Aqua Metals, Inc.

1. Organization

Aqua Metals (NASDAQ: AQMS) is engaged in the business of applying its commercialized clean, water-based recycling technology principles to develop the clean and cost-efficient recycling solutions for lithium-ion (“Li”) batteries. Our recycling process is a hydro- and electrometallurgical technology that is an innovative, proprietary and patented process we developed and named AquaRefining. AquaRefining is a low-emissions, closed-loop recycling technology that replaces polluting furnaces and hazardous chemicals with electricity-powered chemical regeneration and electroplating to recover valuable metals and materials from spent batteries with higher purity, lower emissions, and with minimal waste. The modular “Aqualyzers” cleanly generate ultra-pure metalone atom at a time, closing the sustainability loop for the rapidly growing energy storage economy.

We are in the process of demonstrating that Li AquaRefining, which is fundamentally non-polluting, can create the highest quality and highest yields of recovered minerals from lithium-ion batteries with lower waste streams and lower costs than existing alternatives.

Our focus for the lead market is providing equipment and licensing of our lead acid battery recycling technologies in an enabler model which allows us to work with anyone in the industry globally and address the entire marketplace. Our focus for the lithium market includes operating ourfirst-of-a-kind lithium battery recycling facility, utilizing electricity to recycle instead of intensive chemical processes, fossil fuels, or high-temperature furnaces and licensing.

Reverse Stock Splits

Effective* August**4,* 2025, the Company effected aone-for-10 reverse stock split of its issued and outstanding common shares. All share and share price information set forth in this report has been adjusted retrospectively to reflect these reverse stock splits.

Liquidity and Going Concern Assessment

For thethree months ended* March 31, 2026and2025**,* the Company reported a net loss of $3,954,000 and $8,315,000, respectively, and negative cash from operations of $3,844,000 and $2,753,000, respectively. As of* March 31, 2026**,* the Company had cash and cash equivalents of approximately $6,816,000, working capital of approximately $7,479,000 and an accumulated deficit of $274,370,000. The decrease in net loss during thethree months ended* March 31, 2026* was due mainly to a non-cash impairment expense of $5,247,000 related to construction-in-progress for the facility located at TRIC. The Company hasnot generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future.

As an additional liquidity source, the Company maintains an At-the-Market (“ATM”) offering program. Under the ATM Sales Agreement with The Benchmark Company, LLC (“Benchmark”), the Company was permitted to offer and sell shares of its common stock, par value $0.001 per share, from time to time through Benchmark, acting as sales agent, with an aggregate offering price of up to $30,000,000, later increased to $50,000,000. Sales of common stock, if any, under the ATM program are deemed to be “at-the-market” offerings as defined in Rule415(a)(4) of the Securities Act of1933, as amended. During thethree months ended* March 31, 2026*, the Company sold an aggregate of 198,780 shares of common stock for net proceeds of approximately $1,295,000, after deducting commissions and offering expenses. As of* March 31, 2026*, $48,600,000 remains available for issuance under the ATM program. Further details of the agreement are included in Note11 – Stockholders’ equity.

In addition to the ATM, the Company also maintains an equity line of credit with Lincoln Park Capital Fund, LLC (“ELOC”) providing for aggregate sales of up to $10,000,000 of common stock. However, pursuant to the securities purchase agreement entered into in connection with the Company’s* October 2025registered direct offering, the Company is restricted from entering into certain variable rate transactions, which limits the Company’s ability to utilize the Lincoln Park facility for a period oftwelve* months following the closing of that transaction. The Company* mayissue additional shares under the facility in the future, subject to the terms of the agreement and applicable registration requirements. Further details of the agreement and accounting treatment are included in Note11* – Stockholders’ equity.

Management believes that there is substantial doubt about the entity’s ability to continue as a going concern withinone year after the date the financial statements are issued. Given the Company’s continuing losses and expected cash requirements, additional capital will be necessary to fund ongoing operations. While the Company intends to pursue such funding opportunities, including through the ATM, ELOC, and other potential financing arrangements, there can beno assurance that these efforts will be successful.

The accompanying condensed consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed consolidated financial statements donot include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that* may*result from uncertainty related to the Company’s ability to continue as a going concern.

