Business Context and Reporting Period
Company: American Battery Technology Company (ABAT)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Three months ended September 30, 2025
Business Overview: ABAT is an integrated critical battery materials company focused on increasing domestic U.S. production of lithium, nickel, cobalt, and manganese. Its strategy involves three pillars: exploration of primary resources (Tonopah Flats Lithium Project), development of extraction technologies, and commercialization of lithium-ion battery recycling. The company operates as a single segment and is currently in a growth stage with limited operating history.
Key Financial Metrics
| Metric | Q1 2026 (Sep 30, 2025) | Q1 2025 (Sep 30, 2024) |
|---|---|---|
| Revenue | $937,589 | $201,960 |
| Cost of Goods Sold (COGS) | $4,454,231 | $2,542,641 |
| Gross Loss | $(3,516,642) | $(2,340,681) |
| Net Loss | $(10,299,566) | $(11,694,569) |
| Net Loss Per Share (Basic/Diluted) | $(0.09) | $(0.17) |
| Cash and Cash Equivalents | $30,122,498 | $5,769,036 (End of Period 2024) |
| Restricted Cash | $800,000 | $0 (End of Period 2024) |
| Total Assets | $101,473,201 | $84,457,791 (Jun 30, 2025) |
| Total Liabilities | $5,474,897 | $13,858,768 (Jun 30, 2025) |
| Notes Payable | $0 | $7,729,755 (Jun 30, 2025) |
| Working Capital | $35,401,739 | $10,863,505 (Jun 30, 2025) |
Cash Flow Summary (Three Months Ended Sep 30, 2025):
- Operating Activities: $(7,138,756)
- Investing Activities: $(708,307)
- Financing Activities: $26,295,257 (Driven by ATM offerings and warrant exercises)
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 364% to $0.94 million, driven by sales of black mass and byproducts from recycling operations.
- Debt Extinguishment: The company fully extinguished $8.0 million in senior secured convertible notes by converting them into common stock. Consequently, Notes Payable dropped from $7.7 million (June 30, 2025) to $0.
- Liquidity Improvement: Cash and cash equivalents increased significantly from $7.5 million (June 30, 2025) to $30.1 million, bolstered by $21.9 million in ATM proceeds and $4.4 million from warrant exercises.
- Expense Reduction: Total operating expenses decreased 11% to $6.6 million, primarily due to a reduction in General and Administrative expenses ($3.6M vs $5.0M) despite an increase in R&D expenses.
- Asset Reclassification: Assets previously held-for-sale (Fernley, Nevada property) were reclassified back to Property and Equipment after a sale agreement was terminated.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
Management anticipates operating losses will lessen in the near term due to revenue growth and cost efficiencies. The company believes its current cash position, combined with anticipated revenue and recent ATM issuances, is sufficient to fund operations for at least the next 12 months. The Tonopah Flats Lithium Project (TFLP) was designated a "Covered Priority Project" for streamlined federal permitting, and a Pre-Feasibility Study (PFS) was published detailing 21.3 million tonnes of LHM resources.
Risks and Contingencies
- Grant Termination: On October 9, 2025 (subsequent to period end), the U.S. Department of Energy (DOE) terminated a $57.7 million grant for the design and construction of a lithium hydroxide refinery. The company has filed an appeal and intends to pursue dispute resolution remedies.
- Internal Control Weakness: Management concluded that disclosure controls and internal controls over financial reporting were not effective as of September 30, 2025. A material weakness was identified regarding the lack of proper segregation of duties in accounting processes. The company is searching for a permanent CFO and implementing remediation measures.
- Liquidity Dependence: The company remains dependent on equity financing (ATM, private placements) and government grants to fund operations and capital expenditures.
Unusual Items
- Non-GAAP COGS: Management reported a non-GAAP cash cost of goods sold of $3.3 million, excluding $1.0 million in depreciation and $0.2 million in stock-based compensation.
- Stock-Based Compensation: Significant non-cash expense of $2.3 million was recognized, primarily related to share awards and warrants.
Investor Verification Checklist
- Grant Appeal Status: Verify the outcome of the appeal regarding the terminated $57.7 million DOE grant, as this impacts future capital and project timelines.
- Internal Control Remediation: Monitor progress on the material weakness in internal controls, specifically the hiring of a permanent CFO and implementation of segregation of duties.
- ATM Utilization: Track the remaining capacity under the $50 million ATM agreement and the dilution impact of recent share issuances (8.2M shares issued in Q1).
- Production Ramp-Up: Assess whether the recycling facility can achieve economies of scale to reduce the gross loss, which widened to $3.5 million despite revenue growth.
- Subsequent Warrant Exercises: Note that additional warrant exercises occurred in October 2025, generating further proceeds ($5.3M cash, plus cashless exercises).