5E Advanced Materials, Inc.

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting the operating results, financial condition, liquidity and capital resources, and cash flows of our Company for the three months ended September 30, 2025 and 2024. This MD&A should be read in conjunction with, and is qualified in its entirety by, the unaudited condensed consolidated financial statements, the accompanying notes thereto and other financial information included in this Quarterly Report on Form 10-Q, and the consolidated financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on September 29, 2025 (the “Annual Report”). Except for historical information, this discussion and analysis contains various forward looking statements that involve risks, uncertainties and assumptions and other important factors, which include, but are not limited to, the risks described in our Annual Report filed with the SEC, any of which could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Additionally, you should refer to the “Cautionary Note Regarding Forward-Looking Statements.” References within this MD&A to the “Company,” “we,” “our,” and “us,” refer to 5E Advanced Materials, Inc., and its subsidiaries.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting the operating results, financial condition, liquidity and capital resources, and cash flows of our Company for the three and six months ended December 31, 2025 and 2024. This MD&A should be read in conjunction with, and is qualified in its entirety by, the unaudited condensed consolidated financial statements, the accompanying notes thereto and other financial information included in this Quarterly Report on Form 10-Q, and the consolidated financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on September 29, 2025 (the “Annual Report”). Except for historical information, this discussion and analysis contains various forward looking statements that involve risks, uncertainties and assumptions and other important factors, which include, but are not limited to, the risks described in our Annual Report filed with the SEC, any of which could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Additionally, you should refer to the “Cautionary Note Regarding Forward-Looking Statements.” References within this MD&A to the “Company,” “we,” “our,” and “us,” refer to 5E Advanced Materials, Inc., and its subsidiaries.

Previous wording

5E Advanced Materials, Inc. is a development stage company focused on becoming a vertically integrated global leader and supplier of refined borates and advanced boron derivative materials whose mission is to enable decarbonization, increase food security, and ensure domestic supply of critical materials. Our business strategy and objectives are to develop capabilities ranging from upstream extraction and product sales of borates, calcium-based co-products, and potentially other byproducts such as lithium carbonate, to downstream advanced boron material processing and development. Our vision is to safely process borates and other industrial minerals through sustainable best practices and a continuous improvement mindset. We hold 100% of the rights through ownership and lode claims filed with the United States Bureau of Land Management in the 5E Boron Americas (Fort Cady) Complex (the “Project”) located in southern California through our wholly owned subsidiary 5E Boron Americas LLC (formerly Fort Cady (California) Corporation (“5EBA”)). Our Project is underpinned by boron reserves and a lithium resource, with the borates being contained in a conventional boron mineral known as colemanite. Our facility was designated as Critical Infrastructure by the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency in 2022, and boron was added to the U.S. Department of the Interior’s 2025 Critical Minerals List on November 7, 2025. We currently operate our small-scale facility (the “SSF”) at the Project, which provides data and information necessary for us to ultimately establish a commercial-scale facility (the “Commercial Scale Facility”) at the Project.

Current wording

5E Advanced Materials, Inc. is a development stage company focused on becoming a vertically integrated global leader and supplier of refined borates and advanced boron derivative materials whose mission is to enable decarbonization, increase food security, and ensure domestic supply of critical materials. Our business strategy and objectives are to develop capabilities ranging from upstream extraction and product sales of borates, calcium-based co-products, and potentially other byproducts such as lithium carbonate, to downstream advanced boron material processing and development. Our vision is to safely process borates and other industrial minerals through sustainable best practices and a continuous improvement mindset. We hold 100% of the rights through ownership and lode claims filed with the United States Bureau of Land Management (the “BLM”) in the 5E Boron Americas (Fort Cady) Complex (the “Project”) located in southern California through our wholly owned subsidiary 5E Boron Americas LLC (formerly Fort Cady (California) Corporation (“5EBA”)). Our Project is underpinned by boron reserves and a lithium resource, with the borates being contained in a conventional boron mineral known as colemanite. Our facility was designated as Critical Infrastructure by the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency in 2022, and boron was added to the U.S. Department of the Interior’s 2025 Critical Minerals List on November 7, 2025. We currently operate our small-scale facility (the “SSF”) at the Project, which provides data and information necessary for us to ultimately establish a commercial-scale facility (the “Commercial Scale Facility”) at the Project.

Previous wording

During August 2025, we packaged boric acid at our Project location and shipped an ocean freight container of finished product where it completed a 20-day international transit to Taiwan to a global specialty glass manufacturing facility. Upon receipt, our product passed a handling trial and met all required specifications. During October 2025, we shipped an additional 20 tons of boric acid produced from our SSF to a potential customer for a large-scale specialty glass trial, and also shipped 1,000 pounds of boric acid for domestic boron carbide (B 4 C) production. These shipments mark important milestones as the Company advances toward commercial production. The boric acid will be delivered to potential customers for evaluation and qualification as part of our ongoing engagement with downstream users in the energy, specialty glass, and defense sectors. We believe these shipments confirm the quality of our product and the reliability of our process technology, reinforcing our confidence in our near-term production path and our mission to establish a secure, U.S. supply of boron for industries that bolster national security and drive economic export growth.

