from issuance of these financial statements. These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.

The going concern assessment excludes the Company's at-the-market ("ATM") offering (Note 13), which could provide sources of liquidity.

Based on our current operating plan, unless we generate income from the operations of our facilities or raise additional capital (debt or equity), it is possible that we will be unable to maintain our financial covenants under our existing Note agreement (Note 11). If such covenant violations are not waived by the Note holder, it would result in an event of default, causing an acceleration of the outstanding balances. If we do raise additional capital through public or private equity offerings, as opposed to debt or additional Note issuances, the ownership interest of our existing stockholders may be diluted.

3. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and pursuant to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the U. S. Securities and Exchange Commission ("SEC") and on the same basis as the Company prepares its annual audited consolidated financial statements.

The condensed consolidated balance sheet at September 30, 2024, and the condensed consolidated statements of operations, comprehensive income (loss), and changes in stockholders' equity, and cash flows for the three months ended September 30, 2024 and 2023 are unaudited, but include all adjustments, consisting of normal recurring adjustments the Company considers necessary for a fair presentation of the financial position, operating results, and cash flows for the periods presented. The results for the three months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending June 30, 2025 or for any future interim period. The condensed consolidated balance sheet at June 30, 2024 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2024 and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2024 as filed with the SEC on September 23, 2024. The Company's consolidated subsidiaries consist of its wholly owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL (dissolved), LithiumOre Corporation (formerly Lithortech Resources Inc), ABMC AG, LLC (dissolved) and Aqua Metals Transfer LLC.

The accompanying condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

As disclosed in the Company's FY 2024 Form 10-K, subsequent to the issuance of the Company's fiscal year 2023 consolidated financial statements, the Company identified errors in the application of Accounting Standards Codification ("ASC") 710, "Compensation-General," and ASC 718, "Compensation-Stock Compensation," related to expense recognition for cash and equity awards that are subject to both service and performance conditions. ASC 710 and ASC 718 require recognition of compensation cost once achievement of the performance condition becomes probable as the requisite service is provided. Historically, the Company did not recognize compensation cost for certain cash and equity awards until the performance conditions in the form of milestones were achieved, and for the Company's common share warrant performance-based awards, no compensation cost had previously been recognized when the performance conditions either became probable of achievement or were achieved. As the common share warrant and restricted stock unit ("RSU") performance-based awards to executive officers and key employees are granted with a fixed dollar value and settled in a variable number of common share warrants or RSUs, these awards are liability-classified until the number of common share warrants or RSUs are fixed, and the corresponding compensation cost should be recorded to current or long-term liabilities, or additional paid-in capital, depending on expected timing of settlement of the award, once the performance conditions become probable of achievement.

The correction of this error resulted in an increase in compensation cost of $1.6million as of and for the quarter ended September 30, 2023. As certain of these awards are liability-classified, the correction of this error resulted in an increase of $0.2million in accounts payable and accrued liabilities for the current portion of the awards, and an increase of $1.4million in additional paid-in capital for the awards where the number of common share warrants or RSUs are fixed as of September 30, 2023.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The Company also identified an error in application of ASC 815, "Derivatives and Hedging," related to the initial and subsequent recognition of a freestanding call option in the Company's convertible notes that does not qualify for equity classification. ASC 815 requires bifurcation of the freestanding call option with subsequent changes in the fair value of the bifurcated derivative to be recorded in earnings. At issuance of the convertible notes, the Company should have recognized a derivative liability and a corresponding discount on the convertible notes resulting from bifurcation of the derivative, with subsequent changes in the fair value of the derivative liability and accretion of the discount recorded in earnings.

The correction of this error resulted in an increase in amortization and accretion of financing costs expense of less than $0.1million for the quarter ended September 30, 2023.

The Company has evaluated the effects of the correction detailed in the tables below on the previously issued consolidated financial statements, individually and in the aggregate, in accordance with the guidance in ASC 250, "Accounting Changes and Error Corrections." The Company has concluded such corrections to be immaterial to its previously issued consolidated financial statements. While management believes the effect of the error is immaterial to the Company's previously issued consolidated financial statements as of and for the quarter ended September 30. 2023, the financial statement line items impacted by this error have been corrected.

The tables below reflect the sections of the Company's consolidated financial statements that were impacted by the error.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

		Three months ended September 30, 2023
		As Reported			Adjustments			As Corrected
Operating expenses
General and administrative		$	2,948,846			$	105,152			$	3,053,998
Research and development			2,155,314				1,458,538				3,613,852
Exploration			1,279,782				70,138				1,349,920
Total operating expenses			6,383,942				1,633,828				8,017,770
Net loss before other income (expense)		$	(6,383,942	)		$	(1,633,828	)		$	(8,017,770	)
Other income (expense)
Amortization and accretion of financing costs		$	(706,731	)		$	(26,165	)		$	(732,896	)
Total other income (expense)			(848,042	)			(26,165	)			(874,207	)
Net loss attributable to common stockholders		$	(7,231,985	)		$	(1,659,992	)		$	(8,891,977	)
Net loss per share, basic and diluted		$	(0.16	)		$	(0.03	)		$	(0.19	)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

		Three months ended September 30, 2023
		As Reported			Adjustments			As Corrected
Stockholders' Equity
Additional paid-in capital:
Stock-based compensation expense			1,921,442				1,447,827				3,369,269
Balance, September 30, 2023		$	226,317,285			$	1,955,760			$	228,273,045
Accumulated deficit
Net loss for period			(7,231,985	)			(1,659,992	)			(8,891,977	)
Balance, September 30, 2023		$	(167,205,560	)		$	(2,512,925	)		$	(169,718,485	)
Total stockholders' equity
Balance, September 30, 2023		$	59,195,532			$	(557,166	)		$	58,638,366

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		Three months ended September 30, 2023
		As Reported			Adjustments			As Corrected
Operating Activities
Net loss attributable to stockholders		$	(7,231,985	)		$	(1,659,992	)		$	(8,891,977	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and accretion expense		$	256,459			$	26,165			$	282,624
Stock-based compensation			1,921,442				1,447,827				3,369,269
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities		$	228,071			$	186,000			$	414,071
Net cash used in operating activities		$	(4,758,984	)		$	-			$	(4,758,984	)

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company regularly evaluates estimates and assumptions related to the fair value of stock-based compensation, valuation and recoverability of long-lived assets and intangible assets subject to impairment testing, and deferred income tax asset valuation allowances.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2024 and June 30, 2024.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities that the reporting entity can assess at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability which include the Company's assumptions regarding the data market participants would use in pricing the asset or liability based on the best information available under the circumstances.

The carrying values of the Company's cash, accounts receivable, prepaid expenses and deposits, notes payable, accounts payable and accrued liabilities approximate fair value due to their short maturities.

The Company's recurring fair value measurements include the valuation of the derivative liabilities for the bifurcated notes payable freestanding call and conversion options and for the liability-classified equity-linked contracts, both of which are classified as Level 3 of the fair value hierarchy. See Notes 6 and 11 for relevant fair value disclosures. Given use of unobservable inputs, there is inherently uncertainty that the inputs could reasonably have been different as of the reporting date.

The Company's non-recurring fair value measurements include the valuation of the assets held-for-sale as of September 30, 2024. See Note 7 for relevant fair value disclosures.

Adoption of Recent Accounting Pronouncements

The Company continually assesses new accounting pronouncements to determine their applicability. When it is determined a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a review to determine the consequences of the change to its consolidated financial statements and assures there are sufficient controls in place to ascertain the Company's consolidated financial statements properly reflect the change.

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The amendments in this ASU are effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.

In November 2024, the FASB Issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update require disclosures, in the notes to financial statements, of specified information about certain costs and expenses. The amendment clarifies which certain costs and expenses that are included in cost of sales and selling, general, and administrative expense categories that should be disclosed with qualitative descriptions of amounts that are not separately disaggregated quantitatively. Additionally, the amendment requires disclosure of total amounts of selling expenses and an entity's definition of selling expense. The update will be effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is in the process of determining the effect this ASU will have on the disclosures contained in the notes to the consolidated financial statements.

4. Inventories

The Company's inventory for its lithium-ion battery recycling operation is comprised of raw materials, in the form of battery feedstock, and finished goods, in the form of black mass and other metals. Inventory is valued at the lower of average cost or net realizable value. The carrying value of inventory includes those costs to acquire battery feedstock and any related carrying and processing costs incurred by the Company.

		September 30, 2024			June 30, 2024
Raw materials		$	68,442			$	66,088
Finished goods			187,455				88,232
	$	255,897			$	154,320

5. Government Grants and Tax Credit Awards

Grants receivable represent qualifying costs incurred where there is reasonable assurance that the conditions of the grant have been met but the corresponding funds have not been received as of the reporting date. As collections from the federal government have been and are expected to continue to be timely, no allowance for doubtful accounts has been established. If amounts become uncollectible, they will be charged to operations. Grants receivable was $0.1million and $0.2million as of September 30, 2024 and June 30, 2024, respectively. The Company recognizes invoiced government funds as an offset to R&D costs in the period the qualifying costs are incurred. During the period ended September 30, 2024, the Company recognized $1.4million of invoiced government funds as an offset to R&D costs. Grants related to investments in property and equipment are recognized as a reduction to the cost basis of the underlying assets with an ongoing reduction to depreciation expense over the assets' estimated useful life.

On January 20, 2021, the U.S. Department of Energy ("DOE") announced that the Company had been selected for award negotiation for a three-year project with a total budget of $4.5million for the field demonstration of its selective leaching, targeted purification, and electro-chemical production of battery grade lithium hydroxide from domestic claystone resources technology. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, or up to $2.3million. The prime agreement contract for this grant (the "AMMTO grant") was issued with a project start date of October 1, 2021. The Company began receiving funds related to this award during the fiscal year ending June 30, 2022. As of September 30, 2024, the cumulative funds invoiced for this grant totaled $2.0million, which represents 86% of the total eligible reimbursements.

On August 16, 2021, the Company received a contract award for a 30-month project with a total budget of $2.0million from the United States Advanced Battery Consortium (the "USABC grant") as part of a competitively bid project, through which the Company will receive reimbursement for up to $0.5million of eligible expenditures. 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, and 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. The Company began receiving funds related to this award during the fiscal year ending June 30, 2024. As of September 30, 2024, the cumulative funds invoiced for this grant totaled $0.5million, which represents 97% of the total eligible reimbursements.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

On October 21, 2022, the U.S. DOE announced that the Company had been selected for award negotiation for a five-year project with a total budget of $115.5million to design, construct, and commission a first-of-kind lithium hydroxide refinery using Nevada-based claystone as the feedstock to expand domestic manufacturing of battery grade lithium hydroxide for lithium-ion batteries for electric vehicles, with a focus on domestic processing of materials and components that are currently imported from foreign countries. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, up to $57.7million. The prime agreement contract for this grant was issued with a project start date of September 1, 2023. The Company began receiving funds related to this award during the period ending December 31, 2023. As of September 30, 2024, the cumulative funds invoiced for this grant totaled $2.5million, which represents 4% of the total eligible reimbursements.

On November 17, 2022, the U.S. DOE announced that the Company had been selected for award negotiation for a three-year project with a total budget of $20.0million to demonstrate and commercialize next generation techniques for its lithium-ion battery recycling processes to produce low-cost and low-environmental impact domestic battery materials. Through this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, up to $10.0million. The prime agreement contract for this grant was issued with a project start date of October 1, 2023. The Company began receiving funds related to this award during the period ending December 31, 2023. As of September 30, 2024, the cumulative funds invoiced for this grant totaled $0.9million, which represents 9% of the total eligible reimbursements.

On March 28, 2024, ABTC was selected for a tax credit for up to $19.5million through the Qualifying Advanced Energy Project Credits program (48C). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the U.S.DOE, which evaluated the feasibility of applicant facilities to advance America's buildout of globally competitive critical material recycling, processing, and refining infrastructure. This tax credit may be utilized both for the reimbursement of capital expenditures spent to date and also future capital expenditures at ABTC's battery recycling facility in the Tahoe-Reno Industrial Center (TRIC) in Storey County, Nevada. As of September 30, 2024, the Company has incurred qualifying expenditures for this tax credit but will not recognize any amounts until it has reasonable assurance of compliance with the relevant standards.

Also on March 28, 2024, ABTC was selected for an additional tax credit of up to $40.5million through the 48C program, which may be used in support of the design and construction of a new commercial battery recycling facility to be located in the United States. As of September 30, 2024, the Company has not incurred any qualifying expenditures towards this tax credit.

On September 23, 2024, the U.S. DOE announced that the Company had been selected for award negotiations for a highly competitive grant for $150million to be applied towards the construction of a new lithium-ion battery recycling facility.

6. Derivative Liabilities

During the quarter ended September 30, 2024, the Company's embedded conversion feature on its convertible notes and its outstanding warrants may be treated as derivative liabilities for accounting purposes under ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity," due to insufficient authorized shares to settle these outstanding equity-linked contracts, while the terms of these instruments still allow the holders to exercise which would require the Company to net-cash settle the instrument. In such cases, the Company has adopted a sequencing approach under ASC 815-40 to determine the classification of its equity-linked financial instruments at issuance and at each subsequent reporting date. Under this sequencing policy, the Company reclassifies to liabilities those equity-linked financial instruments with the most recent issuance or modification date. The derivative liabilities are initial recorded at fair value and subsequently re-valued each reporting date, with changes in fair value reported in the condensed consolidated statements of operations. The Company utilizes the Black-Scholes option-pricing model to value the derivative liabilities at initial reclassification and subsequent valuation dates, adjusted for instrument-specific terms as applicable.

In August 2024, the Company issued common shares and warrants to purchase common shares under private placement subscription agreements. See further discussion at Note 13. As there were insufficient authorized shares available at the time of issuance, the warrants were classified as derivative liabilities, measured at fair value as of issuance, and re-measured to fair value as of September 30, 2024. Of the $1.9 million in proceeds received from the private placement, $0.6 million was received from related parties of the Company, including current employees and an immediate family member of the Chief Executive Officer. The Company recognized common shares and warrants to purchase common shares with a total fair value of $1.4 million, compensation expense of $0.7 million and a loss on private placement of $0.1 million in the condensed consolidated statements of operations. The Company recognized less than a $0.1 million loss on change in fair value of these liability-classified equity-linked financial instruments. As of September 30, 2024, derivative liabilities totaling $0.9 million relate to the warrants held by the related parties in this transaction and are included in long-term liabilities in the condensed consolidated balance sheets.

For the remaining private placement subscription agreements, the Company recognized the fair value of the warrants of $1.7million and a loss on private placement of $0.6million as of issuance, and a fair value of $1.7million as of September 30, 2024, with the loss on change in fair value of less than $0.1million recorded to change in fair value of liability-classified equity-linked contracts in the condensed consolidated statements of operations. The associated derivative liability is included in long-term liabilities in the condensed consolidated balance sheets.

In September 2024, the Company's convertible notes were amended to increase the conversion rate of the conversion option. See further discussion at Note 11. Upon modification, the Company no longer had sufficient authorized shares to settle all equity-linked contracts including the convertible notes upon a potential conversion and accordingly, the embedded conversion feature was bifurcated from the convertible notes to be accounted for as a derivative liability. The Company calculated a fair value of the bifurcated conversion feature of $0.7million as of the modification date and a fair value of $0.9million as of September 30, 2024, with the loss on change in fair value of $0.2million recorded to change in fair value of liability-classified financial instruments in the condensed consolidated statements of operations. The associated derivative liability is included in long-term liabilities in the condensed consolidated balance sheets.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

During the quarter ended September 30, 2024, the Company issued additional common shares under its ATM and as a result of the Company's sequencing policy did not have sufficient authorized shares to settle all of its equity-linked financial instruments. The Company reclassified warrants with a fair value of $0.2million to liabilities and recognized a gain on change in fair value of liability-classified financial instruments of less than $0.1million in the condensed consolidated statements of operations. The associated derivative liability is included in long-term liabilities in the condensed consolidated balance sheets

The table below sets forth the Black-Scholes inputs and assumptions for the Company's valuation and re-valuation of its derivative liabilities for the quarter ending September 30:

		2024
Weighted average expected term (years)			0.08- 5.00
Risk-free interest rate			3.47% - 5.47	%
Dividend yield			0	%
Volatility			29.11% - 137.84	%

A summary of the activity related to derivative liabilities for the quarter ending September 30, 2024, is as follows:

		Warrant Derivative Liabilities			Conversion Option Derivative Liability			Total Derivative Liabilities
Balance, June 30, 2024		$	-			$	-			$	-
Fair value of reclassifications during the period			502,627				689,131				1,191,758
Fair value of issuances during the period			2,632,467				-				2,632,467
Change in fair value			(17,447	)			250,304				232,857
Balance, September 30, 2024		$	3,117,647			$	939,435			$	4,057,082

7. Property, Plant and Equipment

The table below presents the property, plant and equipment as of September 30, 2024 and June 30, 2024:

		September 30, 2024			June 30, 2024
Land		$	8,860,916			$	8,860,916
Building			16,632,100				24,867,784
Equipment and vehicles			22,893,669				14,313,970
Total Property, plant and equipment			48,386,685				48,042,670
Less: accumulated depreciation			(2,966,058	)			(1,727,704	)
Property, plant and equipment, net			45,420,627			$	46,314,966

The Company recognized depreciation expense of $1.3million and $36,502for the three months ended September 30, 2024 and 2023, respectively.

During the fourth quarter of fiscal 2024, the Company approved a plan to sell certain assets comprised primarily of land and a building from our Fernley location. The Company made this decision due to the acquisition of the Peru facility that would accelerate our time to production and commercialization. The assets located at Fernley had a carrying amount of $18.6 million and water rights with a carrying amount of $0.1 million. These assets have been classified as held-for-sale as of June 30, 2024 and are expected to be sold within the next twelve months. The Company recorded an impairment charge on the assets held-for-sale of $10.3 million for the fiscal year ended June 30, 2024. The fair value of the assets held-for-sale is classified within Level 3 of the fair value hierarchy and was determined based on indicative market listing prices of the assets. As of September 30, 2024, there were no changes to the valuation of assets held-for-sale.

8. Mining Properties

On July 21, 2022, the Company exercised the option to purchase the rights to unpatented lode claims in Tonopah, Nevada. Since that time, the Company has worked with third parties to conduct drill programs and analysis to verify the grade and continuity of the mining claims. Over 50% of the inferred mineral resources have been upgraded to measured and indicated classifications. The Company is still in the exploration stage and expenses all mineral exploration costs. If the Company identifies proven and probable reserves and develops an economic plan for operating a mine, it will enter the development stage and capitalize future costs until production is established.

On July 22, 2023, the Company began a third exploration program to advance its Tonopah Flats Lithium Project. This drill program includes core infill and step out drilling to support the evolution of its domestic resource with the goal of upgrading to a 'measured and indicated' resource classification. The Company selected and engaged KB Drilling for the collection of infill and step out samples for this latest drill program, which consists of sample collections from eight additional drill holes and includes 6,500 feet of total drilling.

In December 2023, the Company entered into a vacant land offer and acceptance agreement for the Company's acquisition of certain mineral patents totaling $0.2 million which was capitalized to mining properties.

On April 24, 2024, the Company announced the completion of the "Amended Resource Estimate and Initial Assessment with Project Economics for the Tonopah Flats Lithium Project, Esmeralda and Nye Counties, Nevada, USA" ("Amended IA") and the publication of the S-K 1300 Technical Report Summary ("TRS") disclosing mineral resources, including an initial economic assessment, for the Tonopah Flats Lithium Project. The TRS was completed by RESPEC Company LLC, a qualified person, in compliance with Item 1300 of Regulation S-K and with an effective date of April 5, 2024.

9. Intangible Assets

On September 12, 2023, the Company acquired approximately 40.52-acre feet of water rights from the Thomas C. Woodward Living Trust, valued at $0.1million. The water rights are treated in accordance with ASC 350, "Intangible Assets," and have an unlimited useful life subject to beneficial use.

The Company's acquisition of the commercial-scale battery recycling facility at the TRIC included water rights valued at $0.7million and are described as an eighteen and forty-five one-hundredths (18.45) acre-foot/annually portion of the Truckee-Carson Irrigation District. These have an unlimited useful life upon assignment to a property through use of a will-serve, which has no expiration date.

The table below presents total intangible assets at:

		September 30, 2024			June 30, 2024
Water rights		$	4,519,038			$	4,519,038

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

10. Accounts Payable and Accrued Liabilities

The table below presents total accounts payable and accrued liabilities at:

		September 30, 2024			June 30, 2024
Trade payables		$	4,728,264			$	4,255,398
Accrued fixed assets			503,611				996,970
Accrued expenses			1,249,744				2,244,265
Market agreement settlement			900,000				1,800,000
Right-of-use liability, current			21,938				54,304
Total accounts payable and accrued liabilities		$	7,403,557			$	9,350,937

On July 3, 2024, the Company and Mercuria Energy America, LLC agreed to resolve their respective disputes related to a Marketing Agreement entered into in May 2023. Under the terms of the Settlement Agreement, the Company agreed to make six monthly payments to Mercuria Energy America, LLC of $0.3million. Upon the completion of the payments, the parties agreed to release any and all claims, disputes, actions, suits, proceedings, demands and/or liabilities in law and/or equity or otherwise. The total amount of payments due of $1.8million was accrued as of June 30, 2024. As of September 30, 2024, $0.9million remained unpaid.

11. Notes Payable

On May 17, 2023, the Company entered into a Credit Agreement (the "Credit Agreement") with Mercuria Investments US, Inc. for pre-payment on the purchase of the Company's recycled battery metal products. As such, inventory serves as collateral for outstanding balances. The Credit Agreement provides for an aggregate loan amount of up to $20million, comprised of (i) an initial term loan in the aggregate principal amount of $6million and (ii) delayed draw term loan commitments in an aggregate amount equal to $14million. Borrowings under the Credit Agreement carry interest calculated as the secured overnight financing rate published on the Federal Reserve Bank of New York's website, plus the applicable credit spread adjustment, based on the elected interest period, plus an applicable margin rate of 6%. The agreement contains provisions that allow the Company to remit principal and interest payments via future delivery of its initial recycling byproduct, black mass.

On August 30, 2023, the Company caused the repayment in full of all indebtedness, liabilities and other obligations under, and terminated the Credit Agreement The Company did not incur any material early termination penalties because of such termination of the credit agreement.

