AMERICAN BATTERY TECHNOLOGY Co (ABAT)

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:

Fiscal
Third Quarter 2026 Financial Highlights (Three Months):

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:

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 isolatio

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

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.

Overview

American
Battery Technology Company (the “Company”, “ABTC”, “we” and “us”) is an integrated critical
minerals manufacturing company that is working to increase the domestic U.S. production of critical minerals, such as lithium, nickel,
cobalt, manganese, copper, aluminum, and graphite through its exploration of new primary resources of critical minerals, the development
and commercialization of new technologies for the extraction of these critical minerals from primary resources, and the 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 critical minerals and to ensure that as these materials reach their end
of life, the constituent elemental critical minerals are returned to the domestic manufacturing supply chain in a closed-loop fashion.

28

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”), consumer electronics industries, and manufactures several types of recycled products and byproducts. 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 June 30, 2026.

The
development and demonstration of these recycling technologies was supported by a competitively awarded grant from the U.S. Advanced Battery
Consortium, which consists of General Motors, Ford Motor Company, Stellantis NV, and the US Department of Energy. The continued expansion
of this facility is also supported by a competitively awarded $19.5 million investment tax credit awarded by the U.S. Department of Energy
and administered by the U.S. Internal Revenue Service through the 48C program. ABTC was selected for an additional $10.0 million competitively
awarded grant by the U.S. Department of Energy to demonstrate, optimize, and construct commercial implementations of ABTC’s next
generation of advanced critical mineral separations and processing manufacturing technologies.

With
the successful operations of ABTC’s first critical mineral recycling facility with a design processing rate of approximately 20,000
tonnes per year, ABTC was awarded a competitive $150 million grant from the U.S. Department of Energy to support the construction of
a second critical mineral recycling facility with a processing rate of 100,000 tonnes per year. The construction of this second facility
is also supported by a competitively awarded $40.5 million investment tax credit awarded by the U.S. Department of Energy and administered
by the U.S. Internal Revenue Service through the 48C program. ABTC has been performing due diligence on several prospective locations
for this second facility throughout the southeastern US.

In
addition to its critical mineral recycling facilities, ABTC is also developing TFLP, one of the largest
identified lithium resources in the United States. In September 2025, ABTC published a Pre-Feasibility Study (PFS) for this project that
details the inferred, indicated, and measured resources and proven and probable reserves at this claystone 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 (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).
The total processing costs for manufacturing this battery grade LHM is projected to be $4,307 per tonne LHM.

To
demonstrate the performance of ABTC’s internally-developed claystone-to-lithium hydroxide technologies, ABTC was awarded a competitive
$2.3 million grant from the U.S. Department of Energy to construct and operate a multi-tonne per day integrated demonstration facility.
ABTC has constructed and operated this demonstration facility and processed tonne-level quantities of claystone from ABTC’s claystone
property near Tonopah, Nevada, and manufactured high-purity battery grade lithium hydroxide product that has been delivered to global
customers for evaluation and qualifications.

ABTC
is currently developing a mine and refinery at the TFLP for the manufacturing of 30,000 tonnes of high purity critical mineral lithium
hydroxide per year. In October 2022, ABTC was selected for a competitively awarded $58 million grant from the U.S. Department of Energy
to support the construction of the first 5,000 tonnes lithium hydroxide per year processing train at this facility.

In October 2025, the DOE notified the Company that
the $57.7 million cooperative agreement for the lithium hydroxide refinery was terminated. The Company appealed, and following a series
of technical and commercial reviews, the DOE reinstated the award in its entirety in January 2026, with no change to funds awarded or
to technical and commercial milestones. The temporary termination and reinstatement did not result in a material change to the Company’s
project timeline or capital program. See Note 5 to the consolidated financial statements.

As
this prospective mine and refinery are located on land managed by the U.S. Bureau of Land Management (BLM), ABTC works closely with the
federal government on the permitting, design, and operations of this facility. In June 2025, ABTC’s TFLP was selected by President
Trump’s National Energy Dominance Council (NEDC) 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.

29

Fiscal
Fourth Quarter 2026 Financial Highlights:

A
reconciliation of cost of goods sold to cash cost of goods sold and adjusted gross margin (both are non-GAAP measures) for the three
months ended June 30, 2026 was as follows:

Fiscal
Year 2026 Financial Highlights:

A
reconciliation of cost of goods sold to cash cost of goods sold and adjusted gross margin (both are non-GAAP measures) for the fiscal
year ended June 30, 2026 was as follows:

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]