AMERICAN BATTERY TECHNOLOGY Co (ABAT) FY 2022 MD&A

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 following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-K.

Overview

ABTC
is a startup company in the lithium-ion battery industry that is working to increase the domestic US production of battery materials,
such as lithium, nickel, cobalt and manganese through its engagement in the exploration of new primary resources of battery metals, in
the development and commercialization of new technologies for the extraction of these battery metals from primary resources, and in the
commercialization of an internally developed integrated process for the recycling of lithium-ion batteries. Through this three-pronged
approach ABTC is working to both increase the domestic production of these battery materials, and to ensure that as these materials reach
their end of lives that the constituent elemental battery metals are returned to the domestic manufacturing supply chain in a closed-loop
fashion.

To
implement this business strategy, the Company is currently constructing its first integrated lithium-ion battery recycling facility,
which will take in waste and end-of-life battery materials from the electric vehicle, stationary storage, and consumer electronics industries.
The construction, commissioning, and operations of this facility are of the highest priority to the company, and as such it has significantly
increased the resources devoted to its execution including the further internal hiring of technical staff, expansion of laboratory facilities,
and purchasing of equipment. The Company has been awarded a competitively bid grant from the US Advanced Battery Consortium to accelerate
the development and demonstration of this pre-commercial scale integrated lithium-ion battery recycling facility.

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 US Department of Energy Advanced Manufacturing Office through the Critical Materials
Innovation program to support the construction and operation of a multi-ton per day integrated continuous demonstration system to support
the scale-up and commercialization of these technologies.

2022
Financial Highlights:

Components
of Statements of Operations

Expenses

The Company recognized $33.7 million of operating
expenses compared to $37.7 million of operating expenses during the fiscal years ended June 30, 2022 and 2021, respectively.

Research
and development expenses for the fiscal year include salaries for laboratory staff, laboratory costs, and lease expenses for the
laboratory space occupied at NCAR at the University of Nevada, Reno. The Company incurred $1.1 million and $0.9 million in research
and development expenses for the fiscal years ended June 30, 2022 and June 30, 2021, respectively. The Company was awarded two
grants in the fiscal year ended June 30, 2022. Income received from these grants was $0.1 million for the fiscal year
ended June 30, 2022. The Company records any grant revenue as an offset to research and development
expenses.

General
and administrative expenses primarily consist of legal, office, consulting, salaries, and benefits expense. The Company recognized
general and administrative expenses of $31.7 and $36.3 million for the fiscal years ended June 30, 2022 and 2021, respectively.
Included within general and administrative expenses is a non-cash expense related to shares issued for professional services of
$20.4 million and $29.4 million during the fiscal years ended June 30, 2022 and 2021, respectively. The Company has significantly reduced the use of shares for professional services to non-employees therefore, we
expect to see a reduction in these expenses beginning July 1, 2022.

Exploration
costs consist primarily of expenses related to the salaries, leasing and drill operations primarily associated with the exploration
of new primary resources of battery metals. The Company recognized exploration costs of $0.9 million and $0.5 million for the fiscal
years ended June 30, 2022 and 2021, respectively.

11

The
Company recorded other income of $0.2 million during the fiscal year ended June 30, 2022 compared to other expenses of $4.0 million during
the fiscal year ended June 30, 2021. The Company recognized a gain of $153,393 related to the sale of mining claims in Railroad Valley,
NV during the fiscal year ended June 30, 2022.

Net
Loss

During
the fiscal year ended June 30, 2022, the Company incurred a net loss of $33.5 million or $0.05 loss per share compared to a net loss
of $41.8 million or $0.08 loss per share during the fiscal year ended June 30, 2021.

