AMERICAN BATTERY TECHNOLOGY Co (ABAT) FY 2023 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 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”) is a new entrant 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 exploration of new
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 is currently constructing and commissioning 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 operation 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 $2M grant from the US Advanced Battery Consortium to accelerate the development and demonstration of
this pre–commercial scale integrated lithium–ion battery recycling facility, and the Company has been selected for an
additional $20M grant award under the Bipartisan Infrastructure Law to validate, test, and deploy three disruptive advanced
separation and processing 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 $4.5M grant cooperative agreement from the US Department of
Energy’s 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. The Company has been awarded an additional $115M grant award under the Bipartisan
Infrastructure Law to design, construct, and commission a first-of-kind commercial manufacturing facility to produce battery-grade
lithium hydroxide from this resource.

2023
Financial Highlights:

Components
of Statements of Operations

Operating
Expenses

During
the fiscal year ended June 30, 2023, the Company incurred $21.6 million of operating expenses compared to $33.7 million of operating
expenses during the fiscal year ended June 30, 2022. The decrease is primarily due to the items described below.

General
and administrative expenses consist of stock-based compensation, office expenses, legal, recruitment, business development, public relations,
and general facility expenses. The Company recognizes stock-based compensation for its employees using over the requisite service period
of the employee, these costs help retain key employees while preserving cash on hand. The Company has reduced the number of common shares
it directly issues to non-employees for professional services, and thus, has recognized a $12.4 million reduction to the non-cash compensation
components on the statement of operations and statement of cash flows for the fiscal year ended June 30, 2023.

Research
and development expenditures are charged to operations as incurred. These costs consist primarily of laboratory leases, supplies, salaries,
stock-based compensation, and benefits. Research and development costs for the years ended June 30, 2023 and 2022 were $7.7 million and
$1.0 million, respectively. The increase in 2023 is attributed to increased headcount and related compensation. These costs are offset
by federal grant funds it receives for grant awards that it has contracted with various federal agencies. The Company recognized an offset
to its research and development costs of $0.9 million and $0.1 million for the fiscal years ended June 30, 2023 and 2022, respectively.

Exploration
costs consist primarily of drilling, assay, claim fees, field office lease and warehouse costs, personnel, stock-based compensation,
travel and other costs related to exploration of claims in central Nevada as it pursues critical battery metals in the region.

Other
Income (Expense)

During
the fiscal years ended June 30, 2023 and 2022, the Company recognized gains of $0.3 million and $0.2 million, respectively, related to
the sale of mining claims. The Company records in other income the money receives from a land lease and unrealized loss on investment,
though immaterial to the Company’s operations.

Net
Loss

During
the fiscal year ended June 30, 2023, the Company incurred a net loss of $21.3 million or $0.49 loss per share compared to a net loss
of $33.5 million or $0.80 loss per share during the fiscal year ended June 30, 2022.

Liquidity
and Capital Resources

At
June 30, 2023, the Company had cash of $2.3 million and total assets of
$74.7 million compared to cash of $29.0 million and total assets of $52.9 million at June 30, 2022. The decrease in cash is due to the
Company having received net proceeds of $23.4 million from financing activities, offset by $8.1 million to acquire claims in Tonopah,
Nevada, $21.9 million of deposits towards its building and related equipment and $6.8 million towards other property and equipment related
to its core business objectives.

The
Company had total current liabilities of $13.4 million at June 30, 2023, compared to $3.1 million at June 30, 2022. The increase in current
liabilities is primarily due to the costs necessary to equip its recycling facility and prepare the facility for its intended use. Current
liabilities at June 30, 2023 includes a $6.0 million financing instrument to assist with the transportation and commissioning of its
recycling facility.

As
of June 30, 2023 the Company had a working capital deficiency of $8.6 million compared to a positive working capital of $26.8 million
at June 30, 2022. The decrease in working capital attributed to acquisitions of property and equipment, increased operating activities
and a decrease to financing activities during the fiscal year ended June 30, 2023. The Company believes its cash holdings and subsequent
financing will be sufficient to meet its future working capital needs.

