AMERICAN BATTERY MATERIALS, INC. 10-K

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock has been quoted on a tier of the OTC Markets Group, currently on the OTC Pink and previously on the OTC QB, where it is quoted under the symbol “BOXS”. The Company’s shares were quoted under the symbol UVND until February 28, 2018 when it applied for and was granted a change of symbol from “UVND”. The Company has 600,000,000 shares of common stock authorized. The last reported sales price of BoxScore’s common stock on the OTC Pink on September 24, 2021 was $0.1. Issued and Outstanding Shares The Company’s certificate of incorporation authorizes 600,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001. As of September 24, 2021, the Company had 226,604,039 shares of common stock, and no shares of preferred stock, issued and outstanding. Stockholders As of September 24, 2021, the Company had approximately 980 record holders of its common stock. This number does not include the number of persons whose shares are in nominee or in “street name” accounts through brokers. Dividend Policy The Company did not pay dividends during the years ended December 31, 2020 and 2019. BoxScore has never declared or paid any cash dividends or distributions on our common stock and intend to retain future earnings, if any, to support our operations and to finance expansion. Therefore, it does not anticipate paying any cash dividends on the common stock in the foreseeable future. Stock Transfer Agent and Warrant Agent The Company’s stock transfer agent is Corporate Stock Transfer Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209. BoxScore acts as its own warrant agent for its outstanding warrants. Recent Issuances of Unregistered Securities None. Shares Repurchased by the Registrant The Company did not purchase or repurchase any of its securities in the years ended December 31, 2020 and 2019. Securities Authorized for Issuance under Equity Compensation Plans On July 22, 2011, the Board of Directors of the Company approved the Company’s 2011 Equity Incentive Plan (the “Plan”) and on July 26, 2011, stockholders holding a majority of shares of the Company approved, by written consent, the Plan and the issuance under the Plan of 5,000,000 shares. On November 16, 2017, the Board of Directors approved an increase of 10,000,000 shares to be made available for issuance under the Plan. Accordingly, the total number of shares of common stock available for issuance under the Plan is 15,000,000 shares. Awards may be granted to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its related companies. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation includes expense charges related to all stock-based awards. Such awards include options, warrants and stock grants. Generally, the Company issues stock options that vest over three years and expire in 5 to 10 years. 8 The Company records share based payments under the provisions of FASB ASC 718. Stock based compensation expense is recognized over the requisite service period based on the grant date fair value of the awards. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model on certain assumptions. The Company estimated the expected volatility based on data used by peer group of public companies. The expected term was estimated using the simplified method. The risk-free interest rate assumption was determined using the equivalent U.S. Treasury bonds yield over the expected term. The Company has never paid any cash dividends and does not anticipate paying any cash dividends in the foreseeable future. Therefore, the Company assumed an expected dividend yield of zero. The following table sets forth information as of December 31, 2020 regarding equity compensation plans under which the equity securities are authorized for issuance. Equity Plan Compensation Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation Plans Equity compensation plans approved by securities holders (1) 2,500 $ 60 14,997,500 Total 2,500 14,997,500 (1) Pursuant to the 2011 Equity Incentive Plan, as amended. ITEM 6 - SELECTED FINANCIAL DATA This item is not applicable to us as a smaller reporting company. 9 ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS Certain statements contained herein constitute “forward-looking statements”. Except for the historical information contained herein, this report contains forward-looking statements (identified by the words “estimate,” “project,” “anticipate,” “plan,” “expect,” “intend,” “believe,” “hope,” “strategy” and similar expressions), which are based on our current expectations and speak only as of the date made. These forward-looking statements are subject to various risks, uncertainties and factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements, including, without limitation, those discussed under Part I, Item 1A “Risk Factors” in this Annual Report, and those described herein that could cause actual results to differ materially from the results anticipated in the forward-looking statements, and the following: ● Our limited operating history with our business model; ● The low cash balance and limited financing