2. Summary of significant accounting policies

The significant accounting policies and estimates used in preparation of the condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended* December 31, 2025*, and the notes thereto, which are included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025*, as filed with the Securities and Exchange Commission, or the SEC, on* March 31, 2026.There have beenno* material changes in the Company’s significant accounting policies during thethree months ended* March 31, 2026*.

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Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Aqua Metals, Inc. and subsidiaries (collectively, the “Company” or “Aqua Metals”) have been prepared in accordance with the interim reporting requirements of Form10-Q, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the Company's audited consolidated financial statements for the period ended* December 31, 2025*, which are included on Form10-K filed with the Securities and Exchange Commission on* March 31, 2026.Accordingly, they donot* include all the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for annual consolidated financial statements.

In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary to present fairly each of the condensed consolidated balance sheet as of* March 31, 2026*, the condensed consolidated statements of operations for thethree months ended* March 31, 2026* and* March 31, 2025*, the condensed consolidated statements of stockholders' equity for thethree months ended* March 31, 2026* and* March 31, 2025* and the condensed consolidated statements of cash flows for thethree months ended* March 31, 2026* and* March 31, 2025*, as applicable, have been made. The condensed consolidated balance sheet as of* December 31, 2025* has been derived from the Company’s audited consolidated financial statements as of such date, but it doesnot include all disclosures required by U.S. GAAP for annual presentation.

The results of operations for thethree months ended* March 31, 2026* arenot necessarily indicative of results that* maybe expected for the year ending December 31, 2026*.

Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned subsidiaries. Inter-company accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount and valuation of long-lived assets, valuation allowances for deferred tax assets, the determination of stock option expense and the determination of the fair value of stock warrants issued. Actual results could differ from those estimates.

Allowance for credit losses

The Company follows the provisions of Accounting Standards Codification (“ASC”)326, Financial Instruments - Credit Losses, to estimate expected credit losses for financial assets measured at amortized cost, including notes receivable and participation interests. ASC326 requires the use of a current expected credit loss (“CECL”) methodology, which requires management to estimate lifetime expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts.

The Company evaluates collectability by considering available information relevant to the collectability of the asset, including the financial condition of the borrower, underlying collateral values, expected repayment structure, current economic conditions, and other relevant factors. Financial assets are presented net of the allowance for credit losses in the condensed consolidated balance sheets, with changes in the allowance recognized in the condensed consolidated statements of operations. Financial assets are evaluated for expected credit losses on an individual basis when similar risk characteristics donot exist. The Company reassesses the adequacy of the allowance for credit losses at each reporting period and adjusts the allowance as necessary based on changes in facts and circumstances.

Fair value measurements

The carrying amounts of cash and cash equivalents, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate fair value due to the short-term nature of these instruments. The carrying value of short and long-term debt, and lease liabilities also approximates fair value since these instruments bear market rates of interest or are calculated using market rates of interest.None of these instruments are held for trading purposes.

Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. Athree-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

Level1. Quoted prices in active markets for identical assets or liabilities.

Level2. Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that arenot active, or other inputs that are observable, either directly or indirectly.

Level3. Significant unobservable inputs that cannot be corroborated by market data.

The asset or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.

As of* March 31, 2026* and* December 31, 2025*, the Company had a Level3 warrant liability related to freestanding warrants issued in connection with a private placement transaction that is measured at fair value on a recurring basis.

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Net loss per share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method or the if-converted method, as applicable. For purposes of this calculation, stock options, restricted stock units (RSUs) and warrants to purchase common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following shares underlying outstanding convertible notes, stock options, RSUs and warrants to purchase common stock were anti-dilutive due to a net loss in the periods presented and, therefore, were excluded from the dilutive weighted average securities computation for thethree months ended* March 31*, as indicated below:

(1) Securities are presented on a weighted average outstanding calculation as required if the securities were dilutive and adjusted to give effect to the August 4, 2025 reverse stock splits.

Segment and geographic information

Our chief operating decision maker (“CODM”) is the Chief Executive Officer. Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the CODM in deciding how to allocate resources and in assessing performance. The CODM views its operations and manages its business inone operating segment. For further discussion related to segment reporting, please refer to Note12 - Segment reporting.

Recent accounting pronouncements

Recently issued accounting pronouncements not yet adopted

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses, which introduced new guidance on disclosures of specified information about certain costs and expenses included within expenses presented on the face or the income statements, such as purchases of inventory and employee compensation. This guidance is effective for the Company for annual reporting periods beginning* January 1, 2027and interim reporting periods beginning January 1, 2028.*The Company is currently evaluating the impact that the adoption of this pronouncement will have on the Company's consolidated financial statements and disclosures.

