American Battery Materials (BLTH) Risk Factors

Our company's stock qualifies as a penny stock, as defined by Rule 15g-9 of the Securities and Exchange Commission (SEC), due to its market price being below $5.00 per share. This classification subjects our stock to regulatory restrictions imposed by the SEC and FINRA. Under SEC regulations, broker-dealers are required to comply with additional sales practice requirements when trading penny stocks with individuals who are not established customers or accredited investors. These requirements include the delivery of a standardized risk disclosure document approved by the SEC, provision of current bid and offer quotations, disclosure of broker-dealer compensation, and issuance of monthly account statements to customers holding penny stocks. Prior to executing a transaction involving penny stocks, broker-dealers must assess the suitability of the investment for the purchaser and obtain written agreement from the purchaser. Furthermore, FINRA mandates that broker-dealers must have reasonable grounds to believe that an investment is suitable for a customer before recommending it. This requirement necessitates gathering information about the customer's financial status, tax status, investment objectives, and other relevant details. FINRA's regulations regarding speculative low-priced securities create additional hurdles for broker-dealers in recommending or trading our company's common stock. These regulatory obligations may diminish the level of trading activity in the secondary market for our stock, potentially limiting investors' ability to buy and sell our stock efficiently. Investors should be aware that these regulatory constraints on penny stock trading could impact the marketability and liquidity of our common stock.

We may become involved in, named as a party to, or be the subject of, various legal proceedings, including regulatory proceedings, tax proceedings, and legal actions relating to personal injuries, property damage, property taxes, land rights, the environment, and contract disputes. The outcome of future legal proceedings cannot be predicted with certainty and may be determined adversely to us and as a result, could have a material adverse effect on our assets, liabilities, business, financial condition, or results of operations. Even if we prevail in any such legal proceeding, the proceedings could be costly, time-consuming, and may divert the attention of management and key personnel from our business operations, which could adversely affect our financial condition.

The development and adoption of new battery technologies that rely on inputs other than lithium compounds could significantly impact our prospects and future revenues. Current and next generation high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. Alternative materials and technologies are being researched with the goal of making batteries lighter, more efficient, faster charging and less expensive, and some of these could be less reliant on lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and on what time horizon. Commercialized battery technologies that use no, or significantly less, lithium could materially and adversely impact our prospects and future revenues.

Our level of profitability, if any, in future years will depend to a great degree on lithium prices and whether our properties can be brought into production. Exploration and development of lithium resources are highly speculative in nature, and it is impossible to ensure that any of our existing properties will establish reserves. Whether it will be economically feasible to extract lithium depends on a number of factors, including, but not limited to: (i) the particular attributes of the deposit, such as size, grade, and proximity to infrastructure; (ii) lithium prices; (iii) extraction, processing, and transportation costs; (iv) the willingness of lenders and investors to provide project financing; (v) labor costs and possible labor strikes; (vi) non-issuance of permits; and (vii) governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation, and reclamation and closure obligations. We are also subject to the risks normally encountered in the lithium industry, which include, without limitation: - the discovery of unusual or unexpected geological formations;- accidental fires, floods, earthquakes, severe weather, seismic activity, or other natural disasters;- unplanned power outages and water shortages;- construction delays and higher than expected capital costs due to, among other things, supply chain disruptions, higher transportation costs, and inflation;- the ability to obtain suitable or adequate machinery, equipment, or labor;- shortages in materials or equipment and energy and electrical power supply interruptions or rationing;- environmental liability; and - other unknown risks involved in the conduct of lithium exploration and operations. The nature of these risks is such that liabilities could exceed any applicable insurance policy limits or could be excluded from coverage. There are also risks against which we cannot insure or against which we may elect not to insure. The potential costs, which could be associated with any liabilities not covered by insurance or in excess of insurance coverage, or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting our future earnings, competitive position, and potentially our financial viability.