S-1/A: ABM Seeks $10M Public Offering for Utah Lithium, Magnesium Project

American Battery Materials Inc. filed an S-1/A registration statement for a public offering of 1,550,388 shares to fund its Lisbon Valley lithium and magnesium extraction project in Utah.

Summary

• American Battery Materials Inc. operates as a U.S. based renewable energy company focused on the extraction, refinement, and distribution of technical minerals, specifically lithium and magnesium.
• The company owns mineral rights on 743 placer claims covering 14,320 acres in the Lisbon Valley of Utah, known as the Lisbon Valley Project.
• Plans involve implementing emerging Direct Lithium Extraction (DLE) technologies to extract lithium and magnesium from subsurface brines.
• Historical data from a 1978 USGS report indicated a brine sample from a well within the project area contained 340 ppm lithium and 74,400 ppm magnesium.
• The company is an exploration stage issuer, has no known mineral reserves, and has not generated any mining revenue to date.
• A public offering of 1,550,388 shares of common stock is proposed at an assumed public offering price of $6.45 per share.
• Estimated net proceeds from the offering are approximately $8,740,002, or $10,097,507 if the underwriters' over-allotment option is fully exercised.
• Proceeds will be allocated as follows: approximately $5,740,000 for Lisbon Valley Project development (drilling, permitting, geological work, pilot plant), $1,000,002 for mineral rights expansion, and $2,000,000 for working capital and general corporate purposes.
• As of September 30, 2025, the company reported a net loss of $4,283,772 for the nine months ended, an accumulated deficit of $28,830,329, and a working capital deficit of $9,237,497.
• The independent registered public accounting firm has included an explanatory paragraph in their report raising substantial doubt about the company's ability to continue as a going concern.
• The company has applied to list its common stock on the NYSE American, which is a condition to completing this offering.
• Two reverse stock splits were effectuated: 1-for-300 on December 8, 2023, and 1-for-5 on January 24, 2025.

Sentiment

Score: 3

Explanation: While the company operates in a high-growth, strategically important industry with promising project potential and government support, its current financial state is extremely weak, marked by recurring losses, a significant accumulated deficit, a working capital deficit, and a going concern warning. The success of the offering is critical for its survival and project development, and there are substantial risks associated with its exploration stage status and reliance on emerging technology. The identified material weaknesses in internal controls further add to the risk profile.

Positives

• The company is focused on critical minerals (lithium and magnesium) essential for U.S. economic and national security, with strong government support for domestic production.
• U.S. government initiatives, including an Executive Order and the Section 45X Advanced Manufacturing Production Tax Credit (AMPTC), aim to expedite permitting, prioritize critical mineral deposits, and expand domestic capacity.
• Historical brine samples from the Lisbon Valley Project area show high concentrations of lithium (340 ppm) and exceptional magnesium (74,400 ppm), which are among the strongest recorded in U.S. brines.
• Direct Lithium Extraction (DLE) technology is intended to be used, offering environmental benefits such as lower water consumption, minimal surface footprint, and no tailings, along with accelerated production timelines.
• The Lisbon Valley area benefits from developed infrastructure, including access to high voltage electrical power, major roadways, and rail spurs, as well as state and local agency support.
• Exploration permits from both the Federal Bureau of Land Management (BLM) and the Utah Division of Oil, Gas and Mining (UDOGM) have been obtained.
• The U.S. is 100% import-dependent for primary magnesium, positioning the company to help rebuild a secure domestic supply chain.
• U.S. lithium demand is predicted to grow significantly by 487% to almost 412,000 tonnes of lithium carbonate equivalent by 2030.
• The burgeoning Battery Energy Storage Systems (BESS) market is projected to grow at a 20% CAGR to 2,100 GWh by 2035, providing robust demand for battery materials.
• Benchmark Minerals forecasts significant deficits in lithium (572,000 tonnes) and nickel (839,000 tonnes) within a decade, highlighting the need for upstream investment.

