S-1/A: American Battery Materials Inc. Launches Public Offering

American Battery Materials Inc. is launching a public offering of 1,550,388 common shares to fund its Lisbon Valley lithium and magnesium extraction project in Utah and seeks a NYSE American listing.

Summary

• American Battery Materials Inc. is offering 1,550,388 shares of common stock at an assumed public offering price of $6.45 per share.
• The company has applied to list its common stock on the NYSE American, which is a condition for completing this offering.
• It operates as a U.S. based renewable energy company focused on the extraction, refinement, and distribution of technical minerals, specifically lithium and magnesium, from brine deposits in the Lisbon Valley of Utah.
• The company owns mineral rights on 743 placer claims covering 14,320 acres in the Paradox Basin.
• It intends to implement emerging Direct Lithium Extraction (DLE) technologies, which are described as environmentally responsible and capital-efficient.
• As an exploration stage issuer, the company has no mineral reserves as defined by Regulation S-K Subpart 1300 and has generated no mining revenue to date.
• For the nine months ended September 30, 2025, the company reported a net loss of $(4,283,772), an increase from $(2,041,882) for the same period in 2024.
• As of September 30, 2025, the company had an accumulated deficit of approximately $28.8 million and a working capital deficit of $9.2 million.
• The independent registered public accounting firm has included an explanatory paragraph in its report raising substantial doubt about the company's ability to continue as a going concern.
• Net proceeds from the offering, estimated at approximately $8,740,002, will primarily fund the development and operation of the Lisbon Valley Project, potential expansion of mineral rights, and general corporate purposes.

Sentiment

Score: 3

Explanation: While the company operates in a high-demand sector with government support and promising technology, its current financial state (significant and increasing losses, going concern doubt, no revenue, exploration stage) and heavy reliance on future capital raises present substantial risks. The offering provides necessary capital but doesn't resolve the underlying financial challenges or guarantee commercial success, making it a highly speculative investment.

Positives

• The company focuses on critical minerals (lithium and magnesium) essential for U.S. economic and national security, with strong government support for domestic supply chains.
• It plans to utilize Direct Lithium Extraction (DLE) technology, which is presented as a cost-effective, environmentally responsible, and capital-efficient method with accelerated production timelines and high recovery rates.
• The Lisbon Valley Project area has historical evidence of high lithium (340 ppm) and exceptional magnesium (74,400 ppm) concentrations from a 1978 USGS report, noted as among the strongest U.S. brine grades.
• The project benefits from developed infrastructure in the Lisbon Valley, including access to high voltage electrical power, major roadways, and rail spurs.
• Exploration permits to drill have been approved by both the Federal Bureau of Land Management (BLM) in November 2024 and the Utah Division of Oil, Gas and Mining (UDOGM) in April 2024.
• U.S. government initiatives, such as the Section 45X Advanced Manufacturing Production Tax Credit (10% cash tax credit) and the National Blueprint for Lithium Batteries 2021-2030, support domestic production of critical minerals.
• Market forecasts predict significant growth in demand for lithium (487% by 2030 in the U.S.) and magnesium (critical for automotive, aerospace, and defense sectors).
• The company has an experienced management team and advisory board with expertise in mining, exploration, and finance.

Negatives

• The company has a limited operating history in the lithium and magnesium industry, making future performance difficult to evaluate.
• It has a history of recurring losses and expects to continue incurring losses in the future, with an accumulated deficit of approximately $28.8 million as of September 30, 2025.
• There is substantial doubt about the company's ability to continue as a going concern, as noted by its independent registered public accounting firm.
• As an exploration stage issuer, there are no known mineral reserves, no mining revenue to date, and no guarantee that development will result in commercial extraction of mineral deposits.
• The net loss for the nine months ended September 30, 2025, increased significantly to $(4,283,772) compared to $(2,041,882) for the same period in 2024.
• General and administrative expenses increased by 24% for the nine months ended September 30, 2025, compared to the prior year period.
• Interest expense significantly increased to $510,810 for the nine months ended September 30, 2025, from $295,572 in the prior year period.
• The Section 45X Advanced Manufacturing Production Tax Credit, a key incentive, is scheduled to phase down from 2031 and terminate by December 31, 2033.
• The company acknowledges current oversupply and low prices in battery raw material markets, despite long-term deficit forecasts.
• Management has identified material weaknesses in internal control over financial reporting, including insufficient qualified accounting personnel and ineffective controls for complex transactions.

