Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
1.
|
Organization
and Nature of Operations
|
|
|
|
|
|
American
Battery Metals Corporation (formerly Oroplata Resources Inc.) (“the Company”) was incorporated under the laws of the
state of Nevada on October 6, 2011 for the purpose of acquiring and developing mineral properties. The Company has a wholly-owned
subsidiary called Oroplata Exploraciones E Ingenieria SRL, which was incorporated in the Dominican Republic on January 10, 2012.
On July 26, 2016, the Company incorporated LithiumOre Corporation (formerly Lithortech Resources Inc.), a Nevada company, as a wholly-owned
subsidiary. On July 5, 2019, the Company incorporated ABMC AG, LLC, a Nevada company as a wholly-owned subsidiary. The Company currently
holds mineral rights in the Western Nevada Basin of Nye County in the state of Nevada. In July 2020, management changed its year
end date from September 30th to June 30th, and these consolidated financial statements reflect the twelve-month
period ended June 30, 2021 and the nine -month period ended June 30, 2020.
|
|
|
|
|
|
On
March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related
adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic
downturn. The impact on the Company is not currently determinable, but management continues to monitor the situation.
|
|
|
|
|
|
Liquidity
and Capital Resources
|
|
|
|
|
|
During
the year ended June 30, 2021, the Company has incurred a net loss of $41,760,064 and used cash of $7,756,438 for operating activities.
As of June 30, 2021, the Company has an accumulated deficit of $105,073,651.
|
|
|
|
|
|
On
September 27, 2021, the Company secured approximately $36,925,000 net proceeds to
construct and commission the pilot plant, fund operations, and increase research and development
activities. The Company believes its recent capital raise, and its current
cash holdings will be sufficient to meet its future working capital needs. The Company
cannot give assurance that it can increase its cash balances or limit its cash consumption
and thus maintain sufficient cash balances for its planned operations. The Company may need
to raise additional capital in the future. However, the Company cannot assure
that it will be able to raise additional capital on acceptable terms, or at all. Subject
to the foregoing, management believes that the Company has sufficient capital and liquidity
to fund its operations for at least one year from the date of issuance of
the accompanying financial statements.
|
|
|
|
|
|
These
audited 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.
|
|
2.
|
Summary
of Significant Accounting Policies
|
|
|
|
|
|
|
(a)
|
Basis
of Presentation
|
|
|
|
|
|
|
|
The
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in
the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is June 30.
|
|
|
|
|
|
|
|
These
consolidated financial statements include the accounts of the Company and its wholly-owned inactive subsidiaries, Oroplata Exploraciones
E Ingenieria SRL and LithiumOre Corporation (formerly Lithortech Resources Inc) and ABMC AG, LLC. All inter-company accounts and
transactions have been eliminated on consolidation.
|
|
|
|
|
|
|
(b)
|
Use
of Estimates
|
|
|
|
|
|
|
|
The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions
related to the fair value of stock-based compensation, recoverability of long-lived assets, valuation of derivative liability, and
deferred income tax asset valuation allowances.
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
2. Summary
of Significant Accounting Policies (continued)
|
|
(b)
|
Use
of Estimates (continued)
|
The
Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and
liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by
the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between
the estimates and the actual results, future results of operations will be affected.
Long-lived
assets, such as property and equipment, mineral properties, and purchased intangibles, are evaluated for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not be recoverable in accordance with Accounting Standards
Codification topic 360 “Property, Plant, and Equipment”. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors;
accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current
period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of
the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated
useful life. The Company’s long-lived assets consist of vehicles, equipment, and land. Vehicles and equipment are depreciated
on a straight-line basis over their estimated value lives ranging between 3 and 7 years.
Recoverability
of assets is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated
by an asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount
by which the carrying amount exceeds the estimated fair value of the asset. The estimated fair value is determined using a discounted
cash flow analysis. Any impairment in value is recognized as an expense in the period when the impairment occurs.
Expenditures
for major repairs and maintenance which extend the useful lives of property and equipment are capitalized. All other maintenance expenditures,
including planned major maintenance activities, are expensed as incurred. Gains or losses from property disposals are included in income
or loss from operations.
Intangible
assets that have indefinite useful lives are tested annually for impairment, or more frequently if events and circumstances indicate
that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the asset group exceeds
its fair value.
The
Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic
and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.
Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining
the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential
shares if their effect is anti-dilutive. At June 30, 2021, the Company has 44,482,000 (2020 – 8,603,112) potentially dilutive
shares.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
2.
|
Summary
of Significant Accounting Policies (continued)
|
|
|
(f)
|
Financial
Instruments
|
Pursuant
to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent,
objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value
hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into
three levels that may be used to measure fair value:
Level
1
Level
1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level
2
Level
2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability
such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets
with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are
observable or can be derived principally from, or corroborated by, observable market data.
Level
3
Level
3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement
of the fair value of the assets or liabilities.
The
Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, amounts due to related parties,
derivative liabilities, loans payable and notes payable. Pursuant to ASC 820, the fair value of cash is determined based on “Level
1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments
approximate their current fair values because of their nature and respective maturity dates or durations.
Fair
value measurements on a recurring basis
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
|
As of June 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Derivative
liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,519,654
|
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
2. Summary
of Significant Accounting Policies (continued)
The
Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability
method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forward.
Deferred
tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are
expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely
than not to be realized.
Any
uncertain tax position liabilities have been applied against the deferred tax balance given that there is a sufficient net operating
loss to cover any penalties and fees associated with the uncertain tax position. We are confident that all uncertain tax positions will
be reversed as the correct information returns are filed with the United States Internal Revenue Service.
We
recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the consolidated statement
of operations.
Due
to the Company’s net loss position from inception on October 6, 2011 to June 30, 2021, there was no provision for income taxes
recorded. As a result of the Company’s losses to date, there exists doubt as to the ultimate realization of the deferred tax assets.
Accordingly, a valuation allowance equal to the total deferred tax assets has been recorded at June 30, 2021 and 2020.
|
|
(h)
|
Stock-based
Compensation
|
The
Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value
method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted
for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably
measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized
based on the fair value of the equity instruments issued. At June 30, 2021 and 2020, the Company did not grant any stock options. The
Company will utilize the Black Scholes method when calculating stock-based compensation expense relating to stock option awards and
warrants.
|
|
(i)
|
Mineral
Property Costs
|
Mineral
property acquisition costs are capitalized as incurred. Exploration and evaluation costs are expensed as incurred until proven and probable
reserves are established. The Company assesses the carrying costs for impairment under ASC 360, “Property, Plant, and Equipment”
at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired,
any capitalized costs will be charged to operations.
|
|
(j)
|
Advertising
and Marketing Costs
|
The
Company expenses advertising and marketing development costs as incurred. No advertising costs were incurred for the twelve months ended
June 30, 2021 and nine months ended June 30, 2020.
|
|
(k)
|
Debt
and Embedded Derivatives
|
The
Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for
hybrid contracts. The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion
options should not be bifurcated from their host instruments in accordance with ASC 470-20 Debt with Conversion and Other Options.
The Company uses option pricing valuation models to determine the fair value of embedded derivatives and records any change in
fair value as a component of other income or expense in the consolidated statement of operations (see Note 7).
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
2. Summary
of Significant Accounting Policies (continued)
|
|
(k)
|
Debt
and Embedded Derivatives (continued)
|
ASC
815 provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for
them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the
host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as
they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.
Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional.
The
Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments
based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the
effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt
to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion
options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment
date of the note transaction and the effective conversion price embedded in the note.