currently available to us. We may in the near future have a number of obligations that we will be unable to meet without generating additional income or raising additional capital; ● Further cost reductions or curtailment in future operations due to our low cash balance and negative cash flow; ● Our ability to effect a financing transaction to fund our operations which could adversely affect the value of our stock; ● Our limited cash resources may not be sufficient to fund continuing losses from operations; ● The failure of our products and services to achieve market acceptance; and ● The inability to compete in our market, especially against established industry competitors with greater market presence and financial resources. The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition, and should be read in conjunction with the consolidated financial statements and footnotes that appear elsewhere in this report. Overview BoxScore Brands, Inc. (formerly U-Vend Inc.) (the “Company”) formerly developed, marketed and distributed various self-serve electronic kiosks and mall/airport co-branded islands throughout North America. Due to the nationwide shutdown related to the COVID-19 pandemic, the Company spent a portion of 2020 restructuring and retiring certain corporate debt and obligations. The Company focused on implementing a new operational direction. After a thorough evaluation process, the Company found that there is a substantial long-term demand for specific commodities relating to battery and new energy technologies. This presents a timely and unique opportunity based on rising demand characteristics. By capitalizing on market trends and current sustainable energy government mandates and environmental, social, and corporate governance (ESG) initiatives, we will focus on bringing a vertically-integrated solution to market. Results of Operations For the Year Ended December 31, 2020 Compared to Year Ended December 31, 2019 Revenue For the year ended December 31, 2020, the Company had no revenue, compared to revenues of $80,233 during the year ended December 31, 2019. The decrease in revenue was due to asset sale (see note 1), resulting in no sales activity during the year ended December 31, 2020. 10 Cost of Goods Sold For the year ended December 31, 2020, the Company had no cost of goods sold compared to cost of goods sold $88,965 during the year ended December 31, 2019. The Company’s gross margin during the year ended December 31, 2019 was (11)%, The decrease in 2020 was because all inventory was liquidated during the quarter ended March 31, 2019 prior to the sale of the MiniMelts assets (see Note 1). Selling Expenses For the year ended December 31, 2020, the Company had no selling expenses, compared to $143,323 during the year ended December 31, 2019. During the year ended December 31, 2019, the Company expensed $115,000 for sponsorship and media commitment fees in connection with the Major League Baseball Properties, Inc. During the year ended December 31, 2020, the Company had no sales and there were no fees recorded under the agreement with MLB as it expired on December 31, 2019. General and Administrative Expenses General and administrative expenses for the year ended December 31, 2020 were $245,813, a decrease of $575,309 or 70%, compared to $821,122 for the year ended December 31, 2019. The decrease in general and administrative expenses was mainly due to decrease in in stock compensation expenses and professional fees as a result of our reduction in operations as we contemplated our business restructuring . Gain on Settlement of Liability During the year ended December 31, 2019, the Company recorded a gain on settlement of liabilities of $156,709. During the year ended December 31, 2020, the Company recorded a gain on settlement of liabilities of $11,000. Loss on Asset Impairment During the year ended December 31, 2019, the Company recorded asset impairment charges of $192,705. No such impairments were noted during the year ended December 31, 2020. Gain on Fair Value of Derivative Liabilities During the year ended December 31, 2019, the Company recognized a gain on the change in fair value of derivative liabilities in the amount $34,986, as compared to a loss on the change in fair value of derivative liabilities of $3,069,702 during the year ended December 31, 2020. Amortization of Debt Discount and Deferred Financing Costs Amortization of debt discount and deferred financing costs for the year ended December 31, 2019 were $171,513, compared to $4,432 for the year ended December 31, 2020. The majority of the debt discount was fully amortized at December 31, 2019, leaving only a minimal amount remaining to be amortized during 2020. At December 31, 2020, there was $0 in unamortized debt discount. Interest Expense Interest expense for the year ended December 31, 2019 was $622,797, as compared to $611,294 during the year ended December 31, 2020. Gain on Sale of Asset During the years ended December 31, 2020 and 2019, the Company sold certain equipment and recorded $12,074 and $27,465, respectively, in loss on sale of assets. 