Grant
Awards

On
August 16, 2021, the Company received a contract award for a 30-month project with a total budget of $2.0 million from the US
Advanced Battery Consortium (the “USABC grant”) as part of a competitively bid project, through which the Company will
receive reimbursement for up to $500,000 of eligible expenditures. The objective of the contract award is for the commercial-scale
development and demonstration of an integrated lithium-ion battery recycling system, the production of battery cathode grade metal
products, the synthesis of high energy density active cathode material from these recycled battery metals, and the fabrication of
large format automotive battery cells from these recycled materials and the testing of these cells against otherwise identical cells
made from virgin sourced metals. The Company began receiving funds related to this award during the fiscal year ended June 30, 2022.

On
January 20, 2021, the US DOE announced that the Company had been selected for award negotiation for a three-year project with a total
budget of $4.5 million for the field demonstration of its selective leaching, targeted purification, and electro-chemical production
of battery grade lithium hydroxide from domestic claystone resources technology. Through this grant award the Company is eligible to
receive reimbursement of up to 50% of eligible expenditures, or up to $2.3 million. The prime agreement contract for this grant (“AMO
grant”) was issued with a project start date of October 1, 2021. The Company began receiving funds related to this award during the fiscal
year ended June 30, 2022.

On
October 21, 2022, the US DOE announced that the Company has been selected for award negotiation for a five-year project with a total
budget of $115.5 million to expand domestic manufacturing of battery grade lithium hydroxide for lithium-ion batteries for electric
vehicles, a focus on domestic processing of materials and components that are currently imported from foreign countries. Through
this grant award the Company is eligible to receive reimbursement of up to 50% of eligible expenditures, or up to $57.7 million. The
prime agreement contract for this grant was issued with a project start date of September 1, 2023. The Company is expected to begin
receiving funds associated with this during the fiscal year ended June 30, 2024.

On
November 17, 2022, the US DOE announced that the Company has been selected for award negotiation for a three-year project with a total
budget of $20.0 million to demonstrate and commercialize next generation techniques for its lithium-ion battery recycling processes to
produce low-cost and low-environmental impact domestic battery materials. Through this grant award the Company is eligible to receive
reimbursement of up to 50% of eligible expenditures, or up to $10.0 million. The Company is expected to begin receiving funds associated with this during
the fiscal year ended June 30, 2024.

Cash Flows

For the fiscal years ended June 30:

Cash
from Operating Activities.

During
the fiscal year ended June 30, 2023, the Company used $13.4 million of
cash for operating activities as compared to $10.2 million used during the fiscal year ended June 30, 2022. The increase included cash
costs for engineering, research and development as well as increased exploration expenses. Increased research and development costs were
to support the development of the Company’s process for the recycling of lithium-ion batteries and for the extraction of lithium
from the Company’s lithium claystone mining claims. The Company has also seen a steady increase in exploration activity expenses
as it continues to evaluate its claims in the Tonopah, Nevada region. The Company also continues to see a stable increase in its general
administrative function to further support its business objectives.

Cash
from Investing Activities

During
the fiscal year ended June 30, 2023, the Company used cash for investing
activities of $36.7 million, including acquisition costs of $28.6 million of property and equipment for its recycling facilities and $8.1
million for mineral rights acquired in Tonopah, Nevada. This is in comparison to cash used for investing activities of $15.1 million for
the fiscal year ended June 30, 2022, consisting primarily of $12.9 million for construction and equipment and $2.2 million for water rights.

As
of June 30, 2023, the Company had recorded specific deposits of $26.9 million, consisting of $21.0 million of cash and $5.9 million of
common stock to acquire its new recycling facility located in McCarran, NV. On August 11, 2023, the Company closed on the acquisition
and will present these deposits as property, plant and equipment for the fiscal quarter ending September 30, 2023.

As
of June 30, 2023, the Company had total non-current assets of $69.9 million
compared to $23.0 million at June 30, 2022. The Company will continue to see an increase in investing activities as it continues to invest
heavily in its recycling and primary resource extraction activities.

