10-K: ABTC Reports Strong Revenue Growth, Advances Battery Recycling

American Battery Technology Company (ABTC) reported significant revenue growth in fiscal year 2025, driven by its battery recycling operations, while continuing to advance its lithium extraction projects and secure substantial government grants.

Summary

• Revenue increased by 1,149% to $4.3 million in fiscal year 2025, up from $0.3 million in fiscal year 2024, reflecting the ramp-up of battery recycling facility operations.
• The net loss improved to $(46.8) million in fiscal year 2025, compared to $(52.5) million in fiscal year 2024.
• Gross loss increased to $(10.6) million in fiscal year 2025 from $(3.0) million in fiscal year 2024, as cost of goods sold significantly exceeded revenue.
• Operating expenses decreased to $31.4 million in fiscal year 2025 from $44.8 million in fiscal year 2024, primarily due to lower research and development and exploration costs.
• Secured a $150 million grant from the U.S. Department of Energy (DOE) for the construction of a new lithium-ion battery recycling facility.
• Completed construction and commissioning of a multi-tonne per day integrated pilot facility for battery-grade lithium hydroxide from claystone resources.
• Received a Letter of Interest from the US Export-Import Bank for up to $900 million in low-interest debt financing to support the Tonopah Flats Lithium Project.
• The cash position improved to $25.4 million as of September 15, 2025, up from $12.5 million at June 30, 2025, due to capital raises and the release of restricted cash.
• A material weakness in internal control over financial reporting was identified, with remediation efforts underway and expected to be completed by the end of fiscal year 2026.

Sentiment

Score: 7

Explanation: The company demonstrates significant progress in scaling its recycling operations and advancing its primary lithium extraction projects, backed by substantial government grants and a Letter of Interest for significant debt financing. The estimated NPV and IRR for the Tonopah Flats project are highly attractive. However, the company still faces a 'going concern' doubt, operates at a gross loss, and has identified a material weakness in internal controls. While the long-term potential is strong, the current financial instability and execution risks temper the overall sentiment.

Positives

• Revenue increased by 1,149% to $4.3 million in fiscal year 2025 from $0.3 million in fiscal year 2024, reflecting the ramp-up of recycling operations.
• Net loss improved to $(46.8) million in fiscal year 2025 from $(52.5) million in fiscal year 2024.
• Secured a $150 million grant from the US DOE for a new lithium-ion battery recycling facility.
• Successfully completed contractual requirements for a $2.3 million DOE grant for the claystone lithium pilot facility.
• Successfully completed contractual requirements for a $0.5 million US Advanced Battery Consortium (USABC) grant, including manufacturing and testing of automotive battery cells from recycled materials.
• Received a $19.5 million tax credit through the Qualifying Advanced Energy Project Credits (48C) program for its Nevada battery recycling facility.
• Received an additional $40.5 million tax credit through the 48C program for a new commercial battery recycling facility.
• Completed construction and commissioning of its multi-tonne per day integrated pilot facility for battery-grade lithium hydroxide from Tonopah Flats claystone.
• Received a Letter of Interest from the US Export-Import Bank for up to $900 million in low-interest debt financing for the Tonopah Flats Lithium Project.
• The cash position improved to $25.4 million as of September 15, 2025, from $12.5 million at June 30, 2025, due to capital raises and release of restricted cash.
• Over 50% of inferred mineral resources at Tonopah Flats have been upgraded to measured and indicated classifications.
• The Tonopah Flats Lithium Project's Initial Assessment estimates a $10.05 billion after-tax net present value (NPV) at a 5% discount rate, a 69.8% Internal Rate of Return (IRR), and a 2.3-year payback of initial capital.

Negatives

• Gross loss increased to $(10.6) million in fiscal year 2025 from $(3.0) million in fiscal year 2024, as cost of goods sold ($14.9 million) significantly exceeded revenue ($4.3 million).
• There is substantial doubt about the Company's ability to continue as a going concern, as expressed by independent auditors.
• Requires significant additional financing within the next 12 months to fund operations and develop facilities, with no assurance such capital will be available on acceptable terms.
• Identified a material weakness in internal control over financial reporting, though remediation efforts are underway.
• Incurred a credit loss expense of $1.4 million related to a subscription receivable that was deemed uncollectible.
• Inventory was written down by $2.9 million in fiscal year 2025 due to lower of cost or net realizable value.
• Operating cash flow remains negative, using $28.9 million in fiscal year 2025.
• A purchase agreement for the Fernley land and building, previously held for sale, was canceled, leading to its reclassification back to property, plant, and equipment.