On August 29, 2023, the Company and High Trail (the "Buyers") entered into a Securities Purchase Agreement (the "Purchase Agreement"), pursuant to which the Company sold to the Buyers up to $51.0million of a new series of senior secured convertible notes (the "Notes"). To date, $25.0million has been received and $22.2million has been repaid. The remaining $26million under the facility includes $13.5million with the condition that the Company started trading on the Nasdaq Capital Market, had $250,000in sales, and establish an ATM or ELOC, and another $12.5million at the discretion of the Buyers. Buyers may request partial redemptions of up to an aggregate of $1.8million on the 15^th of each month or may convert the Notes into shares of common stock of the Company ("Conversion Shares") at a conversion rate of 110% of the last reported sales price on the date of the agreement to acquire such Notes. The Notes bear zero coupon, mature on September 1, 2025, require a minimum of $5.0million maintained in cash and cash equivalents, and are secured by certain real property and cash and investment accounts of the Company.

The Company analyzed the conversion features of the Notes for derivative accounting considerations under ASC 815-15, "Derivatives and Hedging," and determined a freestanding call option should be bifurcated and separately accounted for as a derivative liability. Accordingly, the derivative liability is carried at fair value at each reporting date with the corresponding gain or loss reflected in earnings in the condensed consolidated statements of operations. See Correction of Previously Issued Consolidated Financial Statements in Note 3. The Company determined the derivative liability to have a fair value of $0.4million at issuance of the Notes. For the three months ended September 30, 2024, the Company recorded a gain of $0.7million within the change in fair value of the derivative liability in the condensed consolidated statements of operations. As of September 30, 2024, the fair value of the derivative liability was determined to be nil given the expiration of the freestanding call option on October 1, 2024.

Note discount and issuance costs totaled $5.1million and reduced the carrying value of the Notes as a debt discount. The carrying value, net of debt discount and issuance costs, is being accreted over the term of the Notes from date of issuance to date of full repayment, expected to be in October 2024 based on partial redemption payments, using the effective interest rate method. For the three months ended September 30, 2024, amortization of debt discount and issuance costs totaled $0.8million.

On September 13, 2024, the Notes were amended to allow payment of principal totaling $0.6million in common shares of the Company in lieu of cash, with the remaining principal due in September 2024 deferred to October 2024. Subsequent to September 30, 2024, further payment on the Notes has been deferred by the Buyers while negotiations on a potential amendment to the Notes are on-going. Total common shares of 726,216were issued with a fair market value of $0.7million. The Notes were also amended to increase the conversion option rate. The Company concluded that the amendment to the Notes was an extinguishment for accounting purposes due to the increase in the conversion option fair value. The Company recognized a $0.7million loss on extinguishment in the condensed consolidated statement of operations, comprised of the write-off of the remaining debt discount and debt issuance costs of $0.6million and the excess of fair value of the common shares paid in lieu of cash over the principal owed of $0.1million.

The table below presents the net carrying amounts of the Notes as of:

		September 30, 2024
Principal outstanding		$	2,883,333
Debt discount associated with bifurcated conversion option			(689,132	)
Amortization of debt discount from derivative liability			366,101
Net carrying value		$	2,560,302

The table below presents the maturities of notes payable as of September 30, 2024:

October 15, 2024		$	2,883,333
Less: unamortized debt discount and issuance costs			(323,031	)
Total notes payable		$	2,560,302
Notes payable, current		$	2,560,302
Notes payable, non-current		$	-

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

12. Leases

A lease provides the lessee the right to control the use of an identified asset for a period in exchange for consideration. Operating lease right-of-use assets ("RoU assets") are presented within the asset section of the Company's consolidated balance sheets, while lease liabilities are included within the liability section of the Company's consolidated balance sheets at September 30, 2024 and June 30, 2024.

RoU assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. RoU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the RoU assets for certain properties include the renewal options that the Company is reasonably certain to exercise.

The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company estimates a rate of 8.0% for the three months ending September 30, 2024 and 2023, based primarily on historical lending agreements. RoU assets include lease payments required to be made prior to commencement and exclude lease incentives. Both RoU assets and the related lease liability exclude variable payments not based on an index or rate, which are treated as period costs. The Company's lease agreements do not contain significant residual value guarantees, restrictions, or covenants.

The Company occupies office facilities under lease agreements that expire at various dates, many of which do not exceed a year in length. Total operating lease costs for the three months ended September 30, 2024 and 2023, were each approximately $0.1million. The Company does not have any finance leases as of September 30, 2024 and 2023.

As of September 30, 2024, current lease liabilities of $0.1million are included in "Accounts payable and accrued liabilities" on the consolidated balance sheets. The table below presents total operating lease RoU assets and lease liabilities at September 30, 2024 and June 30, 2024:

		September 30, 2024			June 30, 2024
Operating lease right-of-use asset		$	16,842			$	42,103
Operating lease liabilities		$	21,938			$	54,304

The table below presents the maturities of operating lease liabilities as of September 30, 2024:

September 30, 2025		$	22,157
September 30, 2026			-
Total lease payments			22,157
Less: discount			(219	)
Total operating lease liabilities		$	21,938
Operating lease liabilities, current		$	21,938
Operating lease liabilities, non-current		$	-

The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use asset as of September 30, 2024.

Weighted average lease term (years)			0.16
Weighted average discount rate			8.00	%

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

13. Stockholders' Equity

Preferred Stock

Our amended and restated articles of incorporation authorize shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management.

To date, the Company has authorized a total of 1,666,667shares of preferred stock. Of this amount the Company has designated a total of 233,334shares to four classes of preferred stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock. As of September 30, 2024 and June 30, 2024, there were 5and nilshares of Series D Preferred Stock issued and outstanding. A description of each class of preferred stock is listed below.

On September 16, 2024, the Company entered into a Subscription and Investment Representation Agreement with Ryan Melsert, its Chief Executive Officer, who is an accredited investor, pursuant to which the Company agreed to issue and sell five (5) shares of the Company's Series D Preferred Stock, par value $0.001per share, to Mr. Melsert for an aggregate purchase price of $100, or $20per share of Series D Preferred Stock. The sale closed on September 16, 2024. The Series D Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series D Preferred Stock has no rights with respect to distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company. Each share of Series D Preferred Stock will have 12,000,000 votes and will vote together with the outstanding shares of the Company's common stock as a single class exclusively with respect to a proposal to amend the Company's articles of incorporation, as amended, to increase the number of authorized shares of common stock of the Company.The Series D Preferred Stock will be voted, without action by the holder, on such proposal in the same proportion, and in the same manner, as shares of common stock are voted by the shareholders and in no other manner. The Series D Preferred Stock has no other voting rights except as otherwise authorized by the Nevada Revised Statutes.

The Series D Preferred Stock shall be redeemed in whole, but not in part, at any time (i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the effectiveness of the amendment to the articles of incorporation, as amended, implementing an increase in the number of authorized shares of common stock of the Company. Upon such redemption, the holder of the Series D Preferred Stock will receive consideration of $100. Accordingly, as the Series D Preferred Stock is subject to possible redemption, it is presented as temporary equity, outside of stockholders' equity, at its redemption amount on the condensed consolidated balance sheets.

Series A Preferred Stock

The Company has 33,334shares of Series A Preferred Stock authorized with a par value of $0.001per share. The Company had nilshares of Series A Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series B Preferred Stock

The Company has 133,334shares of Series B Preferred Stock authorized with a par value of $10.00per share. The Company had nilshares of Series B Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series C Preferred Stock

The Company has 66,667shares of Series C Preferred Stock authorized with a par value of $10.00per share. The Company had nilshares of Series C Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series D Preferred Stock

The Company has 5shares of Series D Preferred Stock authorized with a par value of $0.001per share. The Company had 5shares and nilshares of Series D Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Common Stock

The Company has 80.0million shares of common stock authorized, with a par value of $0.001per share.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Three months ended September 30, 2024:

During the period the Company issued 353,221 common shares upon vesting of share-based awards.

On April 3, 2024, the Company entered into an ATM sales agreement with Virtu Americas LLC, pursuant to which the Company may offer and sell, from time to time through the sales agent, shares (the "Shares") of the Company's common stock, par value $0.001 per share, having an aggregate offering price of up to $50,000,000, subject to the terms and conditions of the Sales Agreement. On September 30, 2024, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No. 333-252492) offering the Shares. During the period, the Company sold 5,938,786 common shares, related to the ATM sales agreement, for total proceeds of $6.3 million, of which $0.1 million is recorded as a subscription receivable on the consolidated balance sheet at September 30, 2024. In addition, the Company settled the issuance of 487,838common shares for a total of $0.6million that was included in subscriptions receivable as of June 30, 2024.

On August 1, 2024, the Company agreed to sell in a private placement 53 Group A Units (defined below) to several accredited investors and 23 Group B Units to the Company's new Chief Operating Officer, to an immediate family member of the Chief Executive Officer, and to two current employees, a portion of which was rescinded on November 12, 2024, resulting in the sale of a total of only 18 Group A Units and 23 Group B Units in such private placement. Each "Group A Unit" consists of 25,000 shares of Common Stock, 25,000 Series A warrants with a five-year term to purchase Common Stock ("Series A Warrants") and 25,000 Series B Warrants with an 18-month term to purchase Common Stock (collectively with the Series A Warrants, the "Warrants") with a purchase price of $25,000 per Unit; each "Group B Unit" consists of 19,531 shares of Common Stock and 39,062 Series A Warrants with a five-year term and a purchase price of U.S. $25,000 per Unit. The Company received an initial payment of approximately $1.9 million but after the recission retained only an aggregate purchase price of $1.0 million. The recission is an event that will be accounted for as part of the second quarter results.

Upon issuance, the Company concluded that it had insufficient authorized shares to settle the warrants (see Note 6). As the warrants are therefore liability-classified and remeasured at fair value each reporting period, the Company allocated the proceeds first to the warrants with any residual proceeds allocated to the common shares. A day-one loss is recognized to the extent the recognized fair value of common shares and warrants exceeds the proceeds received.

During the period, the Company issued 726,216 common shares pursuant to the debt conversion option in lieu of cash payment of $0.6million (see Note 11). The fair value of the common shares issued of $0.7million was recorded in additional paid-in capital for this transaction.

On July 22, 2024, the Board of Directors authorized and approved to extend the expiration date to April 30, 2025 for 600,000 certain warrants with an exercise price of $1.125 issued in connection with a previous equity offering which were previously scheduled to expire on October 31, 2024. Of the 600,000 warrants, 200,000 warrants are held by Ryan Melsert, Chief Executive Officer. The modification of the warrants resulted in incremental fair value of $0.1 million as of the modification date, of which less than $0.1 million was recognized as stock-based compensation expense for those warrants held by the Chief Executive Officer and the remainder as a deemed dividend per the requirements of ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity." The Company utilized a Black-Scholes option-pricing model to determine the incremental fair value with assumptions including volatility of 100.47% and a risk-free rate of 5.06%.

During the period, the Company recognized stock-based compensation expense of $3.2million, which was an increase to additional paid-in capital of $2.4million and an increase to the equity compensation liability of $0.1million. Stock-based compensation expense also included the $0.7million related to the excess fair value related to warrants issued to the Insiders and the incremental fair value from modification of certain warrants discussed above.

The Company had the following potentially dilutive shares outstanding as of September 30:

		2024			2023
Convertible notes			3,489,871				2,528,873
Warrants			9,394,469				5,696,026
Share awards outstanding			3,176,967				1,582,126
Total potentially dilutive			16,061,307				9,807,025

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

14. Share Purchase Warrants

During the three months ended September 30, 2024, there were 3,548,426 warrants issued pursuant to the Private Placement (see Note 13), of which 898,426 warrants were purchased by employees of the Company.

		Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance, June 30, 2024			6,928,758			$	12.95
Granted			3,548,426				1.01
Exercised			-			-
Expired			(1,082,715	)			12.02
Balance, September 30, 2024			9,394,469			$	8.55			2.97		$	248,390
Exercisable, September 30, 2024			8,663,129			$	8.76			2.85		$	248,390

15. Equity Compensation Awards

The Company has established the 2021 Retention Plan ("the Retention Plan") to issue shares in the effort to retain key executives, directors, and employees. The Retention Plan allows for several different types of awards to be granted, including but not limited to, restricted share units and restricted share awards, collectively referred to as "share awards". Share awards generally have the same expense characteristics under US GAAP and generally vest over a four-year period at a rate of 25% per annum.

Under the Retention Plan, the Company is authorized to issue shares of common stock to employees and non-employees up to ten percent (10%) of the total number of shares of common stock outstanding as of December 31, 2022, on a fully diluted basis. The Company adjusts the authorized shares under the plan each December 31, while the Retention Plan remains in effect. During the three months ended September 30, 2024, the Company granted 0.2million share awards, respectively.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

15. Equity Compensation Awards (continued)

The table below reflects the share award activity for the period ended September 30, 2024:

		Units			Weighted- Average Grant Date Fair Value per Unit
Unvested share awards at June 30, 2024			3,428,604			$	5.02
Granted			185,742				1.00
Vested			(410,504	)			4.10
Forfeitures			(26,875	)		$	5.22
Unvested awards at September 30, 2024			3,176,967			$	4.90

As awards are granted, stock-based compensation equivalent to the fair market value of the underlying common stock on the date of grant is expensed over the requisite service period, generally four years with a maximum contractual term of ten years, using the graded vesting attribution method as acceptable under ASC 718, "Compensation-Stock Compensation." The Company accounts for forfeitures as they occur. The fair value of share awards that vested during the quarter ended September 30, 2024 totaled $0.4million.

The Company recognized stock-based compensation expense of $3.2million and $3.4million for the three months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and June 30, 2024, the equity compensation liability totaled $0.5million and $0.4million related to warrants and RSUs awarded to officers of the Company, respectively, where the performance target had not yet been achieved by employees and officers but was probable of achievement. Subsequent to September 30, 2024, the performance target has been achieved and approval by the board of directors has occurred.

As of September 30, 2024, there were approximately $8.5million of unamortized expenses relating to outstanding equity compensation awards to be recognized over a remaining weighted-average period of 2.6years.

The table below presents the stock-based compensation expense per respective line item on the condensed consolidated statements of operations for the three months ended September 30:

		2024			2023
Cost of goods sold		$	145,259			$	-
General and administrative		1,959,270			935,963
Research and development			902,268				2,287,859
Exploration			164,319				145,447
Total stock-based compensation		$	3,171,116			$	3,369,269

Executive officers and selected other key employees are eligible to receive common share performance-based awards, as determined by the board of directors. The payouts, in the form of share awards, vary based on the degree to which corporate operating objectives are met. These performance-based awards typically include a service-based requirement, which is generally four-years.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

16. Supplemental Statement of Cash Flow Disclosures

For the three months ended September 30:

		2024			2023
Supplemental disclosures:
Interest paid		$	4,575			$	-
Non-cash investing and financing activities:
Purchases of property and equipment accrued in current liabilities			503,611				2,088,533
Deposits capitalized as investing activities			-				27,737,370
Other receivables recognized as financing activities			102,743				350,550
Debt payment satisfied with common shares			600,000				-

17. Commitments and Contingencies

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Except as otherwise identified herein, management is currently not aware of any such legal proceedings or claims that could have, individually or in aggregate, a material adverse effect on our business, financial condition, or operating results.

Operating Leases

The Company leases its principal office location in Reno, Nevada. It also leases lab space at the University of Nevada, Reno on short term leases. The principal office location lease expires on November 30, 2024 and the Lab leases expire on November 30, 2024. Consistent with the guidance in ASC 842, the Company has recorded the principal office lease in its condensed consolidated balance sheet as an operating lease. For further information on operating lease commitments, see Note 12 - Leases.

Financial Assurance:

Nevada and other states, as well as federal regulations governing mine operations on federal land, require financial assurance to be provided for the estimated costs of mine reclamation and closure, including groundwater quality protection programs. The Company has satisfied financial assurance requirements using a combination of cash bonds and surety bonds. The amount of financial assurance The Company is required to provide will vary with changes in laws, regulations, reclamation and closure requirements, and cost estimates. At September 30, 2024, The Company's financial assurance obligations associated with U.S. mine closure and reclamation/restoration cost estimate totaled $0.1million, for which the Company is legally required to satisfy its financial assurance obligations for its mining properties in Tonopah, Nevada. The Company was previously released of all of its liability in the Railroad Valley region of Nevada.

18. Subsequent Events

On June 18, 2024, at the recommendation of the compensation committee of the Company, our board of directors adopted, subject to the receipt of shareholder approval, the American Battery Technology Company 2024 Employee Stock Purchase Plan (the "ESPP") providing for the issuance of up to 3,000,000shares of our common stock. On November 13, 2024, at our 2024 annual meeting of shareholders (the "Annual Meeting:") our shareholders approved the ESPP. The purpose of the ESPP is to provide employees of the Company and its subsidiaries (as set forth in the ESPP) with an opportunity to acquire a proprietary interest in the Company through the purchase of shares of common stock.

On November 12, 2024, part of the private placement transaction executed on August 1, 2024 was rescinded, resulting in an aggregate issuance of 41 units made up of: (i) with respect to non-employee investors, 18 units consisting of 25,000 shares of Common Stock (the "Shares"), 25,000 Series A Warrants to Purchase Common Stock ("Series A Warrants" as further described herein) and 25,000 Series B Warrants to Purchase Common Stock ("Series B Warrants" as further described herein and collectively, with the Series A Warrants, the "Warrants") (such Shares and Warrants are collectively referred to herein as the "Units"), at the price of U.S. $25,000 per Unit; and (ii) with respect to employee investors, 23 units consisting of 19,531 Shares and 39,062 Series A Warrants (such Shares and Series A Warrants are collectively referred to herein as the "Employee Units"), at the price of U.S. $25,000 per Employee Unit.The Company retained an aggregate purchase price of $1.0million.

On November 13, 2024, at the Annual Meeting, our shareholders approved and adopted an amendment (the "Amendment") to the Company's articles of incorporation, as amended, to increase the number of authorized shares of the Company's common stock from 80,000,000 to 250,000,000. On November 14, 2024, the Amendment was filed with the Secretary of State of Nevada and was effective upon filing.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes in "Item 1. Condensed Consolidated Financial Statements". References in this report to "American Battery," the "Company," "we," "our" and "us" are references to American Battery Technology Company and its subsidiaries.

Forward-Looking Statements

We make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission, or SEC. We may also make forward-looking statements in our press releases or other public or shareholder communications. Our forward-looking statements are subject to risks and uncertainties and include information about our current expectations and possible or assumed future results of our operations. When we use words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "could," "plan," "potential," "predict," "forecast," "project," "intend," "is focused on" or similar expressions, or make statements regarding our intent, belief, or current expectations, we are making forward-looking statements. Our forward-looking statements also include, without limitation, statements about our liquidity and capital resources; our ability to continue as a going concern; our ability to successfully execute on our business strategy; our ability to raise additional capital and statements regarding our anticipated future financial condition, operating results, cash flows and business plans.

While we believe our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements, which are based on information available to us on the date of this report or, if made elsewhere, as of the date made. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different. Factors that might cause such a difference include, without limitation, the risks and uncertainties discussed in this report, "Item 1A - Risk Factors" in our Form 10-K for the year ended June 30, 2024 and from time to time in our other reports filed with the SEC.

Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flow and financial position. There can be no assurance future results will meet expectations. Forward-looking statements speak only as of the date of this report and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise, except as may be required by applicable law.

Overview

American Battery Technology Company (the "Company") is a growth company within the lithium-ion battery industry that is working to increase the domestic U.S. production of battery materials, such as lithium, nickel, cobalt, and manganese through its exploration of new domestic-US primary resources of battery metals, development and commercialization of new technologies for the extraction of these battery metals from primary resources, and commercialization of an internally developed integrated process for the recycling of lithium-ion batteries. Through this three-pronged approach the Company is working to both increase the domestic production of these battery materials, and to ensure spent batteries have their elemental battery metals returned to the domestic manufacturing supply chain in an economical, environmentally-conscious, closed-loop fashion.

To implement this business strategy, the Company has constructed its first integrated lithium-ion battery recycling facility, which takes in waste and end-of-life battery materials from the electric vehicle, stationary storage, and consumer electronics industries. The ramp-up and operations of this facility are of the highest priority to the Company, and as such it has significantly increased the resources devoted to its execution including the further internal hiring of technical staff, expansion of laboratory facilities, and purchasing of equipment. The Company has been awarded a competitively bid grant from the U.S. Advanced Battery Consortium to support a $2 million project to accelerate the development and demonstration of the technologies within this integrated lithium-ion battery recycling facility. The Company has also been awarded an additional grant from the U.S. Department of Energy to support a $20 million project under the Bipartisan Infrastructure Law to validate, test, and deploy three next-generation disruptive advanced separation and processing recycling technologies.

Additionally, the Company is accelerating the demonstration and commercialization of its internally developed low-cost and low-environmental impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada-based sedimentary claystone resources. The Company has been awarded a competitive grant from the U.S. Department of Energy's Advanced Manufacturing and Materials Technologies Office through the Critical Materials Innovation program to support a $4.5 million project for the construction and operation of a multi-ton per day integrated continuous demonstration system to support the scale-up and commercialization of these technologies. The Company has also been awarded an additional grant award under the Bipartisan Infrastructure Law to support a $115 million project to design, construct, and commission a first-of-kind commercial-scale refinery to produce 30,000 MT of battery-grade lithium hydroxide per year from this resource.

ABTC has completed the construction and commissioning of its claystone to lithium hydroxide (LiOH) pilot plant, marking a significant milestone in the commercialization of its internally-developed processes to access an unrealized domestic primary lithium resource. The construction and commissioning of this pilot plant enables ABTC to demonstrate its technologies for accessing the lithium housed in its unconventional resource, Tonopah Lithium Flats Project (TFLP), in an integrated and continuous system, and to generate large amounts of battery grade lithium hydroxide for delivery to customers for qualifications and evaluation. The construction and operation of this pilot demonstration plant are supported by a competitively awarded grant from the U.S. Department of Energy (DOE) for this $4.5 million effort. Product from the pilot plant is being sent for analysis to confirm and validate the resource.

ABTC has filed an amended Initial Assessment for its Tonopah Flats Lithium Project (TFLP). The TFLP is one of the largest identified lithium resources in the U.S., and while initial pit designs and economic analyses in previous assessments evaluated the full resource, this updated Initial Assessment utilizes a commercialization pathway with a more rigorous mine plan that contemplates utilization of only Measured and Indicated Mineral Resources, and excludes Inferred Mineral Resources, to supply the planned commercial-scale lithium hydroxide refinery. This commercialization pathway allows for an engineered phased development, with improved access to the higher quality portions of the resource, and at improved project economics.