Negatives

• The company has a limited operating history in the lithium and magnesium industry, making future performance difficult to evaluate.
• A history of recurring losses and an expectation to continue incurring losses in the future.
• Substantial doubt exists about the company's ability to continue as a going concern, as noted by the independent registered public accounting firm.
• As an exploration stage issuer, there are no known mineral reserves and no mining revenue to date, with no guarantee of commercial extraction or profitability.
• The success of the company is highly dependent on the development and implementation of DLE technologies, which are emerging and still face challenges regarding scalability and brine reinjection.
• Significant additional capital is required to fund ongoing operations and development, and there is no assurance that such funding will be available on satisfactory terms or at all.
• The mineral and chemical processing industry is intensely competitive, with many competitors possessing greater financial resources and technical capabilities.
• Purchasers in this offering may experience substantial dilution due to the issuance of additional shares and potential future capital raises.
• The market price of common stock may be volatile and could drop below the public offering price.
• Management has broad discretion in the application of the net proceeds from the offering, which may not ultimately increase shareholder value.
• Executive officers and directors collectively hold significant voting power (30.4% post-offering), which could influence corporate decisions.
• No dividends are anticipated in the foreseeable future, requiring investors to rely on stock price appreciation for returns.
• Material weaknesses have been identified in internal control over financial reporting, including insufficient qualified accounting personnel and issues with segregation of duties and complex transaction accounting.
• The company is at risk of securities class action litigation, which could be costly and divert management's attention.
• Financial reporting obligations as a public company are expensive and time-consuming.
• Anti-takeover provisions in the Certificate of Incorporation and Bylaws, along with Delaware law, could discourage changes in control.

Risks

• Future performance is difficult to evaluate due to a limited operating history in the lithium and magnesium industry.
• A history of losses and expectation to continue incurring losses, leading to substantial doubt about the ability to continue as a going concern.
• As an exploration stage issuer, there is no guarantee that development will result in the commercial extraction of mineral deposits.
• Exposure to numerous risks related to exploration, construction, and extraction, including geological formations, natural disasters, power outages, construction delays, labor costs, and environmental liability.
• The mineral and chemical processing industry is intensely competitive, potentially affecting the ability to attract capital or acquire properties.
• Long-term success depends on generating revenues, achieving profitability, and developing positive cash flows from lithium activities, which is uncertain.
• Dependence on successfully accessing capital and financial markets; inability to do so may limit liquidity, operations, and growth.
• Reliance on key management employees, whose loss could adversely affect performance.
• Challenges in managing growth could strain financial, technical, operational, and administrative resources.
• Potential for lawsuits and adverse rulings that could materially affect business, financial condition, or liquidity.
• Success depends on research and development capabilities for Direct Lithium Extraction (DLE) and securing capital for brine processing plants, with DLE technology still facing scalability and water consumption challenges.
• Development of non-lithium battery technologies could adversely affect demand for lithium and magnesium compounds.
• Business is subject to cybersecurity risks.
• Requirement to obtain governmental permits and approvals, which is costly and time-consuming, with no certainty of being granted.
• Operations face substantial regulation governing worker health and safety.
• Compliance with environmental regulations and potential litigation could require significant expenditures.
• Lithium and magnesium prices are subject to unpredictable fluctuations.
• Changes in technology or other developments could adversely affect demand for lithium and magnesium compounds or result in preferences for substitute products.
• Quarterly and annual operating and financial results are likely to fluctuate significantly.
• An active trading market for common stock may not develop, and investors may be unable to resell shares at or above the public offering price.
• Stock price may be volatile due to various factors, including market conditions, competitive offerings, regulatory developments, and macroeconomic conditions.
• Purchasers in this offering may experience substantial dilution in the book value of their investment.
• Management has broad discretion in the use of net proceeds from the offering.
• Executive officers and directors have significant voting power, potentially influencing corporate actions not in the best interests of all stockholders.
• No dividends are expected in the foreseeable future.
• Indemnification of officers and directors and limitations on their liability could limit recourse against them.
• Failure to implement and maintain proper and effective internal controls and disclosure controls could impair financial statements and public reports.
• Risk of securities class action litigation.
• Financial reporting obligations of being a public company are expensive and time-consuming.
• Certificate of Incorporation, Bylaws, and Delaware law may have anti-takeover effects.
• Future sales and issuances of common stock could result in additional dilution.

