Executive Summary / Key Takeaways

• American Battery Technology Company (ABAT) is strategically positioned at the forefront of the burgeoning domestic critical battery materials industry, leveraging its dual approach of advanced lithium-ion battery recycling and sustainable primary lithium extraction to address a significant U.S. supply chain imbalance.
• The company's proprietary recycling and extraction technologies offer distinct advantages, including reduced environmental impact, high recovery rates of critical metals, and lower production costs, forming a crucial competitive moat in a rapidly expanding market.
• ABAT demonstrated substantial operational progress in fiscal year 2025, with revenue surging by 1,149% to $4.30 million, driven by the ramp-up of its McCarran recycling facility, and a nearly tripling of quarterly revenue in Q4 FY2025.
• Significant government grants and tax credits, coupled with a $900 million Letter of Interest for financing its Tonopah Flats Lithium Project, underscore strong national support for ABAT's initiatives and provide substantial capital for its ambitious expansion plans.
• While ABAT faces challenges typical of a growth-stage company, including recurring losses, negative operating cash flow, and the need for further financing, its improving liquidity post-fiscal year-end and the promising economics of its Tonopah Flats project (estimated $10.05 billion after-tax NPV) highlight a compelling long-term investment opportunity in a critical sector.

The Foundation of a Domestic Battery Powerhouse

The global lithium-ion battery market is experiencing explosive growth, surpassing $100 billion in 2024 and projected to exceed $250 billion by 2030. This surge is fueled by the accelerating adoption of electric vehicles, stationary energy storage systems, and consumer electronics, all of which drive a significant increase in demand for critical battery materials such as lithium, cobalt, nickel, and manganese. However, the United States faces a severe domestic capacity imbalance, with less than 1% of these essential materials currently sourced within the country, posing a substantial risk to the domestic economy and potentially hindering the widespread adoption of clean energy technologies.

American Battery Technology Company (ABAT), headquartered in Reno, Nevada, is strategically addressing this critical supply chain vulnerability. With a current market capitalization of approximately $596.14 million, ABAT operates as an integrated critical battery materials company, pursuing a three-pronged strategy: exploration of new primary resources, development and commercialization of advanced extraction technologies, and commercialization of an internally developed integrated process for lithium-ion battery recycling. This integrated approach aims to establish a closed-loop domestic supply chain, ensuring both increased production and responsible end-of-life management of battery materials.

ABAT's journey began in 2011 as Oroplata Resources, Inc., initially focused on mineral property acquisition. Over time, the company's strategic vision evolved, reflected in its name changes to American Battery Metals Corporation and, in August 2021, to American Battery Technology Company, aligning with its expanded focus on advanced battery material technologies. A pivotal moment in its history was winning the battery recycling portion of the Circularity Challenge in September 2019, which provided seed funding and access to critical facilities, signaling early recognition of its innovative recycling approach.

Technological Edge: The Core of ABAT's Competitive Moat

ABAT's investment thesis is deeply rooted in its differentiated and proprietary technologies across both battery recycling and primary resource extraction. These innovations are designed to overcome the limitations of conventional methods, offering superior environmental performance and economic efficiencies.

Pioneering Lithium-Ion Battery Recycling

The company's universal lithium-ion battery recycling system stands out from traditional pyrometallurgical (high-temperature thermal) or simple hydrometallurgical (shredding/solvent extraction) processes. ABAT's system employs a two-phase approach: an automated de-manufacturing process followed by a targeted chemical extraction train. Phase 1, commissioned in the fourth quarter of fiscal year 2024 at its McCarran, Nevada facility, focuses on separating battery feedstock into constituent components like scrap metals and black mass filter cake. Phase 2 will further refine these intermediates into battery cathode-grade lithium, nickel, cobalt, and manganese.