In* September 2025,the Financial Accounting Standards Board (“FASB”) issued ASU2025*-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU amends certain aspects for the accounting and disclosure of internal-use software by replacing prescriptive project-stage guidance with a principles-based capitalization model that applies to all development approaches. Capitalization begins when management authorizes and commits to fund a project and it is probable the software will be completed and used as intended, while development uncertainty defers capitalization until resolved. The ASU also integrates website-development guidance, aligns software disclosures with those for property, plant and equipment. The amendments are effective for fiscal years beginning after* December 15, 2027,including interim periods, with early adoption permitted. The Company is evaluating the impact of this ASU and doesnot* expect a material effect on its consolidated financial statements upon adoption.

In* December 2025,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2025-12, Codification Improvements. Among other items, the update includes amendments to Topic260,* Earnings Per Share, which clarify the calculation of diluted earnings per share when an entity reports a loss from continuing operations and has contracts that* maybe settled in cash or stock and are classified as assets or liabilities. Under the amended guidance, entities are required to evaluate whether including potential common shares would have a dilutive effect by considering the combined impact on both the numerator and denominator of the diluted earnings per share calculation. The amendments in ASU2025*-12 are effective for annual reporting periods beginning after* December 15, 2026,including interim periods within those fiscal years, and are required to be applied retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this ASU and doesnot* expect a material effect on its consolidated financial statements upon adoption.

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3. Note receivable, net

On* December 1, 2025,the Company entered into an agreement with Lion Energy, LLC (“Lion Energy”) pursuant to which the Company provided $2,069,000 of short-term financing to Lion Energy. Under the arrangement, repayment was dueno* later than* December 30, 2025.As of December 31, 2025,*the entire amount remained outstanding and was recorded as a note receivable in the condensed consolidated balance sheet.

On* February 6, 2026,the Company entered into a non-binding term sheet contemplating a potential acquisition of Lion Energy and purchased a subordinated participation interest in Lion Energy’s senior secured credit facility, which finances Lion Energy’s working capital needs. Lion Energy was in default under the underlying credit facility as of March 31, 2026.*As a result of the default provisions under the underlying revolving credit facility, the participation interest has been classified as a current asset in the accompanying condensed consolidated balance sheet.

In connection with this arrangement, the Company contributed $2,100,000 which includes the original note receivable balance and approximately $31,000 of accrued interest and related costs and advanced an additional $2,000,000 to acquire the participation interest. The participation interest is subordinated to the senior secured lender and is subject to the terms and conditions of the underlying credit facility. The note accrues interest at a rate equal to the adjusted term SOFR rate plus an applicable margin and is subject to increased rates upon the occurrence of an event of default. For thethree months ended* March 31, 2026*, we accrued approximately $60,000 in interest receivable. On* May 11, 2026,we elected to terminate the Lion Energy term sheet, although we continue to pursue discussions with Lion Energy concerning a business combination on different terms. There can beno* assurance we will be able to successfully conclude any agreement with Lion Energy.

The Company evaluates the Lion Energy exposure individually due to its borrower-specific credit characteristics. The Company monitors credit quality based on Lion Energy’s operating performance, liquidity, compliance with its senior secured credit facility, collateral coverage, lender priority, and available credit support. The Company estimated expected credit losses using a probability-weighted scenario analysis that considered potential recovery outcomes, expected collateral recoveries, the senior lender’s priority claim, estimated costs to realize collateral, and available credit support. Based on this analysis, the Company recorded an allowance for credit losses of approximately $437,000 as of* March 31, 2026*. The estimate is sensitive to changes in assumptions and future developments, including the enforceability of available credit support and recoverability of Lion Energy’s inventory and accounts receivable.

The table below summarizes the allowance for credit loss balance for thethree months ended* March 31, 2026* (in thousands):

4. Inventory

Inventory consisted of the following (in thousands):

5. Property and equipment, net

Property and equipment, net, consisted of the following (in thousands):

Property and equipment depreciation expense was $197,000 and $221,000 for thethree months ended* March 31, 2026* and* March 31, 2025*, respectively. Equipment under construction is comprised of our lithium-ion battery recycling commercial equipment along with various components being manufactured or installed by the Company.

