Stockholders’ Equity

3 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders’ Equity

13. Stockholders’ Equity

Preferred Stock

Our amended and restated articles of incorporation authorize shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management.

To date, the Company has authorized a total of 1,666,667 shares of preferred stock. Of this amount the Company has designated a total of 233,334 shares to four classes of preferred stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock. As of September 30, 2024 and June 30, 2024, there were 5 and nil shares of Series D Preferred Stock issued and outstanding. A description of each class of preferred stock is listed below.

On September 16, 2024, the Company entered into a Subscription and Investment Representation Agreement with Ryan Melsert, its Chief Executive Officer, who is an accredited investor, pursuant to which the Company agreed to issue and sell five (5) shares of the Company’s Series D Preferred Stock, par value $0.001 per share, to Mr. Melsert for an aggregate purchase price of $100, or $20 per share of Series D Preferred Stock. The sale closed on September 16, 2024. The Series D Preferred Stock is not convertible into, or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series D Preferred Stock has no rights with respect to distribution of assets of the Company, including upon a liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company. Each share of Series D Preferred Stock will have 12,000,000 votes and will vote together with the outstanding shares of the Company’s common stock as a single class exclusively with respect to a proposal to amend the Company’s articles of incorporation, as amended, to increase the number of authorized shares of common stock of the Company. The Series D Preferred Stock will be voted, without action by the holder, on such proposal in the same proportion, and in the same manner, as shares of common stock are voted by the shareholders and in no other manner. The Series D Preferred Stock has no other voting rights except as otherwise authorized by the Nevada Revised Statutes.

The Series D Preferred Stock shall be redeemed in whole, but not in part, at any time (i) if such redemption is ordered by the Board of Directors in its sole discretion or (ii) automatically upon the effectiveness of the amendment to the articles of incorporation, as amended, implementing an increase in the number of authorized shares of common stock of the Company. Upon such redemption, the holder of the Series D Preferred Stock will receive consideration of $100. Accordingly, as the Series D Preferred Stock is subject to possible redemption, it is presented as temporary equity, outside of stockholders’ equity, at its redemption amount on the condensed consolidated balance sheets.

Series A Preferred Stock

The Company has 33,334 shares of Series A Preferred Stock authorized with a par value of $0.001 per share. The Company had nil shares of Series A Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series B Preferred Stock

The Company has 133,334 shares of Series B Preferred Stock authorized with a par value of $10.00 per share. The Company had nil shares of Series B Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series C Preferred Stock

The Company has 66,667 shares of Series C Preferred Stock authorized with a par value of $10.00 per share. The Company had nil shares of Series C Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Series D Preferred Stock

The Company has 5 shares of Series D Preferred Stock authorized with a par value of $0.001 per share. The Company had 5 shares and nil shares of Series D Preferred Stock issued and outstanding on September 30, 2024 and June 30, 2024.

Common Stock

The Company has 80.0 million shares of common stock authorized, with a par value of $0.001 per share.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Three months ended September 30, 2024:

During the period the Company issued 353,221 common shares upon vesting of share-based awards.

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 (the “Shares”) of the Company’s common stock, par value $0.001 per share, having an aggregate offering price of up to $50,000,000, subject to the terms and conditions of the Sales Agreement. On September 30, 2024, the Company filed a prospectus supplement to its registration statement on Form S-3 (File No. 333-252492) offering the Shares. During the period, the Company sold 5,938,786 common shares, related to the ATM sales agreement, for total proceeds of $6.3 million, of which $0.1 million is recorded as a subscription receivable on the consolidated balance sheet at September 30, 2024. In addition, the Company settled the issuance of 487,838 common shares for a total of $0.6 million that was included in subscriptions receivable as of June 30, 2024.

On August 1, 2024, the Company agreed to sell in a private placement 53 Group A Units (defined below) to several accredited investors and 23 Group B Units to the Company’s new Chief Operating Officer, to an immediate family member of the Chief Executive Officer, and to two current employees, a portion of which was rescinded on November 12, 2024, resulting in the sale of a total of only 18 Group A Units and 23 Group B Units in such private placement. Each “Group A Unit” consists of 25,000 shares of Common Stock, 25,000 Series A warrants with a five-year term to purchase Common Stock (“Series A Warrants”) and 25,000 Series B Warrants with an 18-month term to purchase Common Stock (collectively with the Series A Warrants, the “Warrants”) with a purchase price of $25,000 per Unit; each “Group B Unit” consists of 19,531 shares of Common Stock and 39,062 Series A Warrants with a five-year term and a purchase price of U.S. $25,000 per Unit. The Company received an initial payment of approximately $1.9 million but after the recission retained only an aggregate purchase price of $1.0 million. The recission is an event that will be accounted for as part of the second quarter results.

Upon issuance, the Company concluded that it had insufficient authorized shares to settle the warrants (see Note 6). As the warrants are therefore liability-classified and remeasured at fair value each reporting period, the Company allocated the proceeds first to the warrants with any residual proceeds allocated to the common shares. A day-one loss is recognized to the extent the recognized fair value of common shares and warrants exceeds the proceeds received.

During the period, the Company issued 726,216 common shares pursuant to the debt conversion option in lieu of cash payment of $0.6 million (see Note 11). The fair value of the common shares issued of $0.7 million was recorded in additional paid-in capital for this transaction.

On July 22, 2024, the Board of Directors authorized and approved to extend the expiration date to April 30, 2025 for 600,000 certain warrants with an exercise price of $1.125 issued in connection with a previous equity offering which were previously scheduled to expire on October 31, 2024. Of the 600,000 warrants, 200,000 warrants are held by Ryan Melsert, Chief Executive Officer. The modification of the warrants resulted in incremental fair value of $0.1 million as of the modification date, of which less than $0.1 million was recognized as stock-based compensation expense for those warrants held by the Chief Executive Officer and the remainder as a deemed dividend per the requirements of ASC 815-40, “Derivatives and Hedging – Contracts in Entity’s Own Equity.” The Company utilized a Black-Scholes option-pricing model to determine the incremental fair value with assumptions including volatility of 100.47% and a risk-free rate of 5.06%.

During the period, the Company recognized stock-based compensation expense of $3.2 million, which was an increase to additional paid-in capital of $2.4 million and an increase to the equity compensation liability of $0.1 million. Stock-based compensation expense also included the $0.7 million related to the excess fair value related to warrants issued to the Insiders and the incremental fair value from modification of certain warrants discussed above.

The Company had the following potentially dilutive shares outstanding as of September 30:

	2024		2023
Convertible notes		3,489,871		2,528,873
Warrants		9,394,469		5,696,026
Share awards outstanding		3,176,967		1,582,126
Total potentially dilutive		16,061,307		9,807,025

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)