Risks

• Substantial doubt exists about the Company's ability to continue as a going concern and to achieve or sustain profitability.
• Significant additional financing may be required within the next 12 months, with no assurance of availability on acceptable terms, which could jeopardize the business plan.
• Challenges may arise in executing growth strategy and effectively managing any expansion, with strategic transactions potentially disruptive or dilutive.
• The ability to source, recover, and recycle lithium-ion battery materials economically and efficiently may be limited by feedstock availability, quality, and competition.
• Inability to continue operating the recycling facility and improve efficiency could materially harm the business.
• Profitability depends heavily on volatile global metal prices, product quality, and customer specifications, and unfavorable pricing could reduce revenues.
• Safety concerns in handling lithium-ion batteries, changes in battery chemistry or technology, slower-than-expected adoption of electric vehicles, or reduced government support for clean energy could negatively impact revenues.
• Operations are subject to development and execution risks, as well as potential limitations in obtaining applicable permits and in obtaining or maintaining insurance coverage.
• Declines in demand, volatility in benchmark metal prices, or shifts in the quantity and composition of lithium-ion battery feedstock could materially affect costs, revenues, and results.
• Dependence on the skills and experience of the senior management team and key employees; loss of such personnel could have a material adverse effect.
• Exposure to litigation, foreclosure, or regulatory actions, any of which could adversely affect financial condition.
• Geopolitical competition over critical minerals and government policies aimed at securing domestic supply chains may restrict access to certain markets, partners, or suppliers.
• Changes in international trade policies, tariffs, or trade disputes could disrupt supply chains, increase costs, or limit market access.
• Changes in government policies or funding priorities for critical minerals could reduce or eliminate incentives, grants, or programs relied upon.
• Export controls or trade restrictions on lithium, equipment, or technology could limit market access, sourcing options, or partnerships.
• Mineral Resources and Reserves are estimates subject to inherent uncertainties; actual tonnage, grades, recoveries, or costs may differ materially.
• No assurance that economically recoverable mineral reserves exist on properties, and exploration and development risks could prevent their extraction.
• Evolving federal and state regulations on battery recycling and extended producer responsibility may create new compliance obligations or increase operating costs.
• Changes in income tax rates or laws, or disputes with tax authorities, could materially affect results of operations.
• Failure to adequately protect intellectual property, or third-party infringement claims, could lead to significant costs.
• Increasing cybersecurity threats and potential attacks could compromise systems, disrupt operations, or expose sensitive data.
• Future issuance of additional equity securities without shareholder approval could dilute existing ownership and potentially place downward pressure on the market price of common shares.
• Common shares have experienced, and may continue to experience, significant volatility.
• No anticipated dividends in the foreseeable future.
• A material weakness in internal control over financial reporting (ICFR) has been identified.
• Compliance with regulatory requirements applicable to U.S. domestic issuers is expected to require considerable time, cost, and resources.
• Failure to comply with covenants in debt agreements could result in default, acceleration of repayment obligations, or loss of collateral.
• May be required to record write-downs, impairments, restructurings, or other charges, any of which could materially and negatively impact financial condition.

Future Outlook

The Company expects continued growth in production volumes and revenues from its recycling operations, with plans to commission Phase 2 of its McCarran facility to refine lithium intermediate and black mass into battery-grade products. A preliminary feasibility study (PFS) for the Tonopah Flats Lithium Project is anticipated in the first quarter of fiscal year 2026, which will further inform the design and construction of a commercial-scale lithium hydroxide refinery. The Company also plans to make improvements to its Fernley property in fiscal year 2026, including obtaining a final certificate of occupancy, before reclassifying it to property, plant, and equipment. Remediation of the material weakness in internal control over financial reporting is expected by the end of fiscal year 2026. The Company will continue to rely on various financing sources, including equity and debt, to fund its ongoing operations and development activities.

Management Comments

• The ramp-up and operation of this facility remain a top priority, and the Company has significantly expanded resources to support its execution.
• The Company has completed the construction and commissioning of its lithium hydroxide (LiOH) pilot plant, marking a significant milestone in the commercialization of its internally-developed processes to access an unrealized domestic primary lithium resource.
• This commercialization pathway allows for an engineered phased development, with improved access to the higher quality portions of the resource, and improved project economics.
• We have implemented, and are continuing to design and implement, measures to remediate the control deficiencies that resulted in the material weaknesses identified in our internal control over financial reporting.

Industry Context

The global market for lithium-ion batteries is projected to exceed $250 billion by 2030, driving significant demand for critical battery materials like lithium, cobalt, nickel, and manganese. The current supply chain is highly segmented, with refining and cell manufacturing predominantly in Asia, leading to a severe domestic capacity imbalance and supply chain risk within the United States. The Company operates in both primary resource extraction and secondary supply (recycling) segments, aiming to increase domestic production and establish a closed-loop supply chain. Its proprietary recycling process offers greater net benefits than conventional high-temperature thermal or mechanical shredding methods, which often lose valuable materials or struggle with purity. The Company's focus on domestic sourcing and advanced processing aligns with broader U.S. government initiatives to secure critical mineral supply chains and reduce foreign dependence.

