# AMERICAN BATTERY TECHNOLOGY Co (ABAT)

Informational only - not investment advice.

CIK: 0001576873
SIC: 1400 Mining & Quarrying of  Nonmetallic Minerals (No Fuels)
SIC breadcrumb: [Mining](/division/B/) > [SIC Major Group 14](/major-group/14/) > [SIC 1400 Mining & Quarrying of  Nonmetallic Minerals (No Fuels)](/industry/1400/)
Latest 10-K filed: 2025-09-18
SEC page: https://www.sec.gov/edgar/browse/?CIK=1576873
Filing source: https://www.sec.gov/Archives/edgar/data/1576873/000149315225014092/form10-k.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 4290224 | USD | 2025 | 2025-09-18 |
| Net income | -46762625 | USD | 2025 | 2025-09-18 |
| Assets | 84457791 | USD | 2025 | 2025-09-18 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001576873.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  |  |  |  |  |  |  |  | 343,500 | 4,290,224 |
| Net income |  | -37,988 | -28,356,180 | -2,690,342 | -6,048,092 | -12,625,204 |  | -41,760,064 | -33,539,962 | -21,338,207 | -52,501,824 | -46,762,625 |
| Operating income | -43,398 | -37,988 | -2,398,931 |  | -5,588,730 | -10,486,623 |  | -37,724,330 | -33,736,160 | -22,428,207 | -47,769,673 | -42,023,329 |
| Gross profit |  |  |  |  |  |  |  |  |  |  | -2,961,207 | -10,574,409 |
| Diluted EPS |  |  |  |  |  |  |  |  | -0.80 | -0.51 | -1.02 | -0.58 |
| Operating cash flow |  | -32,941 | -199,402 | -484,899 | -993,422 | -3,432,069 |  | -7,756,438 | -10,177,994 | -13,367,980 | -16,736,231 | -28,921,158 |
| Assets |  |  | 90,040 | 61,641 | 308,769 | 92,694 | 1,161,314 | 21,263,103 | 52,861,989 | 74,658,652 | 77,675,132 | 84,457,791 |
| Liabilities |  | 101,666 | 634,033 |  | 2,741,281 | 4,880,156 | 6,101,818 | 1,822,498 | 3,227,930 | 13,789,168 | 16,207,492 | 13,858,768 |
| Stockholders' equity |  |  | -543,993 | -1,266,005 | -2,432,512 | -4,787,462 | -4,940,504 | 19,440,605 | 49,634,059 | 60,869,484 | 61,467,640 | 70,599,023 |
| Cash and cash equivalents |  |  | 90,040 | 9,141 | 122,769 | 7,371 | 829,924 | 12,843,502 | 28,989,166 | 2,320,149 | 7,001,786 | 7,474,304 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Return on equity |  |  |  |  |  |  |  | -214.81% | -67.57% | -35.06% | -85.41% | -66.24% |
| Return on assets |  |  |  |  |  |  |  | -196.40% | -63.45% | -28.58% | -67.59% | -55.37% |
| Liabilities / equity |  |  |  |  |  |  |  | 0.09 | 0.07 | 0.23 | 0.26 | 0.20 |
| Current ratio |  |  | 0.14 | 0.05 | 0.11 | 0.01 | 0.18 | 7.76 | 9.79 | 0.35 | 1.17 | 2.16 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001576873.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2023-Q4 | 2023-06-30 |  | -7,098,762 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2023-09-30 |  | -7,231,985 | -0.16 | reported discrete quarter |
| 2024-Q2 | 2023-12-31 |  | -9,291,435 | -0.19 | reported discrete quarter |
| 2024-Q3 | 2023-12-31 |  | -10,177,859 | -0.21 | reported discrete quarter |
| 2024-Q4 | 2024-06-30 |  | -23,436,846 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2024-09-30 | 201,960 | -11,694,569 | -0.17 | reported discrete quarter |
| 2025-Q2 | 2024-09-30 |  | -11,694,569 |  | reported discrete quarter |
| 2025-Q2 | 2024-12-31 | 332,440 |  | -0.18 | reported discrete quarter |
| 2025-Q3 | 2024-12-31 |  | -13,400,506 |  | reported discrete quarter |
| 2025-Q3 | 2025-03-31 | 979,977 |  | -0.14 | reported discrete quarter |
| 2025-Q4 | 2025-06-30 | 2,775,847 | -10,171,603 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2025-09-30 | 937,589 | -10,299,566 | -0.09 | reported discrete quarter |
| 2026-Q2 | 2025-09-30 |  | -10,299,566 |  | reported discrete quarter |
| 2026-Q2 | 2025-12-31 | 4,759,831 |  | -0.07 | reported discrete quarter |
| 2026-Q3 | 2025-12-31 |  | -9,280,971 |  | reported discrete quarter |
| 2026-Q3 | 2026-03-31 | 7,811,229 |  | -0.26 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1576873/000149315226022149/form10-q.htm

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization.
Confidence: high
Filing date: 2026-05-11
Report date: 2026-03-31

Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes
in “Item 1. Condensed Consolidated Financial Statements”. References in this report to “American Battery,” the
“Company,” “we,” “our” and “us” are references to American Battery Technology Company
and its subsidiaries.

