American Battery Technology pany(ABAT) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Unaudited financial statements for March 31, 2022, reflect significant asset growth, a reduced net loss, and substantial cash inflow from financing activities Condensed Consolidated Balance Sheets As of March 31, 2022, total assets significantly increased to $56.6 million, driven by higher cash and property, with equity rising to $52.7 million from financing Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash | $36,323,316 | $12,843,502 | | Total current assets | $36,768,869 | $14,135,718 | | Property and equipment, net | $15,741,458 | $5,484,225 | | Total assets | $56,599,686 | $21,263,103 | | Liabilities & Equity | | | | Total current liabilities | $3,734,222 | $1,822,498 | | Total liabilities | $3,938,303 | $1,822,498 | | Total stockholders' equity | $52,661,383 | $19,440,605 | Condensed Consolidated Statements of Operations For the nine months ended March 31, 2022, net loss decreased to $26.7 million, primarily due to lower operating expenses and a positive swing in other income Statement of Operations Summary (Unaudited) | Metric | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | | Total operating expenses | $26,927,975 | $31,837,067 | | Net loss attributable to stockholders | $(26,689,316) | $(36,127,295) | | Net loss per share, basic and diluted | $(0.04) | $(0.08) | | Weighted average shares outstanding | 619,973,643 | 476,505,278 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity significantly increased to $52.7 million by March 31, 2022, driven by a $36.9 million private placement and conversion/redemption of all preferred stock - Total stockholders' equity increased to $52,661,383 as of March 31, 2022, up from $19,440,605 at June 30, 2021[30][31] - During the nine months ended March 31, 2022, all 207,700 outstanding shares of Series C Preferred Stock were converted into 16,616,000 shares of common stock[30][64] - All 500,000 shares of Series A Preferred Stock were redeemed during the period[23][31][62] Condensed Consolidated Statements of Cash Flows For the nine months ended March 31, 2022, cash used in operations and investing increased, offset by $41.7 million from financing, resulting in a $36.3 million ending cash balance Cash Flow Summary (Unaudited, for the nine months ended March 31) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(7,261,200) | $(5,240,504) | | Net Cash Used In Investing Activities | $(10,978,692) | $(1,724,380) | | Net Cash Provided by Financing Activities | $41,719,706 | $13,084,229 | | Change in Cash | $23,479,814 | $6,119,345 | | Cash – End of Period | $36,323,316 | $6,949,269 | Notes to the Condensed Consolidated Financial Statements Notes detail the company's startup status, battery materials strategy, sufficient capital, a $36.9 million private placement, preferred stock conversion, and significant investments - The company is a startup in the lithium-ion battery industry with no revenue generated to date. Management believes current cash holdings are sufficient to fund operations for at least one year[37][38][40] - All outstanding Series A and Series C preferred shares were redeemed or converted into common stock as of March 31, 2022[62][64][65] - The company issued 25,389,611 units in a private placement for net proceeds of $36.9 million. Each unit consists of one common share and one warrant[67][100] - As of March 31, 2022, the company had 41,210,611 share purchase warrants outstanding with a weighted average exercise price of $1.18[76] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's three-pronged battery material strategy, prioritizing recycling facility construction, highlighting a strong cash position, reduced operating expenses, and improved net loss - ABTC's strategy is a three-pronged approach: exploring new primary resources, developing new extraction technologies, and commercializing an integrated process for recycling lithium-ion batteries[86] - The company's highest priority is the construction, commissioning, and operation of its first integrated lithium-ion battery recycling facility[87] Financial Highlights (Nine Months Ended March 31, 2022) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Cash | $36.3 million | - | | Cash provided by financing | $41.7 million | - | | Cash used for investing (property, construction, etc.) | $11.0 million | - | | Cash used in operations | $7.3 million | +39% | | Total operating costs | $26.9 million | -15% | - The company secured net proceeds of $36.9 million from a registered direct offering to fund the construction of its battery recycling pilot plant and other operations[100] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable for the company as a smaller reporting entity - As a smaller reporting company, quantitative and qualitative disclosures about market risk are not required and have not been provided[104][120] Item 4. Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were ineffective due to material weaknesses, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2022[105] - A material weakness was identified in internal control over financial reporting due to: inadequate documentation, lack of supervision and review of complex accounting, and improper segregation of duties[109] - The company has a remediation plan that includes hiring more personnel, implementing a new ERP system, providing training, and developing more detailed policies and procedures[111] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is in ongoing litigation with its former CEO, Craig Alford, regarding fraudulently issued shares and related claims, with settlement negotiations underway - The company is in ongoing litigation with former CEO Craig Alford concerning the alleged fraudulent issuance of 16 million common shares[116] - A related complaint was filed by Alford for the company's failure to remove a restricted legend from 4,000,000 common shares. Litigation in both matters is on hold pending settlement negotiations[117] Item 1A. Risk Factors As a smaller reporting company, detailed risk factors are not required, though the indeterminable impact of the COVID-19 pandemic is noted - The company is a smaller reporting company and is not required to provide detailed risk factors[120] - The company notes that the COVID-19 pandemic has adversely affected workforces and economies, and its impact on the company is not currently determinable[121] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the nine months ended March 31, 2022, the company issued common shares in unregistered transactions, including warrant exercises and shares for services valued at $18.1 million - Issued 13,128,728 common shares for services with a fair value of $18,086,443[124] - Issued 12,500,000 common shares from the cash exercise of warrants, yielding proceeds of $956,250[122] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[126] Item 4. Mine Safety Disclosure This section is not applicable - Not Applicable[126] Item 5. Other Information The company reports no other information - None[126] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report, including CEO and CFO certifications and Inline XBRL data files - The report includes CEO and CFO certifications and Inline XBRL documents as exhibits[127]