American Battery's Black-Mass Export Restrictions Reverse Gross Profit

The Tip Desk · November 13, 2026 · 3 min read

Revenue was $1.7 million in the three months ended September 30, 2026, and the company booked a $3.3 million inventory write-down after federal export controls trapped finished black mass.

American Battery Technology Company (ABAT), an integrated critical-minerals manufacturer, swung to a $3.7 million gross loss in the three months ended September 30, 2026 after a federal export restriction on black mass limited sales and built inventory, reversing the $1.3 million gross profit recorded in the three months ended June 30, 2026.

Revenue was $1.7 million, down from $8.2 million in the prior quarter. The company said the increase versus a year earlier was driven by higher processed feedstock, production throughput and product prices, but that the period was negatively impacted by the black-mass export restriction.

Cost of goods sold was $5.4 million, including a $3.3 million inventory write-down to net realizable value, compared with $4.5 million in the year-ago quarter. Excluding $0.9 million of depreciation and $0.2 million of stock-based compensation, cash cost of goods sold was $4.3 million. The company said production costs on unsold inventory were capitalized rather than recognized on sale, and that accumulated inventory carrying values exceeded estimated net realizable value.

On July 30, 2026, President Trump issued a Defense Production Act determination declaring black mass from lithium-ion battery recycling a critical material. On August 6, 2026, the Bureau of Industry and Security published a temporary final rule requiring U.S. sellers of black mass to allocate 100% of monthly sales to U.S. persons; the directive took effect August 27, 2026. The company said the restriction limited exports of finished black mass and raised inventory.

Inventory was $2.8 million at September 30, 2026, up from $0.6 million at June 30, 2026. Accounts receivable fell to $3.0 million from $7.0 million.

On September 30, 2026, the company received BIS approval for a license to export up to $100 million of recycled black mass under specified terms. It said revenue is expected to begin recovering in the second quarter as it resumes or expands activities previously constrained, with timing dependent on processing accumulated feedstock, fulfilling demand and converting finished goods into sales.

Net loss widened to $14.6 million from $10.3 million a year earlier. Operating expenses were $11.4 million. General and administrative expenses were $7.3 million, including about $3.3 million of stock-based compensation tied to fiscal 2026 executive performance awards and a long-term incentive agreement granted to the chief executive officer in the fourth quarter of fiscal 2026. Research and development expenses were $3.6 million. Exploration expenses were $0.4 million.

Cash, cash equivalents and restricted cash were $43.4 million at September 30, 2026, of which $43.3 million was unrestricted, down from $49.5 million of available cash at June 30, 2026. The company held zero debt. Cash used in operating activities was $5.0 million, compared with $7.1 million a year earlier. Investing cash use was $2.0 million, including $1.8 million for property and equipment at the recycling facility. Working capital excluding restricted cash was $44.9 million.

In September 2026, the U.S. Bureau of Land Management accepted the company’s Plan of Operations for the Tonopah Flats Lithium Project, a permitting milestone. The company remains debt-free and said it will continue to rely on share sales, debt or other financings beyond cash generated from operations and government credits and grants.