Forward-Looking
Statements

We
make forward-looking statements in this report and may make such statements in future filings with the Securities and Exchange Commission,
or SEC. We may also make forward-looking statements in our press releases or other public or shareholder communications. Our forward-looking
statements are subject to risks and uncertainties and include information about our current expectations and possible or assumed future
results of our operations. When we use words such as “may,” “might,” “will,” “should,”
“believe,” “expect,” “anticipate,” “estimate,” “continue,” “could,”
“plan,” “potential,” “predict,” “forecast,” “project,” “intend,”
“is focused on” or similar expressions, or make statements regarding our intent, belief, or current expectations, we are
making forward-looking statements. Our forward-looking statements also include, without limitation, statements about our liquidity and
capital resources; our ability to continue as a going concern; our ability to successfully execute on our business strategy; our ability
to raise additional capital and statements regarding our anticipated future financial condition, operating results, cash flows and business
plans.

While
we believe our forward-looking statements are reasonable, you should not place undue reliance on any such forward-looking statements,
which are based on information available to us on the date of this report or, if made elsewhere, as of the date made. Because these forward-looking
statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many
of which are beyond our control or are subject to change, actual results could be materially different. Factors that might cause such
a difference include, without limitation, the risks and uncertainties discussed in this report, “Item 1A — Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and from time to time in our other reports filed with the
SEC.

Other
factors not currently anticipated may also materially and adversely affect our results of operations, cash flows, and financial position.
There can be no assurance future results will meet expectations. Forward-looking statements speak only as of the date of this report
and we expressly disclaim any intent to update or alter any statements whether as a result of new information, future events or otherwise,
except as may be required by applicable law.

Overview

American
Battery Technology Company (the “Company”) is a growth-stage company in the lithium–ion battery industry that is working
to increase the domestic U.S. production of battery materials, such as lithium, nickel, cobalt, and manganese through its: (i) exploration
of new, United States based primary resources of battery materials, (ii) development and commercialization of new technologies for the
extraction of these battery materials from primary resources, and (iii) commercialization of an internally developed integrated process
for the recycling of lithium–ion batteries. Through this three–pronged approach the Company is working to both increase the
domestic production of these battery materials, and to ensure spent batteries have their elemental battery metals returned to the domestic
manufacturing supply chain in an economical, environmentally-conscious, closed–loop fashion.

To
implement this business strategy, the Company has constructed and is operating its first integrated lithium–ion battery recycling
facility, which takes in waste and end–of–life battery materials from the electric vehicle, battery energy storage system
(“BESS”), and consumer electronics industries. The ramp-up and operation of this facility remain top priorities, and the
Company has significantly expanded resources to support its development. These efforts include hiring additional technical staff, expanding
laboratory facilities, and purchasing equipment. As a result, the Company generated its first revenue in the fourth quarter of fiscal
year 2024 and has achieved continued growth in production volumes and revenue through March 31, 2026.

The
Company was awarded and has completed a competitively bid grant from the U.S. Advanced Battery Consortium to support a $2 million project
to accelerate the development and demonstration of the technologies within this integrated lithium–ion battery recycling facility.

The
Company has also been awarded an additional grant from the DOE to support a $20 million project under the Bipartisan Infrastructure Law
to validate, test, and deploy three next-generation disruptive advanced separation and processing recycling technologies.

On
March 28, 2024, the Company was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project
Credits program (the “48C program”). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service
following a competitive technical and economic review process performed by the DOE, which evaluated the feasibility of applicant facilities
to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure. This
$19.5 million tax credit can be utilized both for the reimbursement of capital expenditures spent to date, and also for equipment and
infrastructure for additional value-add operations at the Company’s battery recycling facility in the Tahoe-Reno Industrial Center
(“TRIC”) near Reno, Nevada. As of March 31, 2026, the Company has incurred qualifying expenditures for this tax credit but
will not recognize any amounts until it has reasonable assurance of compliance with the relevant standards.

22

Also
on March 28, 2024, the Company was selected for an additional $40.5 million tax credit through the 48C program to support the design
and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. This award was
granted by the U.S. Department of Treasury Internal Revenue Service following a competitive technical and economic review process performed
by the DOE, which evaluated the feasibility of applicant facilities to advance America’s buildout of globally competitive critical
material recycling, processing, and refining infrastructure. As of March 31, 2026, the Company has not incurred any qualifying expenditures
towards this tax credit.