Current wording

During August 2025, we packaged boric acid at our Project location and shipped an ocean freight container of finished product where it completed a 20-day international transit to Taiwan to a global specialty glass manufacturing facility. Upon receipt, our product passed a handling trial and met all required specifications. During October 2025, we shipped an additional 20 tons of boric acid produced from our SSF to a potential customer for a large-scale specialty glass trial, and during December of 2025 we were notified that the boric acid had been dispatched into the glass furnace. We also shipped 1,000 pounds of boric acid for domestic boron carbide (B 4 C) production. These shipments mark important milestones as the Company advances toward commercial production. We believe these shipments confirm the quality of our product and the reliability of our process technology, reinforcing our confidence in our near-term production path and our mission to establish a secure, U.S. supply of boron for industries that bolster national security and drive economic export growth.

Previous wording

On August 27, 2024, we completed an offering (the “August 2024 Equity Offering”) of (i) 231,884 shares (the “Shares”) of our common stock, par value $0.01 per share (“Common Stock”), (ii) Series A warrants to purchase up to an aggregate of up to 231,885 shares of Common Stock (the “Series A Warrants”) and (iii) Series B warrants to purchase an aggregate of 231,885 shares of Common Stock (the “Series B Warrants”, and collectively with the Series A Warrants, the “2024 Warrants”). The Shares and 2024 Warrants were offered and sold on a combined basis for consideration equating to $17.25 for one Share and two 2024 Warrants. The exercise price for each of the 2024 Warrants is $18.3563 per share.

Current wording

On August 27, 2024, we completed an offering (the “August 2024 Equity Offering”) of (i) 231,884 shares (the “Shares”) of our common stock, par value $0.01 per share (“Common Stock”), (ii) Series A warrants to purchase up to an aggregate of up to 231,885 shares of Common Stock (the “Series A Warrants”) and (iii) Series B warrants to purchase an aggregate of 231,885 shares of Common Stock (the “Series B Warrants”, and collectively with the Series A Warrants, the “2024 Warrants”). The Shares and 2024 Warrants were offered and sold on a combined basis for consideration equating to $17.25 for one Share and two 2024 Warrants. The exercise price for each of the 2024 Warrants is $18.3563 per share. The net proceeds to us for the August 2024 Equity Offering were approximately $3.0 million after deducting placement agent fees and other offering expenses.

Previous wording

On September 16, 2024, we entered into a third amendment (“Amendment No. 3”) to a January 2024 amended and restated note purchase agreement (as described in Note 7-Debt, of Part I, Item 1 of this Quarterly Report, the “January 2024 Amended and Restated Note Purchase Agreement”) and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as convertible notes issued in June of 2024 (as described in Note 7–Debt of Part I, Item 1 of this Quarterly Report, the “June 2024 Notes”), in an aggregate principal amount of $6.0 million (the “September 2024 Notes”) to Bluescape Special Situations IV (“Bluescape”), Meridian Investments Corporation (“Meridian”) and Ascend Global Investment Fund SPC for and on behalf of Strategic SP (together with Meridian, “Ascend”), and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 3 (the “September 2024 Amended and Restated Note Purchase Agreement”). The net proceeds to us for the September 2024 Notes were approximately $5.5 million after deducting issuance costs and fees payable by us.

Current wording

On September 16, 2024, we entered into a third amendment (“Amendment No. 3”) to a January 2024 amended and restated note purchase agreement (as described in Note 7-Debt, of Part I, Item 1 of this Quarterly Report, the “January 2024 Amended and Restated Note Purchase Agreement”) and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as convertible notes issued in June of 2024 (as described in Note 7–Debt of Part I, Item 1 of this Quarterly Report, the “June 2024 Notes”), in an aggregate principal amount of $6.0 million (the “September 2024 Notes”) to Bluescape Special Situations IV (“Bluescape”), Meridian Investments Corporation (“Meridian”) and Ascend Global Investment Fund SPC for and on behalf of Strategic SP (together with Meridian, “Ascend”), and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 3 (the “September 2024 Amended and Restated Note Purchase Agreement”). The net proceeds to us for the September 2024 Notes were approximately $5.5 million after deducting issuance costs and fees.

Previous wording

On January 14, 2025, we entered into a fourth amendment (“Amendment No. 4”) to the January 2024 Amended and Restated Note Purchase Agreement and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as the September 2024 Notes, in an aggregate principal amount of $5.0 million (the “January 2025 Notes” and, together with the August 2022 Notes, the June 2024 Notes and the September 2024 Notes, the “Convertible Notes”) to Bluescape and Ascend, and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 4 (as amended, the “Amended and Restated Note Purchase Agreement”). The Amended and Restated Note Purchase Agreement also extended the date to which we were required to comply with a financial covenant to maintain a cash balance of at least $7.5 million from December 31, 2024 to March 31, 2025. The net proceeds to us for the January 2025 Notes were approximately $4.7 million after deducting issuance costs and fees payable by us.

