Aqua Metals, Inc.

Aqua Metals, Inc. is engaged in the development and commercialization of proprietary recycling and refining technologies for critical minerals and metals, primarily focusing on lithium-ion (Li-ion) batteries. The company's core technology, AquaRefining, is an electro-hydrometallurgical process designed to recover high-purity materials from battery and other metal-bearing feedstocks using a closed-loop system powered by electricity, aiming to reduce capital and operating expenses, emissions, hazardous waste, and reliance on conventional smelting and chemical refining methods. The company initially focused on lead-acid battery recycling from 2015 to 2019, operating a demonstration facility that achieved sustained production of recycled lead. Since 2021, Aqua Metals has expanded its focus to Li-ion battery recycling, establishing an Innovation Center in the Tahoe-Reno Industrial Center (TRIC) for research, development, and pilot-scale operations. The company has demonstrated bench-scale and pilot-scale recovery of lithium, nickel, cobalt, copper, and manganese from Li-ion battery black mass, and in 2025, refined its commercialization strategy to prioritize a simplified product slate of lithium carbonate and mixed hydroxide precipitate (MHP) to reduce capital requirements, improve early-stage operating economics, and accelerate deployment timelines.

The company's business model revolves around commercializing its Li AquaRefining technology through the development and operation of recycling facilities, as well as potential licensing, joint ventures, and strategic partnerships. Aqua Metals aims to recover high-purity materials such as lithium hydroxide or lithium carbonate, copper, nickel, cobalt, and other compounds for sale into battery supply chains or broader commodities markets. The company believes its process can produce higher yields of higher purity, and thus higher value product, compared to primary smelters and conventional hydrometallurgical methods. The AquaRefining equipment is designed to be modular, allowing for varying capacities to meet customer needs. Aqua Metals also offers an integrated software and portal called PureMetrics for tracking production and key operating metrics. The company partners with black mass producers that use non-pyro processes to align with its low-carbon objectives.

Aqua Metals did not generate revenue during the fiscal years ended December 31, 2025, and December 31, 2024, as its operations were devoted to developing and improving its Li AquaRefining battery recycling technology. Total operating expenses for the year ended December 31, 2025, were $23,331,000 ¹, a decrease of 2% from $23,847,000 ² in 2024. This was primarily driven by a $4,806,000 ³ or 67% ⁴ decrease in plant operations costs to $2,407,000 ⁵ in 2025 from $7,213,000 ⁶ in 2024, largely due to workforce reductions and decreases in professional fees and supplies. Research and development costs decreased by $262,000 ⁷ or 17% ⁸ to $1,325,000 ⁹ in 2025 from $1,587,000 ¹⁰ in 2024. Impairment and loss on disposal of property, plant, and equipment increased significantly to $9,114,000 ¹¹ in 2025 from $3,080,000 ¹² in 2024, primarily due to the sale of a facility at TRIC. General and administrative expenses decreased by $1,482,000 ¹³ or 12% ¹⁴ to $10,485,000 ¹⁵ in 2025 from $11,967,000 ¹⁶ in 2024.

The company reported a net loss of $22,646,000 ¹⁷ for the year ended December 31, 2025, compared to a net loss of $24,555,000 ¹⁸ for the year ended December 31, 2024. Basic and diluted net loss per share was $15.15 ¹⁹ in 2025, an improvement from $38.25 ²⁰ in 2024. Cash and cash equivalents totaled $10,810,000 ²¹ as of December 31, 2025, up from $4,079,000 ²² at December 31, 2024. Working capital was $8,977,000 ²³ as of December 31, 2025. Net cash used in operating activities was $10,253,000 ²⁴ in 2025, an improvement from $13,632,000 ²⁵ in 2024. Net cash provided by investing activities was $2,898,000 ²⁶ in 2025, a significant change from net cash used of $11,636,000 ²⁷ in 2024, driven by the sale of a building and equipment for $4,382,000 ²⁸ and refunded equipment deposits of $1,141,000 ²⁹. Net cash provided by financing activities was $14,086,000 ³⁰ in 2025, including $5,931,000 ³¹ from ATM sales, $903,000 ³² from ELOC sales, and $11,939,000 ³³ from a registered direct offering and warrant placement. Total liabilities as of December 31, 2025, were $4,936,000 ³⁴, down from $10,121,000 ³⁵ in 2024.