The tangible benefits of ABAT's recycling technology are significant. It achieves decreased air and liquid pollutant emissions through strategic design and the complete avoidance of high-temperature operations, which are energy-intensive and can cause substantial pollution. The early separation of low-value materials allows for high recovery and purity of high-value products, enabling metal products to re-enter the supply chain in a closed-loop fashion. The system is designed for throughput equal to that of manufacturing facilities on a per-region basis, boasts low capital costs by avoiding high-temperature operations and minimizing waste generation, and features short processing residence times through high-speed strategic disassembly and material handling. These advantages position ABAT to deliver reliable quantities of high-quality, battery-grade materials with a lower environmental footprint and potentially superior cost efficiencies compared to competitors. The company's technical advancements in battery recycling were recently recognized with the prestigious Global Voltas Award for Pioneering Battery Recycling Innovations.

Sustainable Primary Lithium Extraction

Concurrently, ABAT is advancing its internally developed sustainable lithium extraction process for manufacturing battery cathode-grade lithium hydroxide from Nevada-based sedimentary claystone resources. This technology represents a significant departure from traditional lithium-from-brine mining, which relies on inefficient and water-intensive evaporation ponds.

ABAT's extraction process utilizes a selective leaching method, resulting in significantly lower consumption of acid, reduced levels of contaminants in the leach liquor, and lower overall production costs. The company has designed, constructed, and is operating a multi-tonne per day integrated demonstration scale facility to prove the commercial viability of these processes. This technological approach not only promises a more environmentally responsible method of lithium production but also aims to unlock one of the largest identified lithium resources in the United States at its Tonopah Flats Lithium Project (TFLP).

Competitive Landscape and Strategic Positioning

ABAT operates in a competitive environment, vying with both established primary producers of battery materials and other recycling companies. Primary producers like Albemarle Corporation (ALB) and Lithium Americas Corp. (LAC) benefit from scale and existing supply chains for raw material extraction. However, their reliance on traditional mining methods often comes with higher environmental impacts and longer development times. ABAT's recycling process, with its focus on high recovery and low environmental footprint, directly addresses the limitations of conventional recycling methods that often lose valuable materials like lithium and manganese in high-temperature processes.

ABAT's competitive advantage lies in its ability to extract additional value from feedstock through its comprehensive recovery of all battery components, enabling low-cost and low-environmental operations. While larger players like Tesla (TSLA) are vertically integrating battery technology, ABAT positions itself as a critical supplier of sustainably sourced and recycled materials, essential for the broader industry. The company's emphasis on product quality and reliability of supply, meeting the stringent specifications of cathode manufacturers, is a key competitive differentiator.

The evolving regulatory landscape, particularly with the rise of Extended Producer Responsibility (EPR) programs, could further benefit ABAT by increasing the availability of feedstock for its recycling operations. Geopolitical competition over critical minerals also plays into ABAT's favor, as governments, including the U.S., prioritize securing domestic supply chains. The TFLP's selection as a Transparency Priority Project by the U.S. Federal Permitting Council underscores its critical role in advancing domestic critical mineral production and supporting U.S. energy independence.

Financial Performance and Operational Momentum

ABAT's fiscal year ended June 30, 2025, marked a significant inflection point, demonstrating substantial operational ramp-up and revenue growth. The company's revenue surged to $4.30 million in fiscal year 2025, a remarkable 1,149% increase from $0.30 million in fiscal year 2024. This growth was primarily driven by the successful commissioning and scaling of its McCarran, Nevada, battery recycling facility, which began generating its first revenue in the fourth quarter of fiscal year 2024. Quarterly revenue in the fourth quarter of fiscal year 2025 further highlighted this momentum, nearly tripling to $2.80 million from $1.0 million in the third quarter of fiscal year 2025. This revenue is primarily derived from the sale of black mass and metal byproducts from its recycling operations.

Despite this impressive revenue growth, ABAT reported a gross loss of $10.57 million in fiscal year 2025, compared to $2.96 million in fiscal year 2024. The increase in the cost of goods sold (COGS) to $14.90 million in fiscal year 2025 from $3.30 million in the prior year reflects higher headcount as the plant was commissioned, increased production capacity, and depreciation expenses associated with the recycling facility. Management anticipates these costs to decrease as a percentage of revenue as production scales and efficiencies are gained.

