10-Q: American Battery Materials Reports Widening Losses, Going Concern Doubts

Sentiment:

Quarterly Report 7 November 2025 3:52 PM

📋All filings for American Battery Materials, INC

American Battery Materials Inc. reported a significant increase in net loss for the nine months ended September 30, 2025, alongside a substantial working capital deficit and ongoing going concern uncertainties.

Capital raiseThe company needs to raise additional financing to fund operations for the next 12 months and continue business development.Potential sources include the sale of debt or equity instruments, or a combination thereof.There is no assurance that the company will be able to successfully raise sufficient capital.

Worse than expectedNet loss for the nine months ended September 30, 2025, more than doubled to $4,283,772, indicating a significant deterioration in financial performance.Total liabilities increased substantially, contributing to a growing working capital deficit of $9,237,497.The company explicitly states substantial doubt about its ability to continue as a going concern, reflecting severe financial distress.Significant dilution occurred through the issuance of common stock for debt modification and extensions, increasing the cost of capital and impacting existing shareholders.

Summary

Net loss for the nine months ended September 30, 2025, more than doubled to $4,283,772, compared to $2,041,882 for the same period in 2024.
The company reported no revenue for both the three and nine months ended September 30, 2025 and 2024.
Total liabilities increased significantly to $9,508,822 as of September 30, 2025, from $7,129,534 at December 31, 2024.
A working capital deficit of $9,237,497 was reported as of September 30, 2025.
Accumulated deficit grew to $28,830,329 as of September 30, 2025.
General and administrative expenses for the nine months ended September 30, 2025, increased by 24% to $1,509,194, primarily due to higher share-based compensation.
Significant losses were recorded from extinguishment of debt ($990,109) and fair value of stock issued for note modification ($1,273,659) for the nine months ended September 30, 2025.
Interest expense for the nine months ended September 30, 2025, rose to $510,810 from $295,572 in the prior year period.
The company's ability to continue as a going concern is dependent on obtaining additional financing, with substantial doubt raised.
Numerous promissory and convertible notes were extended, often with increases in principal and issuance of additional common stock as consideration, including related party transactions.
The company owns 743 placer claims over 14,320 acres in the Lisbon Valley of Utah, focused on lithium and other technical minerals, but has no proven or probable reserves and no mining revenue to date.

Sentiment

Score: 2

Explanation: The company is in severe financial distress, evidenced by rapidly increasing net losses, a substantial accumulated deficit, a significant working capital deficit, and explicit 'going concern' warnings. The continuous reliance on debt extensions and equity dilution, coupled with no revenue and material weaknesses in internal controls, paints a highly negative picture despite efforts in mineral claim acquisition and technology exploration.

Positives

The company is actively pursuing advanced brine extractive technology methodologies, which are described as cost-effective and ESG friendly.
General and administrative expenses for the three months ended September 30, 2025, decreased by 42% to $293,140, mainly due to a decrease in professional fees.

Negatives

Net loss for the nine months ended September 30, 2025, more than doubled to $4,283,772.
The company has no revenue from operations.
Total liabilities increased significantly to $9,508,822, contributing to a substantial working capital deficit of $9,237,497.
Accumulated losses total $28,830,329, indicating a history of unprofitability.
Significant dilution occurred through the issuance of 265,340 shares of common stock for note modification, valued at $1,273,659, and additional shares for debt extensions.
The company faces substantial doubt about its ability to continue as a going concern.
All 49,446 outstanding warrant securities expired during the nine months ended September 30, 2025.

Risks

The company's ability to continue as a going concern is uncertain due to recurring net losses, accumulated deficit, and working capital deficit.
Reliance on obtaining additional financing through debt or equity instruments, with no assurance of success.
Risk of being unable to successfully restructure debt obligations if additional financing is not secured.
No proven and probable mineral reserves have been identified, and there is no determination if mineralization can be economically or legally produced.
Material weaknesses in internal control over financial reporting, including lack of controls for data completeness/accuracy, absence of written policies, insufficient segregation of duties, inadequate finance/accounting personnel, and no functioning audit committee.
Shareholders face potential significant dilution from future equity offerings or stock issuances for debt conversion/extension.
The company has no revenue, indicating a lack of sustainable operations to cover expenses.

Future Outlook

The company requires additional funding to support continuing operations and its growth strategy, potentially through equity offerings, debt financing, collaborations, strategic alliances, or other licensing arrangements. There is no assurance that sufficient capital will be raised, and failure to do so may necessitate negotiating debt repayment extensions or could lead to cessation of operations.