Future Outlook

The strategic goal is to become a producer of lithium and magnesium in the United States, leveraging advanced Direct Lithium Extraction (DLE) technologies. The pre-production phase includes drilling exploration wells in Q2 2026, preparing a technical report in Q3 2026, selecting a DLE technology provider in Q3 2026, developing a pilot plant in H2 2026, and commencing production well drilling by H1 2027. The full production phase, including a permanent extraction plant, is estimated to begin in 2028. The company plans to expand its resource base through acquisitions and joint ventures and anticipates needing additional equity financing in 2027 for the production phase. The outlook is supported by strong projected growth in U.S. lithium demand (487% by 2030) and the burgeoning Battery Energy Storage Systems (BESS) market, which is expected to offset tempered EV market growth.

Management Comments

• Management believes that a strategy centered on advanced brine extraction technologies, specifically Direct Lithium Extraction (DLE), represents the most cost-effective, environmentally responsible, and capital-efficient pathway currently available for domestic lithium and magnesium production.
• Management believes there is a high probability of identifying and producing super saturated brines from beneath the Lisbon Valley Project, based on abundant evidence from oil, gas, and potash wells drilled in the Paradox Basin.
• Management acknowledges that estimated timelines and milestones are subject to a variety of operating, financial, and regulatory risks and delays, including obtaining operating permits, government approvals, and adequate funding.

Industry Context

The company operates in the critical minerals sector, focusing on lithium and magnesium, which are vital for renewable energy technologies and national security. The U.S. currently has no domestic primary magnesium production, making the nation 100% import-dependent, and the company is one of only three major domestic efforts to restart primary production. Government initiatives, such as a Presidential Executive Order and the Section 45X Advanced Manufacturing Production Tax Credit, aim to bolster domestic supply chains and reduce reliance on foreign sources, particularly China. U.S. lithium demand is projected to grow by nearly 500% by 2030, driven by the electric vehicle (EV) market, although EV sales growth is expected to temper. However, the Battery Energy Storage Systems (BESS) market is experiencing rapid growth, providing a robust counterbalance to demand for battery materials. Industry forecasts predict significant deficits in battery minerals like lithium and nickel within a decade, underscoring the urgent need for upstream investment.

Comparison to Industry Standards

• Historical brine samples from the Fed 88-21P potash well within the Lisbon Valley Lithium Project area showed 340 ppm lithium and 74,400 ppm magnesium, with lithium concentrations comparable to operating benchmarks and magnesium significantly richer than Great Salt Lake or Dead Sea feedstocks.
• The company's DLE strategy is positioned as the most cost-effective, environmentally responsible, and capital-efficient pathway compared to traditional hard-rock mining or conventional solar evaporation.
• The company is one of only three major domestic efforts underway to restart primary magnesium production, alongside startups like Magrathea Metals (developing seawater electrolysis technology with DoD backing) and Tidal Metals (pioneering zero-carbon electrical extraction from seawater brines).

Management Changes

Corporate Governance

Legal Proceedings

• Currently not aware of any legal proceedings or claims that are believed to have a material adverse effect on the business, financial condition, or operating results.

