American Battery Technology Company (ABAT) — FY2023 Form 10-K
Reporting period: Fiscal year ended June 30, 2023, compared with fiscal year ended June 30, 2022. Although the request metadata says “2022 Q4,” this filing covers FY2023. Amounts are U.S. dollars; share and per-share data are presented retroactively adjusted for the September 2023 1-for-15 reverse split.
Business context
ABAT is a pre-revenue battery-materials technology and development company pursuing lithium-ion battery recycling, primary lithium-resource exploration, and extraction and refining technologies. Its priority was commissioning its first commercial-scale recycling facility in McCarran, Nevada, while advancing the Tonopah Flats claystone lithium project. The filing says the company has not generated revenue from its primary business activities.
Key financial metrics
| Metric | FY2023 / June 30, 2023 | FY2022 / June 30, 2022 |
|---|---|---|
| Revenue | No revenue from primary business activities | No revenue from primary business activities |
| Operating expenses | $21.6 million | $33.7 million |
| Net loss | $21.3 million; $0.49 per share | $33.5 million; $0.80 per share |
| Operating cash flow | $(13.4) million | $(10.2) million |
| Investing cash flow | $(36.7) million | $(15.1) million |
| Financing cash flow | $23.4 million | $41.4 million |
| Cash | $2.3 million | $29.0 million |
| Current assets / current liabilities | $4.8 million / $13.4 million | $29.9 million / $3.1 million |
| Working capital | $(8.6) million | $26.8 million |
| Total assets / total liabilities | $74.7 million / $13.4 million | $52.9 million / $3.2 million |
| Accumulated deficit | $160.0 million | $138.6 million |
Gross margin and operating margin are not meaningful because the company had no primary-business revenue. FY2023 R&D expense was $7.7 million, up from $1.0 million; G&A was $12.0 million, down from $31.7 million; and exploration expense was $1.9 million, up from $0.9 million. The G&A decline largely reflected $12.4 million less expense for shares issued for professional services. Stock-based compensation was $9.2 million versus $1.2 million.
At year-end, notes payable were $6.0 million and current liabilities included that financing. The Mercuria credit agreement was repaid and terminated on August 30, 2023. The auditor issued an unqualified opinion on the financial statements and reported no critical audit matters; it did not audit internal control effectiveness.
Material changes versus FY2022
- Net loss narrowed by about $12.2 million, while operating cash use increased by about $3.2 million.
- Cash fell by about $26.7 million as investing outflows rose, including facility-related deposits and equipment and $8.1 million to acquire Tonopah mineral rights.
- Working capital shifted from a $26.8 million surplus to an $8.6 million deficit. Total assets increased to $74.7 million, primarily reflecting deposits, property and equipment, and mining properties.
- Financing cash inflow declined to $23.4 million from $41.4 million. FY2023 financing included equity offerings and a $6.0 million Mercuria loan.
Outlook, risks, contingencies, and unusual items
- Project plans: Management expected recycling Phase 1 commissioning in calendar Q4 2023 and Phase 2 in 2024. These are forward-looking targets, not reported operating achievements. Phase 1 is intended to produce intermediates and scrap byproducts; Phase 2 is intended to refine materials to battery-grade products.
- DOE support: The filing describes a $115.5 million, five-year lithium project budget with reimbursement eligibility of up to $57.7 million, and a $20.0 million recycling project budget with reimbursement eligibility of up to $10.0 million. DOE funds reimburse eligible expenditures and are not equivalent to unrestricted cash or guaranteed revenue. The company also had earlier USABC and DOE awards, including a $2.0 million project and a $4.5 million project with partial reimbursement.
- Liquidity and going concern: Management said cash and funds raised after year-end were expected to fund operations for at least 12 months from issuance of the financial statements, and concluded substantial doubt had been alleviated. The company nevertheless expects continued operating cash outflows and says further capital may be required. On August 29, 2023, it entered into an agreement for up to $51 million of zero-coupon senior secured convertible notes; $25 million had been received as of the filing. The notes mature September 1, 2025 and are secured by specified property and cash and investment accounts.
- Execution and market risks: Recycling and extraction processes have not been demonstrated at commercial scale. Scale-up, product quality, permitting, construction costs, commodity prices, feedstock availability, water rights, customer qualification, competition, and access to additional capital could delay projects or undermine commercial economics. The Tonopah resource is reported as inferred; resource estimates and future recovery are uncertain.
- Legal matters: The filing describes a former employee wage/contract case and an OSHA retaliation complaint by a former CFO, both disputed by the company. A separate shareholder case was settled and dismissed with prejudice in July 2023 without monetary compensation or attorneys’ fees.
- Controls: Management concluded disclosure controls were effective, but internal control over financial reporting was ineffective because of inadequate segregation of duties, a material weakness. Remediation was expected by December 31, 2023; completion was not assured.
- Other post-year-end changes: The McCarran facility acquisition closed in August 2023; the company terminated a proposed sale-leaseback; it repaid the Mercuria facility; and its stock began trading on Nasdaq as ABAT in September 2023 after the reverse split.
Important facts for investors to verify
- Whether Phase 1 and Phase 2 commissioning occurred on schedule, and whether commercial throughput, recovery, cost, and product-quality targets are being met.
- Cash runway, spending needs, and the terms, conversion/redemption mechanics, collateral, and dilution implications of the post-year-end convertible notes and other financing.
- DOE award conditions, eligible-cost reimbursement timing, matching-fund requirements, and cash actually received versus announced project budgets.
- Whether the segregation-of-duties material weakness was remediated and whether subsequent filings report any additional control deficiencies.
- Updates on the Tonopah resource classification, technical and economic studies, permitting, water access, and the disputed legal matters.