American Battery Technology Company Releases Second Quarter Fiscal Year 2024 Financial Report

Rhea-AI Summary

American Battery Technology Company (ABTC) announces Q2 FY2024 financial results, highlighting progress in lithium-ion battery recycling facility operations and securing U.S. Department of Energy grants totaling over $135 million. The company continues to ramp up operations, secure feedstock agreements, and advance commercialization of battery recycling and lithium hydroxide refining technologies.

Positive

• ABTC finalized the purchase of a commercial-scale facility for battery recycling in August 2023.
• The company completed the construction and installation of battery recycling systems in October 2023.
• ABTC received U.S. DOE grants totaling $135 million to support its projects.
• Cash used for investments and operations remained consistent with the prior year.
• ABTC entered into an agreement to issue senior secured convertible notes for up to $51 million.
• The company is progressing towards fully-ramped battery recycling operations at its first facility.
• ABTC is concurrently commercializing battery recycling and lithium hydroxide refining technologies.
• Research and development costs increased to $5.3 million for the fiscal year-to-date six months ended December 31, 2023.

Negative

• None.

Insights

Market Research Analyst

The expansion of American Battery Technology Company's (ABTC) operations, particularly in the lithium-ion battery recycling sector, indicates a strategic move to capitalize on the growing demand for recycled battery materials. The establishment of the Tahoe-Reno Industrial Center (TRIC) facility and the successful audit and environmental reviews signal a robust entry into commercial production. The company's ability to secure long-term feedstock agreements suggests confidence in its operational capacity and the quality of its recycled products.

ABTC's alignment with strategic partners and OEMs is crucial, as it not only provides a steady supply of materials but also ensures a market for its recycled battery metals. This vertical integration strategy could potentially lead to cost savings and improved margins. Moreover, the involvement of the U.S. Department of Energy via substantial grants underscores the national interest in domestic battery materials production and recycling, which could provide a favorable regulatory and financial environment for ABTC's growth.

Financial Analyst

Analyzing ABTC's financial results, the increase in government grant funding from $0.4 million to $1.7 million year-over-year represents a significant boost in non-dilutive financing, which is beneficial for shareholder value. However, the consistent cash usage both for investment and operations reflects a phase of heavy capital expenditure, which is typical for companies scaling up their manufacturing capabilities.

The issuance of $25 million in senior secured convertible notes indicates a reliance on debt financing to fuel growth. While this provides necessary capital, it also introduces potential dilution for existing shareholders and an increased debt burden. The company's ability to manage this debt will be critical in maintaining financial health. Investors should monitor ABTC's revenue growth and margin improvement as operations ramp up to ensure that the company can achieve profitability and service its debt obligations.

Environmental and Sustainability Analyst

ABTC's focus on lithium-ion battery recycling is significant in the context of environmental sustainability and the circular economy. By recycling used batteries, ABTC contributes to reducing the environmental impact associated with mining and disposal of battery materials. The company's technology and processes will likely be scrutinized for their environmental footprint and their ability to meet stringent environmental standards will be essential for long-term success.

Furthermore, the company's potential to reduce reliance on imported battery materials aligns with broader sustainability goals and national security interests. The environmental reviews and qualifications with global automotive and battery manufacturers indicate that ABTC's operations meet industry standards, which could enhance its reputation and lead to increased business opportunities in an industry that is becoming increasingly conscious of sustainability practices.

Company continues to ramp operations and manufacture commercial-scale quantities of recycled metal products at its first lithium-ion battery recycling facility, and has contracted and begun receiving funds for two U.S. Department of Energy grants supporting over $135 million of projects

RENO, Nev., Feb. 14, 2024 /PRNewswire/ -- American Battery Technology Company (ABTC) (NASDAQ: ABAT), an integrated critical battery materials company that is commercializing its first-of-kind technologies for both primary battery minerals manufacturing and secondary minerals lithium-ion battery recycling, announced its second quarter fiscal year (FY) 2024 financial results, for the period ending December 31, 2023.  

Highlights from Q2 FY2024 include: 