On March 28, 2024, ABTC was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the U.S. Department of Energy (DOE), which evaluated the feasibility of applicant facilities to advance America's buildout of globally competitive critical material recycling, processing, and refining infrastructure. This $19.5 million tax credit can be utilized both for the reimbursement of capital expenditures spent to date, and also for equipment and infrastructure for additional value-add operations at ABTC's battery recycling facility in the Tahoe-Reno Industrial Center (TRIC) in Storey County, Nevada. As of September 30, 2024, the Company has incurred qualifying expenditures for this tax credit but will not recognize any amounts until it has reasonable assurance of compliance with the relevant standards. The Company intends to sell the credit in order to monetize it's value.

Also on March 28, 2024, ABTC was selected for an additional $40.5 million tax credit through the Qualifying Advanced Energy Project Credits program (48C) to support the design and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. As with ABTC's initial $19.5 million tax credit under the 48C program supporting the construction and buildout of its battery recycling facility in Nevada, this additional award was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive technical and economic review process performed by the U.S. Department of Energy (DOE), which evaluated the feasibility of applicant facilities to advance America's buildout of globally competitive critical material recycling, processing, and refining infrastructure. As of September 30, 2024, the Company has not incurred any qualifying expenditures towards this tax credit.

Financial Highlights:

	●	Revenues were $202,000 in the three months ended September 30, 2024, following the Company's initial recognition of revenues in the fourth quarter of fiscal 2024.
	●	Cash COGS was $1.3 million in the three months ended September 30, 2024, after the removal of non-cash items such as depreciation expense and stock-based compensation.
	●	On September 23, 2024, the Company was selected for a new highly competitive grant from the US DOE for $150 million in federal funding to construct a second lithium-ion battery recycling facility.
	●	Government grant reimbursement was $1.4 million for the three months ended September 30, 2024 compared to $0.5 million during the same period of the prior year. Out of the current period's $1.4 million in grant funding, $0.3 million was recorded as an offset to fixed assets, as reimbursements related to equipment purchases, and $0.8 million was recorded as an offset to research and development costs within the condensed consolidated statement of operations.
	●	As of September 30, 2024, the Company had total cash on hand of $5.8 million.
	●	Cash used in operations for the three months ended September 30, 2024 was $5.6 million, compared to $4.8 million of cash used in operations during the three months ended September 30, 2023.
	●	On August 1, 2024, the Company entered into a private placement offering for a total amount of $1.9 million.

Components of Statements of Operations

Revenue

During the three months ended September 30, 2024, our revenue was $0.2 million. This is related to the sale of our recycled products produced from recycling operations and followed our initial revenue generated by the Company in the fourth quarter of fiscal 2024. The materials were sold to a customer who took delivery at our plant and the materials will remain at our plant to be further processed when phase two of the plant is complete.

Cost of Goods Sold

Cost of goods sold during the three months ended September 30, 2024 was $2.5 million. After the removal of non-cash items of $1.2 million such as depreciation expense of $1.1 million and stock-based compensation of $0.1 million, cash cost of goods sold was $1.3 million. The high cost of goods sold is related to the depreciation of the recycling facility fixed assets in the amount of $1.1 million, which is time based, and the finalization of the production process. We expect these costs to continue to rise on an absolute basis but will be reduced as a percentage of revenue as we scale our production and sales and gain efficiencies in the production process. In Q4 of fiscal 2024, the Company generated its first revenue and started to record cost of goods sold. Cost of goods sold during the three months ended June 30, 2024 was $3.3 million of which $1.3 million was related to depreciation expense and $0.2 million was related to stock-based compensation. Cash cost of goods sold for the three months ended June 30, 2024 was $1.8 million.

Operating Expenses

During the three months ended September 30, 2024, the Company incurred $7.5 million of operating expenses compared to $8.0 million during the three months ended September 30, 2023.

General and administrative expenses consist of stock-based compensation, office expenses, legal, recruitment, business development, public relations, and general facility expenses. For the three months ended September 30, 2024, general and administrative expenses were $5.0 million, an increase of $1.9 million over the same period in the prior year primarily related to increased stock-based compensation, personnel costs, audit and insurance costs.

Research and development expenses consist primarily of laboratory leases, supplies, salaries, stock-based compensation, and employee benefits. Research and development expenses for the three months ended September 30, 2024 and 2023 were $2.0 million and $3.6 million, respectively. The decrease is primarily due to allocation of such costs to cost of goods sold and inventory as part of phase 1 recycling operations coming online in the fourth quarter of fiscal 2024. These costs are partially offset by federal grant funds for awards that it has contracted with various federal agencies. The Company recognized an offset to its research and development costs of $0.8 million and $0.5 million related to these awards for the three months ended September 30, 2024 and 2023 respectively.

Exploration costs consist primarily of drilling, assay, claim fees, personnel, stock-based compensation, office and warehouse costs, travel, and other costs related to exploration of claims in central Nevada. Exploration expenses totaled $0.4 million for the three months ended September 30, 2024 compared to $1.4 million during the same period in the prior year. The decrease year-over-year resulted principally from higher costs in prior year related to drilling, assaying and engineering to further define and potentially upgrade the geological classification of the mineral rights.

Other Income (Expense)

During the three months ended September 30, 2024, the Company recorded other expense of $1.9 million, including $1.2 million for amortization of debt financing costs, $0.7 million loss on debt extinguishment, $0.6 million loss on private placement and $0.2 million for change in fair value of liability classified instruments; offset by other income of $0.7 million for change in fair value of derivative liability and $0.1 million for interest income.

Net Loss

During the three months ended September 30, 2024, the Company incurred a net loss of $11.8 million or $0.17 loss per share compared to a net loss of $8.9 million, or $0.19 loss per share, during the three months ended September 30, 2023.

Liquidity and Capital Resources

At September 30, 2024, the Company had cash of $5.8 million and total assets of $73.8 million compared to cash of $7.0 million and total assets of $77.7 million at June 30, 2024. The decrease of cash is due to normal transactional activities related to plant production and paydown of debt obligation.

The Company had total current liabilities of $10.0 million at September 30, 2024, compared to $15.8 million at June 30, 2024. The decrease related to paydown of debt and timing of payments for accounts payable and accrued expenses.

As of September 30, 2024 the Company had working capital of $5.5 million compared to $2.6 million at June 30, 2024. The positive working capital at the end of both periods results from the classification of $8.4 million of held-for-sale assets as current at September 30, 2024 and June 30, 2024. Absent this classification, the working capital deficiency would have been $2.9 million and $5.8 million at September 30, 2024 and June 30, 2024, respectively.

The continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain debt or equity financing. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain them on favorable terms, which could limit its operations. Any such financing activities are subject to market conditions. These uncertainties cause substantial doubt to exist as to the Company's ability to continue as a going concern for 12 months from issuance of these financial statements. These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.

The going concern assessment excludes the Company's at-the-market ("ATM") offering, which could provide sources of liquidity.

Based on our current operating plan, unless we generate income from the operations of our facilities or raise additional capital (debt or equity), it is possible that we will be unable to maintain our financial covenants under our existing Note agreement. If such covenant violations are not waived by the Note holder, it would result in an event of default, causing an acceleration of the outstanding balances. If we do raise additional capital through public or private equity offerings, as opposed to debt or additional Note issuances, the ownership interest of our existing stockholders may be diluted.

Cash Flows

For the three months ended September 30:

		2024			2023
Cash used in operating activities		$	(5,552,350	)		$	(4,758,984	)
Cash used in investing activities			(863,158	)			(7,272,098	)
Cash provided by financing activities			5,182,758				15,090,046
Net increase (decrease) in cash during the period			(1,232,750	)			3,058,964

Cash from Operating Activities.

During the three months ended September 30, 2024, the Company used $5.5 million of cash for operating activities, compared to $4.8 million cash used during the three months ended September 30, 2023. In both periods, the cash used has supported an increased scale of operations including employee headcount and personnel costs, production, and, administrative costs related to insurance, legal and accounting.

Cash from Investing Activities

During the three months ended September 30, 2024, the Company used cash in investing activities of $0.9 million for acquisition of property and equipment for its recycling facilities. This is in comparison to cash used in investing activities of $7.3 million for the three months ended September 30, 2023. The decrease is due to the Company purchasing more equipment in the beginning stages of the plant build-out in prior year.

Cash from Financing Activities

During the three months ended September 30, 2024, the Company had cash provided by financing activities of $5.2 million, compared to $15.1 million provided during the three months ended September 30, 2023. The Company has relied on equity and debt financings to support the increased operating activities, and the ramp up of the recycling plant, development of the lithium ore pilot plant, and upgrades to the geological category of its Tonopah claims through additional studies and assessments.

The Company had proceeds from equity financings of $8.8 million in the three months ended September 30, 2024 compared to $2.4 million in the prior year period. The reduction in cash provided by financing activities in the three months ended September 30, 2024 compared to the prior year results from the paydown of notes payable of $3.6 million without any borrowings while, in the 2023 period, the Company had net borrowings of $12.7 million.

Working Capital

		September 30, 2024			June 30, 2024
Current assets		$	15,483,244			$	18,406,048
Current liabilities			9,963,859				15,798,298
Working capital			5,519,385			2,607,750

Future Financing

We will continue to rely on sales of our common shares, debt, or other financing to fund our business operations as needed beyond any revenue generated from internal operations and the government tax credits and grants that offset research & development expenses, and capital expenditures. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the securities or arrange for debt or other financing to fund planned operating activities, acquisitions and exploration activities.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.

While some of our significant accounting policies are more fully described in Note 2, "Summary of Significant Accounting Policies" in the notes to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q, all our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended June 30, 2024.

Off-Balance Sheet Arrangements

As of September 30, 2024, we had no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

Item 4. Controls and Procedures

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the "Exchange Act"). Disclosure controls and procedures are controls and other procedures designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company's management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of September 30, 2024, the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, the Company's disclosure controls and procedures are not effective, based on the material weaknesses described below.

Material Weakness in Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Management, with the participation of the principal executive officer and principal financial officer, under the oversight of our Board of Directors, assessed the effectiveness of our internal control over financial reporting as of September 30, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013 Framework). Based on this assessment, management concluded that, as of September 30, 2024, our internal control over financial reporting was not effective, due to the material weaknesses in internal control over financial reporting, described below.

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including the individuals serving as our principal executive officer and principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

The Company did not have a sufficient complement of personnel with appropriate technical expertise to perform an effective risk assessment. In addition, the Company did not maintain proper segregation of duties related to accounting processes. As a consequence, internal control deficiencies related to the design and operation of process-level controls were determined to be pervasive throughout the Company's financial reporting processes. While these material weaknesses did result in immaterial misstatements of the Company's consolidated financial statements, these material weaknesses create a reasonable possibility that a material misstatement of account balances or disclosures in the consolidated financial statements may not be prevented or detected in a timely manner. Therefore, we concluded that the deficiencies represent material weaknesses in the Company's internal control over financial reporting and our internal control over financial reporting was not effective as of September 30, 2024.

Remediation Plan

During the fiscal year ended June 30, 2024, remediation efforts included removing accounting personnel access to both create and post a journal entry, moving the systems administration tasks to personnel outside of the accounting department, and adding review procedures by qualified personnel over complex accounting matters by way of engaging third-party professionals with whom to consult regarding complex accounting applications and valuations. However, there is no guarantee that these measures will remediate the material weaknesses described above.