ASC
815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement,
then the contract shall be classified as an asset or a liability. The Company uses the option pricing model to determine the fair market
value of the derivative liabilities for the twelve months ended June 30. 2021 and nine months ended June 30. 2020.
|
|
(l)
|
Debt
Modifications and Extinguishments
|
When
the Company modifies or extinguishes debt, it does so in accordance with ASC Topic 470-50-40, which requires modification to debt instruments
to be evaluated to assess whether the modifications are considered “substantial modifications”. A substantial modification
of terms shall be accounted for like an extinguishment. Based on the guidance relied upon and the analysis performed, if the Company
believes the embedded conversion feature has no fair value on the date of issuance (measurement date) and the embedded conversion feature
has no beneficial conversion feature, the embedded conversion feature does not meet the criteria in ASC 470-50-40-10 or 470-20-25 and
the issuance of the convertible note payable is considered a modification, and not an extinguishment that would require the recognition
of a gain or loss. If the Company determines the change in terms meet the criteria for substantial modification under ASC 470 it will
treat the modification as extinguishment and recognize a loss from debt extinguishment.
The
Company follows the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset (“ROU”) and a
lease liability for virtually all leases. Operating lease ROU assets and liabilities are recognized at commencement date based on the
present value of lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the
lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company
uses an implicit rate of interest to determine the present value of lease payments utilizing its incremental borrowing rate, as the implicit
rate of interest in the respective leases is not readily determinable. The Company’s incremental borrowing rate is a hypothetical
rate based on its understanding of what its credit rating would be. As of June 30, 2021 and 2020, operating lease ROU assets and liabilities
were immaterial.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
2. Summary
of Significant Accounting Policies (continued)
|
|
(n)
|
Recent
Accounting Guidance
|
New
Significant Accounting Pronouncements
In
August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments. The
guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments,
requiring bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815 or for convertible debt issued at
a substantial premium. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting
periods within those annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2020.
The Company is currently evaluating the timing and method of adoption and the related impact of the new guidance on the earnings per
share and on its financial statements.
|
3.
|
Property
and Equipment
|
During
the twelve months ended June 30, 2021, the Company purchased land for $907,381 comprised of 12.44 acres and located in Fernley, Nevada.
The Company will be constructing five separate building areas on this property to create a Pilot Plant campus that includes: Production
Process Areas, Feedstock Sorting Area, Analytical Laboratory Spaces & Process Development Bays, a Storage Warehouse, and general
Office Space.
On February 3, 2021, the Company made
the final payment on vacant land located in Ely, NV, purchased for $204,000.
On
June 28, 2021, the Company closed the acquisition of property comprised of 13.8 acres located in McCarran, Nevada for $4,229,240.
|
|
|
Equipment
$
|
|
|
Vehicle
$
|
|
|
Land
$
|
|
|
Total
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2019
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
Additions
|
|
|
–
|
|
|
|
61,916
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
–
|
|
|
|
61,916
|
|
|
|
–
|
|
|
|
61,916
|
|
|
Additions
|
|
|
99,466
|
|
|
|
–
|
|
|
|
5,340,621
|
|
|
|
5,440,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021
|
|
|
99,466
|
|
|
|
61,916
|
|
|
|
5,340,621
|
|
|
|
5,502,003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2019
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
Additions
|
|
|
–
|
|
|
|
3,110
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
–
|
|
|
|
3,110
|
|
|
|
–
|
|
|
|
3,110
|
|
|
Additions
|
|
|
4,356
|
|
|
|
10,312
|
|
|
|
–
|
|
|
|
14,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021
|
|
|
4,356
|
|
|
|
13,422
|
|
|
|
–
|
|
|
|
17,778
|
|
|
Carrying Amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
–
|
|
|
|
58,806
|
|
|
|
–
|
|
|
|
58,806
|
|
|
Balance, June 30, 2021
|
|
|
95,110
|
|
|
|
48,494
|
|
|
|
5,340,621
|
|
|
|
5,484,225
|
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
During
the year ended June 30, 2021, the Company purchased 127 acres of water rights in the City of Fernley, Nevada for $1,643,160. The water
rights will be used to ensure the Company’s lithium-ion battery recycling plant will have adequate water to operate at full capacity
once construction is complete. The water rights are treated in accordance with ASC 350, Intangible Assets, and have an unlimited useful
life given that there are no expiration dates on the water rights acquired by the Company.
|
|
|
|
Water
Rights
$
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
–
|
|
|
Additions
|
|
|
1,643,160
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021
|
|
|
1,643,160
|
|
|
5.
|
Related
Party Transactions
|
|
|
(a)
|
As
of June 30, 2021, the Company owes $120,146 (2020 - $120,146) to the former Chief Executive
Officer and Director of the Company for advances to the Company to fund day-to-day operations.
The amounts owing are unsecured, non-interest bearing, and due on demand.
|
|
|
(b)
|
As
of June 30, 2021, the Company owes $85,500 (2020 - $85,500) to the former Chief Executive
Officer and Director of the Company for advances to the Company to fund day-to-day operations
and accrued management fees. The amounts owing are unsecured, non-interest bearing, and due
on demand.
|
|
|
(c)
|
As
of June 30, 2021, the Company owed $nil (2020 - $388,577) to the Chief Executive Officer
of the Company for accrued management fees. The amounts owing are unsecured, non-interest
bearing, and due on demand. The amounts owed were paid in November 2020.
|
|
|
(d)
|
As
of June 30, 2021, the Company owed $nil (2020– $30,726) to directors of the
Company for accrued management fees. The amounts owing are unsecured, non-interest bearing,
and due on demand. The amounts owed were paid in December 2020.
|
|
|
(e)
|
During
the year ended June 30, 2021, the Company issued 16,590 shares to Just Business Management
for consulting services, of which Director David Batstone was a 50% owner as of June 30,
2021. Additionally, JB People & Planet, of which Director David Batstone is a 5.161%
owner, purchased 8,538,012 shares through a warrant exercise and purchased 125,000 Preferred
C shares.
|
6. Investment
in Joint Venture
On
October 8, 2018, the Company entered into a joint venture agreement with CINC Industries Inc. (“CINC”), a Nevada company,
for a period of five years whereby the joint venture will propagate the sale of a new process for extraction of lithium salt from salt
brine solutions using CINC’s existing and future processing equipment. As part of the joint venture, each of CINC and the Company
holds a 50% interest in the joint venture. CINC is responsible for completing testing on the pilot project, providing training to the
Company for use of its processing equipment, manufacturing up to 20 test units, and support and product development, as well as shared
costs on other personnel utilized in the joint venture company. The Company is responsible for the initial funding for all equipment
and associated expenses, the cost of the lease space, and marketing and sales of the joint venture agreement. The joint venture is committed
to acquiring a minimum amount of processing equipment, goods, accessories, and/or materials totaling: (i) $1,000,000 by October 8, 2020;
(ii) $3,000,000 by October 8, 2021; (iii) $6,000,000 by October 8, 2022; and (v) $10,000,000 by October 8, 2023. If the joint venture
fails to meet the minimum amounts above, the Company will lose the exclusive right to market, promote and sell the processing equipment
provided by CINC. As part of the joint venture agreement, the Company issued 250,000 common shares to CINC. On June 4, 2021, the Company
informed CINC that it was exercising its right to terminate the joint venture agreement and recorded a loss on extinguishment of the
agreement of $35,250.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
7.
|
Derivative
Liabilities
|
The
Company records the fair value of the conversion price of the convertible debentures as disclosed in Note 2 in accordance with
ASC 815, Derivatives and Hedging. The fair value of the derivatives was calculated using a multi-nominal lattice model. The fair value
of the derivative liabilities is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated
statement of operations. For the twelve months ended June 30, 2021, the Company recorded a loss on the change in the fair value of derivative
liability of $19,655,296 (nine months ended June 30, 2020 - $5,863,127).
