American Battery Metals Corporation (OTCQB:ABML), which is changing its name to American Battery Technology Company (ABTC), told investors Thursday that it believes recent reports from short-selling firm Spruce Point Capital Management containing “false allegations and misinformation” are responsible for a decline in the company’s share price.
American Battery called the articles and videos defamatory and believes they were released with the deliberate intent of lowering its stock value. Spruce Point acknowledges in its report that it holds a short position in the company.
The company said it intends to defend itself vigorously and it is reviewing all legal options at its disposal to hold the authors and sponsors accountable. American Battery said it is in the process of hiring a nationally recognized law firm to investigate this matter.
READ: American Battery Metals wins $4.5M DOE grant to produce battery cathode lithium hydroxide
American Battery said it denies the allegations in the reports, including an accusation that the city of Fernley, Nevada, the site of the company’s planned battery recycling pilot plant, adding that no applications or permits have been submitted to date on the company’s parcel of land.
In its statement, American Battery makes clear that it previously submitted a Conditional Use Permit application and cited a Ferney community development report from March that refers to said application. The application is currently undergoing public review, and it anticipates going before the city's planning commission and city council in the coming months.
The company also took issue with Spruce Point’s characterization of lithium demand. American Battery pointed to reporting from Bloomberg that highlighted a significant increase in demand for lithium and nickel, as well as growth in the lithium cathode market that is expected to jump by nearly $60 billion by 2024.
American Battery's proprietary extraction and recycling processes is expected to produce battery-grade lithium and nickel that can be sold directly to cathode manufacturers to tackle the growing consumer demand for electric vehicles (EVs), cell phones, personal computers and electronics that use lithium battery technology as power sources.
The report notably ignores third party endorsements of its technology, American Battery said. For instance, BASF, one of the largest cathode manufacturers in North America, selected American Battery from a pool of over 100 applicants as the winner of the Battery Recycling portion of its Circularity Challenge. The purpose of that global competition was to identify the most promising lithium-ion battery recycling technologies in the world.
Additionally, the US Department of Energy's Advanced Manufacturing Office selected American Battery and its partners for a $4.5 million grant to evolve the company's lithium extraction system design from bench-scale validations to a multi-ton per day integrated system that receives lithium-rich claystone material as feedstock and manufactures battery cathode specification lithium hydroxide as the final commercial product.
Lastly, American Battery said that Spruce Point is improperly alleging malfeasance by alleging that a member of its team is consulting for another company that the firm is short, Comstock Mining Inc (NYSEAMERICAN:LODE). While it is true that one American Battery employee previously worked at Comstock Mining, the company said it maintains no financial or operational ties and that any suggestion to the contrary is defamatory.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel