American Battery Technology Company — FY2022 Form 10-K
Reporting period: Fiscal year ended June 30, 2022, compared with fiscal 2021. The request metadata says “2021 Q4,” but the filing covers the full fiscal year ended June 30, 2022.
Business context
ABTC is a pre-revenue battery-materials technology company developing lithium-ion battery recycling, extraction and refining technologies, and domestic lithium resources. It was constructing a recycling pilot plant in Fernley, Nevada, and exploring lithium-bearing claystone claims near Tonopah. The company states it has not generated revenue from its primary business activities.
Financial performance and liquidity
| Metric | FY2022 / June 30, 2022 | FY2021 / June 30, 2021 |
|---|---|---|
| Revenue | No revenue from primary business activities | No revenue from primary business activities |
| Operating expenses | $33.7 million | $37.7 million |
| Net loss | $33.5 million; $0.05 per share | $41.8 million; $0.08 per share |
| Cash from operations | $(10.2) million | $(7.8) million |
| Cash from investing | $(15.1) million | $(7.1) million |
| Cash from financing | $41.4 million | $26.9 million |
| Cash | $29.0 million | $12.8 million |
| Working capital | $26.8 million | $12.3 million |
| Total assets | $52.9 million | $21.3 million |
| Total liabilities | $3.2 million | $1.8 million |
General and administrative expense was $31.7 million, including $20.4 million of shares issued for professional services, down from $36.3 million and $29.4 million, respectively, in FY2021. Research and development expense was $1.0 million as reported in the audited statements; the MD&A describes approximately $1.1 million of costs, partly offset by $0.1 million of grant income. Exploration expense was $0.9 million. No operating margin is meaningful because the company had no primary-business revenue.
Financing included approximately $36.9 million net proceeds from a registered direct offering and approximately $4.0 million from a share purchase agreement, plus warrant exercises. The company reported no outstanding preferred shares at year-end. It had 644.1 million common shares outstanding and 40.3 million potentially issuable shares from warrants and restricted share units. Lease liabilities were $274,794; the filing reports no material off-balance-sheet arrangements.
Changes, outlook and risks
- Net loss narrowed by $8.2 million year over year, while operating cash use increased by $2.4 million and investing cash use increased by $8.0 million.
- FY2021 results included substantial convertible-debt and derivative valuation items; FY2022 had no corresponding derivative-liability expense or debt-settlement gain.
- At June 30, 2022, ABTC had invested approximately $10.8 million in Phase 1 pilot-plant construction, excluding land. The facility is designed for 20,000 metric tonnes of battery feedstock annually. Management expected Phase 1 commissioning in the first half of calendar 2023 and Phase 2 in the first half of 2024; these are forecasts, not completed milestones.
- Management believed cash and recent financing would fund operations for at least one year from the financial-statement issuance date, but said future capital may be needed and additional financing is not assured. It expects continued reliance on equity financing, which could dilute existing holders.
- The company reported an accumulated deficit of $138.6 million and limited operating history. Commercial-scale execution, construction and commissioning, technology performance, feedstock supply, product qualification, exploration results, permitting, and access to capital are material risks. No economic lithium reserve or resource is established in the provided filing text.
- After year-end, ABTC exercised an option to acquire 305 Tonopah claims for $8.0 million in two installments; it paid $4.0 million in cash in July 2022, with the remaining installment scheduled for October 2022.
- The company received a $2 million USABC contract award and a $4.5 million Department of Energy grant award. These support development work and do not establish commercial viability.
- Management concluded disclosure controls and internal control over financial reporting were ineffective at June 30, 2022, citing inadequate control documentation and review and insufficient segregation of duties. Management targeted remediation during FY2023, with no assurance it would be completed on schedule.
- The independent auditor issued an unqualified opinion on the financial statements; the auditor did not audit internal control effectiveness. A former-CEO legal matter was settled in June 2022, and the company reported no other proceedings considered material.
Important facts for investors to verify
- Whether Phase 1 and Phase 2 construction, commissioning, throughput, recovery, product quality, and commercialization milestones were achieved, and at what cost.
- Current cash runway, subsequent operating and capital spending, and whether the remaining $4.0 million Tonopah claim payment was made.
- Actual revenue, customer and feedstock contracts, grant conditions and receipts, and the economics of recycling and claystone-lithium projects.
- Exploration results and any independently supported resource or reserve estimates for Tonopah Flats.
- Progress in remediating material weaknesses, including effectiveness of accounting controls and financial reporting processes.
- Fully diluted share count, warrant exercises and expirations, equity-plan awards, and the effect of future financing on existing shareholders.