As
at June 30, 2021, the Company recorded a derivative liability of $nil (2020 - $4,519,654). The following inputs and assumptions were
used to value the derivative liabilities outstanding during the periods ended June 30, 2021 and 2020:
|
|
|
June
30, 2021
|
|
|
June
30, 2020
|
|
|
Expected volatility
|
|
|
136-286
|
%
|
|
|
158-240
|
%
|
|
Risk free rate
|
|
|
0.04-0.16
|
%
|
|
|
0.16
|
%
|
|
Expected life (in years)
|
|
|
0.2-1.0
|
|
|
|
0.5-1.0
|
|
A
summary of the activity of the derivative liability is shown below:
|
Balance, September 30, 2019
|
|
$
|
3,437,200
|
|
|
Derivative additions associated with convertible
notes
|
|
|
2,591,119
|
|
|
Adjustment for conversion/prepayment
|
|
|
(7,371,792
|
)
|
|
Mark to market adjustment
|
|
|
5,863,127
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
4,519,654
|
|
|
|
|
|
|
|
|
Derivative additions associated with convertible
notes
|
|
|
403,378
|
|
|
Adjustment for conversion/prepayment
|
|
|
(24,578,328
|
)
|
|
Mark to market adjustment
|
|
|
19,655,296
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021
|
|
|
–
|
|
8. Loans
Payable
On
January 27, 2020, the Company entered into a finance loan agreement relating to the acquisition of a company vehicle. Under the terms
of the finance loan, the Company will make monthly installment payments of $1,089 at a finance loan interest rate of 7.99% per annum,
which is due in February 2026. The loan was paid off prior to maturity in January 2020. As of June 30, 2021, the Company carried a balance
of $nil (2020 - $59,236) on the loan.
On
May 7, 2020, the Company received $255,992 from the U.S. Small Business Administration as part of the Paycheck Protection Program. The
amounts are unsecured, bears interest at 1% per annum commencing on November 7, 2020, and is due on May 7, 2022. In June 2021, the U.S.
Small Business Administration forgave the balance owing of $255,992.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
|
|
June
30,
2021
$
|
|
|
June
30,
2020
$
|
|
|
|
|
|
|
|
|
|
|
Eagle Equities, LLC, $147,250 on
January 31, 2020, unsecured, bears interest at 10% per annum, due on January 31, 2021, convertible into common stock at 60% of the
lowest trading price in the ten trading days prior to conversion, unamortized discount of $137,038 (2020)
|
|
|
–
|
|
|
|
10,212
|
|
|
|
|
|
|
|
|
|
|
|
|
GS Capital Partners, LLC, $147,250 on January
31, 2020, unsecured, bears interest at 10% per annum, due on January 31, 2021, convertible into common stock at 40% of the lowest
trading price in the twenty trading days prior to conversion, unamortized discount of $134,584 (2020)
|
|
|
–
|
|
|
|
12,666
|
|
|
|
|
|
|
|
|
|
|
|
|
GS Capital Partners, LLC, $177,200 on February
7, 2020, unsecured, bears interest at 10% per annum which increases to 22% per annum on default, due on February 7, 2021, convertible
into common stock at 60% of the lowest trading price in the twenty trading days prior to conversion, unamortized discount of $165,770
(2020)
|
|
|
–
|
|
|
|
11,430
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Up Lending Group Ltd., $83,000 on February
14, 2020, unsecured, bears interest at 10% per annum, due on December 1, 2021, convertible into common stock at 61% of the lowest
trading price in the ten trading days prior to conversion, unamortized discount of $76,662 (2020)
|
|
|
–
|
|
|
|
6,338
|
|
|
|
|
|
|
|
|
|
|
|
|
Crown Bridge Partners, LLC, $75,000 on February
14, 2020, unsecured, bears interest at 10% per annum, due on February 14, 2021, convertible into common stock at 65% of the lower
of the lowest closing bid or the lowest trading price in the twenty trading days prior to conversion, unamortized discount of $70,577
(2020)
|
|
|
–
|
|
|
|
4,423
|
|
|
|
|
|
|
|
|
|
|
|
|
BHP Capital NY Inc., $110,000 on February 18,
2020, unsecured, bears interest at 10% per annum, due on February 18, 2021, convertible into common stock at 61% of the lesser of:
(i) lowest trading price during the previous twenty trading days before the issue date; or (ii) the lowest trading price during the
twenty trading days prior to conversion, unamortized discount of $103,282
|
|
|
–
|
|
|
|
6,718
|
|
|
|
|
|
|
|
|
|
|
|
|
Jefferson Street Capital, LLC, $110,000 on
February 18, 2020, unsecured, bears interest at 10% per annum, due on February 18, 2021, convertible into common stock at 61% of
the lesser of: (i) the lowest trading price during the previous twenty trading days before the issue date; or (ii) the lowest trading
price during the twenty trading days prior to conversion, unamortized discount of $103,818 (2020)
|
|
|
–
|
|
|
|
6,182
|
|
|
|
|
|
|
|
|
|
|
|
|
Odyssey Capital, LLC, $220,000 on February
19, 2020, unsecured, bears interest at 10% per annum, due on February 19, 2021 convertible into common stock at 60% of the lowest
closing bid price for the fifteen trading days prior to conversion, unamortized discount of $205,226
|
|
|
–
|
|
|
|
14,774
|
|
|
|
|
|
|
|
|
|
|
|
|
GS Capital Partners, LLC, $520,000 on March
17, 2020, unsecured, bears interest at 10% per annum, due on March 17, 2021, convertible into common stock at 63% of the lowest trading
price in the twenty trading days prior to conversion, unamortized discount of $478,979 (2020)
|
|
|
–
|
|
|
|
41,021
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Up Lending Group Ltd., $78,000 on April
6, 2020, unsecured, bears interest at 12% per annum which increases to 22% per annum on default, due on April 6, 2021, convertible
into common stock at 61% of the lowest trading price in the ten trading days prior to conversion, unamortized discount of $75,816
(2020)
|
|
|
–
|
|
|
|
2,184
|
|
|
|
|
|
|
|
|
|
|
|
|
Adar Alef, LLC, $110,000 on April 7, 2020,
unsecured, bears interest at 10% per annum, due April 7, 2021, convertible into common stock at 60% of the lowest closing bid price
for the fifteen trading days prior to conversion, unamortized discount of $107,464 (2020)
|
|
|
–
|
|
|
|
2,536
|
|
|
|
|
|
|
|
|
|
|
|
|
Auctus
Fund, LLC, $150,000 on April 10, 2020, unsecured, bears interest at 10% per annum which increases to
24% per annum on default, due on April 10, 2021, convertible into common stock at 68% of the lowest
trading in the twenty trading days prior to conversion, unamortized discount of $146,667 (2020)
|
|
|
–
|
|
|
|
3,333
|
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
|
|
June
30,
2021
$
|
|
|
June
30,
2020
$
|
|
|
Power Up Lending Group Ltd., $43,000
on April 21, 2020, unsecured, bears interest at 10% per annum which increases to 22% per annum on default, due on April 21, 2021,
convertible into common stock at 61% of the lowest trading price during the ten trading days prior to conversion, unamortized discount
of $42,176 (2020)
|
|
|
–
|
|
|
|
824
|
|
|
|
|
|
|
|
|
|
|
|
|
Black Ice Advisors, LLC, $115,500 on April
22, 2020, unsecured, bears interest at 10% per annum, due on April 22, 2021, convertible into common stock at 60% of the lowest closing
bid price for the fifteen trading days prior to conversion, unamortized discount of $113,318 (2020)
|
|
|
–
|
|
|
|
2,182
|
|
|
|
|
|
|
|
|
|
|
|
|
Efrat Investments, LLC,
$125,000 on April 23, 2020, unsecured, bears interest at 10% per annum, due on April 23, 2021, convertible into common stock at 60%
of the lowest closing bid price for the fifteen trading days prior to conversion, unamortized discount of $122,674 (2020)
|
|
|
–
|
|
|
|
2,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
|
|
|
127,149
|
|
9. Stockholder’s
Equity (Deficit)
Common
Stock
The
Company’s authorized common stock consists of 1,200,000,000 shares of common stock, with par value of $0.001.