In addition to the above steps taken, in July 2024, we hired a new corporate controller with extensive experience in technical accounting, SEC reporting and internal control over financial reporting. In October 2024, we hired a senior accountant with public accounting and public company reporting experience, which will help to mitigate segregation of duties weakness. We plan to continue to utilize an outside CPA firm for technical expertise and we plan to perform a complete risk assessment to update our control procedures. These additional steps will help mitigate the technical expertise weakness, the segregation of duties weakness and identify any other areas of risk to be incorporated in our overall internal control plan. We expect to remediate these material weaknesses by the end of fiscal year 2025.

We are committed to ensuring that our internal control over financial reporting is designed and operating effectively. While we believe procedures are in place as of September 30, 2024 to address the material weaknesses, remediation steps are required to be in place and effective for an adequate period of time. We cannot provide assurance that such material weaknesses will be remediated, and we may discover additional material weaknesses that may require additional time and resources to remediate.

Changes in Internal Control over Financial Reporting

Except as noted above with respect to the completion of certain steps in the remediation plan, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter covered by this Interim Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We may be involved in certain routine legal proceedings from time to time before various courts and governmental agencies. We cannot predict the final disposition of such proceedings. We regularly review legal matters and record provisions for claims considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on our operations or consolidated financial statements in the period in which they are resolved.

On September 24, 2024, the Company filed a complaint in the U.S. District Court for the District of Nevada, Case No. 3:24-cv-00434, asserting claims against Tysadco Partners, LLC ("Tysadco") for amounts due and owing under March 16, 2024, March 21, 2024, and March 31, 2024, purchase agreements between Tysadco and the Company related to a Prospectus Supplement for the sale of Company stock. The Company promptly fulfilled its obligations under the Purchase Agreements by issuing the agreed upon shares of its common stock. However, to date Tysadco has only made partial payments to the Company under the purchase agreements, with the remaining $1,415,804.65 still unpaid. The Company intends to vigorously pursue its remedies against Tysadco for its nonpayment.

Item 1A. Risk Factors

Our business is subject to various risks, including those described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2024. There have been changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended June 30, 2024 under "Item 1A - Risk Factors" as noted below.

An investment in the Company's securities is subject to a number of risks at any given time. Below is a description of the principal risk factors affecting the Company. The risk factors set out below are not exhaustive and unidentified risks may have potential to adversely affect the Company's financial condition, operating results, business or future prospects. Investors should carefully consider these risk factors, many of which are beyond the Company's control, together with other disclosures and market information before investing in the Company's securities.

Pre-Commercialization Company Risks

Because we have not yet achieved full commercialization, a company like ours is inherently subject to many risks. These risks and difficulties include (a) significant capital requirements and challenges with respect to obtaining financing until we can achieve full commercialization; (b) accumulated and continuing losses; (c) challenges in accurate financial planning; (d) uncertainties resulting from a relatively limited time period in which to develop and evaluate business strategies as compared to companies with longer operating histories; (e) cost and complexity of compliance with significant regulations in connection with our operations and products; (f) reliance on third parties for consulting, laboratory work, regulatory, commercialization or other activities; (g) reliance on third parties to carry out contractual arrangements; and (h) meeting the challenges of the other risk factors described herein. We are subject to all risks incident to an emerging company.

Working Capital Risks

We will need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all. We will need to raise capital over the next 12 months to satisfy such requirements, the receipt of which cannot be assured. We will also require capital in order to fully develop our recycling, extraction and refining operations. We intend to seek additional funds through various financing sources, including the private sale of our equity and debt securities, potential joint ventures with capital partners, grants, government loans, and project financing of our recycling facilities. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose your entire investment.

Risks of Competitive Industry

Inherent to competitive industries, there are risks the Company may be unable to maintain or acquire financing, seek available opportunities, retain existing personnel or hire new personnel, or maintain or acquire technical or other resources, supplies or equipment, all on terms it considers acceptable to complete the development of its projects. Battery recycling is a highly competitive and speculative business. Competing recycling processes and facilities are primarily located in the United States, Europe, and China and employ various techniques for extraction of the contained battery metals. In seeking available opportunities, we will compete with a number of other companies, including established, multi-national companies that have more experience and resources than we do. There also may be other small companies that are developing similar processes and are farther along than the Company. Because we may not have the financial and managerial resources to compete with other companies, we may not be successful in our efforts to develop technology which is commercially viable.

Business Model Risks

We intend to engage in the business of lithium recycling through proprietary recycling technology. While the production of lithium-ion recycling is an established business, to date most lithium-ion recycling has been produced by way of performing bulk high temperature calcinations or bulk acid dissolutions. We have developed a highly strategic recycling processing train that does not employ any high temperature operations or any bulk chemical treatments of the full battery. We have tested our recycling process on a small scale and to a limited degree; however, there can be no assurance that we will be able to produce battery metals in commercial quantities at a cost of production that will provide us with an adequate profit margin. The uniqueness of our process presents potential risks associated with the development of a business model that is untried and unproven as we undertake the build-out and operation of a large-scale facility capable of recycling commercial quantities. There can be no assurance that as we commence large scale manufacturing or operations that we will not incur unexpected costs or hurdles that might restrict the desired scale of our intended operations or negatively impact our projected gross profit margin.

Share Price Risks

The market price of the stock of a publicly traded company is affected by a number of variables, many of which are outside the Company's control. Such factors include: the general condition of markets for resource stocks, and particularly for stocks of lithium exploration and development companies and other battery-metals stocks; the general strength of the economy; the availability and attractiveness of alternative investments; analysts' recommendations and their estimates of financial performance; investor perception and reactions to disclosures made by the Company, and by the Company's competitors; future securities sales; reputational risks of the Company; and the breadth of the public markets for the stock. Investors could suffer significant losses if the Company's common stock is depressed or illiquid when an investor seeks liquidity.

Market Risks

The Company is exposed to commodity price movements for the inventory it holds and the products it plans to produce. Commodity price risk management activities are currently limited to monitoring market prices. The Company's future revenues, if any, are sensitive to the market prices of the metals contained in its planned products.

The Company's projects are highly dependent on the demand for and uses of lithium-based end products. This includes lithium-ion batteries for electric vehicles and other large format batteries that currently have limited market share and whose projected adoption rates are not assured. To the extent that such markets do not develop in the manner contemplated by the Company, then the long-term growth in the market for lithium products will be adversely affected. This would inhibit the potential for development of the projects, their potential commercial viability and would otherwise have a negative effect on the business and financial condition of the Company. In addition, as a commodity, lithium market demand is subject to the substitution effect in which end-users adopt an alternate commodity as a response to supply constraints or increases in market pricing. These circumstances could limit the quantity of customers and prices paid for our products. To the extent that these factors arise in the market for lithium, it could have a negative impact on overall prospects for growth of the lithium market and pricing, which in turn could have a negative effect on the Company and its projects.

Product Price and Quality Risks

The ability to reach and sustain profitable operations on the recycling and extraction projects, if and to the extent the projects are developed and enter full commercial operation, will be significantly affected by changes in the market price of lithium-based end products. The market price of these products fluctuates widely and is affected by numerous factors beyond the Company's control, including world supply and demand, pricing characteristics for alternate energy sources such as oil and gas, government policy and laws, interest rates, the rate of inflation and the stability of currency exchange rates, and other geopolitical and global economic factors. Such external economic factors are influenced by changes in international investment patterns, various political developments and macro-economic circumstances. Furthermore, the price of lithium products is significantly affected by their purity and performance, and by the specifications of end-user battery manufacturers. If the products produced from the Company's projects do not meet battery-grade quality and/or do not meet customer specifications, pricing will be reduced from that expected for battery-grade product. In turn, the company may lose or fail to attract customers. The Company may not be able to effectively mitigate pricing risks for its products. Depressed pricing for the Company's products will affect the level of revenues expected to be generated by the Company, which in turn could affect the value of the Company, its share price and the potential value of its properties.

Project and Process Risks

The processes contemplated by the Company for refining of extracted materials and refining of recycled materials have not previously been demonstrated at commercial scale. There are risks that efficiencies of recovery and throughput capacity will not be met, and risks that scaled production will not be cost effective or operate as expected. In addition, there is potential for unforeseen costs, additional changes to the process chemistry and engineering, and other unforeseen circumstances that could result in delays to the projects or increased capital or operating costs.

The Company is in the process of exploring and assessing a mineral resource in Tonopah, Nevada, with the intent of progressing the project to mining and processing activities. The Company has no prior history of completing the development of a mining project or conducting mining operations. If found to be economically feasible, the future development of mineral resources will require the construction and operation of a mine, processing plant and related infrastructure. While certain members of management have mining development and operational experience, the Company does not have any such experience as a collective organization. As a result of these factors, the Company's future success is more uncertain than if it had a proven operating history.

If the Tonopah project advances, the Company is and will continue to be subject to all risks inherent with establishing new mining operations including: the time and costs of construction of mining and processing facilities and related infrastructure; the availability and costs of skilled labor and mining equipment and supplies; the need to obtain necessary environmental and other governmental approvals, licenses and permits, and the timing of the receipt of those approvals, licenses and permits; the availability of funds to finance construction and development activities; potential opposition from non-governmental organizations, indigenous peoples, environmental groups or local groups which may delay or prevent development activities; and potential increases in construction and operating costs due to various factors, including changes in the costs of fuel, power, labor, contractors, materials, supplies and equipment.

It is common in new mining operations to experience unexpected costs, problems and delays during construction, commissioning and mine start-up, as well as delays in the early stages of mineral production.

The Company is concurrently overseeing the advancement of our major lithium projects. Work to advance these projects requires the dedication of considerable time and resources by the Company and its management team. The advancement of the projects concurrently brings with it the associated risk of strains on managerial, human and other resources. The Company's ability to successfully manage each of these processes will depend on a number of factors, including its ability to manage competing demands on time and other resources, financial or otherwise, and successfully retain personnel and recruit new personnel to support its growth and the advancement of its projects.

Risks Relating to the U.S. DOE Grant Programs

The DOE's invitation to enter into confirmatory due diligence and term sheet negotiations is not an assurance that DOE will offer a term sheet to the applicant, or that the terms and conditions of any term sheet will be consistent with the terms proposed by the applicant. The outcome of the Company's application to the DOE for funding is wholly dependent on the results of DOE advanced due diligence and DOE's determination whether to proceed, and there can be no assurances as to the outcome of such due diligence review, whether the DOE will determine to proceed and as to the terms and conditions of any term sheet that may be offered, if any.

Permitting Risks

Our operations in the United States are subject to the federal, state and local environmental, health and safety laws applicable to the reclamation of lithium-ion batteries and exploration for, and the development and operation of, mineral properties. Depending on how any particular operation is structured, our operations and related facilities will have to obtain environmental permits or approvals to operate, including those associated with, among other things, air emissions, water discharges, waste management and storage, and exploration and development of mineral properties on federal lands and related processing facilities. We may face opposition from local residents or public interest groups to the installation and operation of our facilities. Failure to secure (or significant delays in securing) the necessary approvals could prevent us from pursuing some of our planned operations and adversely affect our business, financial results and growth prospects. Additionally, there can be no certainty that current permits will be maintained, permitting changes will be approved, estimated permitting timelines will be met, estimated costs will be accurate, or additional or approvals required to carry out recycling, extraction and refining will be obtained. There is the risk that existing permits will be subject to challenges of regulatory administrative processes and similar litigation and appeal processes. Litigation and regulatory review processes can result in lengthy delays, with uncertain outcomes. Such issues could impact the expected timelines of the Company's projects and consequently have a material adverse effect on the Company's prospects and business.

