Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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 Annual Report on Form 10-K for the fiscal year ended June 30, 2025, 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 flows, 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-stage company 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: (i) exploration of new, United States primary resources of battery materials, (ii) development and commercialization of new technologies for the extraction of these battery materials from primary resources, and (iii) 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 operation of this facility remain a top priorities, and the Company has significantly expanded resources to support its development. These efforts include hiring additional technical staff, expanding laboratory facilities, and purchasing equipment. As a result, the Company generated its first revenue in the fourth quarter of fiscal year 2024 and achieved continued growth in production volumes and revenue throughout fiscal year 2025. The Company was awarded and has completed 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 DOE 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.

On March 28, 2024, the Company was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project Credits program (the "48C program"). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service following a competitive technical and economic review process performed by the 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 the Company's battery recycling facility in the Tahoe-Reno Industrial Center ("TRIC") near Reno, Nevada. As of September 30, 2025, 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, the Company was selected for an additional $40.5 million tax credit through the 48C program to support the design and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. This award was granted by the U.S. Department of Treasury Internal Revenue Service following a competitive technical and economic review process performed by the 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, 2025, the Company has not incurred any qualifying expenditures towards this tax credit.

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 was awarded and has completed a grant cooperative agreement from the DOE'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 completed the construction and commissioning of its lithium hydroxide ("LiOH") pilot plant. The construction and commissioning of this pilot plant enables the Company to demonstrate its technologies for accessing the lithium housed in its unconventional resource, Tonopah Flats Lithium 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 TFLP is one of the largest identified lithium resources in the United States, and the Company recently published a PreFeasibility Study ("PFS") that details the lithium mineral resources and reserves at this property, as well as the technical and financial roadmap for bringing the associated lithium mine and lithium hydroxide monohydrate ("LHM") refinery to commercialization. This PFS has concluded that the TFLP contains approximately 21.3 million tonnes LHM resource, with 2.7 million tonnes of LHM further classified as proven and probable reserve. The total processing costs for manufacturing this battery grade LHM is published to be $4,307 per tonne LHM. This project was recently selected by the National Energy Dominance Council (NEDC) and the FAST-41 Permitting Council within the Trump Administration to become a Priority Project, in order to enable streamlined federal permitting to accelerate the commercialization of this project.

Financial Highlights:

	●	The Company had cash on hand of $30.9 million at September 30, 2025, of which $30.1 million was unrestricted. This was a $22.6 million increase in unrestricted cash from June 30, 2025
	●	Revenue was $0.9 million for the three months ended September 30, 2025, as compared to $0.2 million for the three months ended September 30, 2024.
	●	Total cost of goods sold was $4.5 million for three months ended September 30, 2025, compared to $2.5 million for the three months ended September 30, 2024. The three months ended September 30, 2025 cost of goods sold included non-cash items of depreciation of $1.0 million and stock-based compensation of $0.2 million. Excluding these non-cash items, the three months ended September 30, 2025, cash cost of goods sold (a non-GAAP measure) was $3.3 million.

A reconciliation of fiscal fourth quarter 2025 GAAP to non-GAAP cost of goods sold

Description		Amount ($M)
GAAP Cost of Goods Sold		4.5
Less: Depreciation Expense		(1.0)
Less: Stock-Based Compensation		(0.2)
Non-GAAP Cash Cost of Goods Sold		3.3