• In August 2023, ABTC finalized the purchase of a move-in ready, unoccupied commercial-scale, industrial facility located in the Tahoe-Reno Industrial Center (TRIC), for the purpose of installing the first implementation of its integrated lithium-ion battery recycling technologies.
• In October 2023, ABTC completed the construction and installation of the initial phase of its battery recycling systems into the TRIC facility and began processing commercial-scale quantities of battery materials into commercial quantities of sellable recycled battery metal products.
• ABTC has continued to ramp the throughput of operations at this facility, and is currently adding a second shift of operations to further increase the rate of recycling operations.
• ABTC's battery recycling operations have successfully completed audit, environmental reviews, and qualification processes with several premier global automotive, battery manufacturers, and other strategic original equipment manufacturers (OEMs), and ABTC is currently in negotiations for quantities of feedstock that would represent several years' worth of operations at the current TRIC facility.
• As a result, in parallel to the finalization and contracting of these prospective long-term feedstock agreements, ABTC has begun coordinating with its strategic partners on the site selection of its next commercial battery recycling facility.
• The prime agreement contract for ABTC's U.S. Department of Energy (DOE) grant to support its $115 million project for its commercial-scale lithium hydroxide refinery was issued with a project start date of September 1, 2023, and ABTC began receiving funds related to this award during this reported quarter.
• The prime agreement contract for ABTC's U.S. DOE grant to support its $20 million project for its next-generation advanced battery recycling technologies was issued with a project start date of October 1, 2023, and ABTC began receiving funds related to this award during this reported quarter.
• Total government grant funding increased to $1.7 million for the fiscal year-to-date six months ended December 31, 2023, compared to $0.4 million during the same period of the prior year.
• Cash used for the investment into the acquisition of property, plant, equipment, mineral rights, and water rights for the fiscal year-to-date six months ended December 31, 2023 was $10.9 million, compared to $10.2 million used in the same period of the prior year.
• Cash used in operations for the fiscal year-to-date six months ended December 31, 2023 was $7.4 million, which is in line with the $7.4 million use of cash during the same period of the prior year.
• On August 29, 2023, ABTC entered into an agreement to allow it to issue a new series of senior secured convertible notes for up to $51 million. To date, $25 million of these notes have been issued.

Continued Acceleration Towards Fully-Ramped Battery Recycling Operations
ABTC continues to advance its battery recycling systems to fully-ramped operations at its first commercial-scale lithium-ion battery recycling facility. In its first months of operations, the company has successfully manufactured a large inventory of recycled battery metal products for sale to its domestic-U.S. strategic partners. This recycling facility has the capacity to process over 20,000 metric tonnes per year of battery feedstock materials when fully ramped, and several strategic partnerships have been announced recently for the sourcing of feed material and the offtake of recycled products, such as with BASF.

Concurrent Commercialization of Recycling and Primary Resource Operations
Progressing a new technology from initial design, to testing and bench scale validations, to integrated piloting, and through commercialization is an arduous process that often takes many years.  ABTC is concurrently commercializing its first-of-kind technologies for both its battery recycling operations and its battery grade lithium hydroxide refining from primary claystone with an accelerated, fast-to-market approach.  

ABTC's in-house team is comprised of chemists, metallurgists, engineers, construction managers, and operators of first-of-kind, large-scale battery manufacturing facilities, and as such has significant experience managing large construction projects and bringing first-of-kind technologies to market.

In order to prioritize these dual commercialization efforts, ABTC recorded $5.3 million in research and development costs for the fiscal year-to-date six months ended December 31, 2023, an increase of $3.3 million when compared to the same period of the prior year.

Additional recent company information and updates can be found at www.americanbattery.com/events-and-presentations including:

• American Battery Technology Company's Annual Meeting of Shareholders Fiscal 2024, Presentation
• American Battery Technology Company's Annual Meeting of Shareholders Fiscal 2024, Video Playback
• American Battery Technology Company's January Overview and Analyst Q&A, Video Playback

About American Battery Technology Company 
American Battery Technology Company (ABTC), 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." Although the American Battery Technology Company's (the "Company") 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; interpretations or reinterpretations of geologic information, unfavorable exploration results, inability to obtain permits required for future exploration, development or production, 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, final investment approval and the ability to obtain necessary financing on acceptable terms or at all. 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 Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended June 30, 2023. The Company assumes no obligation to update any of the information contained or referenced in this press release.

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SOURCE American Battery Technology Company

FAQ

What were the highlights of ABTC's Q2 FY2024 financial results?

ABTC announced progress in its lithium-ion battery recycling facility operations and secured U.S. Department of Energy grants totaling over $135 million.

When did ABTC finalize the purchase of a move-in ready facility?

ABTC finalized the purchase of a commercial-scale, unoccupied facility in August 2023.

What projects are supported by the U.S. Department of Energy grants?

The grants support ABTC's $115 million project for a lithium hydroxide refinery and a $20 million project for advanced battery recycling technologies.

How much cash was used for investments and operations in the fiscal year-to-date six months ended December 31, 2023?

ABTC used $10.9 million for investments and $7.4 million in operations, consistent with the prior year.

What agreement did ABTC enter into on August 29, 2023?

ABTC entered into an agreement to issue senior secured convertible notes for up to $51 million.

What progress has ABTC made towards battery recycling operations at its first facility?

ABTC is advancing towards fully-ramped operations and has successfully manufactured recycled battery metal products for sale.

How is ABTC progressing with the commercialization of its technologies?

ABTC is concurrently commercializing battery recycling and lithium hydroxide refining technologies with an accelerated approach.

What was the increase in research and development costs for ABTC in the fiscal year-to-date six months ended December 31, 2023?

Research and development costs increased to $5.3 million, up $3.3 million compared to the prior year.