Management Comments

"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."
"There is no assurance we will be able to raise sufficient capital to finance our operations."
"Unless we can attract additional investment, our operating as a going concern is in doubt."
"If we are unable to obtain sufficient amounts of additional capital, we may have to cease filing the required reports and cease operations completely."

Industry Context

The company operates in the renewable energy sector, specifically focusing on the extraction, refinement, and distribution of technical minerals like lithium, crucial for battery production. It aims to employ advanced, ESG-friendly brine extractive technologies, aligning with broader industry trends towards sustainable mineral sourcing for the growing electric vehicle and technology markets. However, as an exploration-stage issuer with no proven reserves or revenue, it faces significant challenges in a capital-intensive industry.

Comparison to Industry Standards

The company is an exploration-stage issuer with no proven and probable reserves, which is typical for early-stage mining companies but contrasts sharply with established producers like Albemarle or SQM that have significant, de-risked reserves and operational revenue.
The reliance on debt extensions and issuance of stock for note modifications, coupled with a substantial accumulated deficit and no revenue, indicates a financial position far below industry standards for operational mining companies.
The identified material weaknesses in internal controls and lack of a functioning audit committee fall short of corporate governance best practices expected in the public markets, especially compared to larger, more mature companies in the battery materials space.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weaknesses	Identified material weaknesses in internal control over financial reporting, including lack of controls for data completeness/accuracy, absence of written policies, insufficient segregation of duties, inadequate finance/accounting personnel, and no functioning audit committee.	2025-09-30	These weaknesses pose a reasonable possibility of material misstatement in financial statements and indicate ineffective oversight, raising concerns about financial reporting reliability and operational integrity.

Related Party Transactions

Promissory notes payable to related parties totaled $1,007,366 as of September 30, 2025, up from $832,534 at December 31, 2024.
Convertible notes payable to related parties totaled $983,584 as of September 30, 2025, up from $631,811 at December 31, 2024.
During the nine months ended September 30, 2025, $135,000 in proceeds were received from convertible notes with related parties.
Two promissory note agreements with a related party ($75,000 principal, $2,710 accrued interest) were exchanged by a new convertible note on March 21, 2024.
One promissory note agreement with a related party ($100,000 principal, $10,500 accrued interest) was forgiven by the noteholder, and a new convertible note was issued in exchange on March 22, 2024.
Between May 16 and August 28, 2024, five short-term promissory notes in the aggregate amount of $564,182 were issued to a related party, later consolidated into a new note with increased principal and shares issued.
A short-term promissory note in the amount of $99,098 was issued to a related party during 2024, subsequently extended with principal increases and share issuances.
In February 2023, a convertible promissory note for $25,000 was entered into with a related party, later forgiven and exchanged for a new convertible note.
During the nine months ended September 30, 2025, five convertible promissory note agreements totaling $80,000 were entered into with related parties, subsequently extended with principal increases and share issuances.
Seven convertible promissory note agreements totaling $50,000 were entered into with a related party during the nine months ended September 30, 2025, subsequently extended with principal increases and share issuances.
Five short-term convertible promissory note agreements totaling $65,721 were entered into with a related party during the nine months ended September 30, 2025, subsequently amended with principal increases and share issuances.
On October 23, 2025, the company issued convertible promissory notes to a related party for $200,000 (accrued payroll) and $34,200 (accrued expenses).

Stakeholder Impact

Shareholders face significant dilution due to the issuance of common stock for debt modifications and extensions, and potential further dilution from future capital raises.
Creditors face increased risk due to the company's 'going concern' status and reliance on debt extensions, indicating potential difficulties in timely repayment.
Employees and management may face uncertainty regarding job security and the company's long-term viability given the severe financial challenges.
Potential investors face high risk due to the company's lack of revenue, substantial losses, and internal control weaknesses.

Next Steps

Obtain additional financing to fund operations for the next 12 months.
Continue the development of business plans for mineral extraction.
Negotiate with lenders to extend repayment dates of indebtedness if additional financing is not available.
Improve internal controls and procedures to remediate identified material weaknesses.