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6. Other assets

Other assets consist of the following (in thousands):

(1) See Footnote8.

7. Accrued expenses

Accrued expenses consist of the following (in thousands):

8. Leases

As of* March 31, 2026*, the Company maintainedone finance lease for equipment andtwo operating leases for real estate. The operating leases had terms of 36 and 37 months and includedone or more options to extend the duration of the agreements. These operating leases are included in "Other assets" on the Company's condensed consolidated balance sheets and represent the Company's right to use the underlying assets for the term of the leases. The Company's obligation to make lease payments are included in "Lease liability, current portion" and "Lease liability, non-current portion" on the Company's condensed consolidated balance sheets.

On* December**9,* 2025, the Company extended its operating lease for its headquarters located at5370 Kietzke Lane, Reno, NV. The lease extension was determined to be a lease modification that qualified as a change of accounting on the existing lease andnot a separate contract. As such, the Right-of-Use (“ROU”) assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.26%, which resulted in an increase of the ROU asset of $147,000 and an increase in the operating lease liabilities of $159,000.

Based on the present value of the lease payments for the remaining lease term of the Company's existing operating leases, as of* March 31, 2026*, total right-of-use assets were approximately $377,000, and operating lease liabilities were approximately $386,000.

The Company currently maintainsone finance lease for equipment. On* April 1, 2024,the Company entered into a finance lease for laboratory equipment which expires in2029.* The Company's obligation to make finance lease payments are included in "Lease liability, current portion" and "Lease liability, non-current portion" on the Company's consolidated balance sheets. As of* March 31, 2026* total finance lease liabilities were $132,000.

Information related to the Company's right-of-use assets and related lease liabilities were as follows (in thousands):

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Future maturities of lease liabilities as of* March 31, 2026* are as follows (in thousands):

9. Warrant liability

The Company accounted for the warrants to purchase 75,000 shares, issued in connection with the* December 18, 2024Securities Purchase Agreement, in accordance with applicable accounting guidance. These warrants contain provisions—such as a mandatory conversion feature upon a change in control—that preclude equity classification and were recorded as a liability. Accordingly, the Company classified the warrants as a liability at fair value and adjusts them to fair value at each reporting period. This liability is re-measured at each balance sheet date until the warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. The fair value of the warrants was estimated using the Monte-Carlo option pricing model to determine the fair value of its liability-classified warrants. These instruments are classified within Level3* of the fair value hierarchy due to the use of unobservable inputs. Key assumptions used in the valuation as of* March 31, 2026* and* December 31, 2025*, included:

The following table provides a roll forward of the Level3 warrant liability as of* December 31, 2025* and* March 31, 2026*, (in thousands):

10. Employee Retention Credit

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided an employee retention tax credit to certain employers that either (1) fully or partially suspend operations because of government orders associated with COVID-19 or (2) experience a substantial decline in income but continue to pay employees their wages. The credit is equal to50% of qualified wages paid in2020, up to a maximum of*$10,000* in qualified wages per employee for the year, and70% of qualified wages paid in2021 (through thethird quarter), up to a maximum of*$10,000* in qualified wages per employee per quarter and can be applied against payroll taxes, with any excess tax credit eligible for a cash refund. The Company’s policy is to recognize these credits based on ASC450-30, Gain Contingencies, when all uncertainties are resolved, and the income is realized. During the quarter ended* March 31, 2025,*the Company recorded government grant income of $223,000, related to the employee retention credit and $34,000 related to interest income, as interest and other income on the Condensed Consolidated Statements of Operations.

11. Stockholders’ equity

At-the-Market (“ATM”) Offering Program

On* August 22, 2024,the Company filed a prospectus supplement under its effective shelf registration statement on Form S-3 authorizing an At-the-Market (“ATM”) offering program for the sale of up to $30,000,000 of the Company’s common stock and later increased to $50,000,000. Under the ATM Sales Agreement with The Benchmark Company, LLC (“Benchmark”), acting as sales agent, the Company mayoffer and sell shares of its common stock from time to time in transactions that are deemed to be “at-the-market” offerings as defined in Rule415*(a)(4) of the Securities Act of1933, as amended. Benchmark is entitled to compensation at a rate of 2.5% of the gross proceeds from each sale of common stock under the Sales Agreement. The Company has also agreed to provide customary indemnification and contribution to Benchmark with respect to certain liabilities, including liabilities under the Securities Act. Duringthree months ended* March 31, 2026*, the Company sold 198,780 shares of common stock under the ATM program for net proceeds of approximately $1,295,000, after deducting sales commissions and offering costs.