Series
A Preferred Stock
On
December 17, 2020, the company issued an additional 200,000 Series A Preferred Stock shares to officers and directors of the company
for services rendered. As of June 30, 2021 and June 30, 2020, 500,000 and 300,000 shares authorized, respectively, issued and
outstanding.
Each
Series A Preferred Stock carries 1,000 votes. The Series A Preferred Stock are non-transferable and there are no conversion rights. They
can be redeemed, at the Company’s option, at the par value of the Company’s Series A Preferred Stock of $0.001 per Series
A Preferred Stock.
Series
B Preferred Stock
As
of June 30, 2020 and June 30, 2021, 2,000,000 shares authorized with a par value of $10.00, no shares issued.
Series
C Preferred Stock
On
December 18, 2020, the Company issued 48.29 units of Series C Preferred Stock, which equates to 241,450 shares of Series C Preferred
Stock. Each unit was issued at $50,000 for aggregate proceeds of $2,414,500. Each unit is comprised of 5,000 shares of Series C Preferred
Stock and 400,000 warrants convertible to common shares of the Company at $0.075 per share of common stock, expiring December 31, 2023.
Each unit holder is entitled to receive a non-cumulative dividend at 8% per annum at the rate per share. The dividend shall be payable
at the Company’s option in either cash or common shares of the Company. The preferred shares have no voting rights. No dividends
have been paid to date.
On
December 18, 2020, the Company issued 8 units of Series C Preferred Stock (40,000 shares of Series C preferred stock) with a fair value
of $400,000 in exchange for of $381,622 of note payable and $18,378 of accrued interest. These Series C Stock units were converted to
3,200,000 shares of common stock on February 3, 2021.
During
the year ended June 30, 2021, the Company converted 73,750 shares of Series C Preferred Stock to 5,900,000 shares of common stock.
At
June 30, 2021 the Company had 1,000,000 Series C Preferred Stock shares authorized, 207,700 shares issued and outstanding at a par value
of $2,077,000.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
9. Stockholder’s
Equity (Deficit) (continued)
Twelve
months ended June 30, 2021
On
July 8, 2020, the Company issued 61,562,500 units for proceeds of $2,462,500, which was received during the year ended June 30, 2020.
Each unit is comprised of one common share of the Company and 0.8 share purchase warrant where each whole share purchase warrant can
be exercised into one common share of the Company at $0.15 per share until October 31, 2024.
On
July 9, 2020, the Company issued 7,950,000 common shares with a fair value of $1,021,276 for consulting services.
On
July 9, 2020, the Company issued 6,081,150 common shares with a fair value of $720,008 for the conversion of $147,250 of note payable,
$6,503 of accrued interest, $105 of fees and $614,477 of derivative liability resulting in a gain on settlement of $48,327.
On
August 18, 2020, the Company issued 2,890,000 common shares with a fair value of $280,000 for consulting services.
On
August 26, 2020, the Company issued 2,196,822 common shares with a fair value of $193,320 for the conversion of $100,000 of note payable,
$5,342 of accrued interest, $105 of fees and $110,007 of derivative liability resulting in a gain on settlement of debt of $22,134.
On
September 16, 2020, the Company issued 1,696,856 common shares with a fair value of $157,808 for the conversion of $77,200 of note payable,
$4,931 of accrued interest, $105 of fees and $87,842 of derivative liability resulting in a gain on settlement of debt of $12,270.
On
September 29, 2020, the Company issued 2,400,000 common shares with a fair value of $383,000 for consulting services, including 2,000,000
common shares with a fair value of $315,000 issued to a director of the Company as management fee.
On
September 30, 2020, the Company issued 5,178,487 common shares with a fair value of $699,096 for the conversion of $270,000 of note payable,
$13,833 of accrued interest, $105 of fees and $560,268 of derivative liability resulting in a gain on settlement of $145,110.
On
October 6, 2020, the Company issued 4,805,558 common shares with a fair value of $617,514 for the conversion of $250,000 of note payable,
$12,311 of accrued interest, $105 of fees and $491,605 of derivative liability resulting in a gain on settlement of $136,507.
On
October 20, 2020, the Company issued 1,326,098 common shares with a fair value of $197,721 for the conversion of $71,548 of note payable,
$7,396 of accrued interest and $130,683 of derivative liability resulting in a gain on settlement of $11,906.
On
November 30, 2020, the Company issued 3,000,000 common shares with a fair value of $765,000 to directors of the Company for consulting
services.
On
December 15, 2020 the Company issued 500,000 common shares with a fair value of $105,000 for consulting services
On
December 15, 2020, the Company issued 6,000,000 common shares pursuant to Securities Purchase Agreement dated October 8, 2020 with Tysadco
for gross proceeds of $600,000
On
December 23, 2020, the Company issued 6,000,000 common shares pursuant to Securities Purchase Agreement dated October 8, 2020 with Tysadco
for gross proceeds of $600,000
On
December 29, 2020, the Company issued 14,400,000 common shares with a fair value of $20,160,000 for consulting services.
On
January 19, 2021, the Company issued 486,451 common shares with a fair value of $702,192 for legal services.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
9. Stockholder’s
Equity (Deficit) (continued)
Twelve
months ended June 30, 2021 (continued)
On
February 5, 2021, the Company issued 69,252 common shares with a fair value of $271,780 pursuant to a rental agreement with a
purchase option in Nye County, Nevada.
On
February 10, 2021, the Company issued 1,021,338 common shares with a fair value of $3,870,871 for the conversion of $520,000
of notes payable, $20,111 of accrued interest, and $18,836,067 of derivative liability resulting in a gain on settlement of $17,682,556.
On
February 10, 2021, the Company issued 379,441 common shares with a fair value of $1,457,055 for the conversion of $302,500 of
notes payable, $1,042 of accrued interest, and $598,765 of derivative liability resulting in a gain on settlement of $71,996.
On
March 5, 2021, the Company issued 2,000,000 common shares to officers and directors of the Company with a fair value of $4,060,000 for
services.
On
March 31, 2021, the Company issued 23,585 common shares to officers and directors of the Company with a fair value of $37,500 for services.
On
April 28, 2021, the Company issued 9,090,910 common shares at $1.65 per share in a prospectus offering for proceeds of $15,000,000. As
part of the offering, the Company incurred share issuance costs of $1,300,000 which has been applied against additional paid-in capital.
On
May 18, 2021, the Company issued 349,999 common shares with a fair value of $528,298 for consulting services.
On
June 9, 2021, the Company issued 16,590 common shares with a fair value of $36,000 for consulting services.
On
June 30, 2021, the Company issued 518,205 common shares with a fair value of $1,046,500 for consulting services, which included
18,205 common shares with a fair value of $37,502 to directors of the Company for directors fees.
During
the year ended June 30, 2021, the Company issued 47,570,677 common shares pursuant to the cashless exercise of share purchase warrants
and 10,100,000 common shares pursuant to the exercise of share purchase warrants for total proceeds of $862,500. The fair value of $73,470
for the warrants exercised was transferred to common shares from additional paid-in capital. As of June 30, 2021, the Company has received
an additional $18,750 for future issuances.