	●	During the quarter ended September 30, 2025, the Company's noteholders the full balance of their remaining notes into common shares. As a result of these conversions, the carrying value of the notes payable was fully extinguished, and no amounts remain outstanding under the 2024 Notes.
	●	Subsequent to September 30, 2025, the Company utilized its ATM offering program to raise additional capital. Through the issuance of common stock under the ATM, the Company received aggregate gross proceeds of approximately $23.6 million (before deducting commissions and other offering expenses). As a result, following the fiscal year ended, the Company's net cash position has improved to $54.9 million as of November 3, 2025.
	●	In May 2025, the Company received formal approval from the US EPA that its battery recycling facility in McCarran, Nevada had been approved for classification to receive waste material under the "Comprehensive Environmental Response, Compensation, and Liability Act" (CERCLA). This certification allowed ABTC to be one of the only battery recyclers in the Western US to be capable of receiving batteries that had been damaged and classified as CERCLA waste, such as battery materials that had been involved in large scale battery energy storage system (BESS) thermal events and fires.
	●	ABTC was awarded a contract and has already started receiving material for the recycling of up to 10,000 tonnes of damaged batteries from the Moss Landing BESS facility near Monterrey, CA. As one of the largest battery recycling projects in the history of the US, ABTC implemented several weeks of downtime within the quarter ended September 30, 20205 to implement facility upgrades to be able to successfully win this contract and process this immense amount of battery material.
	●	The Company was selected for a competitively awarded $1 million agreement by the DOE's Argonne National Laboratory ReCell Center to support the commercialization of one of its internally developed technologies for the domestic manufacturing of critical mineral lithium hydroxide.
	●	The Company and Call2Recycle, the nation's largest consumer battery stewardship and collection program, announced a strategic partnership to advance the recycling of lithium-ion batteries for consumers across the United States.
	●	In August 2025, the Company's Tonopah Flats Lithium Project was approved by the National Energy Dominance Council and the FAST-41 Permitting Council to become a Covered Priority Project for streamlined federal permitting.
	●	The Company published the PreFeasibility Study (PFS) for its Tonopah Flats Lithium Project, which details the technical and financial roadmap for the commercialization of this domestic-US critical mineral lithium mine and refinery.

Components of Statements of Operations

The following table sets forth the Company's operating results for the periods indicated:

		Three Months Ended September 30, 2025				Three Months Ended September 30, 2024				$ Change				% Change
Revenue		$	937,589			$	201,960			$	735,629				364	%
Cost of goods sold			4,454,231				2,542,641				1,911,590				75
Gross loss			(3,516,642	)			(2,340,681	)			(1,175,961	)			50
Operating expense
General and administrative			3,628,127				5,009,841				(1,381,714	)			(28	)
Research and development			2,697,639				2,032,135				665,504				33
Exploration			290,951				420,507				(129,556	)			(31	)
Total operating expenses			6,616,717				7,462,483				(845,766	)			(11	)
Other income (expense)			(166,207	)			(1,891,405	)			1,725,198				(91	)
Net loss			(10,299,566	)			(11,694,569	)			1,395,003				(12	)

Revenue

During the three months ended September 30, 2025 and 2024, our revenue was $0.9 million and $0.2 million, respectively, which related to the sale of our black mass and byproducts resulting from recycling operations.

Cost of Goods Sold

Cost of goods sold during the three months ended September 30, 2025 and 2024 were $4.5 million and $2.5 million, respectively. The increase in cost of sales was primarily driven by higher headcount as the plant was commissioned, and employees were hired to support expanded production capacity. In addition, cost of goods sold reflects depreciation expense associated with the recycling facility fixed assets, which commenced upon the facility's in-service date during the three months ended September 30, 2024. We expect these costs to be reduced as a percentage of revenue as we scale our production and gain efficiencies in the production process.

Management uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analysing business trends as well as to view the results from management's perspective. Non-GAAP cost of goods sold excludes certain non-cash charges including depreciation expense and stock-based compensation. Non-GAAP results have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for our results reported under GAAP.

Operating Expenses

During the three months ended September 30, 2025, the Company incurred $6.6 million of operating expenses compared to $7.5 million of operating expenses during the three months ended September 30, 2024. The decrease is primarily due to the items described below:

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, 2025, general and administrative expenses were $3.6 million, a decrease of $1.4 million from the same period in the prior year, primarily related to a decrease in payroll costs of $0.7 million, driven by changes in employee activity, resulting in a decrease in general and administrative expenses with a corresponding increase to research and development expenses; $0.5 million in stock compensation expense; and $0.2 million in accounting, audit and insurance expenses.

Research and development expenses consist primarily of personnel, laboratory leases, and supplies. Research and development expenses for the three months ended September 30, 2025 and 2024, were $2.7 million and $2.0 million, respectively.