Additionally,
the Company is accelerating the demonstration and commercialization of its internally developed low–cost and low–environmental
impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada–based sedimentary claystone resources.
The Company was awarded and has completed a grant cooperative agreement from the DOE’s Advanced Manufacturing and Materials Technologies
Office through the Critical Materials Innovation program to support a $4.5 million project for the construction and operation of a multi–ton
per day integrated continuous demonstration system to support the scale–up and commercialization of these technologies. The Company
has completed the construction and commissioning of this demonstration system, which enables the Company to demonstrate its technologies
for accessing the lithium housed in its unconventional resource, TFLP, and to generate large amounts of battery grade lithium hydroxide
for delivery to customers for qualifications and evaluation.

The
TFLP is one of the largest identified lithium resources in the United States, and the Company recently published a Pre-Feasibility Study
(“PFS”) that details inferred, indicated, and measured resources and proven and probable reserves at this property, as well
as the technical and financial roadmap for bringing the associated lithium mine and lithium hydroxide monohydrate (“LHM”)
refinery to commercialization. This PFS has estimated that the TFLP contains approximately 21.3 million tonnes LHM resource, with 2.7
million tonnes of LHM further classified as proven and probable reserves. The total processing costs for manufacturing this battery grade
LHM is projected to be $4,307 per tonne LHM. Inferred, indicated, and measured resources have lower levels of geological confidence than
proven and probable reserves, and in certain cases may not be considered when assessing the economic viability of a mining project.

In
June 2025, the TFLP was selected by the National Energy Dominance Council and the FAST-41 Permitting Council as a Transparency Priority
Project. This designation highlights the project’s role in advancing domestic critical mineral lithium production and supporting
U.S. energy independence. In August 2025, the TFLP was further approved by the FAST-41 Permitting Council as a Covered Priority Project,
which provided additional resources to streamlining the permitting efforts for this project.

Company
Financial Highlights:

●

The Company had cash and
cash equivalents of $38.5 million as of March 31, 2026, of which $37.7 million was unrestricted. This was a $30.2 million increase
in unrestricted cash from June 30, 2025.

●

The Company held zero debt
as of March 31, 2026, compared to $7.7 million as of March 31, 2025.

Fiscal
Third Quarter 2026 Financial Highlights (Three Months):

●

Revenue was $7.8 million
for the three months ended March 31, 2026, as compared to $1.0 million for the three months ended March 31, 2025.

●

Total
cost of goods sold was $7.1 million for three months ended March 31, 2026, compared to $3.7 million for the three months ended March
31, 2025. Cost of goods sold for the three months ended March 31, 2026 included non-cash items, including depreciation of $1.0 million
and stock-based compensation of $0.3 million. Excluding these non-cash items, cash cost of goods sold (a non-GAAP measure) for the three
months ended March 31, 2026 was $5.8 million.

23

A
reconciliation of cost of goods sold to cash cost of goods sold and adjusted gross margin

(both are a non-GAAP measure) for the three months ended March 31, 2026 was as follows:

Description

Amount ($M)

Revenue

7.8

Cost of Goods Sold (GAAP)

7.1

Gross Margin

0.7

Description

Amount ($M)

Revenue

7.8

Cost of Goods Sold (GAAP)

7.1

Less: Depreciation Expense

(1.0

)

Less: Stock-Based Compensation

(0.3

)

Cash Cost of Goods Sold (Non-GAAP)

5.8

Adjusted Gross Margin

2.0

●

The Company has achieved
a critical milestone this quarter, with the achievement of its first positive gross profit on revenue of $0.7 million.

●

Excluding
non-cash items, such as stock-based compensation and depreciation, the Company achieved an adjusted gross profit (a non-GAAP measure)
of $2.0 million.

Management
uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful
to investors for analysing business trends as well as to view the results from management’s perspective. Non-GAAP cost of goods
sold excludes certain non-cash charges including depreciation expense and stock-based compensation. Non-GAAP results have limitations
as an analytical tool, and you should not consider them in isolation or as a substitute for our results reported under GAAP.

Fiscal
Year to Date 2026 Financial Highlights (Nine Months):

●

Revenue was $13.5 million
for the nine months ended March 31, 2026, as compared to $1.5 million for the nine months ended March 31, 2025.

●

Total cost of
goods sold was $17.9 million for nine months ended March 31, 2026, compared to $9.5 million for the nine mon

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

Forward-Looking
Statements

You
should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial
statements and the notes thereto included elsewhere in this Form 10-K. The information in this discussion contains forward-looking statements
and information within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements
include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected
costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “will,” “would”
and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these
identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and
you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks
and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without
limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which
they are made, and we do not assume any obligation to update any forward-looking statements except as required by applicable securities
laws.

28

Overview

American
Battery Technology Company (the “Company”) is a growth-stage company in the lithium–ion battery industry that is
working to increase the domestic U.S. production of battery materials, such as lithium, nickel, cobalt, and manganese through its exploration
of new domestic-United States primary resources of battery metals, development and commercialization of new technologies for the extraction
of these battery metals from primary resources, and commercialization of an internally developed integrated process for the recycling
of lithium–ion batteries. Through this three–pronged approach the Company is working to both increase the domestic production
of these battery materials, and to ensure spent batteries have their elemental battery metals returned to the domestic manufacturing
supply chain in an economical, environmentally-conscious, closed–loop fashion.