On
October 23, 2020, the Company entered into an equity-line purchase agreement with Tysadco Partners LLC, a Delaware limited company (“Tysadco”)
to purchase up to $10,000,000 in Common Stock at the Company’s discretion at a discount to the market price. On April 2, 2021,
the Company entered into an additional agreement with Tysadco to purchase up to another $75,000,000 in common stock, via an equity-line,
based on a discount to market price. 750,000 common shares were issued under the latter contract terms as a “share commitment fee”
with a fair market value of 1,139,250, which has been applied against additional paid-in capital. Under these two share purchase agreements,
the Company issued 4,750,000 common shares for net proceeds of $9,823,451.
As
of June 30, 2021, the Company was due to issue 128,359 common shares with a fair value of $229,000 for legal and consulting
services incurred.
Nine
months ended June 30, 2020
On
October 1, 2019, the Company issued 300,000 Series A preferred stock to officers and directors of the Company for no consideration. The
preferred stock has no conversion rights, not entitled to receive dividends, carries voting rights of 1,000 votes per share of preferred
stock, and is redeemable at the option of the Company at par value of $0.001 per share.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
9. Stockholder’s
Equity (Deficit) (continued)
Nine
months ended June 30, 2020 (continued)
On
October 3, 2019, the Company issued 917,777 common shares with a fair value of $49,560 for the conversion of $30,000 of notes payable,
$2,225 of accrued interest, and $23,675 of derivative liability resulting in a gain on settlement of debt of $6,340.
On
October 8, 2019, the Company issued 577,496 common shares with a fair value of $31,185 for the conversion of $15,000 of notes payable,
$500 of fees, and $17,800 of derivative liability resulting in a gain on settlement of debt of $2,115.
On
October 10, 2019, the Company issued 2,036,114 common shares with a fair value of $97,733 for the conversion of $55,000 of notes payable,
$4,129 of accrued interest, and $47,710 of derivative liability resulting in a gain on settlement of debt of $9,106.
On
October 15, 2019, the Company issued 465,723 common shares with a fair value of $29,341 for the conversion of $12,000 of notes payable,
$500 of fees, and $18,440 of derivative liability resulting in a gain on settlement of debt of $1,599.
On
October 17, 2019, the Company issued 502,980 common shares with a fair value of $25,149 for the conversion of $13,000 of notes payable,
$500 of fees, and $13,747 of derivative liability resulting in a gain on settlement of debt of $2,098.
On
October 18, 2019, the Company issued 1,113,981 common shares with a fair value of $54,028 for the conversion of $30,000 of notes payable,
$2,350 of accrued interest, and $27,088 of derivative liability resulting in a gain on settlement of debt of $5,410.
On
October 21, 2019, the Company issued 542,526 common shares with a fair value of $29,242 for the conversion of $12,000 of notes payable,
$500 of fees, $2,061 of accrued interest, and $16,874 of derivative liability resulting in a gain on settlement of debt of $2,193.
On
October 25, 2019, the Company issued 559,768 common shares with a fair value of $27,429 for the conversion of $14,500 of notes payable,
$500 of fees, $24 of accrued interest, and $15,781 of derivative liability resulting in a gain on settlement of debt of $3,376.
On
October 25, 2019, the Company issued 481,557 common shares with a fair value of $23,596 for the conversion of $10,500 of notes payable,
$500 of fees, $1,925 of accrued interest and $13,570 of derivative liability resulting in a gain on settlement of debt of $2,899.
On
October 28, 2019, the Company issued 2,996,985 common shares for the exercise of cashless warrants.
On
October 30, 2019, the Company issued 744,949 common shares with a fair value of $36,503 for the conversion of $20,000 of notes payable,
$1,633 of accrued interest, and $19,841 of derivative liability resulting in a gain on settlement of debt of $4,972.
On
October 31, 2019, the Company issued 500,000 common shares with a fair value of $24,500 for the conversion of $9,500 of notes payable,
$500 of fees, and $16,152 of derivative liability resulting in a gain on settlement of debt of $1,652.
On
November 4, 2019, the Company issued 820,497 common shares with a fair value of $33,640 for the conversion of $20,000 of notes payable,
$1,661 of accrued interest and derivative liability of $17,362 resulting in a gain on settlement of debt of $5,383.
On
November 8, 2019, the Company issued 815,396 common shares with a fair value of $35.877 for the conversion of $6,234 of notes payable,
$1,645 of accrued interest, $13,647 of finance penalties, and $19,231 of derivative liability resulting in a gain on settlement of debt
of $4,880.
On
November 8, 2019, the Company issued 5,560,000 common shares with a fair value of $233,520 for consulting services including 1,000,000
common shares with a fair value of $42,000 to a director of the Company.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
9. Stockholder’s
Equity (Deficit) (continued)
Nine
months ended June 30, 2020 (continued)
On
November 12, 2019, the Company issued 972,587 common shares with a fair value of $39,876 for the conversion of $25,000 of notes payable,
$1,653 of accrued interest, and $20,360 of derivative liability resulting in a gain on settlement of debt of $7,137.
On
November 20, 2019, the Company issued 994,354 common shares with a fair value of $35,797 for the conversion of $20,000 of notes payable,
$1,367 of accrued interest, and $19,506 of derivative liability resulting in a gain on settlement of debt of $5,076.10.
On
November 20, 2019, the Company issued 1,986,954 common shares with a fair value of $71,531 for the conversion of $40,000 of notes payable,
$2,696 of accrued interest, and $37,954 of derivative liability resulting in a gain on settlement of debt of $9,119.
On
November 21, 2019, the Company issued 850,000 common shares with a fair value of $34,000 for the conversion of $11,825 of notes payable,
$500 of fees, and $23,375 of derivative liability resulting in a gain on settlement of debt of $1,700.
On
November 29, 2019, the Company issued 996,680 common shares with a fair value of $37,874 for the conversion of $20,000 of notes payable,
$1,417 of accrued interest, and $21,476 of derivative liability resulting in a gain on settlement of debt of $5,018.
On
December 6, 2019, the Company issued 607,477 common shares with a fair value of $20,958 for the conversion of $13,000 of notes payable
and $11,339 of derivative liability resulting in a gain on settlement of debt of $3,381.
On
December 9, 2019, the Company issued 746,269 common shares with a fair value of $25,224 for the conversion of $15,000 of notes payable
and $14,028 of derivative liability resulting in a gain on settlement of debt of $3,804.
On
December 10, 2019, the Company issued 999,524 common shares with a fair value of $32,984 for the conversion of $20,000 of notes payable,
$1,478 of accrued interest, and $16,607 of derivative liability resulting in a gain on settlement of debt of $5,101.
On
December 11, 2019, the Company issued 845,771 common shares with a fair value of $25,458 for the conversion of $17,000 of notes payable
and $13,874 of derivative liability resulting in a gain on settlement of debt of $5,416.
On
December 12, 2019, the Company issued 700,000 common shares with a fair value of $22,820 for the conversion of $9,650 of notes payable,
$500 of fees, and $14,396 of derivative liability resulting in a gain on settlement of debt of $1,726.
On
December 13, 2019, the Company issued 703,704 common shares with a fair value of $22,167 for the conversion of $10,000 of notes payable,
$3,300 of accrued interest, and $12,107 of derivative liability resulting in a gain on settlement of debt of $3,240.
On
December 13, 2019, the Company issued 822,281 common shares with a fair value of $25,902 for the conversion of $15,000 of notes payable,
$500 of fees, and $12,103 of derivative liability resulting in a gain on settlement of debt of $1,701.
On
December 16, 2019, the Company issued 2,079,180 common shares with a fair value of $62,375 for the conversion of $40,000 of notes payable,
$2,981 of accrued interest, and $33,668 of derivative liability resulting in a gain on settlement of debt of $14,274.