Key Dates

Date	Description
2011-07-26	Board and stockholders approved the 2011 Equity Incentive Plan.
2014-12-19	Issued a $40,000 promissory note.
2016-03-29	Issued a $30,000 promissory note.
2016-09-23	Issued a $30,000 unsecured promissory note.
2016-11-20	Issued a $50,000 unsecured promissory note.
2017-11-16	Board approved an increase of 33,333 shares for issuance under the 2011 Equity Incentive Plan.
2021-11-05	Acquired rights to 102 Federal Mining Claims in Lisbon Valley, Utah for $100,000.
2022-10-19	Stockholders approved the Name Change and Authorized Share Increase.
2022-10-20	Company filed an amendment to its Certificate of Incorporation for Name Change and Authorized Share Increase, with the Authorized Share Increase becoming effective.
2023-04-25	Formed Mountain Sage Minerals, LLC, a 100% owned Utah limited liability company.
2023-05-01	FINRA completed processing of the company's name change to American Battery Materials Inc. and trading symbol changed to BLTH.
2023-06-01	Entered into an Agreement and Plan of Merger with Seaport Global Acquisition II Corp. (SGI II).
2023-07-01	Acquired and staked additional lithium mining claims adjacent to the Lisbon Valley Project in Utah.
2023-08-01	Board unanimously approved a 1-for-300 Reverse Stock Split.
2023-08-04	Filed an Amendment to the Certificate of Incorporation to effect a 1-for-300 Reverse Stock Split.
2023-11-20	SGI II notified the company of its election to terminate the Merger Agreement.
2023-12-08	Effectuated a 1-for-300 Reverse Stock Split of common stock.
2023-12-29	A short-term promissory note in the amount of $125,000 was bought by another holder not affiliated with the company.
2024-01-01	The $125,000 promissory note was exchanged by a new note with an increase of principal to $175,000 and an interest rate of 10%.
2024-03-21	Two promissory note agreements with a related party ($75,000 principal, $2,710 accrued interest) were exchanged by a new convertible note.
2024-03-22	One promissory note ($50,000 principal, $5,322 accrued interest) was forgiven by the noteholder, and a new convertible note was issued in exchange.
2024-03-22	One promissory note agreement with a related party ($100,000 principal, $10,500 accrued interest) was forgiven by the noteholder, and a new convertible note was issued in exchange.
2024-03-28	One promissory note agreement ($25,000) was amended, increasing principal to $35,471, interest rate to 10%, and extending for 1 year. 3,250 shares of common stock were issued.
2024-08-13	Board of Directors adopted the American Battery Materials Inc. 2024 Incentive Compensation Plan, reserving 800,000 shares of Common Stock.
2024-09-30	Five short-term promissory notes ($564,182 aggregate) issued to a related party between May 16 and August 28, 2024, were consolidated into a new note with principal increased to $733,436, interest to 10%, and a 6-month term. 32,882 shares were issued.
2024-10-23	A transaction triggered Most Favored Nations (MFN) provisions under a promissory note, increasing the principal to $46,113 and resulting in the issuance of 1,845 shares of common stock.
2025-01-16	Filed a Certificate of Amendment to effect a 1-for-5 reverse stock split of issued and outstanding common stock.
2025-01-24	The 1-for-5 reverse stock split became effective, and the total number of authorized common stock shares was reduced from 4,500,000,000 to 100,000,000.
2025-04-01	Multiple promissory and convertible notes were extended to July 31, 2025, with corresponding principal increases and issuance of additional common stock.
2025-07-31	Multiple promissory and convertible notes were further extended to October 31, 2025, with corresponding principal increases and issuance of additional common stock.
2025-09-30	End of the quarterly reporting period.
2025-10-23	Issued a convertible promissory note to a related party for $200,000 for accrued payroll.
2025-10-23	Issued a convertible promissory note to a related party for $34,200 for accrued expenses.
2025-10-31	Entered into extension agreements with certain noteholders, extending maturity dates to January 31, 2026, with a 10% principal increase ($731,377 aggregate) and issuance of 196,557 additional common shares.
2025-10-31	Two convertible promissory notes ($200,000 and $34,200) received terms consistent with the extension agreements, including a 10% principal increase ($23,420 aggregate) and additional shares (4,811 and 823 respectively) due to a Most Favored Nation clause, with maturity remaining January 31, 2026.
2025-11-04	Issued 14,740 shares of common stock to three parties in exchange for services provided.
2025-11-07	Filing date of the Form 10-Q.

Recommendation

strong sell

The company's financial position is extremely precarious, marked by rapidly escalating net losses, a substantial accumulated deficit, and a significant working capital deficit. The explicit 'going concern' warning, coupled with zero revenue and a heavy reliance on continuous debt restructuring through principal increases and equity dilution, indicates severe operational and financial instability. Furthermore, identified material weaknesses in internal controls and the absence of a functioning audit committee raise serious governance concerns. Given these factors, the risk of significant capital loss is exceptionally high, making it an unsuitable investment for all but the most speculative portfolios.

Keywords

Lithium, Battery Materials, Mining Claims, Renewable Energy, Utah, Lisbon Valley, Exploration Stage, Going Concern, Convertible Notes, Promissory Notes, SEC 10-Q, Financial Results, Debt Restructuring, Internal Controls

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