To
implement this business strategy, the Company has constructed its first integrated lithium–ion battery recycling facility, which
takes in waste and end–of–life battery materials from the electric vehicle, stationary storage, and consumer electronics
industries. The Company’s revenue increased from $0.3 million in fiscal 2024 to $4.3 million in fiscal 2025. The ramp-up and operation
of this facility remain a top priority, and the Company has significantly expanded resources to support its execution. These efforts included
hiring additional technical staff, expanding laboratory facilities, and purchasing equipment. As a result, the Company generated its
first revenue in the fourth quarter of fiscal 2024 and achieved continued growth in production volumes and revenues throughout fiscal
2025. The Company has been awarded a competitively bid grant from the U.S. Advanced Battery Consortium to support a $2 million project
to accelerate the development and demonstration of the technologies within this integrated lithium–ion battery recycling facility.
The Company has also been awarded an additional grant from the U.S. Department of Energy (“DOE”) to support a $20 million
project under the Bipartisan Infrastructure Law to validate, test, and deploy three next-generation disruptive advanced separation and
processing recycling technologies.

Additionally,
the Company is accelerating the demonstration and commercialization of its internally developed low–cost and low–environmental
impact processing train for the manufacturing of battery grade lithium hydroxide from Nevada–based sedimentary claystone resources.
The Company has been awarded a grant cooperative agreement from the DOE’s Advanced Manufacturing and Materials Technologies Office
through the Critical Materials Innovation program to support a $4.5 million project for the construction and operation of a multi–ton
per day integrated continuous demonstration system to support the scale–up and commercialization of these technologies. The Company
has also been awarded an additional grant award under the Bipartisan Infrastructure Law to support a $115 million project 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 this resource.

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. The construction
and commissioning of this pilot plant enables the Company to demonstrate its technologies for accessing the lithium housed in its unconventional
resource, Tonopah Flats Lithium Project (“TFLP”), in an integrated and continuous system, and to generate large amounts of
battery grade lithium hydroxide for delivery to customers for qualifications and evaluation.

The TFLP is one of the largest identified
lithium resources in the United States, and while initial pit designs and economic analyses in previous assessments evaluated the full
resource, an updated Initial Assessment utilizes a commercialization pathway with a more rigorous mine plan that contemplates utilization
of only Measured and Indicated Mineral Resources, and excludes Inferred Mineral Resources, to supply the planned commercial-scale lithium
hydroxide monohydrate (“LHM”) refinery. This commercialization pathway allows for an engineered phased development, with
improved access to the higher quality portions of the resource, and improved project economics.

On
March 28, 2024, the Company was selected for an approximately $19.5 million tax credit through the Qualifying Advanced Energy Project
Credits program (the “48C program”). This tax credit was granted by the U.S. Department of Treasury Internal Revenue Service
following a highly competitive technical and economic review process performed by the DOE, which evaluated the feasibility of applicant
facilities to advance America’s buildout of globally competitive critical material recycling, processing, and refining infrastructure.
This $19.5 million tax credit can be utilized both for the reimbursement of capital expenditures spent to date, and also for equipment
and infrastructure for additional value-add operations at the Company’s battery recycling facility in the Tahoe-Reno Industrial
Center (TRIC) near Reno, Nevada. As of June 30, 2025, the Company has incurred qualifying expenditures for this tax credit but will not
recognize any amounts until it has reasonable assurance of compliance with the relevant standards.

29

Also
on March 28, 2024, the Company has been selected for an additional $40.5 million tax credit through the 48C program to support the design
and construction of a new, next-generation, commercial battery recycling facility to be located in the United States. As with the Company’s
initial $19.5 million tax credit under the 48C program supporting the construction and buildout of its battery recycling facility in
Nevada, this additional award was granted by the U.S. Department of Treasury Internal Revenue Service following a highly competitive
technical and economic review process performed by the DOE, which evaluated the feasibility of applicant facilities to advance America’s
buildout of globally competitive critical material recycling, processing, and refining infrastructure. As of June 30, 2025, the Company
has not incurred any qualifying expenditures towards this tax credit.

Fiscal
Fourth Quarter 2025 Financial Highlights :

●

Revenue
increased to $2.8 million in fourth quarter fiscal year 2025, compared to $1.0 million in third quarter fiscal year 2025, nearly tripling and reflecting a significant
ramp-up of battery recycling facility operations.

●

Total
cost of goods sold was $5.3 million for fiscal fourth quarter fiscal year 2025, compared to $3.7 million in third quarter fiscal
year 2025. The fiscal fourth quarter fiscal year 2025 cost of goods sold included non-cash items of depreciation of $1.0 million and
stock-based compensation of $0.2 million. Excluding these non-cash items, fiscal fourth quarter fiscal year 2025 cash cost of goods
sold (a non-GAAP measure) was $3.9 million.