Geopolitical Risks

In recent years there has been a substantial increase in political tensions, which is particularly acute in respect to lithium. Lithium has been identified as a 'critical mineral' in multiple jurisdictions and is the subject of increasingly active industrial policy. The Company does not believe this will result in a substantive adverse change to its business or operations. However, the Company does expect that over time it may limit our ability to undertake business opportunities with actors from non-Western countries.

Cost Estimate Risks

Capital costs, operating costs, raw materials costs, production and other estimates may differ significantly from those anticipated by the Company's current estimates, and there can be no assurance that the Company's actual costs will not be higher than currently anticipated. The Company's actual costs and production may vary from estimates for a variety of reasons, including, but not limited to: lack of or availability of raw materials, resources or necessary supplies or equipment; inflationary pressures flowing from global supply chain shortages and increased transportation costs, which in turn are causing increased costs for supplies and equipment; increasing labor and personnel costs; unexpected construction or operating problems; higher than expected cost of commodities or feedstock; lower than expected realized lithium prices; revisions to construction plans; risks and hazards associated with exploration or mineral production; natural phenomena; floods; unexpected labor shortages or strikes; and general inflationary pressures. Many of these factors are beyond the Company's control and could have a material effect on the Company's operating cash flow, including the Company's ability to service its indebtedness.

Operating Risks

The Company's operations are subject to all the hazards and risks normally incidental to the exploration for, and the development and operation of, mineral properties. The Company strives to implement comprehensive health and safety measures designed to comply with government regulations and protect the health and safety of the Company's workforce in all areas of its business. The Company also strives to comply with environmental regulations in its operations. Nonetheless, risks associated with the Company's planned operations include fires, power outages, shutdowns due to equipment breakdown or failure, aging of equipment or facilities, unexpected maintenance and replacement expenditures, human error, labor disruptions or disputes, inclement weather, higher than forecast precipitation, flooding, shortages of water, explosions, releases of hazardous materials, landslides, earthquakes, industrial accidents and explosions, protests and other security issues, and the inability to obtain adequate machinery, equipment or labor due to shortages, strikes or public health issues such as pandemics.

Risk of Hazardous Substances

We may be held responsible for the costs of remediating contamination at the site of current or former activities or at third party sites or be held liable to third parties for exposure to hazardous substances should those be identified in the future. Under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") and its state law equivalents, current or former owners of properties may be held jointly and severally liable for the costs of site cleanup or required to undertake, remedial actions in response to unpermitted releases of hazardous substances at such property, in addition to, among other potential consequences, liability to governmental entities for the cost of damages to natural resources, which may be significant.

Costs and Requirements of Being a Public Company

As a public reporting company, we are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and other federal securities laws, rules and regulations. Complying with these laws and regulations requires more time and attention of our Board of Directors and management and requires additional employees compared to a privately-held company. In addition, the costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC, furnishing audited reports to stockholders, maintaining more comprehensive compliance functions, policies and procedures, and corporate governance, are greater than that of a privately-held company.

To the extent any public or private offering of our securities is not conducted in accordance with applicable federal or state securities laws, purchasers of our securities could be entitled to rescission rights.

We have issued a significant number of securities in public and private offerings and as payment for services or in connection with transactions. It is possible, by reason of procedural or similar failures, or failures to provide disclosure or notices of sales, that a violation of federal or state securities laws may have occurred. If a holder of our securities were successful in claiming that securities were issued to such holder without such issuance being in compliance with applicable securities laws, we believe that the remedy to such holder would be a rescission of the sale, pursuant to which the holder could be entitled to recover the amount paid for the security, plus interest (usually at a statutory rate prescribed by state law).

Risk of Fraud, Misconduct, or Non-Compliance with Anti-Corruption Laws

We may be exposed to fraud, non-compliance with anti-corruption laws, or other misconduct committed by our employees, potential joint venture partners, representatives, agents, vendors, customers or other third parties undertaking actions on our behalf that could subject us to litigation, financial losses and fines or penalties imposed by governmental authorities and affect our reputation.

Such misconduct could include, but is not limited to, misappropriating funds, engaging in misrepresentation or fraudulent, deceptive or otherwise improper activities, including activities in exchange for personal benefit or gain or activities that otherwise do not comply with applicable laws or our internal policies and procedures. The risk of fraud or other misconduct could increase as we expand our business.

Risk of Failure to Meet Development Timelines and Capital Estimates

Our required capital expenditures can be complex and challenging to predict, may experience delays or other difficulties, and the costs may exceed our estimates.

Our capital expenditures primarily consist of substantial investments in new or used equipment, facilities and properties, as well as expenditures to maintain and improve existing equipment, facilities and properties. Execution of these capital expenditures can be complex, and commencement of production requires start-up, commission and certification of product quality by our customers, which may impact the expected output and timing of sales of product from such facilities. Construction of large operations is subject to numerous risks and uncertainties, including, among others, the ability to complete a project on a timely basis and in accordance with the estimated budget for such project and our ability to estimate future demand for our products. In addition, our returns on these capital expenditures may not meet our expectations. Future capital expenditures may be significantly higher, depending on the investment requirements of each of our business lines, and may also vary substantially if we are required to undertake actions to compete with new technologies in our industry. We may not have the capital necessary to undertake these capital investments. If we are unable to do so, we may not be able to effectively compete in some of our markets.

Risk of Failure to Comply with Covenants

The Company has contractual arrangements that contain affirmative and negative covenants that must be adhered to. It is possible that the Company could fail to meet the requirements of one or more covenants, resulting in penalties or acceleration of amounts due. No assurance can be given that a breach will not occur. This could result in a default under our credit agreements that would permit the applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. If we are unable to repay our debt, creditors would have the right to proceed against the collateral securing the debt. This in turn could have a material adverse effect on the Company's business and operations.

Going Concern Risk

The continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain debt or equity financing to meet expected cash requirements. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain them on favorable terms, which could limit its operations. Any such financing activities are subject to market conditions.

These uncertainties cause substantial doubt about the Company's ability to continue as a going concern for 12 months from issuance of these financial statements. In their report on our financial statements included in this Form 10-K, our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

Risks from Changing Regulations and Laws

Changes to government laws and regulations may affect the development of the Company's projects. Such changes could include laws relating to grant funds availability, taxation, royalties, restrictions on production, environmental, biodiversity and ecological compliance, mine development and operations, mine safety, permitting and numerous other aspects of the business.

Environmental Risks and Regulations

The Company must comply with stringent environmental regulations. These are evolving in a manner that is expected to require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. Applicable environmental laws and regulations may require enhanced public disclosure and consultation. It is possible that a legal protest could be triggered through one of these requirements or processes that could delay development activities. No assurance can be given that new environmental laws and regulations will not be enacted or that existing environmental laws and regulations will not be applied in a manner that could limit or curtail the Company's development programs. Such changes in environmental laws and regulations and associated regulatory requirements could delay and/or increase project costs or increase the risk of environmental liability associated with project operations. This in turn could have a material adverse effect on the Company's business and operations.

Insurance Risks

While the Company maintains insurance to protect against certain risks associated with its business, insurance may not be available to insure against all risks, or the costs of such insurance may be uneconomic. The Company may also elect not to obtain insurance for other reasons. Insurance policies maintained by the Company may not be adequate to cover the full costs of actual liabilities incurred by the Company or may not be continued by insurers for reasons not solely within the Company's control. The Company maintains liability insurance in accordance with industry standards. However, losses from uninsured and underinsured liabilities have the potential to materially affect the Company's financial position and prospects.

Health and Safety Risks

The Company carries a risk of liability related to workers' health and safety. Compliance with health and safety laws, and any changes to such laws, and the requirements of applicable permits and other regulatory requirements remains material to the Company's business. The Company may become subject to government orders, investigations, inquiries or other proceedings (including civil claims) relating to health and safety matters. The occurrence of any of these events or any changes, additions to or more rigorous enforcement of health and safety laws, permits or other approvals could have a significant impact on operations and result in additional costs or penalties. In turn, these could have a material adverse effect on the Company's reputation, operations and future prospects.

Risk of Catastrophic Events, Terrorism and War

The occurrence or threat of extraordinary events, including domestic and international terrorist attacks, may disrupt our operations and decrease demand for our products. Certain assets may be at greater risk of future terrorist attacks than other possible targets in the United States and around the world. Extraordinary events cannot be predicted, and their occurrence may negatively affect the economy in general, and the markets for our products in particular. The resulting damage from a direct attack on our assets, or assets used by us, could include loss of life and property damage. In addition, available insurance coverage may not be sufficient to cover all the damage incurred or, if available, may be prohibitively expensive.

Risk of Accounting Estimates and Impairment Charges

We make certain accounting estimates and projections in connection with our impairment analysis for long-lived assets in accordance with applicable accounting guidance. An impairment charge may be required if the impairment analysis indicates that the carrying value of an asset exceeds the sum of the expected undiscounted cash flows of the asset. The projection of future cash flows used in this analysis requires the use of judgment and a number of estimates and projections of future operating results. If actual results differ from Company estimates, additional charges for asset impairments may be required in the future. If impairment charges are significant, our financial results could be negatively affected.

Mineral Resource and Mineral Reserve Estimation Risks

Mineral Resources and Mineral Reserves figures are estimates only. Estimated tonnages and grades may not be achieved if the projects are brought into production; differences in grades and tonnage could be material; and, estimated levels of recovery may not be realized. The estimation of Mineral Resources and Mineral Reserves carries with it many inherent uncertainties, of which many are outside the control of the Company. Estimation is by its very nature a subjective process, which is based on the quality and quantity of available data, engineering assumptions, geological interpretation and judgements used in the engineering and estimation processes. Estimates may also need to be revised based on changes to underlying assumptions, such as commodity prices, drilling results, metallurgical testing, production, and changes to mine plans of operation. Any material decreases in estimates of Mineral Resources or Mineral Reserves, or an inability to extract Mineral Reserves could have a material adverse effect on the Company, its business, results of operations and financial position.

Any estimates of Inferred Mineral Resources are also subject to a high degree of uncertainty and may require a significant amount of exploration work to determine if they can be upgraded to a higher confidence category. Risks associated with upgrading the Tonopah project to a higher confidence category include the accuracy of fault modeling and offset of lithium-hosting lithologies on western-side of mineral resource, the lack of project-specific lithologic density data, the accuracy of processing cost used in the pit optimization to define the resource which can potentially affect resource cut-off grades, and the large fluctuations in commodity prices which can potentially affect resource cut-off grades.

Exploration Stage Company Risks

We cannot assure you about the existence of economically extractable mineralization at this time, nor about the quantity or grade of any mineralization we may have found. Because the probability of an individual prospect ever having reserves is uncertain, our properties may not contain any reserves and any funds spent on evaluation and exploration may be lost. Even if we confirm reserves on our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are mined. We do not know with certainty that economically recoverable minerals exist on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties. Further, our lack of established reserves means that we are uncertain about our ability to generate revenue from our operations.