Comparison to Industry Standards

• The Company's uniquely pioneered recycling process is stated to realize greater net benefits than current conventional methods, including decreased air and liquid pollutant emissions through strategic design and no high-temperature operations.
• The process allows for the separation of low-value materials early, leading to high recovery and purity of high-value products, enabling metal products to meet battery cathode specifications for re-entry into the supply chain.
• The recycling facilities are designed for throughput equal to that of manufacturing facilities on a per-region basis, with low capital costs due to avoidance of high-temperature operations and minimal waste generation, and short processing residence times.
• Conventional recycling methods, such as high-temperature thermal processes (pyrometallurgy), often result in the loss of key battery materials like lithium, graphite, and aluminum, and can present challenges in refining to high purity specifications, while being energy-intensive and causing substantial air and water pollution.
• Mechanical crushing/simple hydrometallurgy approaches face challenges in recovering battery-grade materials due to high impurities in the black mass and potential adverse environmental impacts from solvents.

Corporate Governance

Legal Proceedings

• May be involved in certain routine legal proceedings from time to time before various courts and governmental agencies. The resolution of these pending routine proceedings is not expected to have a material effect on operations or consolidated financial statements.

Related Party Transactions

• Ryan Melsert, Chief Executive Officer, held 200,000 warrants whose expiration date was extended to April 30, 2025, on July 22, 2024, resulting in less than $0.1 million in stock-based compensation expense.
• A portion of the August 1, 2024 private placement ($0.6 million) was received from related parties, including current employees and an immediate family member of the Chief Executive Officer.
• Stock-based compensation expense for officers and directors totaled approximately $6.2 million for fiscal year 2025 and $7.5 million for fiscal year 2024.
• Stock-based compensation expense included $4.3 million (FY2025) and $1.9 million (FY2024) related to warrants awarded to officers of the Company.

Stakeholder Impact

• Shareholders face potential dilution from future equity issuances and continued stock price volatility, but benefit from improved cash position post-year-end and significant project advancements.
• Employees benefit from the new 2024 Employee Stock Purchase Plan and stock-based compensation, with increased headcount supporting expanded operations.
• Customers can expect increased production capacity for recycled battery materials and the development of battery-grade lithium hydroxide, potentially leading to more reliable domestic supply.
• Creditors face ongoing risk due to the 'going concern' doubt and the need for additional financing, but debt conversions to equity and a Letter of Interest for significant financing provide some mitigation.
• Local communities may experience economic benefits from facility operations and job creation, but also potential opposition to facility installation and operation due to environmental concerns.

Next Steps

• Commission Phase 2 of the McCarran recycling facility to further refine lithium intermediate and black mass into battery-grade nickel, cobalt, manganese, and lithium hydroxide products.
• Continue exploration of the Tonopah Flats Lithium Project to further expand and define the deposit, collect data for detailed design of the mining pit shell, and upgrade to a measured and indicated resource classification.
• Publish a preliminary feasibility study (PFS) for the Tonopah Flats Lithium Project within the first quarter of fiscal year 2026.
• Design, construct, and commission a first-of-kind commercial-scale refinery to produce 30,000 MT of battery-grade lithium hydroxide per year from the Tonopah Flats resource.
• Incur qualifying expenditures for the additional $40.5 million 48C tax credit to support the design and construction of a new commercial battery recycling facility.
• Construct a new lithium-ion battery recycling facility with the $144 million DOE grant.
• Make improvements to the Fernley property in fiscal year 2026, including obtaining a final certificate of occupancy (COO) and completing other upgrades, then reclassify it to property, plant, and equipment.
• Remediate the remaining material weakness in internal control over financial reporting by the end of fiscal year 2026.
• Conduct a search for a permanent Chief Financial Officer.

Key Dates

Recommendation

The company demonstrates significant progress in scaling its recycling operations and advancing its primary lithium extraction projects, backed by substantial government grants and a Letter of Interest for significant debt financing. The estimated NPV and IRR for the Tonopah Flats project are highly attractive. However, the company still faces a 'going concern' doubt, operates at a gross loss, and has identified a material weakness in internal controls. While the long-term potential is strong, the current financial instability and execution risks warrant a cautious 'Hold' recommendation until sustained profitability and full remediation of internal control weaknesses are demonstrated.

Keywords

Lithium-ion battery recycling, Critical battery materials, Lithium extraction, Tonopah Flats, Nevada, Electric vehicles, Energy storage, Government grants, SEC 10-K, Financial results, Mineral resources, Hydrometallurgy, Supply chain, ESG, Clean energy, Battery technology