Related Party Transactions

• David E. Graber (Chairman and CEO), Justin Vorwerk (Director), Jared Levinthal (Director), Adam C. Lipson, M.D. (Director), and Andrew Suckling (Director) have provided loans to the company through convertible promissory notes.
• Mr. Graber made additional loans via convertible promissory notes totaling $99,182 (May 16, 2024), $80,000 (June 18, 2024), $200,000 (July 11, 2024), $150,000 (August 19, 2024), $35,000 (August 28, 2024), and $99,098 (December 18, 2024). These were consolidated on September 30, 2024, with a principal increase and interest rate hike, and further extended in 2025.
• On October 23, 2025, Mr. Graber received a convertible promissory note for $200,000 for accrued payroll.
• On October 23, 2025, Dr. Lipson received a convertible promissory note for $34,200 for accrued expenses, and on December 17, 2025, a promissory note for $10,000.
• Various promissory and convertible notes held by related parties have been subject to multiple extension agreements between April and October 2025, often involving a 10% increase in principal and the issuance of additional shares of common stock as consideration.
• Marilyn Kane, a 5% shareholder, holds convertible notes, and Mr. Graber owns a non-controlling interest in an entity managed by Ms. Kane.
• The company's policy requires related party transactions to be approved by a majority of disinterested independent directors.

Stakeholder Impact

• Shareholders face significant potential dilution from the current public offering and anticipated future equity financings, alongside high investment risk due to the company's exploration stage, history of losses, and going concern warning.
• Employees (currently three full-time executive officers and four independent contractors) may benefit from future hiring efforts focused on local communities near project areas as the company progresses.
• Future customers could benefit from a secure, domestic supply of critical minerals (lithium and magnesium), reducing reliance on foreign imports.
• Creditors, particularly holders of promissory and convertible notes, have demonstrated continued support through multiple extensions, often receiving increased principal and additional shares, but also bear the risk of the company's financial instability.
• Local communities in the Lisbon Valley of Utah may experience economic benefits through job creation and infrastructure development if the project advances to commercial production.

Next Steps

• Complete the public offering of 1,550,388 shares of common stock.
• Obtain listing of common stock on the NYSE American, which is a condition to completing the offering.
• Fund the development and operation of the Lisbon Valley Project using the net proceeds from the offering.
• Commence drilling exploration wells in the second quarter of 2026.
• Prepare a Regulation S-K Subpart 1300 technical report on exploration results in the third quarter of 2026.
• Select a DLE technology provider in the third quarter of 2026.
• Develop and build a pilot lithium and magnesium extraction plant in the second half of 2026.
• Commence drilling production wells by the first half of 2027.
• Begin building a permanent lithium and magnesium extraction plant in 2028.
• Evaluate opportunities to further expand the resource base and production capacity through acquisitions of additional mineral claims and joint venture opportunities.
• Raise additional equity financing in 2027 for the production phase.
• Maintain the registration of common stock under the Exchange Act for a period of three years.
• Furnish financial statements and other periodic and special reports to the Representative for a period of three years.
• Retain a transfer agent and registrar acceptable to the Representative for a period of three years.
• Provide trading reports relating to the Public Securities to the Representative.
• Comply with all applicable provisions of the Sarbanes-Oxley Act.
• Notify the Representative if the company ceases to be an Emerging Growth Company.

Key Dates

Recommendation

The company is an exploration-stage entity with no revenue, a history of significant losses, a substantial accumulated deficit, and a working capital deficit. The independent auditor has issued a going concern warning. While the market for lithium and magnesium is attractive and the company has promising historical data and a clear development plan, the execution risk is extremely high, compounded by reliance on emerging DLE technology and the critical need for continuous financing. The current offering, while providing some capital, is insufficient for the entire production phase, and significant dilution is a constant threat. The material weaknesses in internal controls further add to the risk profile. A seasoned investor would likely view this as highly speculative with a very high probability of capital loss.

Keywords

Lithium, Magnesium, Direct Lithium Extraction, DLE, Brine Mining, Exploration Stage, Battery Materials, Critical Minerals, Utah, Lisbon Valley, SEC Filing, Public Offering, Renewable Energy, EV Market, BESS Market