Risks

• Future performance is difficult to evaluate due to a limited operating history in the lithium and magnesium industry.
• The company has a history of losses and expects to continue incurring losses, with an accumulated deficit of approximately $29 million as of September 30, 2025.
• There is substantial doubt about the company's ability to continue as a going concern without additional financing.
• As an exploration stage issuer, there is no guarantee that development will result in the commercial extraction of mineral deposits, and funds spent on exploration may be lost.
• The company faces numerous risks related to exploration, construction, and extraction of mineral deposits, including unexpected geological formations, natural disasters, power outages, supply chain disruptions, and higher capital costs.
• The mineral and chemical processing industry is intensely competitive, with many competitors possessing greater financial resources and technical capabilities.
• Long-term success depends on the ability to generate revenues, achieve and maintain profitability, and develop positive cash flows from lithium activities.
• Growth strategy relies on successfully accessing capital and financial markets; inability to do so may limit liquidity, operations, and future growth.
• The company is dependent upon key management employees, whose loss may adversely affect performance.
• The ability to manage growth will have an impact on business, financial condition, and results of operations.
• Lawsuits may be filed against the company, and an adverse ruling could materially affect its business, financial condition, or stock price.
• Success depends on research and development capabilities for Direct Lithium Extraction (DLE) and securing capital for brine processing plants, as DLE technology still faces challenges around scalability and water consumption/reinjection.
• The development of non-lithium battery technologies could adversely affect demand for lithium and magnesium compounds.
• The business is subject to cybersecurity risks that could compromise systems and data.
• Obtaining governmental permits and approvals for development and extraction operations is costly, time-consuming, and uncertain.
• Operations face substantial regulation governing worker health and safety, with potential for penalties or closures for non-compliance.
• Compliance with environmental regulations and potential litigation could require significant expenditures and impact financial condition.
• Land reclamation and exploration restoration requirements may be burdensome and costly, potentially exceeding estimates.
• Lithium and magnesium prices are subject to unpredictable fluctuations due to various factors beyond the company's control.
• Changes in technology or other developments could adversely affect demand for lithium and magnesium compounds or result in preferences for substitute products.
• An active trading market for the common stock may not develop, and investors may be unable to resell shares at or above the public offering price.
• The stock price may be volatile and decline below the public offering price due to various market and company-specific factors.
• 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, which may not effectively increase shareholder value.
• Executive officers and directors have significant voting power (30.6% post-offering) and may take actions not in the best interests of all stockholders.
• No dividends are expected to be declared 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 the ability to produce accurate and timely financial statements.
• The company may be at risk of securities class action litigation.
• Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming.
• The Certificate of Incorporation, Bylaws, and Delaware law may have anti-takeover effects that could discourage, delay, or prevent a change in control.
• Future sales and issuances of common stock could result in additional dilution of the percentage ownership of stockholders and cause the share price to fall.

Future Outlook

The company's strategic goal is to become a producer of lithium and magnesium in the United States, leveraging Direct Lithium Extraction (DLE) technologies at its Lisbon Valley Project. It anticipates a pre-production phase with exploration drilling commencing in the second quarter of 2026, followed by a technical report and DLE technology provider selection in the third quarter of 2026. A pilot lithium and magnesium extraction plant is expected to be developed in the second half of 2026, with production drilling starting by the first half of 2027. The full production phase, including a permanent extraction plant, is estimated to begin in 2028. The company also plans to expand its mineral rights through acquisitions and joint ventures in the Lisbon Valley and potentially in other U.S. and South American regions. It will rely on competitive strengths and an experienced management team to generate revenue and explore funding options, including strategic partnerships and off-take agreements.

Management Comments

• We intend to implement emerging direct lithium extraction (DLE) technologies to extract lithium and magnesium from the production of subsurface brines.
• Our strategic goal is to become a producer of lithium and magnesium in the United States.
• We believe 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.
• We intend to develop our projects on a measured timeline that balances near-term cash flow generation with long-term value maximization, delivering secure, low-carbon domestic supply of these critical minerals in a manner that is both economically superior and environmentally responsible.
• We believe there is evidence from oil, gas and potash wells drilled in the Paradox Basin indicating a high probability of identifying and producing super saturated brines from beneath the Project.
• We will need funding to support continuing operations and support our growth strategy and we will need to finance operations by offering any combination of equity offerings, debt financing, collaborations, strategic alliances or other licensing arrangements.

Industry Context

The company operates within the critical minerals sector, specifically lithium and magnesium, which are vital for U.S. economic and national security. The U.S. is currently 100% import-dependent for primary magnesium, and domestic efforts to restart production are limited to only three major players, including this company. The market is driven by significant demand growth for lithium, with Fastmarkets forecasting a 487% increase in U.S. demand by 2030, primarily due to the electric vehicle (EV) and Battery Energy Storage Systems (BESS) markets. Government support, such as the Section 45X Advanced Manufacturing Production Tax Credit and the National Blueprint for Lithium Batteries, aims to secure domestic supply chains. Despite current oversupply and low prices in battery raw material markets, Benchmark Minerals forecasts significant deficits within a decade, underscoring the urgent need for upstream investment. The company's focus on Direct Lithium Extraction (DLE) aligns with industry trends towards more environmentally responsible and efficient extraction methods compared to traditional mining.