During 2025, Aqua Metals sold a five-acre parcel of land with an existing building at TRIC, which was intended for its Li AquaRefining recycling campus, for total net proceeds of approximately $4,064,000 ³⁶. This decision was driven by a change in the company's priorities and capital allocation plans. The company also expanded its feedstock diversification strategy to include the evaluation of polymetallic deep-sea nodules using its AquaRefining technology, entering into MOUs with Impossible Metals Inc. and MOBY Robotics Inc. for exploratory collaboration and testing. In February 2025, the company announced a phased operational strategy to increase lithium carbonate output by deferring the conversion of nickel and cobalt into metal form to a later phase, aiming to simplify the initial product portfolio to lithium carbonate and MHP. The company also repaid its $1,500,000 ³⁷ bridge loan and a $3,000,000 ³⁸ loan from Summit Investment Services, LLC in 2025.

Aqua Metals has not provided specific revenue, margin, or EPS guidance for the upcoming period in this filing. The company explicitly states that it expects to continue incurring losses for the foreseeable future.

The company's primary growth area is the commercialization of its Li AquaRefining technology for lithium-ion battery recycling. This involves the development and operation of recycling facilities, as well as potential licensing, joint ventures, and strategic partnerships. The company's refined commercialization strategy prioritizes a simplified product slate, including lithium carbonate and mixed hydroxide precipitate (MHP), with the objective of reducing capital requirements, improving early-stage operating economics, and accelerating deployment timelines. This phased operational strategy defers the conversion of nickel and cobalt into metal form to a later phase. The company believes its process can enable the domestic recovery of materials such as lithium, nickel, cobalt, copper, and manganese for reuse in battery manufacturing and other industrial supply chains.

Another growth vector involves the evaluation of additional feedstocks and applications for its AquaRefining technology. This includes exploratory initiatives related to polymetallic nodules and other sources of critical minerals. During the third quarter of 2025, the company entered into an MOU with Impossible Metals Inc. to explore collaboration on a domestic, environmentally responsible supply chain for critical minerals recovered from deep-sea nodules. In November 2025, an MOU was signed with MOBY Robotics Inc. to evaluate robotic harvesting and precision sorting of nodules and to conduct bench-scale AquaRefining testing of nodule-derived materials. These initiatives are currently in the evaluation stage to assess technical and economic feasibility, and no commercial-scale operations have commenced.

Operationally, Aqua Metals is focused on further advancing its Li AquaRefining technology, qualifying products, and evaluating commercial deployment opportunities, including site selection, strategic partnerships, and financing alternatives. The company's strategy to simplify its initial product portfolio to lithium carbonate and MHP is expected to reduce initial capital expenditures, increase early production volumes, further de-risk initial operations, and improve near-term revenue and operating margins, supporting improved payback on the remaining capital to be financed. The company also emphasizes its ability to conduct battery recycling operations with less regulatory cost and burden than smelting operators due to the nature of its process, and a key initiative is to educate regulators and the public on the environmental benefits of AquaRefining.

Regarding capital allocation, Aqua Metals is actively seeking additional capital to fund its current level of ongoing costs over the next 12 months and to move forward with its business strategy, including the development of its first-of-a-kind lithium battery recycling facility. The company intends to acquire necessary capital through debt financing or the sale of equity. During the year ended December 31, 2025, the company issued 836,219 ³⁹ shares of common stock through an at-the-market (ATM) offering for net proceeds of $5,931,000 ⁴⁰, and 177,283 ⁴¹ shares of common stock through an equity-line-of-credit (ELOC) purchase agreement for net proceeds of $903,000 ⁴². On October 16, 2025, a registered direct offering of 205,213 ⁴³ shares of common stock and 928,581 ⁴⁴ pre-funded warrants, along with a concurrent private placement of 1,133,794 ⁴⁵ common stock purchase warrants, generated aggregate net proceeds of approximately $11,939,000 ⁴⁶. The company maintains an ATM offering program with an aggregate offering price of up to $50,000,000 ⁴⁷ and an ELOC facility providing for aggregate sales of up to $10,000,000 ⁴⁸ of common stock. However, the company is restricted from utilizing the Lincoln Park ELOC facility for a period of twelve months following the October 2025 registered direct offering due to variable rate transaction limitations. Research and development costs were $1,325,000 ⁴⁹ for the year ended December 31, 2025. The company does not plan to pay any cash dividends in the foreseeable future, intending to reinvest all earnings to pursue its business plan and cover operating costs.