11 Net Loss As a result of the foregoing, the net loss for the year ended December 31, 2019 was $1,896,150 as compared to $3,932,313 for the year ended December 31, 2020. Liquidity and Capital Resources The accompanying consolidated financial statements have been prepared on a going concern basis. The Company had net loss of $3,932,313 during the year ended December 31, 2020, has accumulated losses totaling $18,130,455, and has a working capital deficit of $8,117,241 at December 31, 2020. These factors, among others, indicate that the Company may be unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company will need to raise additional financing in order to fund their operations for the next 12 months, and to allow the Company to continue the development of its business plans and satisfy its obligations on a timely basis. Should additional financing not be available, the Company will have to negotiate with its lenders to extend the repayment dates of its indebtedness. There can be no assurance that the Company will be able to successfully restructure its debt obligations in the event it fails to obtain additional financing. Operating Activities During the year ended December 31, 2020, the Company used $40,394 of cash in operating activities primarily as a result of the Company’s net loss of $3,932,313, offset by change in fair value of derivative liabilities of $3,069,702, loss on sale of asset of $12,074, share-based compensation of $5,772, $4,432 in amortization and accretion of debt discount, gain on settlement of liabilities of $11,000, and net changes in operating assets and liabilities of $810,939. During the year ended December 31, 2019, the Company used $751,637 of cash in operating activities primarily as a result of the Company’s net loss of $1,896,150, offset by gain on change in fair value of derivative liabilities of $34,986, loss on sale of asset of $27,465, loss on asset impairment of $192,705, share-based compensation of $285,379, $100,188 in depreciation expense, $171,513 in amortization and accretion of debt discount, loss on default of convertible notes of $42,625, gain of settlement of debt $156,709 and net changes in operating assets and liabilities of $516,333. Investing Activities During the year ended December 31, 2020, investing activities provided $18,000 in cash in proceeds from sale of property and equipment. During the year ended December 31, 2019, investing activities provided $350,000 in cash in proceeds from sale of property and equipment. The Company does not anticipate any investing purchasing activities in the near future. Financing Activities During the year ended December 31, 2020, financing activities provided $45,980, resulting from $76,500 in proceeds from convertible notes, $15,000 repayments of promissory notes and $15,520 in repayments of capital lease obligations. During the year ended December 31, 2019, financing activities provided $338,559, resulting from $270,000 in proceeds from promissory notes and $619,303 in proceeds from convertible notes. The Company used $296,508 in repayments of promissory notes, $64,300 in repayment of convertible notes, and $189,936 in repayments of capital lease obligations. 12 Off-Balance Sheet Arrangements The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, an effect on its financial condition, financial statements, revenues or expenses. Inflation Although the Company’s operations are influenced by general economic conditions, it does not believe that inflation had a material effect on its results of operations during the last two years as it is generally able to pass the increase in material and labor costs to its customers or absorb them as it improves the efficiency of its operations. Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. The consolidated financial statements as of December 31, 2020 describe the significant accounting policies and methods used in the preparation of the consolidated financial statements. Actual results could differ from those estimates and be based on events different from those assumptions. Future events and their effects cannot be predicted with certainty; estimating therefore, requires the exercise of judgment. Thus, accounting estimates change as new events occur, as more experience is acquired or as additional information is obtained. The following critical accounting policies are impacted significantly by judgments, assumptions and estimates used in the preparation of our consolidated financial statements: Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The three levels of valuation hierarchy are defined as follows: ● Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis ● Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instruments, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace. ● Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Level 3 instruments include derivative warrant instruments. The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Certain warrants issued by the Company contain terms that result in the warrants being classified as derivative liabilities for accounting purposes. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 13