Even if we do eventually discover a mineral reserve on one or more of our properties, there can be no assurance that they can be developed into producing mines and that we can extract those minerals. Both mineral exploration and development involve a high degree of risk, and few mineral properties that are explored are ultimately developed into producing mines.

Water Management Risks

Water management regulations are in place in Nevada where the Company's projects are located. As such, the Company must obtain sufficient water rights and transfer those rights such that they may be used for planned recycling and extraction projects. The Company's flowsheets are designed and/or being designed to lower the use of water to the extent possible by incorporating recycling technologies. The availability of water and pricing of water rights are risks that may be heightened by the potential effects of climate change and could have a material adverse effect on the Company's business.

Climate Change Risks

The introduction of climate change legislation is an increasing focus of various levels of government worldwide. The Company is committed to developing its business with a view to contributing to the low carbon economy. This includes incorporating sustainable energy sources and minimizing the use of non-renewable sources of energy to the extent that renewable sources are available with sufficient capacity, at cost effective pricing and that are complementary to the facilities and site design. However, the use of such low carbon technologies may be more costly in certain instances than non-renewable options in the near-term, or may result in higher design costs, long-term maintenance costs or replacement costs. Additionally, if the trend toward increasing regulations continues, the Company may face increasing operating costs at its projects to comply with these changing regulations. Until then, the Company views the risk of occurrence of such litigation as being low.

Risk of Future Losses and Lack of Profitability

The Company anticipates it will continue to have negative cash flow from operating activities in future periods until profitable commercial production is achieved. Although the Company has cash on hand and access to additional cash, the Company's ability to continue as a going concern will be dependent upon its ability to generate profits from its proposed operations, or to raise capital through equity or debt financing to continue to meet its obligations and repay its liabilities arising from normal business operations when they come due.

Intellectual Property Risks

The Company relies on the ability to protect its intellectual property rights and depends on patent, trademark and trade secret legislation to protect its proprietary know-how. There is no assurance that the Company has adequately protected or will be able to adequately protect its valuable intellectual property rights or will at all times have access to all intellectual property rights that are required to conduct its business or pursue its strategies, or that the Company will be able to adequately protect itself against any intellectual property infringement claims. There is also a risk that the Company's competitors could independently develop similar technology, processes or know-how; that the Company's trade secrets could be revealed to third parties; that any current or future patents, pending or granted, will be broad enough to protect the Company's intellectual property rights; or, that foreign intellectual property laws will adequately protect such rights. The inability to protect the Company's intellectual property could have a material adverse effect on the Company's business, results of operations and financial condition. Additionally, the applied science industry is characterized by frequent allegations of intellectual property infringement. Though we do not expect to be subject to any of these allegations, any allegation of infringement could be time consuming and expensive to defend or resolve, result in substantial diversion of management resources, cause suspension of operations or force us to enter into royalty, license, or other agreement, rather than dispute the merits of such allegation. If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation. We may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all.

Risk of Defects in Title

We have investigated our rights to the assets we have purchased and developed, and, to the best of our knowledge, those rights are in good standing. However, no assurance can be given that such rights will not be revoked, or significantly altered, to our detriment. There can also be no assurance that our rights will not be challenged or impugned by third parties, including by governments and non-governmental organizations.

Risks Related to Research, and Development, and Changing Technology

Our research and development efforts may not succeed in addressing changes in our customers' needs, and our competitors may develop more effective or successful products. The development and adoption of new battery technologies could rely on inputs other than lithium compounds which could significantly impact our prospects and future revenues.

Current and next generation high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. The pace of advances in current battery technologies, the development and adoption of new battery technologies that rely on inputs other than lithium compounds, or a delay in the development and adoption of next generation high nickel battery technologies that utilize lithium hydroxide could significantly impact our prospects and future revenues. Many materials and technologies are being researched and developed with the goal of making batteries lighter, more efficient, faster charging and less expensive. Some of these could be less reliant on lithium hydroxide or other lithium compounds, especially if the demand for batteries for use in electric vehicles outstrips the available supply of lithium hydroxide or other lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and their share in the overall mix over any time horizon. Commercialized battery technologies that use less lithium compounds could materially and adversely impact our prospects and future revenues.

Joint Venture, Acquisition and Strategic Alliance Risks

Our business strategy includes, in part, entering into potential joint ventures, acquisitions, and strategic alliances with parties involved in the manufacture and recycling of lithium-ion products. Failure to successfully identify or integrate such potential joint ventures, acquisitions or strategic alliances into our operations could adversely affect our business. Joint ventures, acquisitions and strategic alliances may involve significant other risks and uncertainties, including distraction of management's attention away from normal business operations, insufficient revenue generation to offset liabilities assumed and expenses associated with the transaction, and unidentified issues not discovered in our due diligence process, such as product quality, technology issues and legal contingencies. In addition, we may be unable to effectively integrate any such initiatives into our operations. Our operating results could be adversely affected by any problems arising during or from such activity.

Risks of Relying on Consultants

The Company has relied on, and may continue to rely on, consultants and others for mineral exploration and exploitation expertise. The Company believes that those consultants are competent and that they have carried out their work in accordance with internationally recognized industry standards. However, if the work conducted by those consultants is ultimately found to be incorrect or inadequate in any material respect, the Company may experience delays or increased costs in developing its properties.

Risk of No Dividends

The Company has not paid dividends on its Common Shares since incorporation, and currently has no ability to generate earnings as it is pre-revenue. The Company anticipates that it will retain its earnings and other cash resources for future operations and the ongoing development of its business. As such, the Company does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of the Board, which will take into account many factors including the Company's operating results, financial condition and anticipated cash needs.

Information Technology and Cybersecurity Risks

Threats to information technology systems associated with cybersecurity risks and cyber incidents or attacks continue to grow and evolve in terms of severity and sophistication, particularly with the increase in remote work that began during the COVID-19 pandemic. A cybersecurity attack has the potential to compromise the business, financial and other systems of the Company, and could go unnoticed for some time. Risks associated with cybersecurity threats include, among other things, loss of intellectual property, disruption of business operations and safety procedures, loss or damage to worksite data delivery systems, privacy and confidentiality breaches, and increased costs and time to prevent, respond to or mitigate cybersecurity incidents. The Company has implemented a cybersecurity policy and provided training to its personnel as mitigation measures. System and network maintenance, upgrades and similar best practices are also followed. However, despite these measures, the occurrence of a significant cybersecurity incident could have a material adverse effect on the Company's business and result in a prolonged disruption to it.

Talent Risk

The Company highly values the contributions of its key personnel. The success of the Company continues to depend largely upon the performance of key officers, employees and consultants who have advanced the Company to its current stage of development and contributed to its potential for future growth. The market for qualified talent has become increasingly competitive, with shortages of qualified talent relative to the number of available opportunities being experienced in all markets where the Company conducts its operations. The ability to remain competitive by offering higher compensation packages and programs for growth and development of personnel, with a view to retaining existing talent and attracting new talent, has become increasingly important to the Company and its operations in the current climate. Any prolonged inability to retain key individuals, or to attract and retain new talent as the Company grows, could have a material adverse effect upon the Company's growth potential and prospects.

Additionally, the Company has not purchased any "key-man" insurance for any of its directors, officers or key employees and currently has no plans to do so.

Implementation of Business Plan Risks

Our ability to successfully implement our business plan requires an effective planning and management process. If funding is available, we may elect to increase the scope of our operations and acquire complementary businesses. Implementing our business plan will require significant additional funding and resources. If we grow our operations, we will need to hire additional employees and make significant capital investments. If we grow our operations, it will place a significant strain on our existing management and resources. Additionally, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to expand, train and manage our workforce. Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer.

Risk of Failure of Internal Control Over Financial Reporting

Our reporting obligations as a public company place a significant strain on our management, operational and financial resources and systems. Because we failed to maintain an effective system of internal control over financial reporting, we could experience delays or inaccuracies in our reporting of financial information, or non-compliance with the SEC, reporting and other regulatory requirements. This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things, cause our stock price to drop.

Risks of Legal Proceedings

The Company may be subject to a variety of regulatory requirements, and resulting investigations, claims, lawsuits and other proceedings in the ordinary course of its business, as a result of its status as a publicly traded company and because of its mining exploration and development business. Litigation related to environmental and climate change-related matters, ESG disclosure, and securities class actions arising from share price volatility is also on the rise. The occurrence and outcome of any legal proceedings cannot be predicted with any reasonable degree of certainty due to the inherently uncertain nature of litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. Defense and settlement costs of legal claims can be substantial, even with respect to claims that are determined to have little or no merit.

Litigation may be costly and time-consuming and can divert the attention of management and key personnel away from day-to-day business operations. The Company and its projects are, from time to time, subject to legal proceedings or the threat of legal proceedings. If the Company were to be unsuccessful in defending any such claims against it, or unable to settle claims on a satisfactory basis, the Company may be faced with significant monetary damages, injunctive relief or other negative impacts that could have a material adverse effect on the Company's business and financial condition. To the extent the Company is involved in any active litigation, the outcome of such matters may not be determinable, and it may not be possible to accurately predict the outcome or quantum of any such proceedings at a given time.

Changes to Tax Laws and Other Tax Risks

Changes to U.S. tax laws could adversely affect the Company or holders of the Common Shares. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.

We are subject to review and audit by U.S. federal, state, local tax authorities. Tax authorities may disagree with or challenge tax positions we take, which if successful could harm our business. We may be subject to additional tax liabilities due to changes in non-income based taxes resulting from changes in federal, state or local tax laws, changes in taxing jurisdictions' administrative interpretations, decisions, policies, and positions, results of tax examinations, settlements, or judicial decisions, changes in accounting principles, changes to our business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period. In the future, the company may also be subject to foreign jurisdictions where tax law changes may pose a similar risk.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

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

Exhibit		Description		Filed Herein		Incorporated Date		By Form		Reference Exhibit
3.1		Certificate of Designation of Series D Preferred Stock, dated September 16, 2024				09/20/2024		8-K		3.1
10.1		Settlement Agreement, dated July 3, 2024, between American Battery Technology Company and Mercuria Energy America, LLC**				07/06/2024		8-K		10.1
10.2		Offer Letter, dated August 26, 2024, between American Battery Technology Company and Steven Wu				08/26/2024		8-K		10.2
10.3		Release Agreement, dated August 26, 2024, between American Battery Technology Company and Andrés Meza				08/26/2024		8-K		10.3
10.4		Subscription and Investment Representation Agreement, dated September 16,2024, by and between American Battery Technology Company and Ryan Melsert				09/20/2024		8-K		10.4
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer		x
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer		x
32.1		Section 1350 Certification of Chief Executive Officer*
32.2		Section 1350 Certification of Chief Financial Officer*
101		INS Inline XBRL Instant Document.		x
101		SCH Inline XBRL Taxonomy Extension Schema Document		x
101		CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document		x
101		LAB Inline XRBL Taxonomy Label Linkbase Document		x
101		PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document		x
101		DEF Inline XBRL Taxonomy Extension Definition Linkbase Document		x
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)		x

*Furnished herewith.

** Certain Confidential information contained in this exhibit has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. Additionally, certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) under Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN BATTERY TECHNOLOGY COMPANY

(Registrant)

Date: November 14, 2024	By:	/s/ Ryan Melsert
		Ryan Melsert
		Chief Executive Officer (Principal Executive Officer)
Date: November 14, 2024	By:	/s/ Jesse Deutsch
		Jesse Deutsch
		Chief Financial Officer (Principal Accounting Officer)

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