A
reconciliation of fiscal fourth quarter 2025 GAAP to non-GAAP cost of goods sold

Description

Amount
($M)

GAAP Cost of Goods Sold

5.1

Less: Depreciation Expense

(1.0

)

Less: Stock-Based Compensation

(0.2

)

Non-GAAP Cash Cost of Goods Sold

3.9

●

Government
grant reimbursement was $1.4 million for fourth quarter fiscal year 2025, compared to $2.3 million in third quarter fiscal year 2025.
Out of the $1.4 million in grant funding for fourth quarter fiscal year 2025, nil was recorded as an offset to fixed assets, as reimbursements
related to equipment purchases, and $1.4 million was recorded as an offset to research and development costs within the consolidated
statement of operations.

●

ABTC
conducted additional drill programs at its Tonopah Flats Lithium Project in order to further expand and define the deposit, collect
data for detailed design of the mining pit shell, and continue to advance the development of the lithium mining and refining project.

●

ABTC
continued to scale and operate its multi-tonne per day integrated pilot facility to demonstrate the performance of its internally-developed
technologies for the manufacturing of battery grade lithium hydroxide from its Tonopah Flats claystone material.

●

On
April 23, 2025, ABTC received a Letter of Interest from the US Export-Import Bank for up to $900 million in low-interest debt financing
to support the construction of the Tonopah Flats Lithium Project.

Fiscal
Year 2025 Financial Highlights:

●

Revenue
increased to $4.3 million in fiscal year 2025, up from $0.3 million in fiscal year 2024, reflecting the ramp-up of facility operations
and higher production volumes.

●

Total cost of goods sold was $14.9 million for the fiscal year ended June
30, 2025, compared to $3.3 million in fiscal year ended 2024. The fiscal year ended 2025 cost of goods sold included non-cash items of
depreciation of $3.6 million and stock-based compensation of $0.8 million. Excluding these non-cash items, fiscal year ended 2025 cash
cost of goods sold (a non-GAAP measure) was $10.5 million.

A reconciliation of fiscal year ended
2025 GAAP to non-GAAP cost of goods sold

Description

Amount ($M)

GAAP Cost of Goods Sold

14.9

Less: Depreciation Expense

(3.6

)

Less: Stock-Based Compensation

(0.8

)

Non-GAAP Cash Cost of Goods Sold

10.5

●

The
Company was selected for, and successfully contracted, a grant from the US DOE for $150 million to support the construction of an
additional battery recycling facility.

●

The
Company successfully completed all contractual requirements of its $2.3 million grant from the US DOE, including the construction
and operation of its multi-tonne per day integrated pilot facility for the demonstration of its internally-developed technologies
for the manufacturing of battery grade lithium from its Nevada-based claystone resource.

●

The
Company and its partners successfully completed all contractual requirements of its $0.5 million grant award from the US Advanced
Battery Consortium, which is comprised of the US DOE, General Motors, Ford Motor Company, and Stellantis NV, including the recycling
of commercial quantities of batteries, the purification and manufacturing of battery grade precursors, the manufacturing of high
energy density cathode active material, and the manufacturing and testing of approximately 100 automotive scale multi-layer pouch
cell batteries.

●

Government
grant reimbursement was $5.7 million for the fiscal year ended June 30, 2025, compared to $3.3 million during the same period of
the prior year. Out of the $5.7 million in grant funding for the fiscal year ended June 30, 2025, $0.6 million was recorded as an
offset to fixed assets, as reimbursements related to equipment purchases, and $5.1 million was recorded as an offset to research
and development costs within the consolidated statement of operations.

●

As
of June 30, 2025, the Company had total cash on hand of $12.5 million of which $7.5 million
was available and $5.0 million was restricted. Subsequent to year-end, on July 29, 2025, the
restrictions were lifted, and the funds became available for general use. As the restriction
was still in place as of the balance sheet date, the cash remains classified as restricted.

●

The Company was able to leverage its June 27, 2025 inclusion in the Russell 2000 index to raise capital, along with
receiving proceeds from warrant exercises, and benefiting from convertible note conversions and the release of restricted cash subsequent
to June 30, 2025. As a result, following the fiscal year ended, the Company’s net cash position has improved to $25.4 million as
of September 15, 2025.