A significant strategic development is the non-binding term sheet entered into on February 6, 2026, with Lion Energy, LLC, contemplating the acquisition of all outstanding equity interests of Lion Energy. The proposed consideration would not exceed $94.9 million ⁵⁰, consisting of $4.1 million ⁵¹ in cash and other consideration (representing prior investment), approximately $25.8 million ⁵² in Aqua Metals common stock, and up to $65 million ⁵³ in contingent earn-out consideration based on Lion Energy's post-closing revenue and EBITDA. This acquisition aims to expand the company's participation in energy storage systems, energy management software, and battery cell production through an equity stake in American Battery Factory upon closing. The transaction is subject to numerous conditions, including due diligence, definitive agreements, regulatory and stockholder approvals, and Lion Energy closing a minimum $25 million ⁵⁴ asset-based lending facility.

Aqua Metals faces several material risks. Operationally, the company has a limited operating history and limited revenue-producing operations, with its AquaRefining process being largely innovative and only demonstrated on a modest scale, making it difficult for investors to evaluate the business. There is no assurance that the company will be able to successfully apply its technology to commercial-scale lithium-ion battery recycling, or that its AquaRefined metals will meet customer certification and purity requirements. The business model, which includes licensing, joint ventures, and strategic alliances, is new and unproven, and there is no guarantee such agreements will be secured or yield expected benefits. The company will require additional financing to execute its business plan and fund operations, and there is substantial doubt about its ability to continue as a going concern within one year after the financial statements are issued, as it had cash of $10,810,000 ⁵⁵ and working capital of $8,977,000 ⁵⁶ as of December 31, 2025, but needs additional capital for ongoing costs. The proposed acquisition of Lion Energy, LLC is non-binding and subject to significant conditions, with no assurance of completion or positive impact on stockholder value, and the stock issuances involved would be highly dilutive to pre-closing stockholders. The company is also subject to a legal claim from Johnson Controls Fire Protections, LP, seeking approximately $3.5 million ⁵⁷ in attorney's fees and costs, which, if awarded, could have a material adverse effect on liquidity and require additional capital or asset liquidation. Intellectual property rights may not adequately protect the business, and processes may infringe on others' IP, leading to costly disputes. Cybersecurity risks, including system failures or breaches, could disrupt operations and harm the company's competitive position. Geopolitical and macroeconomic developments, such as global economic uncertainty, inflation, changes in interest rates, supply chain disruptions, armed conflicts, trade restrictions, and regulatory changes, could adversely affect the business. Labor issues and higher labor costs could also negatively impact operations. Expansion into international markets exposes the company to additional risks, including increased costs of enforcing IP rights, compliance with diverse regulations, and foreign currency fluctuations. U.S. government and environmental regulations, including permitting requirements and hazardous materials handling, pose risks of significant penalties, operational restrictions, or facility closures.

Management's message to shareholders conveys a tone of strategic evolution and focused development, emphasizing the transition from lead-acid battery recycling to lithium-ion battery recycling using its proprietary AquaRefining process. They highlight the technology's potential to be a cleaner, more cost-efficient, and environmentally responsible solution compared to conventional smelting and chemical-intensive methods, aiming for higher purity and yields of recovered critical minerals. A key strategic priority is the commercialization of Li AquaRefining through the development and operation of recycling facilities, alongside pursuing licensing, joint ventures, and strategic partnerships. Management has refined its commercialization strategy to prioritize a simplified product slate of lithium carbonate and mixed hydroxide precipitate (MHP) to reduce initial capital expenditures, increase early production volumes, de-risk initial operations, and improve near-term revenue and operating margins. Another strategic focus is the evaluation of additional feedstocks, such as polymetallic deep-sea nodules, to expand the applicability of the AquaRefining platform. Management explicitly states that the company expects to continue incurring losses for the foreseeable future and requires additional capital to fund ongoing operations and advance its business strategy. They intend to seek this funding through equity or debt financing. A significant forward-looking statement is the non-binding term sheet to acquire Lion Energy, LLC, with a total consideration not exceeding $94.9 million ⁵⁸, aiming to expand participation in energy storage systems and energy management software.