PART I. FINANCIAL INFORMATION Financial Statements The unaudited consolidated financial statements for the period ended March 31, 2019, reveal no revenue, significant net loss, and a growing working capital deficit, raising substantial doubt about going concern Consolidated Balance Sheets As of March 31, 2019, total liabilities of $4.24 million exceeded assets, resulting in a $3.79 million stockholders' deficit and a worsening financial position Consolidated Balance Sheet Summary (Unaudited) | Balance Sheet Items | March 31, 2019 ($) | September 30, 2018 ($) | | :--- | :--- | :--- | | Assets | | | | Cash | 347,549 | 122,769 | | Total Current Assets | 417,844 | 308,769 | | Total Assets | 453,094 | 308,769 | | Liabilities | | | | Accounts payable and accrued liabilities | 557,321 | 509,779 | | Due to related parties | 695,971 | 582,877 | | Derivative liability | 2,708,198 | 800,973 | | Convertible notes payable, net | 279,265 | 847,652 | | Total Current Liabilities | 4,240,755 | 2,741,281 | | Total Stockholders' Deficit | (3,787,661) | (2,432,512) | Consolidated Statements of Operations The company reported no revenue for the periods ended March 31, 2019, with net loss surging to $9.13 million for the six-month period, driven by increased expenses Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2019 ($) | Three Months Ended Mar 31, 2018 ($) | Six Months Ended Mar 31, 2019 ($) | Six Months Ended Mar 31, 2018 ($) | | :--- | :--- | :--- | :--- | :--- | | Revenues | - | - | - | - | | General and administrative | 6,450,636 | 790,872 | 7,593,232 | 3,281,570 | | Change in fair value of derivative liability | (235,853) | - | (944,008) | - | | Interest expense | (439,474) | (31,784) | (717,164) | (55,933) | | Net Loss | (6,563,205) | (829,108) | (9,133,011) | (3,347,085) | | Net Loss Per Share | (0.06) | (0.01) | (0.09) | (0.05) | Consolidated Statements of Stockholder's Deficit The stockholder's deficit increased from $2.43 million to $3.79 million by March 31, 2019, primarily due to a $9.13 million net loss, partially offset by share issuances - Key activities affecting stockholder's deficit in the six months ended March 31, 2019 include: - Shares issued for services: $6,328,36014 - Shares issued pursuant to note conversion: $1,414,25214 - Net loss for the period: ($9,133,011)14 Consolidated Statements of Cash Flows For the six months ended March 31, 2019, net cash used in operations was $0.97 million, funded by $1.19 million from financing, increasing cash to $347,549 Cash Flow Summary (Unaudited) | Cash Flow Activity | Six Months Ended Mar 31, 2019 ($) | Six Months Ended Mar 31, 2018 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (966,484) | (229,730) | | Net Cash Provided by Financing Activities | 1,191,264 | 226,500 | | Change in Cash | 224,780 | (3,230) | | Cash – End of Period | 347,549 | 5,911 | Notes to the Consolidated Financial Statements The notes detail accounting policies and significant financial items, including a 'Going Concern' warning, convertible notes, related party transactions, a new joint venture, and derivative liabilities - The financial statements have been prepared on a going concern basis, but the company's working capital deficit of $3,822,911 and accumulated deficit of $46,398,345 as of March 31, 2019, raise substantial doubt about its ability to continue operations20 - The company entered into a joint venture with CINC Industries Inc. on October 8, 2018, to commercialize a new process for lithium salt extraction, issuing 250,000 common shares as part of the agreement62 Derivative Liability Activity | Description | Amount ($) | | :--- | :--- | | Balance, September 30, 2018 | 800,973 | | Additions associated with convertible notes | 1,939,539 | | Adjustment for conversion | (976,322) | | Mark to market adjustment at March 31, 2019 | 944,008 | | Balance, March 31, 2019 | 2,708,198 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's pre-revenue lithium exploration focus, highlighting a $9.1 million net loss for the six months ended March 31, 2019, driven by stock-based compensation and reliance on convertible debentures - The company is a pre-revenue, start-up lithium exploration company focused on its Western Nevada Basin claims, recently changing its name from Oroplata Resources, Inc. to American Battery Metals Corporation to better reflect its operational focus9095 - The increase in operating expenses for the six months ended March 31, 2019, was primarily due to issuing more common shares for services ($6.3 million in FY2019 vs. $2.9 million in FY2018) and increased consultant usage for the Nye Valley property104 - The working capital deficit increased to $3,822,911 at March 31, 2019, from $2,432,512 at September 30, 2018, as the company financed its operating costs through the issuance of convertible debentures without generating cash flow from operations110 Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company is a smaller reporting company - The company has not provided quantitative and qualitative disclosures about market risk, as it is not required for a smaller reporting company121 Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2019, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2019123 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect, internal controls124 PART II. OTHER INFORMATION Legal Proceedings The company is involved in ongoing litigation against its former CEO regarding the alleged fraudulent issuance of 16 million shares, with 10 million cancelled, and a separate shareholder lawsuit seeking legend removal - The company is in ongoing litigation against former CEO Craig Alford regarding the alleged fraudulent issuance of 16 million shares, with 10 million shares cancelled as a result126 - In March 2019, a shareholder sued the company to remove a securities law restrictive legend and for related damages126 Risk Factors This section is not applicable as the company is a smaller reporting company and is not required to provide this information - As a smaller reporting company, the company is not required to provide information on risk factors under this item128 Unregistered Sales of Equity Securities and Use of Proceeds The company engaged in numerous unregistered sales of equity securities, primarily convertible promissory notes to investment funds with high interest rates and deep conversion discounts, using proceeds for working capital - The company issued multiple convertible promissory notes in January, February, and March 2019 to entities including GS Capital Partners, Power Up Lending Group, Eagle Equities, and others to raise working capital129139143 - Common features of the convertible notes include conversion prices set at a deep discount (e.g., 61% to 68%) to the lowest trading price over a recent period and high default interest rates (e.g., 22% to 24%)130132135 - In addition to notes, the company issued millions of common shares for consulting services and for the conversion of previously issued convertible notes137140141 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities148 Mine Safety Disclosure This section is not applicable to the company's operations for this reporting period - Mine safety disclosures are not applicable148 Other Information There is no other information to report for this period - No other information was disclosed148 Exhibits This section lists exhibits filed with the quarterly report, primarily securities purchase agreements, convertible promissory notes, officer certifications, and XBRL data files - Exhibits filed include numerous Securities Purchase Agreements and Convertible Promissory Notes with entities such as GS Capital Partners, Power Up Lending Group, and Eagle Equities150 - Certifications from the Chief Executive Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits150
American Battery Technology pany(ABAT) - 2019 Q3 - Quarterly Report