Operating expenses decreased to $31.40 million in fiscal year 2025 from $44.80 million in fiscal year 2024. This reduction was influenced by a reallocation of payroll costs from research and development (R&D) to general and administrative (G&A) as operations commenced, and a decrease in R&D and exploration costs due to the commissioning of recycling operations, increased plant throughput, and higher grant reimbursements. The company's net loss narrowed slightly to $46.76 million in fiscal year 2025 from $52.50 million in fiscal year 2024.

From a liquidity perspective, ABAT used $28.90 million in cash for operating activities in fiscal year 2025, reflecting increased operational scale. However, financing activities provided $36.90 million, demonstrating the company's ability to raise capital to support its growth initiatives. As of June 30, 2025, ABAT had $12.50 million in cash, which significantly improved to $25.40 million by September 15, 2025, due to strategic capital raises, warrant exercises, and debt conversions.

Outlook, Strategic Initiatives, and Risks

ABAT's forward-looking strategy is underpinned by substantial government support and ambitious project development. The company has secured significant grants, including a $2 million contract from the U.S. Advanced Battery Consortium for its recycling system, a $20 million grant from the DOE for next-generation recycling technologies, and a $4.50 million grant from the DOE for lithium extraction technologies. A particularly impactful award is a $115 million grant from the DOE to 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. Furthermore, ABAT 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 company also secured $19.50 million and an additional $40.50 million in tax credits through the Qualifying Advanced Energy Project Credits program for its battery recycling facilities.

The Tonopah Flats Lithium Project is a cornerstone of ABAT's future. An Amended Resource Estimate and Initial Assessment (IA) with Project Economics, published in April 2024, outlines a commercialization pathway utilizing Measured and Indicated Mineral Resources. The IA estimates a $10.05 billion after-tax Net Present Value (NPV) at a 5% discount rate, a 69.80% Internal Rate of Return (IRR), and a 2.3-year payback of initial capital, based on an average annual production of 33,000 tons of lithium hydroxide monohydrate (LHM) over a 50-year mine life. The results of the 2025 drill program will be incorporated into an upcoming SK-1300 compliant preliminary feasibility study (PFS) expected within the first quarter of fiscal year 2026.

Despite this promising outlook, ABAT faces notable risks. The company's independent auditors have expressed "substantial doubt about its ability to continue as a going concern" due to recurring losses and negative cash flows from operations. ABAT will require significant additional financing to fund operations and develop its facilities, and there is no assurance such capital will be available on acceptable terms. The company's lack of prior history in completing and operating a mining project introduces execution risks, with potential for unexpected costs and delays during construction and start-up. The success of its recycling operations is also dependent on securing adequate quantities of suitable feedstock at economically viable prices, a market that is still developing. Volatile global metal prices and the uncertain adoption rates of lithium-based end products also pose risks to profitability. Furthermore, ABAT has identified a material weakness in its internal control over financial reporting, though remediation efforts are underway with an expected completion by the end of fiscal year 2026.

Conclusion

American Battery Technology Company stands as a compelling, albeit speculative, investment opportunity at the nexus of critical mineral independence and sustainable technology. Its integrated strategy of advanced lithium-ion battery recycling and innovative primary lithium extraction positions it uniquely to capitalize on the exponential growth of the battery market and the urgent need for domestic supply chain solutions. The company's proprietary technologies offer a clear competitive advantage through superior environmental performance and cost efficiencies, which are crucial for long-term success.

While ABAT's financial performance in fiscal year 2025 showcased significant revenue acceleration and operational ramp-up, the company remains in a growth stage, characterized by losses and a reliance on external financing. However, the substantial government backing, including significant grants and tax credits, coupled with the impressive economic projections for its Tonopah Flats Lithium Project, provide a strong foundation for future growth. Investors must weigh the inherent risks of a developing company, particularly those related to financing and operational scaling, against the immense potential of ABAT's technological leadership and strategic importance in shaping a secure and sustainable domestic battery materials ecosystem. The company's ability to execute its ambitious plans and translate its technological advantages into sustained profitability will be the ultimate determinant of its long-term value.