On
December 16, 2019, the Company issued 567,874 common shares with a fair value of $17,036 for the conversion of $7,000 of notes payable,
$500 of fees, $2,872 of accrued interest, and $7,416 of derivative liability resulting in a gain on settlement of debt of $752.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
9. Stockholder’s
Equity (Deficit) (continued)
Nine
months ended June 30, 2020 (continued)
On
December 17, 2019, the Company issued 1,047,754 common shares with a fair value of $35,624 for the conversion of $20,000 of notes payable,
$1,517 of accrued interest, and $16,552 of derivative liability resulting in a gain on settlement of debt of $2,444.
On
December 24, 2019, the Company issued 932,920 common shares with a fair value of $38,670 for the conversion of $6,650 of notes payable,
$500 of fees, and $29,558 of derivative liability resulting in a loss of settlement of debt of $1,962.
On
December 24, 2019, the Company issued 1,561,157 common shares with a fair value of $64,710 for the conversion of $25,000 of notes payable,
$1,646 of accrued interest, and $43,120 of derivative liability resulting in a gain on settlement of debt of $5,056.
On
December 27, 2019, the Company issued 896,925 common shares with a fair value of $30,047 for the conversion of $14,000 of notes payable,
$500 of fees, $133 of accrued interest, and $16,948 of derivative liability resulting in a gain on settlement of debt of $1,535.
On
December 30, 2019, the Company issued 1,164,572 common shares with a fair value of $32,608 for the conversion of $18,500 of notes payable,
$500 of fees, and $14,929 of derivative liability resulting in a gain on settlement of debt of $1,321.
On
January 2, 2020, the Company issued 2,316,826 common shares with a fair value of $81,090 for the conversion of $40,000 of note payable,
$3,167 of accrued interest, and $49,831 of derivative liability resulting in a gain on settlement of debt of $11,908.
On
January 2, 2020, the Company issued 1,567,942 common shares with a fair value of $54,878 for the conversion of $25,000 of note payable,
$1,708 of accrued interest, and $36,380 of derivative liability resulting in a gain on settlement of $8,210.
On
January 2, 2020, the Company issued 892,857 common shares with a fair value of $31,250 for the conversion of $15,000 of note payable
and $19,062 of derivative liability resulting in a gain on settlement of $2,812.
On
January 3, 2020, the Company issued 1,553,815 common shares with a fair value of $49,722 for the conversion of $21,500 of note payable,
$3,530 of accrued interest, $500 of fees, and $48,168 of derivative liability resulting in a gain on settlement of $2,500.
On
January 3, 2020, the Company issued 2,000,000 common shares with a fair value of $64,000 for the conversion of $25,933 of note payable,
$6,697 of accrued interest and $36,589 of derivative liability resulting in a gain on settlement of $5,219.
On
January 3, 2020, the Company issued 892,857 common shares with a fair value of $28,572 for the conversion of $15,000 of note payable
and $16,833 of derivative liability resulting in a gain on settlement of $3,261.
On
January 6, 2020, the Company issued 860,000 common shares with a fair value of $25,800 for the conversion of $11,311 of note payable,
$750 fees and $15,573 of derivative liability resulting in a gain on settlement of $1,834.
On
January 6, 2020, the Company issued 1,264,782 common shares with a fair value of $37,944 for the conversion of $20,000 of note payable,
$94 of accrued interest, $500 of fees and $19,661 of derivative liability resulting in a gain on settlement of $2,311.
On
January 6, 2020, the Company issued 1,071,429 common shares with a fair value of $32,143 for the conversion of $18,000 of note payable
and $17,815 of derivative liability resulting in a gain on settlement of $3,672.
On
January 7, 2020, the Company issued 802,381 common shares with a fair value of $24,874 for the conversion of $10,000 of note payable,
$3,622 of accrued interest and $14,098 of derivative liability resulting in a gain on settlement of $2,846.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
9.
|
Stockholder’s
Equity (Deficit) (continued)
|
Nine
months ended June 30, 2020 (continued)
On
January 7, 2020, the Company issued 1,569,981 common shares with a fair value of $48,669 for the conversion of $25,000 of note payable,
$1,743 of accrued interest and $27,445 of derivative liability resulting in a gain on settlement of $5,519.
On
January 10, 2020, the Company issued 1,395,332 common shares for a fair value of $35,581 for the conversion of $20,000 of note payable,
$1,014 of accrued interest and $21,671 of derivative liability resulting in a gain on settlement of $7,104.
On
January 13, 2020, the Company issued 1,938,768 common shares for a fair value $52,347 for the conversion of $30,000 of note payable,
$2,142 of accrued interest and $26,911 of derivative liability resulting in a gain on settlement of $6,706.
On
January 14, 2020, the Company issued 1,340,000 common shares for a fair value of $45,560 for the conversion of $17,306 of note payable,
$750 of fees and $31,041 of derivative liability resulting in a gain on settlement of $3,537.
On
January 14, 2020, the Company issued 916,963 common shares for a fair value of $31,177 for the conversion of $14,000 of note payable,
$600 of accrued interest, $500 of fees and $19,647 of derivative liability resulting in a gain on settlement of $3,570.
On
January 14, 2020, the Company issued 5,021,366 common shares for a fair value of $170,726 for the conversion of $79,067 of note payable,
$572 accrued interest and $114,349 of derivative liability resulting in a gain on settlement of $23,262.
On
January 15, 2020, the Company issued 1,500,000 common shares for a fair value of $100,470 for the conversion of $19,462 of note payable,
$750 of fees and $100,470 of derivative liability resulting in a gain on settlement of 21,212.
On
January 15, 2020, the Company issued 4,649,492 common shares for a fair value of $311,422 for the conversion of $75,000 of note payable,
$5,938 of accrued interest and $247,423 derivative liability resulting in a gain on settlement of $16,939.
On
January 15, 2020, the Company issued 2,805,479 common shares for a fair value of $187,911 for the conversion of $40,000 of note payable,
$2,082 of accrued interest and $154,571 of derivative liability resulting in a gain on settlement of $8,742.
On
January 15, 2020, the Company issued 3,232,955 common shares for a fair value of $216,543 for the conversion of $50,000 of note payable,
$3,597 of accrued interest and $168,041 of derivative liability resulting in a gain on settlement of $5,095.
On
January 16, 2020, the Company issued 3,233,793 common shares for a fair value of $181,093 for the conversion of $50,000, accrued interest
of $3,611 and derivative liability of $132,763 resulting in a gain on settlement of $5,281.
On
January 17, 2020, the Company issued 5,263,014 common shares for a fair value of $302,623 for the conversion of $75,000 of note payable,
$3,945 of accrued interest and $242,111 of derivative liability resulting in a gain on settlement of $18,433.
On
January 22, 2020, the Company issued 2,591,056 common shares for a fair value of $82,914 for the conversion of $40,000 of note payable,
$2,956 accrued interest and $53,413 of derivative liability resulting in a gain on settlement of $13,455.
On
January 23, 2020, the Company issued 1,757,077 common shares for a fair value of $70,248 for the conversion of $25,000 of note payable,
$1,295 accrued interest and $52,557 of derivative liability resulting in a gain of settlement of $8,604.
On
January 23, 2020, the Company issued 3,761,200 common shares with a fair value of $150,448 for consulting services.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
9.
|
Stockholder’s
Equity (Deficit) (continued)
|
Nine
months ended June 30, 2020 (continued)
On
January 23, 2020, the Company issued 3,475,000 common shares with a fair value of $139,000 for consulting services including 1,000,000
common shares with a fair value of $40,000 to a director of the Company.
On
January 27, 2020, the Company issued 4,679,001 common shares with a fair value of $170,784 for the conversion of $75,000 of note payable,
$6,793 of accrued interest and $150,648 of derivative liability resulting in a gain on settlement of $61,657.
On
January 27, 2020, the Company issued 2,594,407 common shares with a fair value of $94,695 for the conversion of $40,000 of note payable,
$3,011 of accrued liability and $59,353 of derivative liability resulting in a gain on settlement of $7,669.
