ABML American Battery Technology Company (QX)

Item 1.01 Entry into a Material Definitive Agreement.

Following the March 7, 2023, announcement that American Battery Technology Company (the “Company”) executed a term sheet with global marketing and supply chain platform TechMet-Mercuria for a $20 non-dilutive pre-payment for the purchase of its recycled battery metal products, the Company entered into definitive agreements pursuant to the term sheet.

On May 17, 2023, the Company entered into a Credit Agreement (the “Credit Agreement”) with Mercuria Investments US, Inc., as agent. The Credit Agreement provides for an aggregate loan amount of up to $20 million, comprised of (i) an initial term loan in the aggregate principal amount of $6 million and (ii) delayed draw term loan commitments in an aggregate amount equal to $14 million. Borrowings under the Credit Agreement carry interest calculated as the secured overnight financing rate published on the Federal Reserve Bank of New York’s website, plus the applicable credit spread adjustment, based on the elected interest period, plus an applicable margin rate of 6%. The Credit Agreement contains various restrictions and covenants applicable to the Company. Among other requirements, the Company must maintain (i) a minimum unrestricted cash balance of $1.5 million, (ii) a minimum debt service coverage ratio of 1.25:1.00, and (iii) a total net debt to capitalization ratio of less than 100%. The Credit Agreement has a maturity of 24 months from the date of signing, and it is secured by, among other things, certain real estate owned by the Company. The Credit Agreement also contains customary events of default.

Concurrently, and included in the loan documents for the Credit Agreement, the Company entered into a Marketing Agreement (the “Marketing Agreement”) with Mercuria Energy America, LLC (“Mercuria Energy”), where the Company agreed to deliver certain products from its lithium-ion battery recycling plant for Mercuria Energy to market and sell to final customers. The Company will compensate Mercuria Energy with a marketing fee and reimbursement of customary fees and expenses associated with the transportation and sale of black mass to final customers.

The foregoing descriptions of the Credit Agreement and Marketing Agreement are qualified in their entirety by the agreements, copies of which will be filed as exhibits to the Company’s annual report on Form 10-K.