Current wording

On January 14, 2025, we entered into a fourth amendment (“Amendment No. 4”) to the January 2024 Amended and Restated Note Purchase Agreement and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as the September 2024 Notes, in an aggregate principal amount of $5.0 million (the “January 2025 Notes” and, together with the August 2022 Notes, the June 2024 Notes and the September 2024 Notes, the “Convertible Notes”) to Bluescape and Ascend, and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 4 (as amended, the “Amended and Restated Note Purchase Agreement”). The Amended and Restated Note Purchase Agreement also extended the date to which we were required to comply with a financial covenant to maintain a cash balance of at least $7.5 million from December 31, 2024, to March 31, 2025. The net proceeds to us for the January 2025 Notes were approximately $4.7 million after deducting issuance costs and fees.

Previous wording

the issuance by us to Ascend and Bluescape of warrants on March 13, 2025 that expire March 13, 2026 to purchase up to 5,632,692 shares of Common Stock, at a price per share equal to the Subscription Price; and

Current wording

the issuance by us to Ascend and Bluescape of warrants on March 13, 2025, that expire March 13, 2026 to purchase up to 5,632,692 shares of Common Stock, at a price per share equal to the Subscription Price (the “Restructuring Warrants”); and

Previous wording

On August 21, 2025, we entered into an underwriting agreement to issue and sell an aggregate of 2,374,481 shares of our Common Stock at a price of $3.50 per share (the “August 2025 Equity Offering”). The August 2025 Offering closed on August 25, 2025, and resulted in aggregate net proceeds of approximately $7.4 million after deducting underwriting discounts and commissions, and other offering expenses paid or payable by us.

Current wording

On August 21, 2025, we entered into an underwriting agreement to issue and sell an aggregate of 2,374,481 shares of our Common Stock at a price of $3.50 per share (the “August 2025 Equity Offering”). The August 2025 Offering closed on August 25, 2025, and resulted in aggregate net proceeds of approximately $7.4 million after deducting underwriting discounts and commissions, and other offering expenses.

Previous wording

EXIM Engineering Multiplier Program Application

Current wording

EXIM Engineering Multiplier Program Application and Warrant Issuance

Previous wording

During November 2025, we formally applied for a $10 million loan through the Engineering Multiplier Program (“EMP”) administered by EXIM. If approved, proceeds are expected to fund a significant portion of the Company’s FEL-3 engineering costs for its proposed commercial-scale facility, an essential step towards final investment decision and execution readiness. We continue to hold a $285 million letter of interest through EXIM’s MMIA program that has the potential to fund a portion of the anticipated costs for the proposed commercial-scale facility, the EMP application complements this letter of interest by targeting earlier-stage engineering needs. There can be no assurance that the EMP application will be approved or that any financing will be completed on the terms sought or at all.

Current wording

During November of 2025, we formally submitted an application to EXIM for a $10.0 million funding package (the “EXIM Loan”) through EXIM’s Engineering Multiplier Program (“EMP”). The EMP is a program designed to finance feasibility studies, pre-construction design, engineering, architectural and environmental services undertaken prior to the commencement of the implementation phase of a physical project, for projects that are anticipated to generate additional exports of U.S. goods and services. The Company believes the Project and the remaining costs associated with the engineering work needed prior to a final investment decision qualifies for a loan pursuant to the EMP program. We continue to hold a $285 million letter of interest through EXIM’s MMIA program that has the potential to fund a portion of the anticipated costs for the proposed commercial-scale facility, the EMP application complements this letter of interest by targeting earlier-stage engineering needs. There can be no assurance that the EMP application will be approved or that any financing will be completed on the terms sought or at all.

Previous wording

Although the August 2025 Equity Offering provided net cash proceeds of approximately $7.7 million (exclusive of related costs that remain payable as of September 30, 2025) and improved our cash position, we continue to operate under a business plan that includes reductions in certain spending, and we will need additional financing in order to continue as a going concern for a period of at least one year after the date we issue this Quarterly Report. The receipt of potential funding cannot be considered probable at this time because these plans are not entirely within management’s control as of the date of this Quarterly Report. Therefore, there exists substantial doubt regarding our ability to continue as a going concern. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding our ability to continue as a going concern. Refer to the “Going Concern” discussion within Note 1-Basis of Financial Statement Presentation of the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report and “Liquidity and Capital Resources” below for more information.

Current wording

As a pre-revenue development stage company, we are dependent on debt and equity financing transactions to fund our continued development and operational activities. While we have continued to execute a number of financing transactions, as described under the heading Financing Highlights above, each of which improved our cash position, we continue to operate under a business plan that includes reductions in certain spending, and we will need additional financing to maintain our operations and carry out our planned business objectives. The receipt of potential funding cannot be considered probable at this time because these plans are not entirely within management’s control as of the date of this Quarterly Report. Therefore, there exists substantial doubt regarding our ability to continue as a going concern. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding our ability to continue as a going concern. Refer to the “Going Concern” discussion within Note 1-Basis of Financial Statement Presentation of the unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report and “Liquidity and Capital Resources” below for more information.

Previous wording

Project expenses include drilling, plug and abandonment, site preparation, engineering (excluding amounts eligible to be capitalized), consumables, testing and sampling, hydrology, permits, surveys, certain consultants and other expenses associated with further progressing our Project. For the three months ended September 30, 2025, Project expenses decreased $398 thousand, or 26%, versus the comparable period in the prior year. The decrease was primarily the result of decreases in: (i) site-related costs ($0.3 million), and (ii) insurance costs ($0.1 million).

Current wording

Project expenses include drilling, site preparation, engineering (excluding amounts eligible to be capitalized), testing and sampling, development and testing of our wellfield, hydrology, permits, property taxes, surveys, certain consultants, certain insurance costs, and other expenses associated with further progressing our Project. For the three months ended December 31, 2025, Project expenses increased $122 thousand, or 7%, versus the comparable period in the prior fiscal year. The increase was primarily the result of an increase in development costs associated with our commercial wellfield design and testing ($0.3 million), which was offset to a lesser extent by a decrease in site-related costs ($0.2 million).

Previous wording

Small-scale facility operating costs consist of raw materials, salaries and benefits for employees that are directly responsible for the operation of the SSF, and maintenance and upkeep related to the SSF. For the three months ended September 30, 2025, Small-scale facility operating costs decreased $754 thousand, or 48%, versus the comparable period in the prior year. The decrease was primarily the result of decreases in: (i) salaries and benefits for our employees directly responsible for operating the SSF ($0.5 million), (ii) raw materials necessary to operate the SSF and produce boric acid ($0.1 million), and (iii) maintenance, upkeep and other costs incurred for the operation of the SSF ($0.2 million).

Current wording

Small-scale facility operating costs consist of raw materials, salaries and benefits for employees that are directly responsible for the operation of the SSF and wellfield, and maintenance and upkeep related to the SSF. For the three months ended December 31, 2025, Small-scale facility operating costs decreased $298 thousand, or 28%, versus the comparable period in the prior fiscal year. The decrease was primarily the result of decreases in: (i) salaries and benefits for our employees directly responsible for operating the SSF ($0.2 million), and (ii) raw materials necessary to operate the SSF and produce boric acid ($0.1 million).

Previous wording

General and administrative expenses include professional fees, costs associated with marketing, on-going SEC and public company costs, public relations, rent, salaries for administrative personnel within the Company, share based compensation, certain consultants, investor relations and other expenses. For the three months ended September 30, 2025, general and administrative expenses decreased $1.4 million, or 28%, versus the comparable period in the prior fiscal year. The decrease was primarily the result of decreases in: (i) incentive compensation related costs, inclusive of share-based compensation expense ($0.9 million), which is primarily the result of $1.1 million of share-based compensation expense recognized during the three months ended September 30, 2024 due to the acceleration of expense associated with a severance agreement with a former employee, (ii) professional and legal fees ($0.5 million), (iii) miscellaneous and travel costs as a result of cost cutting measures across the organization ($0.2 million), (iv) insurance related costs ($0.2 million), and (v) employee severance costs ($0.1 million). These decreases were offset by increases in (i) marketing and investor relation related costs ($0.4 million) and (ii) commercial consulting costs ($0.1 million)

Current wording

For the six months ended December 31, 2025, general and administrative expenses decreased $1.7 million, or 21%, versus the comparable period in the prior fiscal year. The decrease was primarily due to decreases in: (i) share based compensation ($0.9 million) which is primarily the result of prior fiscal year including approximately $1.1 million of share based compensation expense associated with the acceleration of expense pursuant to an employee severance agreement, (ii) professional fees, primarily as a result of incurring incremental legal fees in the prior fiscal year leading up to the Exchange Transaction ($0.5 million), (iii) corporate insurance costs ($0.4 million), (iv) other miscellaneous cost-cutting measures across the organization ($0.3 million), and (v) severance related costs ($0.2 million). These decreases were offset by an increase in investor relations and marketing costs ($0.6 million).

Previous wording

Depreciation and amortization relate to use of our SSF, injection and recovery wells, owned or leased vehicles, buildings and equipment and the accretion of our asset retirement obligations. For the three months ended September 30, 2025, depreciation and amortization expense increased $342 thousand, or 7%, versus the comparable period in the prior year. The increase was primarily due to the combined effect of (i) our beginning to depreciate $2.1 million of costs incurred for the horizontal sidetracks we drilled from our existing injection and recovery wells during the quarter ended September 30, 2025, and (ii) the reduction in useful life of the injection and recovery wells from 5.0 years to 3.75 years to more closely align with our operational and development plans.

Current wording

Depreciation and amortization relate to use of our SSF, injection and recovery wells, owned or leased vehicles, buildings and equipment and the accretion of our asset retirement obligations. For the three months ended December 31, 2025, depreciation and amortization expense increased $385 thousand, or 8%, versus the comparable period in the prior fiscal year. For the six months ended December 31, 2025, depreciation and amortization expense increased $729 thousand, or 7%, versus the comparable period in the prior fiscal year. These increases were primarily due to the combined effect of (i) our beginning to depreciate $2.1 million of costs incurred for the horizontal sidetracks we drilled from our existing injection and recovery wells during the quarter ended September 30, 2025, and (ii) the reduction in useful life of the injection and recovery wells from 5.0 years to 3.75 years to more closely align with our operational and development plans.

Previous wording

Interest income is derived from the investment of our excess cash and cash equivalents and reclamation bond deposits in short-term (original maturities of three months or less) investments of highly liquid treasury bills and certificates of deposit. For the three months ended September 30, 2025, interest income increased $32 thousand, or 139%, versus the comparable period in the prior fiscal year. The increase was primarily due to the combined effect of (i) improved management of idle funds, and (ii) interest income from the reclamation bond deposit account that was established during April 2025.

Current wording

Interest income is derived from the investment of our excess cash and cash equivalents and reclamation bond deposits in short-term (original maturities of three months or less) investments of highly liquid treasury bills and certificates of deposit. For the three months ended December 31, 2025, interest income increased $1 thousand, or 4%, versus the comparable period in the prior fiscal year. For the six months ended December 31, 2025, interest income increased $33 thousand, or 69%, versus the comparable period in the prior fiscal year. These increases were primarily due to interest income from the reclamation bond deposit account that was established during April 2025.

Previous wording

Other income is primarily derived from the sale of scrap and other materials. For the three months ended September 30, 2025, we did not recognize other income from the sale of scrap materials, versus $1 thousand recognized for the sale of scrap materials during the comparable period in the prior fiscal year.

Current wording

Other income is primarily derived from the sale of scrap and other materials. For the three and six months ended December 31, 2025, we did not recognize other income from the sale of scrap materials, versus $4 thousand recognized during the three and six months ended December 31, 2024.

Previous wording

Derivative gain (loss) results from changes in the fair value of the embedded conversion features relating to degressive issuance provisions originally contained in an amended and restated note purchase agreement entered into during May of 2024, and subsequently incorporated into and continue under the September 2024 Amended and Restated Note Purchase Agreement. These conversion features were deemed to be embedded derivatives requiring bifurcation and separate accounting as stand-alone derivative instruments (the “June 2024 Convertible Note Derivative” and “September 2024 Convertible Note Derivative”), each as discussed within Note 7-Debt and Note 8-Convertible Note Derivatives to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Current wording

Derivative gain (loss) results from changes in the fair value of the embedded conversion features relating to degressive issuance provisions originally contained in an amended and restated note purchase agreement entered into during May of 2024 and subsequently incorporated into and continued under the September 2024 Amended and Restated Note Purchase Agreement. These conversion features were deemed to be embedded derivatives requiring bifurcation and separate accounting as stand-alone derivative instruments (the “June 2024 Convertible Note Derivative” and “September 2024 Convertible Note Derivative”), each as discussed within Note 7-Debt and Note 8-Convertible Note Derivatives to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Previous wording

There was no unrealized derivative gain (loss) during the three months ended September 30, 2025, as the June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative each expired on December 31, 2024, prior to the beginning of such period.

Current wording

There was no unrealized derivative gain (loss) during the three and six months ended December 31, 2025, as the June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative each expired on December 31, 2024, prior to the beginning of such period.

Previous wording

The unrealized derivative gain (loss) during the three months ended September 30, 2024 was primarily due to a decrease in our stock price during the period, which resulted in a gain on the June 2024 Convertible Note Derivative. Our stock price on June 28, 2024 (the last trading day prior to the end of our 2024 fiscal year) and September 30, 2024 (the end of the prior year fiscal quarter) was $27.83 and $12.42, respectively. The observed decline in our stock price, particularly to a price below the Conversion Price for the June 2024 Notes, resulted in a decline in the value of the embedded conversion feature and a resulting derivative gain of $2.4 million. This derivative gain was offset, to a lesser extent, by a loss with respect to the September 2024 Convertible Note Derivative during the same period. The unrealized derivative loss was primarily due to an increase in our stock price from $11.50 on September 16, 2024 (the issuance date of the September 2024 Notes) to $12.42 on September 30, 2024 (the end of the prior year fiscal quarter). On December 31, 2024, upon the expiration of the degressive issuance conversion feature associated with the June 2024 Notes and September 2024 Notes, the June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative expired and the remaining aggregate fair value of such derivatives of $3.6 million was transferred to additional paid-in capital.

Current wording

The unrealized derivative gain of $1.4 million during the six months ended December 31, 2024, was primarily due to a decrease in our stock price during the period, which resulted in a gain on the June 2024 Convertible Note Derivative. Our stock price on June 28, 2024 (the last trading day prior to the end of our prior fiscal year) and December 31, 2024 (the end of the prior year fiscal quarter) was $27.83 and $14.72, respectively. The observed decline in our stock price resulted in a decline in the value of the embedded conversion feature liability and a resulting derivative gain of $2.2 million. This derivative gain was offset, to a lesser extent, by a loss with respect to the September 2024 Convertible Note Derivative during the same period. The unrealized derivative loss was primarily due to an increase in our stock price from $11.50 on September 16, 2024 (the issuance date of the September 2024 Notes) to $14.72 on December 31, 2024 (the end of the prior year fiscal quarter), resulting in an increase in the value of the embedded conversion feature liability during such period and a resulting derivative loss of $0.9 million. On December 31, 2024, the conversion features associated with the June 2024 Notes and September 2024 Notes that resulted in separate accounting expired and the remaining aggregate fair value of such derivatives of $3.6 million was transferred to additional paid-in capital.

Previous wording

Interest expense primarily related to interest expense incurred on the Convertible Notes and was net of amounts capitalized to construction-in-progress. Prior to the January 2024 Amended and Restated Note Purchase Agreement, the Convertible Notes accrued interest at a rate of 6.0% when interest was paid-in-kind through the issuance of additional notes. Subsequent to the January 2024 Amended and Restated Note Purchase Agreement, the Convertible Notes accrued interest at a rate of 10.0% when interest was paid-in-kind through the issuance of additional notes, with such rate also applying to the June 2024 Notes, September 2024 Notes and January 2025 Notes. We also recognized interest expense for the amortization of debt issuance costs and the amortization of debt discounts on the Convertible Notes. As part of the modification of the terms of our debt associated with the January 2024 Amended and Restated Note Purchase Agreement, the modified debt was recognized at fair value on our balance sheet which eliminated the prior debt discount and prior debt issuance costs that were amortized to interest expense. In connection with the Exchange Transaction on March 5, 2025, all indebtedness owed by the Company under the Amended and Restated Note Purchase Agreement was extinguished and the recognition of interest expense ceased.

Current wording

Interest expense primarily related to interest expense incurred on the Convertible Notes while such notes were outstanding and was net of amounts capitalized to construction-in-progress. Prior to the January 2024 Amended and Restated Note Purchase Agreement, the Convertible Notes accrued interest at a rate of 6.0% when interest was paid-in-kind through the issuance of additional notes. Subsequent to the January 2024 Amended and Restated Note Purchase Agreement, the Convertible Notes accrued interest at a rate of 10.0% when interest was paid-in-kind through the issuance of additional notes, with such rate also applying to the June 2024 Notes, September 2024 Notes and January 2025 Notes. We also recognized interest expense for the amortization of debt issuance costs and the amortization of debt discounts on the Convertible Notes. As part of the modification of the terms of our debt associated with the January 2024 Amended and Restated Note Purchase Agreement, the modified debt was recognized at fair value on our balance sheet which eliminated the prior debt discount and prior debt issuance costs that were amortized to interest expense. In connection with the Exchange Transaction on March 5, 2025, all indebtedness owed by the Company under the Amended and Restated Note Purchase Agreement was extinguished and the recognition of interest expense ceased.

Previous wording

For the three months ended September 30, 2025, interest expense decreased $2.1 million, versus the comparable period in the prior fiscal year. The decrease was due to the extinguishment of the Convertible Notes and recognition of interest expenses thereon.

Current wording

For the three months ended December 31, 2025, interest expense decreased $2.4 million, versus the comparable period in the prior fiscal year. For the six months ended December 31, 2025, interest expense decreased $4.6 million, versus the comparable period in the prior fiscal year. These decreases were due to the extinguishment of the Convertible Notes and recognition of interest expenses thereon.

Previous wording

Other expense relates to losses on foreign currency transactions, certain non-income related taxes and penalties. For the three months ended September 30, 2025, other expense was $4 thousand, consistent with the comparable period in the prior fiscal year.

Current wording

Other expense relates to losses on foreign currency transactions, certain non-income related taxes, and penalties. For the three months ended December 31, 2025, other expense increased $11 thousand, versus the comparable period in the prior fiscal year. For the six months ended December 31, 2025, other expense increased $10 thousand, versus the comparable period in the prior fiscal year. Such increases were primarily due to increases in fines and penalties.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $5.5 million and a working capital deficit of $1.5 million compared to $3.8 million of cash and cash equivalents and a working capital deficit of $1.8 million as of June 30, 2025. We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions may exceed insured limits. Market conditions can impact the viability of these institutions.

Current wording

As of December 31, 2025, we had cash and cash equivalents of $0.6 million and a working capital deficit of $4.8 million compared to $3.8 million of cash and cash equivalents and a working capital deficit of $1.8 million as of June 30, 2025. We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at certain of these institutions may exceed insured limits. Market conditions can impact the viability of these institutions.

Previous wording

Our predominant source of cash has been generated through equity financing from issuances of our common stock and equity-linked securities, including our previously outstanding Convertible Notes. Since inception, we have not generated revenues, and as such, have relied on equity financing and equity-linked instruments to fund our operating and investing activities. As a result of the Exchange Transaction (as defined in Note 1-Basis of Financial Statement Presentation in Item 1 of this Quarterly Report) in March of 2025, all outstanding indebtedness pursuant to the Convertible Notes was extinguished in exchange for equity interest in the Company, and the financial covenant requiring us to maintain a minimum cash balance was eliminated.

Current wording

Our predominant source of cash has been generated through equity financing from issuances of our common stock and equity-linked securities, including our previously outstanding Convertible Notes. Since inception, we have not generated revenues, and as such, have relied on equity financing and equity-linked instruments to fund our operating and investing activities. As a result of the Exchange Transaction in March of 2025, all outstanding indebtedness pursuant to the Convertible Notes was extinguished in exchange for equity interest in the Company, and the financial covenant requiring us to maintain a minimum cash balance was eliminated.

Previous wording

During fiscal year 2026, we completed the August 2025 Equity Issuance aimed at strengthening our balance sheet, to help fund mining and SSF operations. wellfield development and analysis, and advanced planning for FEL-3 engineering.

Current wording

To date, during fiscal year 2026, we have completed the August 2025 Equity Offering, the 2025 Warrant Exercise and February 2026 Equity Offering, each aimed at strengthening our balance sheet, to help fund mining and SSF operations, wellfield development and analysis, and engineering for our proposed commercial scale facility.

Previous wording

A summary of our cash flows for the three months ended September 30, 2025 and 2024 follows.

Current wording

A summary of our cash flows for the six months ended December 31, 2025 and 2024 follows.

Previous wording

Net cash used in operating activities for each of the above periods was primarily the result of general and administrative costs (exclusive of share based compensation), costs incurred in furthering the Project, and operating costs of the SSF. During the three months ended September 30, 2025, we used $4.3 million of cash for operating activities, a decrease of approximately $2.1 million or 33% compared to the comparable period in the prior fiscal year. The decrease in cash used in operations during the current period primarily results from decreases in Small-scale facility operating costs, Project expenses and General and administrative expenses, net of non-cash share-based compensation expense (refer to the discussion of period-over-period changes in Small-scale facility operating costs, Project expenses and General and administrative expenses within Results of Operations above for additional details).

Current wording

Net cash used in operating activities for each of the above periods was primarily the result of general and administrative costs (exclusive of share based compensation), costs incurred in furthering the Project, and operating costs of the SSF. During the six months ended December 31, 2025, we used $9.5 million of cash for operating activities, a decrease of approximately $2.2 million or 18% compared to the comparable period in the prior fiscal year. The decrease in cash used in operations during the current period primarily results from decreases in Small-scale facility operating costs, General and administrative expenses, net of non-cash share-based compensation expense, and Project expenses (refer to the discussion of period-over-period changes in Small-scale facility operating costs, General and administrative expenses and Project expenses within Results of Operations above for additional details).

Previous wording

Our cash flows used for investing activities primarily relate to wellfield development activities, equipment purchases, stage 2 of our front-end loading (“FEL-2”) engineering and related vendor testing related to our commercial-scale facility, and advanced planning for stage 3 of our front-end loading (“FEL-3”) engineering program. During the three months ended September 30, 2025, we used $1.4 million of cash for investing activities, an increase of approximately $1.0 million, or 262%, compared to the comparable period in the prior fiscal year. The increase in cash used in investing activities primarily results from wellfield development activities during the three months ended September 30, 2025, including the horizontal sidetracks we drilled from two of our existing injection and recovery wells.

Current wording

Our cash flows used for investing activities primarily relate to wellfield development activities, equipment purchases, stage 2 of our front-end loading (“FEL-2”) engineering and related vendor testing related to our commercial-scale facility, and advanced planning for stage 3 of our front-end loading (“FEL-3”) engineering program. During the six months ended December 31, 2025, we used $2.8 million of cash for investing activities, an increase of approximately $2.0 million, or 259%, compared to the comparable period in the prior fiscal year. The increase in cash used in investing activities primarily results from wellfield development activities, including the horizontal sidetracks we drilled from two of our existing injection and recovery wells.

Previous wording

Our cash flows from financing activities primarily relate to equity and equity-linked financing transactions to fund our business and operations. Cash flows provided by financing activities for the three months ended September 30, 2025 were the result of approximately $7.7 million of net proceeds received from the August 2025 Equity Offering, which was offset by approximately $0.2 million of costs incurred in connection with an equity offering during May of 2025 and approximately $0.1 million of taxes paid upon the vesting and release of shares for equity awards.

Current wording

Our cash flows from financing activities primarily relate to equity and equity-linked financing transactions to fund our business and operations. Cash flows provided by financing activities for the six months ended December 31, 2025 were the result of (i) approximately $7.4 million of net proceeds received from the August 2025 Equity Offering, and (ii) approximately $2.0 million of net proceeds received from the 2025 Warrant Exercise. These net cash inflows were offset by (i) approximately $0.2 million of costs paid in connection with the May 2025 Subscription, and (ii) approximately $0.1 million of taxes paid upon the vesting and release of shares for equity awards.

Previous wording

Cash flows provided by financing activities for the three months ended September 30, 2024 were the result of (i) approximately $3.1 million of net proceeds received from the August 2024 Equity Offering (as defined in Note 10-Equityin Item 1 of this Quarterly Report), after recognition of the related costs and fees (exclusive of amounts payable and accrued as of September 30, 2024), and (ii) approximately $5.7 million of proceeds received from the issuance of the September 2024 Notes (as defined in Note 7-Debtin Item 1 of this Quarterly Report), after recognition of the related costs and fees (exclusive of amounts payable and accrued as of September 30, 2024).

Current wording

Cash flows provided by financing activities for the six months ended December 31, 2024 were the result of (i) approximately $3.0 million of net proceeds received from the August 2024 Equity Offering, after recognition of the related costs and fees, (ii) approximately $5.5 million of proceeds received from the issuance of September 2024 Notes, after recognition of the related costs and fees, and (iii) approximately $0.1 million of taxes withheld and paid upon the vesting and release of shares for equity awards.

Previous wording

Our material short-term cash requirements include general and administrative expenses including recurring payroll and benefit obligations for our employees, costs necessary to further the engineering of our proposed commercial-scale facility, professional fees, operating costs for the SSF, Project related costs, payments under certain lease agreements and working capital needs. Our long-term material cash requirements from currently known obligations include future obligations to reclaim, remediate, or otherwise restore properties to a condition that existed prior to our operations, and $2.3 million primarily for raw materials for the operation of the SSF; materials, drilling and other services for the Company’s wellfield development program; engineering services and vendor tested related to the design of the proposed commercial-scale facility; environmental testing and other corporate services. Refer to the “Construction in Progress,” “Asset Retirement Obligations,” “Accounts Payable and Accrued Liabilities,” and “Commitments and Contingencies” footnotes in the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for more information on certain of these expenditures and obligations.

Current wording

Our material short-term cash requirements include general and administrative expenses including recurring payroll and benefit obligations for our employees, costs necessary to further the engineering of our proposed commercial-scale facility, professional fees, operating costs for the SSF, Project related costs, payments under certain lease agreements and working capital needs. Our long-term material cash requirements from currently known obligations include future obligations to reclaim, remediate, or otherwise restore properties to a condition that existed prior to our operations, and $2.5 million primarily for raw materials for the operation of the SSF; wellfield materials, consulting and services; engineering services and vendor testing related to the design of the proposed commercial-scale facility; environmental testing and other corporate services. Refer to the “Construction in Progress,” “Asset Retirement Obligations,” “Accounts Payable and Accrued Liabilities,” and “Commitments and Contingencies” footnotes in the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information on certain of these expenditures and obligations.

Previous wording

Optimize well-field design and operating plan in an effort to reduce future mining capital and operational expenditures through various drilling techniques such as directional, horizontal, and radial drilling;

Current wording

Optimize well-field design and operating plan in an effort to reduce future mining capital and operational expenditures, including the operation and study of our recently drilled horizontal wells;

Previous wording

Although the August 2025 Equity Offering improved our cash position, and we continue to operate under a business plan that includes reductions in certain spending, we will need additional financing within the next twelve months. Absent additional financing, we may no longer be able to meet our ongoing obligations, continue operations or achieve the milestones outlined above.

Current wording

Although the August 2025 Equity Offering, 2025 Warrant Exercise and February 2026 Equity Offering, each improved our cash position, and we continue to operate under a business plan that includes reductions in certain spending, we will need additional financing to maintain our operations and carry out our business objectives. Absent additional financing, we may no longer be able to meet our ongoing obligations, continue operations, or achieve the milestones outlined above.

Previous wording

We intend to explore different potential financing strategies to help support the growth of our business and execution of our business plan, including equity or debt financing, government funding or grants, private capital, royalty agreements or customer prepayments, the exercise of a significant portion of the warrants outstanding to acquire our Common Stock, or other strategic alliances with third parties. However, there is no assurance that we will be able to secure additional financing on adequate terms, in a timely manner, or at all.

Current wording

We intend to explore different potential financing strategies to help support the growth of our business and execution of our business plan, including equity or debt financing, government funding or grants, private capital, royalty agreements or customer prepayments, or other strategic alliances with third parties. However, there is no assurance that we will be able to secure additional financing on adequate terms, in a timely manner, or at all.

Previous wording

The receipt of any potential funding cannot be considered probable at this time because these plans are not entirely within our control as of the date of this Quarterly Report. Therefore, there exists substantial doubt regarding our ability to continue as a going concern for a period of one year after the date of this Quarterly Report. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding our ability to continue as a going concern. If the Company is unable to raise additional capital or generate cash flows necessary to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects. Refer to the “Going Concern” discussion within Note 1-Basis of Financial Statement Presentation of the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for more information.

Current wording

The receipt of any potential funding cannot be considered probable at this time because these plans are not entirely within our control as of the date of this Quarterly Report on Form 10-Q. Therefore, there exists substantial doubt regarding our ability to continue as a going concern for a period of one year after the date of this Quarterly Report on Form 10-Q. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding our ability to continue as a going concern. If the Company is unable to raise additional capital or generate cash flows necessary to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects. Refer to the “Going Concern” discussion within Note 1-Basis of Financial Statement Presentation of the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for more information.

Previous wording

A complete discussion of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. There have been no significant changes in our critical accounting policies during the three months ended September 30, 2025. Unless otherwise discussed, we believe that the impact of recently issued standards did not or will not have a material impact on our consolidated financial statements upon adoption.

Current wording

A complete discussion of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. There have been no significant changes in our critical accounting policies during the six months ended December 31, 2025. Unless otherwise discussed, we believe that the impact of recently issued standards did not or will not have a material impact on our consolidated financial statements upon adoption.