Business context and reporting period
American Battery Metals Corporation filed this Form 10-K for the fiscal year ended June 30, 2021. The supplied filing is not a 2020 Q4 report; the company changed its fiscal year-end, so the comparable period is the nine months ended June 30, 2020. The company later changed its name to American Battery Technology Company.
The company was pre-revenue and developing battery-metal recycling, extraction technologies, and lithium exploration projects. Its primary near-term focus was a proposed battery-recycling pilot plant in Nevada. Financial statements are audited and prepared under U.S. GAAP.
Financial performance and liquidity
| Metric | Year ended June 30, 2021 | Comparable period |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $37.7 million | $4.4 million |
| Net loss attributable to common stockholders | $41.9 million; $0.08 per share | $13.3 million; $0.05 per share |
| Cash used in operating activities | $7.8 million | $3.0 million |
| Cash used in investing activities | $7.1 million | $3,896 |
| Cash provided by financing activities | $26.9 million | $3.8 million |
The comparison covers a full fiscal year versus nine months and is not directly like-for-like. Margins are not meaningful because the company had no revenue. The reported loss included a $19.7 million derivative fair-value loss and an $18.7 million gain on debt settlement. Management attributed much of the expense increase to growth-related costs and stock-based compensation; consulting fees were $24.1 million and management fees $5.0 million, with most of those costs related to share-based compensation.
At June 30, 2021, cash was $12.8 million, total assets $21.3 million, total liabilities $1.8 million, and working capital $12.3 million, versus a $4.7 million working-capital deficit a year earlier. The company reported no convertible debentures or associated derivative liability outstanding at year-end. It had an accumulated deficit of $105.1 million. Common shares outstanding rose from 365.2 million to 573.3 million during the fiscal year; 44.5 million additional shares were potentially issuable from warrants and convertible preferred stock at June 30.
Material changes and financing
- Cash increased from $0.8 million to $12.8 million, principally through equity financing and warrant exercises, while liabilities declined from $6.1 million to $1.8 million as convertible debt was settled.
- The company spent $7.1 million on investing activities, including $5.4 million for property and equipment and $1.6 million for water rights.
- After year-end, on September 27, 2021, the company completed a securities transaction for approximately $39.1 million gross and $36.9 million net proceeds, issuing common shares and warrants. Management said proceeds were intended to fund pilot-plant construction and commissioning, operations, and research and development.
Outlook, risks and unusual items
Management estimated approximately $30 million of investment from September 2021 through September 2022 for the first plant phase, and a further approximately $10 million beginning in the fourth calendar quarter of 2022 for value-add processing. The filing also describes the post-year-end plant as a 20,000-metric-tonne-per-year facility. These are plans and estimates, not reported operating results; the company had not yet generated revenue or established lithium resources or reserves on its exploration property.
Management believed cash on hand and the subsequent financing would fund operations for at least one year from the financial-statement issuance date, but warned that additional capital may be needed and may not be available on acceptable terms. Future equity issuance could dilute existing holders. The prior-period auditor highlighted substantial doubt about the company’s ability to continue as a going concern; the current-year auditor issued an unqualified opinion on the financial statements. COVID-19 effects remained uncertain.
Management concluded disclosure controls and internal control over financial reporting were ineffective at June 30, 2021, citing insufficient documentation and review, inadequate segregation of duties, and corrected or immaterial misstatements in preliminary statements. A remediation program was underway, with remediation expected during fiscal 2022; the auditor did not provide an internal-control attestation. Other notable matters include ongoing litigation involving a former CEO, a $40,000 tax penalty, and the termination of a joint venture recorded with a $35,250 loss.
Key facts for investors to verify
- Confirm progress, capital costs, timing, planned throughput, and commissioning milestones for the Nevada plant; reconcile the stated 20,000-tonne annual capacity with the described phased facility plans.
- Track whether the $36.9 million net financing is sufficient, actual cash burn, and any further financing or dilution, including the warrants issued after year-end.
- Assess whether the company can commercialize its recycling and extraction processes and secure customers; the filing reports no revenue and no proven reserves.
- Review remediation of the disclosed material weaknesses and any subsequent changes in financial reporting controls.
- Monitor the former-CEO litigation and the status of the company’s exploration claims and water rights.