On
January 30, 2020, the Company issued 2,596,417 common shares with a fair value of $84,383 for the conversion of $40,000, $2,683 of accrued
interest and $50,666 of derivative liability resulting in a gain on settlement of 8,966.
On
February 4, 2020, the Company issued 6,467,394 common shares with a fair value of $239,293 for the conversion of $98,000 of note payable,
$5,907 of accrued interest, $105 of fees and $166,151 of derivative liability resulting in a gain on settlement of $30,870.
On
February 5, 2020, the Company issued 2,503,957 common shares with a fair value of $113,930 for the conversion of $40,000 of note payable,
$3,589 of accrued interest and $72,495 of derivative liability resulting in a gain on settlement of $2,154.
On
February 5, 2020, the Company issued 670,000 common shares with a fair value of $30,485 for the conversion of $8,278 of note payable,
$750 of fees and $22,106 of derivative liability resulting in a gain on settlement of $649.
On
February 6, 2020, the Company issued 5,026,425 common shares with a fair value of $201,057 for the conversion of $78,630 of note payable,
$4,375 of accrued interest and $134,206 of derivative liability resulting in a gain on settlement of $16,154.
On
February 10, 2020, the Company issued 9,723,549 common shares with a fair value of $495,901 for the conversion of $150,000 of note payable,
$11,096 of accrued interest, $105 of fees and $366,278 of derivative liability resulting in a gain on settlement of $31,578.
On
February 10, 2020, the Company issued 1,118,568 common shares with a fair value of $57,047 for the conversion of $20,000 of note payable
and $37,087 of derivative liability resulting in a gain on settlement of $40.
On
February 10, 2020, the Company issued 7,834,840 common shares with a fair value of $399,577 for the conversion of $125,000 of note payable,
$14,524 of accrued interest and $269,904 of derivative liability resulting in a gain on settlement of $9,851.
On
February 11, 2020, the Company issued 2,051,298 common shares with a fair value of $137,355 for the conversion of $18,641 of note payable,
$4,564 of accrued interest, $1,500 of fees and $108,919 of derivative liability resulting in a gain on settlement of $3,731.
On
February 12, 2020, the Company issued 1,388,889 common shares with a fair value of $83,333 for the conversion of $25,000 of note payable
and $65,150 of derivative liability resulting in a gain on settlement of $6,817.
On
February 14, 2020, the Company issued 2,688,172 common shares with a fair value of $161,290 for the conversion of 50,000 of note payable,
$3,550 of accrued interest and $127,306 of derivative liability resulting in a gain on settlement of $19,566.
On
February 19, 2020, the Company issued 9,301,308 common shares with a fair value of $836,188 for the conversion of $175,000 of note payable,
$14,529 of accrued interest, $105 of fees and $238,239 of derivative liability resulting in a loss on settlement on 408,315.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
9.
|
Stockholder’s
Equity (Deficit) (continued)
|
Nine
months ended June 30, 2020 (continued)
On
February 19, 2020, the Company issued 3,643,827 common shares with a fair value of $327,580 for the conversion of $60,000 of note payable,
$5,472 of accrued interest and $327,580 of derivative liability resulting in a gain on settlement of $65,472.
On
February 24, 2020, the Company issued 10,000,000 common shares with a fair value of 400,000 for consulting services including 6,000,000
common shares with a fair value of $240,000 to three directors of the Company.
On
February 24, 2020, the Company issued 9,206,396 common shares with a fair value of $535,996 for the conversion of $175,000 of note payable,
$12,705 of accrued interest, $105 of fees and $398,306 of derivative liability resulting in a gain on settlement of $50,120.
On
February 27, 2020, the Company issued 1,313,822 common shares for the exercise of cashless warrants.
On
March 1, 2020, the Company issued 2,104,577 common shares with a fair value of $99,967 for the conversion of $35,200 of note payable,
$2,147 of accrued interest, $500 fees and $68,868 of derivative liability resulting in a gain on settlement of 3,748.
On
March 2, 2020, the Company issued 2,049,666 common shares with a fair value of $97,359 for the conversion of $35,200 of note payable,
$2,159 of accrued interest, $500 of fees and $69,374 of derivative liability resulting in a gain on settlement of $9,874.
On
March 4, 2020, the Company issued 7,910,062 common shares with a fair value of $514,154 for the conversion of $150,000 of note payable,
$11,635 of accrued interest, $105 of fees and $390,342 of derivative liability resulting in a gain on settlement of $37,928.
On
March 24, 2020, the Company issued 5,082,065 common shares with a fair value of $193,118 for the conversion of $90,000 of note payable.
$6,657 of accrued interest, $105 of fees and $127,986 of derivative liability resulting in a gain on settlement of $31,630.
On
April 7, 2020, the Company issued 5,666,272 common shares with a fair value of $214,185 for the conversion of $100,000 of note payable.
$7,781 of accrued interest, $105 of fees and $134,929 of derivative liability resulting in a gain on settlement of $28,630.
On
April 17, 2020, the Company issued 4,545,632 common shares with a fair value of $259,101 for the conversion of $80,000 of note payable.
$6,959 of accrued interest, $105 of fees and $177,250 of derivative liability resulting in a gain on settlement of $5,213.
On
April 22, 2020, the Company issued 1,544,271 common shares with a fair value of $64,859 for the conversion of $29,150 of note payable.
$1,817 of accrued interest, $500 of fees and $47,556 of derivative liability resulting in a gain on settlement of $14,164.
On
April 22, 2020, the Company issued 1,555,098 common shares with a fair value of $76,977 for the conversion of $29,150 of note payable.
$1,827 of accrued interest, $500 of fees and $58,343 of derivative liability resulting in a gain on settlement of $12,842.
On
April 29, 2020, the Company issued 2,512,923 common shares with a fair value of $150,775 for the conversion of $52,000 of note payable.
$2,817 of accrued interest, $105 of fees and $115,796 of derivative liability resulting in a gain on settlement of $19,942.
On
April 29, 2020, the Company issued 2,093,860 common shares for the exercise of cashless warrants.
On
May 20, 2020, the Company issued 5,657,363 common shares for the exercise of cashless warrants.
On
May 22, 2020, the Company issued 6,874,831 common shares with a fair value of $382,928 for consulting services and management fee.
On
June 19, 2020, the Company issued 859,259 common shares for the exercise of cashless warrants.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
9.
|
Stockholder’s
Equity (Deficit) (continued)
|
Nine
months ended June 30, 2020 (continued)
On
June 29, 2020, the Company issued 3,750,000 units for proceeds of $150,000. Each unit is comprised of one common share of the Company
and 0.8 share purchase warrants where each whole share purchase warrant can be exercised into one common share of the Company at $0.15
per share until October 31, 2024.
On
June 30, 2020, the Company issued 1,712,824 common shares as part of the settlement for the exercise of cashless warrants.
As
at June 30, 2020, the Company received share subscriptions of $2,450,000 for the future issuance of private placement units at $0.04
per unit, where each unit is comprised of one common share of the Company and 0.8 share purchase warrants where each whole share purchase
warrant can be exercised into one common share of the Company at $0.15 per share until October 31, 2024.