Components
of Statements of Operations

The
following table sets forth the Company’s operating results for the periods indicated:

Fiscal
Year Ended

June 30, 2025

Fiscal
Year Ended

June 30, 2024

$
Change

%
Change

Revenue

$

4,290,224

$

343,500

$

3,946,724

1,149

%

Cost of goods sold

14,864,633

3,304,707

11,559,926

350

Gross loss

(10,574,409

)

(2,961,207

)

(7,613,202

)

257

Operating expense

General and administrative

21,151,445

16,106,807

5,044,638

31

Research and development

8,470,161

14,325,681

(5,855,520

)

(41

)

Exploration

1,827,314

4,121,941

(2,294,627

)

(56

)

Impairment charge on held-for sale assets

-

10,254,037

(10,254,037

)

(100

)

Total operating expenses

31,448,920

44,808,466

(13,359,546

)

(30

)

Other income (expense)

(4.739.296

)

(4,732,151

)

(7,145

)

(0

)

Net loss

(46,762,625

)

(52,501,824

)

5,739,199

(11

)

Revenue

During
the fiscal years ended June 30, 2025 and 2024, our net sales were $4.3 million and $0.3 million, respectively. These sales are related
to our black mass and metal byproducts resulting from recycling operations.

Cost
of Goods Sold

Cost
of goods sold during the fiscal years ended June 30, 2025 and 2024 were $14.9 million and $3.3 million, respectively, well above the
value of the related revenue. The increase in cost of sales was primarily driven by higher headcount as the plant was commissioned and
employees were hired to support expanded production capacity. In addition, cost of goods sold reflects depreciation expense associated
with the recycling facility fixed assets, which commenced upon the facility’s in-service date. Costs also increased as the production
process was finalized and stabilized during the period. We expect these costs to be reduced as a percentage of revenue as we scale our
production and gain efficiencies in the process.

Management
uses certain non-GAAP metrics to evaluate our operating and financial results. We believe the presentation of non-GAAP results is useful
to investors for analyzing business trends as well as to view the results from management’s perspective. Non-GAAP cost of goods
sold excludes certain non-cash charges including depreciation expense and stock-based compensation. Non-GAAP results have limitations
as an analytical tool, and you should not consider them in isolation or as a substitute for our results reported under GAAP.

30

Operating
Expenses

During
the fiscal year ended June 30, 2025, the Company incurred $31.4 million of operating expenses compared to $44.8 million of operating
expenses during the fiscal year ended June 30, 2024. The decrease is primarily due to the items described below:

General
and administrative expenses consist of personnel, legal, finance, recruiting, business development, public relations, and general
facility expenses. For the fiscal year ended June 30, 2025 and 2024, general and administrative expenses were $21.2 million and
$16.1 million, respectively. The increase of $5.0 million is related to the following: an increase of $3.0 million in payroll,
driven by the changes in employee activity, resulting in additional cost into general and administrative during fiscal year 2025
with a corresponding decrease to research and development cost; a $2.4 million increase in stock-based compensation based on the
achievement of executive performance milestones; and property tax expense increased by $0.4 million due to the plant commissioning
in fourth quarter of fiscal year 2024.

Research
and development expenses consist primarily of personnel, laboratory leases, and supplies. Research and development expenses for the fiscal
years ended June 30, 2025 and 2024 were $8.5 million and $14.3 million, respectively. The decrease is due to allocation of such costs
to inventory and cost of goods sold as part of phase 1 recycling operations being commissioned in the fourth quarter of fiscal year 2024
and fiscal year 2025 seeing an increase in throughput of the plant. In addition, there was a decrease, for fiscal year ended 2025 as
compared to the fiscal year ended 2024, due to higher grant reimbursements which are recorded as an offset to research and development
expenses of $1.6 million.

Exploration
costs consist primarily of personnel, drilling, assay, claim fees, office and warehouse costs, travel, and other costs related to exploration
of claims in central Nevada. Exploration expenses totaled $1.8 million for the fiscal year ended June 30, 2025, compared to $4.1 million
during the prior year. The decrease reflects $1.5 million in lower payroll costs resulting from the transfer of employees from exploration
to technical programs (research and development) and to general and administrative. In addition, exploration costs decreased by $0.9
million as the Company completed its drilling program and shifted focus to producing and publishing the PFS.

An
impairment loss of $10.2 million on assets held-for-sale was recorded in the fiscal year ended June 30, 2024, related to two parcels
of land and a building at the Fernley, Nevada location, comprising 12.44 acres and 11.55 acres, that the Company decided to sell. As
of June 30, 2024, these assets had a carrying value of $8.4 million. As of June 30, 2025, the 11.55 acres of land was no longer actively
marketed for sale and was therefore reclassified back to property, plant, and equipment. As of June 30, 2025, the remaining land and
building has a carrying value of $6.0 million, is included within assets held for sale on the consolidated balance sheet, and is subject
to further impairment, if required, until the asset is sold. Additionally, as of March 31, 2025, the Company reclassified certain water
rights with a carrying value of $3.8 million to assets held for sale in the consolidated balance sheet.