Exploration costs consist primarily of drilling, assay, claim fees, personnel, stock-based compensation, office and warehouse, travel, and other costs related to exploration of claims in central Nevada. Exploration expenses totaled $0.3 million for the three months ended September 30, 2025, compared to $0.4 million during the same period in the prior year. The increase resulted principally from costs related to drilling, assaying, and engineering to further define and potentially upgrade the geological classification of the mineral rights.

Other Income (Expense)

Other expense was $0.2 million in the three months ended September 30, 2025, versus other expense of $1.9 million during the same period in the prior year. The changes for the three months ended September 30, 2025 primarily resulted from a change in fair value of the derivative liability of $0.7 million (see Note 13 of the condensed consolidated financial statements for further detail), $0.7 loss on debt extinguishment, $0.6 million loss on private placement, $0.2 million for change in fair value of liability classified instruments, and a decrease in the amortization and accretion of financing costs of $0.9 million.

Liquidity and Capital Resources

At September 30, 2025, the Company had available cash of $30.1 million and total assets of $101.5 million compared to available cash of $7.5 million and total assets of $84.5 million at June 30, 2025. The increase of cash is due to the raising of capital through the exercising of warrant agreements, utilization of the ATM sales agreement with Virtu Americas, LLC, and revenue from sales of its products.

The Company had total current liabilities of $5.3 million at September 30, 2025, compared to $13.7 million at June 30, 2025. The decrease related to conversion of the debt as discussed in Note 11 and timing of payments for accounts payable and accrued expenses.

As of September 30, 2025, the Company had working capital of $35.4 million compared to $10.9 million at June 30, 2025.

Cash Flows

For the three months ended September 30:

		September 30, 2025				September 30, 2024
Cash Flows used in Operating Activities		$	(7,138,756	)		$	(5,552,350	)
Cash Flows used in Investing Activities			(708,307	)			(863,158	)
Cash Flows provided by Financing Activities			26,295,257				5,182,758
Net Increase (Decrease) in Cash During the Period			18,448,194				(1,232,750	)

Cash from Operating Activities.

During the three months ended September 30, 2025, the Company used $7.1 million of cash for operating activities, compared to use of $5.6 million during the three months ended September 30, 2024. In both periods, the cash used supported an increased scale of operations including increased employee headcount and personnel costs, increased production, and increased administrative costs.

Cash from Investing Activities

During the three months ended September 30, 2025, the Company used cash in investing activities of $0.8 million for acquisition of property and equipment for its recycling facilities. This is in comparison to cash used in investing activities of $0.9 million for the three months ended September 30, 2024. The decrease in purchases reflects the completion of major capital investments, as the recycling plant has transitioned from expansion to fully operational status.

Cash from Financing Activities

During the three months ended September 30, 2025, the Company had cash provided by financing activities of $26.3 million, compared to $5.2 million provided during the three months ended September 30, 2024. The Company has relied on equity and debt financing to support its increased operating activities, the ramp up of the recycling plant, development of the lithium claystone pilot plant, and upgrades to the geological classification of its Tonopah Flats claims through additional studies and assessments.

The Company received proceeds of $26.3 million from equity financings during the three months ended September 30, 2025, compared to $8.8 million in the prior year period. In the three months ended September 30, 2024, equity financing proceeds were offset by the repayment of $3.6 million of notes payable, with no new borrowings during that period. In the current period, the carrying value of notes payable totaling $8.0 million was fully extinguished through conversion to equity, and no amounts remain outstanding.

Working Capital

		September 30, 2025				June 30, 2025
Current Assets		$	41,517,511			$	29,532,110
Restricted Cash			(800,000	)			(5,000,000	)
Current Liabilities			5,315,772				(13,668,605	)
Working Capital			35,401,739				10,863,505

Future Financing

The Company 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 we have been awarded. 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 accounting principles generally accepted in the United States of America ("U.S. 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 3, "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 fiscal year ended June 30, 2025.

Off-Balance Sheet Arrangements

As of September 30, 2025, we had no off-balance sheet arrangements.