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
10.
|
Share
Purchase Warrants
|
|
|
|
Number
of
warrants
|
|
|
Weighted
average exercise price
$
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2019
|
|
|
8,925,334
|
|
|
|
0.09
|
|
|
Issued
|
|
|
6,522,224
|
|
|
|
0.16
|
|
|
Exercised
|
|
|
(5,610,807
|
)
|
|
|
0.09
|
|
|
Expired
|
|
|
(1,233,639
|
)
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2020
|
|
|
8,603,112
|
|
|
|
0.14
|
|
|
Issued
|
|
|
71,516,000
|
|
|
|
0.13
|
|
|
Exercised
|
|
|
(52,253,112
|
)
|
|
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2021
|
|
|
27,866,000
|
|
|
|
0.09
|
|
Additional
information regarding share purchase warrants as of June 30, 2021, is as follows:
|
|
|
Outstanding
and exercisable
|
|
Range of
Exercise Prices
$
|
|
Number
of
Warrants
|
|
|
Weighted
Average Remaining Contractual Life (years)
|
|
|
|
|
|
|
|
|
|
|
|
|
0.075
|
|
|
25,750,000
|
|
|
|
3.3
|
|
|
0.15
|
|
|
500,000
|
|
|
|
4.3
|
|
|
0.25
|
|
|
1,616,000
|
|
|
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,866,000
|
|
|
|
3.3
|
|
|
11.
|
Supplemental
Disclosures
|
|
|
|
June
30,
2021
$
|
|
|
June
30,
2020
$
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
63,216
|
|
|
|
64,973
|
|
|
Income
taxes paid
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount on convertible
debenture
|
|
|
-
|
|
|
|
396,893
|
|
|
Beneficial Conversion Feature
|
|
|
271,000
|
|
|
|
-
|
|
|
Original issuance discount
on convertible debentures
|
|
|
51,000
|
|
|
|
149,300
|
|
|
Preferred shares issued
to officers and directors
|
|
|
200
|
|
|
|
300
|
|
|
Common shares issued for
deposit for acquisition of property
|
|
|
271,780
|
|
|
|
–
|
|
|
Common
shares issued for settlement of convertible debt
|
|
|
8,313,393
|
|
|
|
9,313,911
|
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
The
Company has no income tax provision for the twelve months ended June 30, 2021 and nine months ended June 30, 2021.
The statutory rate of 21% for U.S. federal income tax is the only applicable tax rate used for the twelve
months ended June 30, 2021 and nine months ended June 30, 2021. The statutory rate differs from the Company’s
current year provision due to the following:
|
|
|
June
30,
2021
$
|
|
|
June
30,
2020
$
|
|
|
|
|
|
|
|
|
|
|
Net loss before taxes
|
|
|
41,760,064
|
|
|
|
13,318,408
|
|
|
Statutory rate
|
|
|
21
|
%
|
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Computed expected tax recovery
|
|
|
8,769,613
|
|
|
|
2,796,866
|
|
|
Change in fair value of derivative liabilities
|
|
|
(4,127,612
|
)
|
|
|
(1,047,095
|
)
|
|
Gain/loss on settlement of debt
|
|
|
3,923,489
|
|
|
|
250,207
|
|
|
Stock-based compensation
|
|
|
(6,164,291
|
)
|
|
|
–
|
|
|
Net operating loss adjustment
|
|
|
(172,322
|
)
|
|
|
–
|
|
|
Change in valuation allowance
|
|
|
(1,625,555
|
)
|
|
|
(1,359,591
|
)
|
|
Other permanent tax
adjustments
|
|
|
(603,322
|
)
|
|
|
(640,387
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
–
|
|
|
|
–
|
|
As
of June 30, 2021, the Company had accumulated $32,341,523 of net operating losses (NOL) carried forward to offset taxable
income in future years. The Company currently has $7,049,590 of unused NOL’s that are set to begin to expire in 2036 to 2038, with
the remainder of $25,291,933 having no expiration date.
The
significant components of deferred income tax assets and liabilities at June 30, 2021 and 2020 after applying enacted corporate income
tax rates are as follows.
|
|
|
2021
$
|
|
|
2020
$
|
|
|
|
|
|
|
|
|
|
|
Net operating losses carried forward
|
|
|
6,791,720
|
|
|
|
5,166,165
|
|
|
Valuation allowance
|
|
|
(6,791,720
|
)
|
|
|
(5,166,165
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset
|
|
|
–
|
|
|
|
–
|
|
The
Company has a sole uncertain tax position (UTP) for stock-based compensation for services included in open tax returns beginning
with the twelve months ended September 30, 2016. The Company intends to remedy the UTP with the required information forms issued
in a timely matter prior to filing of the tax return for the twelve months ended June 30, 2021. Penalties continue to accrue on
untimely information returns, though the amount is immaterial to these financial statements.
The
unrecognized tax benefits for the Company are as follows:
|
|
|
2021
$
|
|
|
2020
$
|
|
|
|
|
|
|
|
|
|
|
Unrecognized tax benefits, beginning
of period
|
|
|
2,550,962
|
|
|
|
–
|
|
|
Increases – tax
position in current period
|
|
|
–
|
|
|
|
2,550,962
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrecognized tax benefits,
end of period
|
|
|
2,550,962
|
|
|
|
2,550,962
|
|
AMERICAN
BATTERY METALS CORPORATION
Notes
to the Consolidated Financial Statements
For
the year ended June 30, 2021 and the nine month period from October 1, 2019 to June 30, 2020
|
12.
|
Income
Taxes (continued)
|
Under
Section 382 and 383 of the Internal Revenue Code of 1986, as amended, the Company’s ability to utilize carryforwards and other
tax attributes such as foreign tax credits, in any taxable year may be limited if the Company experiences, or has experienced, an “ownership
change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders, who
own at least 5% of the Company’s stock, increase their ownership percentage by more than 50 percentage points over their lowest
ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. The Company may, in the future
experience one or more additional Section 382 “ownership changes.”
The
CARES Act was enacted March 27, 2020. Among the business provisions, the CARES Act provided for various payroll tax incentives, changes
to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified
improvement property. Additionally, the Consolidated Appropriations Act of 2021 was signed on December 27, 2020, which provided additional
COVID-19 relief provisions for businesses. The Company has evaluated the impact of both the Acts and has determined that any impact is
not material to its financial statements.
We
file U.S. income tax returns with varying statutes of limitations. The tax returns for years ended September 30, 2016, to June
30, 2021, remain open to examination due to the carryover of unused NOL carryforwards and tax credits. The Company is not under examination
by any tax authority as of June 30, 2021.
The
Company has incurred tax penalties of $40,000 for the twelve months ending June 30. 2021. The expense has been presented within the consolidated
statements of operations, general and administrative expenses. No tax penalties were incurred during the nine months ended June 30. 2020.
The Company is currently working on remedying the penalties given the reasonable cause of the related filings.
From
time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may
harm business. Management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate,
a material adverse effect on our business, financial condition, or operating results.
On
July 9, 2021, the Company purchased 173AF of water rights in basin 76, Fernley, NV for $2,172,750, to be used at the Company’s
discretion.
On
July 21, 2021, the Company issued 10,000,000 restricted shares of common stock as a result of Series C preferred share conversion.
The shareholder in receipt of these shares is JB People and Planet Fund, of which, David Batstone is indirectly a 5.161% owner.
On
July 23, 2021, the Company purchased 11.55 acres of industrial-zoned land in Fernley, Nevada for $1,300,000. The Company intends to construct
a supplemental storage facility for pilot plant feedstock on this site.
On
August 25, 2021, the Board agreed to redeem all of the 500,000 shares of super voting Series A Preferred Shares held by its directors
at par value ($0.001 per share) according to the redemption provisions set forth in the Designation of Series A Preferred Shares. The
redemption was taken in connection with certain corporate governance changes of the Company being taken to facilitate its listing on
the NASDAQ stock exchange.
On
September 27, 2021, the Company entered into a definitive securities purchase agreement with a U.S.-based
institutional asset manager for the purchase and sale of approximately $39,100,000 in securities, before deducting transaction fees
and expenses. In this transaction, the Company sold an aggregate of 25,389,611 shares of its 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. The net proceeds received by the Company from this transaction is to be used for construction and commissioning of its
Nevada-based 20,000 metric tonne per year battery recycling plant as well as for working capital purposes.