16. Equity Compensation Awards

The Company has established the 2021 Equity Incentive Plan (the “Retention Plan”) to issue shares in the effort to retain key executives, directors, and employees. The Retention Plan allows for several different types of awards to be granted, including but not limited to, restricted share units and restricted share awards, collectively referred to as “share awards”. Share awards generally have the same expense characteristics under US GAAP and generally vest over a four-year period at a rate of 25% per annum.

Under the Retention Plan, the Company is authorized to issue shares of common stock to employees and non-employees up to ten percent (10%) of the total number of shares of common stock outstanding as of December 31, 2022, on a fully diluted basis. The Company adjusts the authorized shares under the plan each December 31, while the Retention Plan remains in effect. During the three months and nine months ended March 31, 2026, the Company granted 2.2 million and 11.1 million share awards under the Retention Plan, respectively.

AMERICAN BATTERY TECHNOLOGY COMPANY

Notes to the Condensed Consolidated Financial Statements

(unaudited)

The table below reflects the share award activity for the nine months ended March 31, 2026:

 Schedule of Restricted Shares and Restricted Share Units Non-Vested

As awards are granted, for those awards subject solely to a service condition, stock-based compensation equivalent to the fair market value of the underlying common stock on the date of grant is expensed over the requisite service period, generally four years with a maximum contractual term of ten years, using the graded vesting attribution method as acceptable under ASC 718, “Compensation-Stock Compensation.” For awards that include performance conditions, compensation expense is recognized when achievement of the performance condition is considered probable and only for the portion of the requisite service period that has been rendered. The Company accounts for forfeitures as they occur. The fair value of share awards that vested during the three months and nine months ended March 31, 2026, totaled $5.6 million and $13.2 million, respectively.

For the three months ended March 31, 2026, the Company recognized $27.6 million of stock-based compensation expense, of which $24.5 million relates to fiscal year 2026 executive performance-based awards recognized in the current quarter upon finalization and approval of the performance milestones by the Board of Directors in January 2026. The expense recognized in the period was further impacted by the vesting of certain of these awards that had a previous service period effective date as of July 1, 2024, as well as a higher grant-date stock price for fiscal year 2026 awards compared to the prior year.

The Company recognized total stock-based compensation expense of $33.1 million and $12.8 million for the nine months ended March 31, 2026 and 2025, respectively. Included in the $33.1 million recognized during the nine months ended March 31, 2026 was $24.5 million related to executive performance-based awards, of which $21.4 million related to officers and directors of the Company. Included in the $12.8 million recognized during the nine months ended March 31, 2025 was $6.2 million related to executive performance-based awards, of which $5.0 million related to officers and directors of the Company.

For the nine months ended March 31, 2026 and 2025, total stock-based compensation expense included $15.2 million and $2.7 million, respectively, related to warrants awarded to officers of the Company.

As of March 31, 2026, there were approximately $21.5 million of unamortized expenses relating to outstanding equity compensation awards to be recognized over a remaining weighted-average period of 2.23 years.

The table below presents the stock-based compensation expense per respective line item on the condensed consolidated statements of operations for the three months ended March 31:

 Schedule of Stock-Based Compensation Expense

The table below presents the stock-based compensation expense per respective line item on the condensed consolidated statements of operations for the nine months ended March 31:

Executive officers and selected other key employees are eligible to receive common share performance-based awards, as determined by the board of directors. The payouts, in the form of share awards, vary based on the degree to which corporate operating objectives are met. These performance-based awards typically include a service-based requirement, which is generally four-years.