Comparison to Industry Standards

• The historical brine sample from the Fed 88-21P potash well within the Lisbon Valley Lithium Project area, containing 340 ppm lithium and 74,400 ppm magnesium, is noted as among the strongest ever recorded in U.S. brines, with lithium comparable to operating benchmarks and magnesium significantly richer than Great Salt Lake or Dead Sea feedstocks.
• The company's planned Direct Lithium Extraction (DLE) method is compared favorably to traditional hard-rock mining or conventional solar evaporation, offering accelerated production timelines (months vs. years), lithium recovery rates exceeding 90%, markedly lower water consumption, a minimal surface footprint, and the ability to co-produce high-value magnesium while reinjecting spent brine.
• The company positions itself as one of only three major domestic efforts underway to restart primary magnesium production, alongside startups like Magrathea Metals (developing seawater electrolysis tech with DoD backing) and Tidal Metals (pioneering zero-carbon electrical extraction from seawater brines).

Management Changes

Corporate Governance

Legal Proceedings

• The company is currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition, or operating results.

Related Party Transactions

• David E. Graber (Chairman and CEO), Justin Vorwerk, and Jared Levinthal (directors) have made loans to the company via convertible promissory notes, with outstanding principal amounts of $254,713, $138,074, and $30,000 respectively as of September 25, 2024.
• All principal and accrued interest under these related party notes will automatically convert into common stock upon the effectiveness of this offering.
• Mr. Graber made additional loans to the company via convertible promissory notes totaling $663,280 between May and December 2024, which were consolidated into a new note on September 30, 2024, with increased principal and interest.
• Between April 23-30, 2025, August 1-6, 2025, and October 31, 2025, the company entered into extension agreements with certain noteholders, including related parties, for promissory and convertible notes. These agreements involved a 10% increase in the principal amount of their notes and the issuance of additional shares of common stock.
• New convertible promissory notes were issued to Jared Levinthal, Justin Vorwerk, Adam Lipson, and Andrew Suckling (all related parties) in February and March 2025.
• On October 23, 2025, the company issued convertible promissory notes to David Graber for $200,000 (accrued payroll) and to Adam Lipson for $34,200 (accrued expenses).
• Adam Lipson received new convertible promissory notes in August 2025 for $15,721.27 and $50,000, and a promissory note for $10,000 on December 17, 2025.
• Marilyn Kane, a 5% shareholder, has beneficial ownership that includes shares issuable upon the automatic conversion of convertible notes.

Stakeholder Impact

• **Shareholders**: Will experience immediate and substantial dilution from the public offering and the conversion of outstanding convertible notes. Future value depends heavily on the successful development and commercialization of the Lisbon Valley Project, which is highly speculative. No dividends are expected in the foreseeable future.
• **Employees**: The company plans to focus hiring efforts on communities near its project areas, potentially creating job opportunities. Equity awards may be granted under the 2024 Incentive Compensation Plan.
• **Customers**: Future customers, if the company achieves commercial production, would benefit from a domestic supply of critical lithium and magnesium, aligning with U.S. supply chain security goals.
• **Creditors**: The automatic conversion of convertible notes upon the offering's effectiveness will reduce the company's debt burden. However, the company's ongoing need for additional financing indicates continued reliance on debt or equity funding.
• **Local Communities**: The Lisbon Valley Project could bring economic benefits through job creation and infrastructure development in the region.
• **Environment**: The commitment to Direct Lithium Extraction (DLE) technology aims to minimize environmental impact through reduced water usage, brine recycling, and a smaller physical footprint compared to traditional mining methods, aligning with ESG objectives.

Next Steps

• 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 the production phase, including building a permanent lithium and magnesium extraction plant, estimated for 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.

Key Dates

Recommendation

The company is an exploration-stage issuer with no revenue and a history of significant and increasing net losses, leading to substantial doubt about its ability to continue as a going concern. While the focus on critical minerals and Direct Lithium Extraction (DLE) technology is strategically sound and supported by government initiatives, the execution risk is extremely high, requiring substantial future capital that is not guaranteed. The immediate dilution from the public offering and convertible note conversions, coupled with identified material weaknesses in internal controls, makes this a highly speculative investment with a strong likelihood of further capital erosion for investors. The current financial instability outweighs the long-term potential.

Keywords

Lithium, Magnesium, Direct Lithium Extraction, DLE, Battery Materials, Critical Minerals, Utah, Lisbon Valley, Paradox Basin, Renewable Energy, Mining, Exploration, SEC Filing, S-1/A, Public Offering, NYSE American, EV, Battery Storage