$10M Registered Direct Offering Priced At-The-Market Under Nasdaq Rules

Rhea-AI Summary

American Battery Technology Company (NASDAQ: ABAT) has announced a $10 million registered direct offering, selling 3,773,586 shares of common stock and warrants. The offering is priced at $2.65 per share and accompanying warrant, slightly above the last closing price of $2.60. The warrants, exercisable immediately with a $2.80 strike price, will expire in five years.

The transaction, expected to close around December 27, 2024, is being conducted through A.G.P./Alliance Global Partners as the sole placement agent. The offering is made under an effective S-3 shelf registration statement filed with the SEC in June 2024.

Positive

• Raised $10M in additional capital through equity offering
• Offering price ($2.65) represents a premium to last closing price ($2.60)
• Warrant exercise price ($2.80) set at premium to offering price

Negative

• Significant dilution with 3,773,586 new shares being issued
• Additional potential dilution from 3,773,586 warrant shares
• Offering expenses and placement agent fees will reduce net proceeds

Insights

Financial Analyst

This $10M registered direct offering reveals significant implications for ABAT's capital structure and growth strategy. The offering price of $2.65 per share represents a slight premium to the last closing price of $2.60, indicating relatively healthy market confidence. The warrant structure, with a $2.80 exercise price and 5-year term, provides additional upside potential while creating future dilution risk. This financing adds approximately 7.3% dilution through the initial shares, with potential for double that if warrants are fully exercised. The timing and ATM pricing suggest opportunistic capital raising to strengthen the balance sheet and fund commercialization efforts in battery materials manufacturing and recycling. For a company with a $199M market cap, this raise represents a meaningful cash injection that should extend their operational runway, though investors should monitor the burn rate and execution of strategic initiatives.

Legal Expert

The offering's structure demonstrates careful regulatory compliance through the use of a recently effective S-3 shelf registration (File No. 333-276329) and ATM pricing under Nasdaq rules. The involvement of institutional investors rather than retail suggests sophisticated scrutiny of the investment thesis. The warrant terms provide a balanced approach to future funding potential while adhering to securities regulations. The explicit disclaimers and SEC filing references reflect proper disclosure practices. The placement agent arrangement with A.G.P./Alliance Global Partners adds credibility to the transaction structure. For retail investors, the key legal protection lies in the registered nature of the offering, providing full SEC oversight and disclosure requirements compared to private placements.

Market Research Analyst

The strategic timing of this capital raise during the broader battery technology sector evolution warrants attention. The premium pricing, albeit modest, suggests institutional investors see value in ABAT's dual-focus business model in both primary battery materials and recycling. The warrant overhang could create near-term selling pressure, but the $2.80 strike price creates a clear upside target. In the context of rising global demand for battery materials and increasing focus on domestic supply chains, this financing strengthens ABAT's competitive position. However, execution risks remain in scaling their technologies to commercial production. The relatively quick turnaround for closing (next day) indicates strong institutional interest despite market volatility.

Reno, Nev., Dec. 26, 2024 (GLOBE NEWSWIRE) --  American Battery Technology Company (NASDAQ: ABAT), an integrated critical battery materials company that is commercializing its technologies for both primary battery minerals manufacturing and secondary minerals lithium-ion battery recycling, today announced it has entered into securities purchase agreements with two institutional investors for the purchase and sale of 3,773,586 shares of its common stock and warrants to purchase up to an aggregate of 3,773,586 shares of common stock in a registered direct offering.  The last closing market price was $2.60 per share and this intraday transaction had at a combined offering price of $2.65 per share and accompanying warrant, priced “at-the-market” under Nasdaq rules. The warrants have an exercise price of $2.80 per share, and will be exercisable immediately from the date of issuance and will expire five years from the initial exercise date.

The gross proceeds of the offering will be approximately $10 million before deducting placement agent fees and other estimated offering expenses payable by the company. The closing of the offering is expected to take place on or about December 27, 2024, subject to the satisfaction of customary closing conditions.

A.G.P./Alliance Global Partners is acting as the sole placement agent for the offering.

A shelf registration statement on Form S-3 (File No. 333-276329) relating to the offering of the securities described above was declared effective by the Securities and Exchange Commission (SEC) on June 24, 2024. The offering may be made only by means of a base prospectus and accompanying prospectus supplement. A prospectus supplement relating to the offering will be filed with the SEC.  Electronic copies will be available on the SEC’s website at www.sec.gov or by contacting A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.


About American Battery Technology Company
American Battery Technology Company, headquartered in Reno, Nevada, has pioneered first-of-kind technologies to unlock domestically manufactured and recycled battery metals critically needed to help meet the significant demand from the electric vehicle, stationary storage, and consumer electronics industries.  Committed to a circular supply chain for battery metals, ABTC works to continually innovate and master new battery metals technologies that power a global transition to electrification and the future of sustainable energy.

Forward-Looking Statements  
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are "forward-looking statements." For example, the company is using forward-looking statements in this press release when it discusses the expected closing date of the offering and use of proceeds from the offering. Although the company’s management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the company's future results to differ materially from those anticipated. Potential risks and uncertainties include, among others, risks and uncertainties related to the company's ability to continue as a going concern; general economic conditions and conditions affecting the industries in which the company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the company's filings with the SEC, including the Annual Report on Form 10-K for the year ended June 30, 2024. The company assumes no obligation to update any of the information contained or referenced in this press release.

FAQ

How much capital did ABAT raise in its December 2024 offering?

ABAT raised $10 million in gross proceeds through a registered direct offering of shares and warrants.

What is the pricing of ABAT's December 2024 share offering?

The offering was priced at $2.65 per share and accompanying warrant, slightly above the last closing price of $2.60.

How many new shares will ABAT issue in the December 2024 offering?

ABAT will issue 3,773,586 shares of common stock, plus warrants to purchase an additional 3,773,586 shares.

What are the terms of ABAT's December 2024 warrants?

The warrants have an exercise price of $2.80 per share, are immediately exercisable, and expire five years from the initial exercise date.

When will ABAT's December 2024 offering close?

The offering is expected to close on or about December 27, 2024, subject to customary closing conditions.