Other
(Expense) Income

Other
expense was $4.7 million in the fiscal year ended June 30, 2025 versus other expense of $4.7 million in the prior year. The noted changes for the current fiscal year as compared to the prior year are as follows: a change in fair value of the derivative liability of $1.0 million (see Note 13 of the consolidated
financial statements for further detail), an increase due to recording a credit loss expense of $1.4 million related to a subscription receivable that was
deemed uncollectible, consistent with the Company’s policy for expected credit losses, and a decrease in the amortization and accretion of financing costs during the fiscal year ended
June 30, 2025 of $0.4 million.

Liquidity
and Capital Resources

At
June 30, 2025, the Company had cash of $12.5 million (of which $7.5 million was available and $5.0 million was restricted) and total assets
of $84.5 million compared to available cash of $7.0 million and total assets of $77.7 million at June 30, 2024.

The
Company had total current liabilities of $13.7 million at June 30, 2025, compared to $15.8 million at June 30, 2024. The decrease is
related to the paydown of outstanding payables with the proceeds from the registered direct offerings and the issuance of the 2024 Notes.

As
of June 30, 2025 and 2024 the Company had positive working capital of $10.9 million and $2.6 million, respectively. The positive
working capital is related to the current classification of held-for-sale assets at June 30, 2025 and 2024 of $9.8 million and $8.4
million, respectively. Absent this classification, we would still maintain a positive working capital of $1.1 million at June 30,
2025 and have a $5.8 million working capital deficiency at June 30, 2024. The working capital deficiency in the prior year is
largely attributed to the current classification of the 2024 Notes, as well as acquisitions of property and equipment and
cash used in operating activities.

31

Going
Concern

The
continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain debt
or equity financing. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain
them on favorable terms, which could limit its operations. Any such financing activities are subject to market conditions. These uncertainties
cause substantial doubt about the Company’s ability to continue as a going concern for 12 months from issuance of these financial
statements. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded
asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
These adjustments could be material.

On
April 3, 2024, the Company entered into an ATM sales agreement with Virtu Americas LLC, pursuant to which the Company may offer and
sell, from time to time through the sales agent, shares of the Company’s common stock having an aggregate offering price of up
to $50,000,000, subject to the terms and conditions of the Sales Agreement (the “ATM Program”). During the fiscal year
ended 2025, the Company sold 14,097,636 common shares for total proceeds of $18.6 million.

The
going concern assessment excludes the ATM Program, which could provide a source of liquidity.

Based
on our current operating plan, unless we generate income from the operations of our facilities and receipt of cash from United
States government grant awards, or raise additional capital (debt or equity), it is possible that we will be unable to maintain our
financial covenants the agreement governing the 2024 Notes (the “Note Agreement”), which, if such violation is not
waived, could result in an event of default, causing an acceleration of the outstanding balance. If we raise additional capital
through public or private equity offerings, as opposed to debt issuances, the ownership interests of our existing
stockholders may be diluted.

Cash
Flows

For
the fiscal years ended June 30:

2025

2024

Cash Flows used in Operating
Activities

$

(28,921,158

)

$

(16,736,231

)

Cash Flows used in Investing Activities

$

(2,548,476

)

$

(12,969,219

)

Cash Flows provided by Financing Activities

$

36,942,152

$

34,387,087

Net Increase in Cash During the Period

$

5,472,518

$

4,681,637

Cash
from Operating Activities

During
the fiscal year ended June 30, 2025, the Company used $28.9 million of cash for operating activities, compared to $16.7 million used
during the fiscal year ended June 30, 2024. In both periods, the cash used has supported an increased scale of operations including increased
employee headcount and personnel costs, increased production, and increased administrative costs.

Cash
from Investing Activities

During
the fiscal year ended June 30, 2025, the Company used cash in investing activities of $2.5 million for acquisition of property and equipment
for its recycling facilities. This is in comparison to cash used in investing activities of $13.0 million for the fiscal year ended June
30, 2024. The decrease is due to the Company’s purchasing more equipment in the beginning stages of the recycling plant build-out
in the prior year.

Cash
from Financing Activities

During
the fiscal year ended June 30, 2025, the Company had cash provided by financing activities of $36.9 million, compared to $34.4 million
provided during the fiscal year ended June 30, 2024. The Company has relied on equity and debt financing to support its increased operating
activities, the ramp up of the recycling plant, development of the lithium claystone pilot plant, and upgrades to the geological classification of
its Tonopah Flats claims through additional studies and assessments.

The
Company had proceeds from equity and debt financings of $45.7 million in the fiscal year ended June 30, 2025, compared to $58.3 million
in the prior year. The proceeds are offset by principal paid on the notes payable of $7.5 million and payment of issuance costs on registered
direct offerings of $1.1 million in fiscal year ended June 30, 2025. In 2024, principal paid on notes payable was $24.0 million.

32

Off-Balance
Sheet Arrangements

As
of June 30, 2025 and 2024, we had no off-balance sheet arrangements.