Liquidity
and Capital Resources

At
June 30, 2022, the Company had cash of $29.0 million and total assets of $52.9 million compared to cash of $12.8 million and total
assets of $21.3 million at June 30, 2021. The increase in cash is due to the Company having received net proceeds of $40.9 million
from private placements and share purchases of common stock and $0.9 million of proceeds from exercises of share purchase warrants, partially offset by higher acquisition costs of property and equipment
and intangible assets.
The increase in total assets was due to the increase in cash of $16.1 million and increase in property and equipment and intangible
assets of $13.4 million relating to additional acquisitions of land, construction in progress, equipment and water rights which will
be used for the Company’s future pilot plant operations.

Liquidity
and Capital Resources (continued)

The
Company had total current liabilities of $3.1 million at June 30, 2022, compared to $1.8 million at June 30, 2021. The increase in current
liabilities is due to an increase in accounts payable and accrued liabilities based on increased expenses in investing activities,
an increase in accounts payable and accrued liabilities and day-to-day operating expenses.

As
of June 30, 2022, the Company had working capital of $26.8 million compared to a working capital of $12.3 million at June 30, 2021. The
increase in working capital was primarily attributed to the inflow of financing activity during the fiscal year ended
June 30, 2022.

Cash
Flows

Cash
from Operating Activities.

During
the fiscal year ended June 30, 2022, the Company used $10.2 million of cash for operating activities as compared to $7.8 million
during the fiscal year ended June 30, 2021. The increase in the use of cash for operating activities was due to an increase in
operating activities in the current period including an increase in a number of expenses including, employment and recruiting,
research and development, exploration and reclamation, and professional fees and services.

Cash
from Investing Activities

During
the fiscal year ended June 30, 2022, the Company used $15.1 million on the construction, procurement of equipment, and water rights
necessary to construct, commission, and operate its lithium-ion battery recycling Pilot Plant. This is in comparison to the cash
used of $7.1 million for the fiscal year ended June 30, 2021. The increase in investing activities is due to the Company continuing
to construct its Pilot Plant where necessary demonstrations are to occur. The Company also continues its acquisition of water rights
and land in the Northern Nevada region to support further operations of the Company. The Company expects to see additional increases
in investing activities as these projects progress to meet management expectations.

Cash
from Financing Activities

During
the fiscal year ended June 30, 2022, the Company had net cash provided by financing activities of $41.4 million compared to $26.9 million
for the fiscal year ended June 30, 2021.

On
September 27, 2021, the Company entered into a securities purchase agreement for the purchase and sale of an aggregate of 25,389,611
shares of the Company’s common stock and warrants to purchase an aggregate of up to 25,389,611 shares of common stock in a registered
direct offering at a combined purchase price of $1.54 per share and warrant, for net proceeds to the Company of $36.9 million. The warrants
are immediately exercisable and may be exercised at any time until September 29, 2026, at an exercise price of $1.75 per warrant.

The
Company engaged a placement agent in connection with the offering and agreed to pay the placement agent a cash fee of 5% of the gross
proceeds the Company receives in the offering. In addition, the Company agreed to issue to the placement agent warrants to purchase shares
equal to 5% of the gross proceeds sold under the securities purchase agreement, or warrants to purchase up to an aggregate of 1,955,000
shares. The placement agent warrants generally will have the same terms as the investor warrants, except they will expire September 29,
2024, at an exercise price of $1.54 per warrant.

12

On
August 5, 2021, the Company elected to exercise its rights pursuant to the Purchase Agreement dated April 2, 2021, to issue 3,000,000
shares for net proceeds to the Company of $4.0 million.

During
the fiscal year ended June 30, 2022, the Company received $1.0 million of proceeds from the exercise of share purchase warrants.

Off-Balance
Sheet Arrangements

As
of June 30, 2022, we had no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenses
or capital resources that are material to stockholders.

RESULTS
OF OPERATIONS

Working
Capital

Cash
Flows

For
the fiscal years ended June 30:

Future
Financings

We
will continue to rely on equity sales of our common shares to continue to fund our business operations. Issuances of additional shares
will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities
or arrange for debt or other financing to fund planned acquisitions and exploration activities.