Cash
from Financing Activities

During
the fiscal year ended June 30, 2023, the Company had net cash provided by financing activities of $23.4 million compared to $41.4 million
for the fiscal year ended June 30, 2022. The decrease represents a decrease in the need for capital requirements while the Company nears
completion of its revenue-generating recycling facility.

During
the period, the Company issued 433,333 shares of common stock pursuant to purchase agreements for net proceeds of $3.9 million,
of which, $0.4 million was received after June 30, 2023.

In
March 2023, the Company entered into a share purchase agreement for the purchase and sale of 952,381 shares of common stock at
an issuance price of $10.50 per share. In addition to the issuance of common shares, the Company issued 952,381 Series A warrants
that are each exercisable into one common share of the Company at $12.00 per share for a period of five years from the date of issuance
and 952,381 Series B warrants that are each exercisable into one common share of the Company at $10.50 per share for a period
of eighteen months from the date of issuance. As part of the financing, the Company engaged a placement agent in connection with the
offering and agreed to pay the placement agent a cash fee of 7.5% of the gross proceeds of the offering, a 1% expense allowance, and
other reimbursable expenses. In addition, the Company issued 57,143 warrants to the placement agent as a commission fee, which are
exercisable at $13.13 per share for a period of five years from the date of issuance. The Company received net proceeds under this
share purchase agreement of $8.9 million.

In May 2023, the Company entered into multiple share
purchase agreements for the purchase and sale of 476,187 common shares at an issuance price of $10.50 per share. In addition to
the issuance of common shares, the Company issued 476,187 Series A warrants that are exercisable into one common share of the Company
at $12.00 per share for a period of five years from the date of issuance and 476,187 Series B warrants that are exercisable into
one common share of the Company at $10.50 per share for a period of eighteen months from the date of issuance. The Company received net
proceeds under this share purchase agreement of $5.0 million. The Company’s offering of the Units was made in reliance on the exemption
from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part
on representations made by the purchasers, including that such purchasers are “accredited investors” (as defined under the
Securities Act) and will resell such securities only if registered under the Securities Act or pursuant to an applicable exemption from
registration requirements.

On May 17, 2023, the Company entered into a Credit Agreement (the “Credit
Agreement”) with Mercuria Investments US, Inc. for pre-payment on the purchase of the Company’s recycled battery metal products.
The Credit Agreement provides for an aggregate loan amount of up to $20.0 million, comprised of (i) an initial term loan in the aggregate
principal amount of $6.0 million and (ii) delayed draw term loan commitments in an aggregate amount equal to $14.0 million. Borrowings
under the Credit Agreement carry interest calculated as the secured overnight financing rate published on the Federal Reserve Bank of
New York’s website, plus the applicable credit spread adjustment, based on the elected interest period, plus an applicable margin
rate of 6%. On August 30, 2023, the Company caused the repayment in full of all indebtedness, liabilities and other obligations
under, and terminated, the Credit Agreement.

Off-Balance
Sheet Arrangements

As
of June 30, 2023, 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.

Working
Capital

Future
Financings

We will continue to rely on sales of our common shares,
debt, or other financing 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 securities or arrange for debt or other financing to fund planned
operating activities, acquisitions and exploration activities.

Going
Concern

At
the Company’s current operating levels and capital usage, we believe that without any further acquisition or investments our aggregate
cash, cash equivalents, and funds raised during August 2023, would allow us to fund our operations through at least 12 months from issuance
of these financial statements. The continuation of the Company as a going concern is dependent upon generating profit from operations
and its ability to identify future investment opportunities and obtain any necessary debt or equity financing. In our filing for the
period ended March 31, 2023, it was noted that uncertainties raise substantial doubt as to the Company’s ability to continue as
a going concern for 12 months. Considering the recycling plant has since progressed and is near operational, the Company has since obtained
financing, and additional financing options are available, the Company has concluded that the substantial doubt of its ability to continue
as a going concern has been alleviated.