Working
Capital

June
30, 2025

June
30, 2024

Current Assets

$

29,532,110

$

18,406,048

Restricted Cash

$

(5,000,000

)

$

-

Current Liabilities

$

(13,668,605

)

$

(15,798,298

)

Working Capital

$

10,863,505

$

2,607,750

Future
Financings

The
Company will continue to rely on sales of our common shares, debt, or other financing to fund our business operations as needed beyond
any revenue generated from internal operations and the government tax credits and grants we have been awarded. Issuances of additional
shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the securities
or arrange for debt or other financing to fund planned operating activities, acquisitions and exploration activities.

Critical
Accounting Estimates and Judgments

Our
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”). The preparation of the consolidated financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. We
evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and
assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.

Certain
accounting estimates, including those concerning revenue recognition, share-based compensation, impairments of long-lived assets, and
assets held-for-sale, are considered to be critical in evaluating and understanding our financial results because they involve inherently
uncertain matters and their application requires the most difficult and complex judgments and estimates. These are described below. For
further information on our accounting policies, see Note 3 to our consolidated financial statements.

Fair
Value Measurements

Recurring
Valuations. The Company’s fair value measurements included the valuation of the derivative liabilities for the bifurcated notes
payable freestanding call and conversion options and for the liability-classified equity-linked contracts, both of which are classified
as Level 3 of the fair value hierarchy. In making these fair value determinations, we were required to make assumptions that affected
the recorded amounts, including volatility, risk free rates, and duration of time. Our estimates of fair value are based upon assumptions
we believe to be reasonable, but which are inherently uncertain. As of December 31, 2024, the Company reclassified derivative liabilities
and liability-classified equity-linked contracts from long-term liabilities to equity. No derivative instruments were issued during the
six months ended June 30, 2025; accordingly, fair value measurement was not required. See Notes 6 and 11 for further discussion.

33

Revenue
Recognition

The
Company recognizes revenue upon satisfying its promises to transfer goods or services to customers under the terms of its contracts.
Nearly all of these promises, referred to as performance obligations, consist of the transfer of physical goods, including recycled ferrous
and nonferrous metals and black mass, to customers. These performance obligations are satisfied at the point in time the Company transfers
control of the goods to the customer, which is when title to and risk of loss of the goods transfer to the customer. The timing of transfer
of title and risk of loss is dictated by customary or explicitly stated contract terms. The majority of the Company’s sales involve
transfer of control to the customer, and thus revenue recognition, before delivery to the customer’s destination; for example,
upon release of the goods to the shipper.

The
Company recognizes revenue based on contractually stated selling prices and quantities shipped, net of sales tax, and adjusted for estimated
claims and discounts. Claims are customary in the recycled metal industry and arise from variances in the quantity or quality of delivered
products. Revenue adjustments may be required if the settlement of claims exceeds original estimates. For the fiscal year ended June
30, 2025, revenue adjustments related to performance obligations that were satisfied in previous periods were not material.

Long-Lived
Assets

The Company evaluates long-lived assets,
such as plant and equipment, with finite useful lives and ROU assets for impairment whenever events or changes in circumstances indicate
that the carrying value of the asset or asset group may not be recoverable. These events and circumstances may include significant decreases
in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being
used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast
of future operating or cash flow losses, significant disposal activity, a significant decline in the Company’s share price, or
a significant decline in revenue or adverse changes in the economic environment. The existence of an individual indicator outlined above,
or otherwise, is not automatically an indicator that a long-lived asset may not be recoverable. Instead, management exercises judgment
and considers the combined effect of all potential indicators and developments present, potentially positive or negative, when determining
whether a long-lived asset may not be recoverable. No impairment loss was recognized during the fiscal years ended June 30, 2025 and
2024.

Assets
Held-for-Sale

The
Company evaluates long-lived assets for classification as held for sale when management, having the authority to approve the action,
commits to a plan to sell the asset. To qualify as held for sale, the asset must be available for immediate sale in its present condition,
subject only to terms that are usual and customary for sales of such assets, and the sale must be probable within one year.

Management
considers whether events and circumstances such as a change in strategic direction and changes in business climate would impact the fair
value of long-lived assets. The Company used critical judgements in analyzing certain market data and estimates to calculate the value
of the assets held-for-sale. Significant assumptions that form the basis of fair value include market comparison of similar properties,
construction cost estimates and using certain dollar per square foot amounts to derive fair value. Our estimates of fair value are based
upon assumptions we believe to be reasonable, but which are inherently uncertain.

Stock-Based
Compensation

The
fair value of share-based payments are valued using the Black-Scholes option pricing model that incorporates market data and involves
uncertainty in estimates used by management in the assumptions. Because the Black-Scholes option pricing model requires the inputs of
highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect
the estimate.

New
Accounting Pronouncements

New
accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that are adopted by
us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not
yet effective will not have a material impact on our financial position or results of operations upon adoption. For further discussion
on recent accounting pronouncements, please see Note 3, “Accounting Pronouncements,” to our consolidated financial
statements included in this Annual Report on Form 10-K for additional information.