As of* December 31, 2025,the Company is subject to the limitations of Form S-3 (the "baby shelf" rules), which limit the amount of securities it mayoffer and sell pursuant of its Form S-3 registration statement. However, in March 2026,the staff of the SEC issued interpretive guidance indicating that a company that filed a prospectus supplement for an at-the-market offering while eligible to use Form S-3 pursuant to General InstructionI.B.1* * maycontinue to offer and sell securities covered by such prospectus supplement following a Section10*(a)(3) update, even if the company subsequently becomes subject to the limitations of General InstructionI.B.6. As of* March 31, 2026*, $48,600,000 remains available for issuance under the ATM program.

Equity Line of Credit and Derivative

On* May 15, 2025,the Company entered into an equity purchase agreement granting it the right, butnot* the obligation, to sell up to$10,000,000 of common stock to Lincoln Park Capital Fund, LLC over 24 months, at a discounted purchase price. On* June 6, 2025,the Company registered 177,283 shares of common stock that the Company mayelect to issue and sell under the ELOC. Additionally, on July 22, 2025,the Company’s shareholders voted to approve, for purposes of complying with Nasdaq Listing Rule5635*(d), the potential issuance and sale of up to $10,000,000 of common stock under the ELOC. Sales under the agreement are solely at the Company’s election and subject to various additional limitations, including pricing formulas, volume caps, and ownership percentage restrictions. The contract was concluded to be a purchased put option equity derivative which doesnot meet the indexation guidance for the scope exception for contracts in a company’s own equity underASC 815‑40. As the shares are sold at fair value less a discount the Company has concluded the derivative asset doesnot have material fair value.

However, pursuant to the securities purchase agreement entered into in connection with the Company’s* October 2025registered direct offering, the Company is restricted from entering into certain variable rate transactions, which maylimit the Company’s ability to utilize the Lincoln Park facility for a period oftwelve* months following the closing of that transaction. The Company* may*issue additional shares under the facility in the future, subject to the terms of the agreement and applicable registration requirements.

Shares issued

During thethree months ended* March 31, 2026*, the Company issued 28,106 shares of common stock upon vesting of Restricted Stock Units ("RSUs") granted by the Company to management and employees, including 10,413 of reissued treasury stock. We withheld 11,792 shares to satisfy approximately $56,000 of employees’ tax obligations during thethree months ended* March 31, 2026*. We treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs in a similar manner as common stock repurchases and reported as treasury stock.

During thethree months ended* March 31, 2026*, the Company issued 4,349 shares of common stock upon vesting of RSUs granted to Board members.

During thethree months ended* March 31, 2025,the Company issued 5,835 shares of common stock upon vesting of Restricted Stock Units ("RSUs") granted by the Company to management and employees, including 2,942 of reissued treasury stock. We withheld 2,648 shares to satisfy approximately $67,000 of employees’ tax obligations during thethree* months ended* March 31, 2025.*We treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs in a similar manner as common stock repurchases and reported as treasury stock.

During thethree months ended* March 31, 2025,*the Company issued 335 shares of common stock upon vesting of RSUs granted to Board members.

During thethree months ended* March 31, 2025,*the Company issued 59,648 shares of common stock pursuant to the at the market issuance sales agreement for net proceeds of $1,214,000.

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Stock-based compensation

The stock-based compensation expense was allocated as follows (in thousands):

2019 Stock Incentive Plan

In2019, our board of directors adopted the Aqua Metals, Inc.2019 Stock Incentive Plan (the*“2019* Plan”). Initially,140,000 shares of common stock were authorized for issuance under the2019 Plan. Subsequently, on* July 22, 2025,260,000 shares of common stock were authorized and added to the plan, bringing the total shares authorized for issuance under the2019* Plan to 400,000 shares. The2019 Plan provides for the following types of stock-based awards: incentive stock options; non-statutory stock options; restricted stock; restricted stock units, or RSUs; and performance stock units, or PSUs. The2019 Plan, under which options* maybe granted to employees and directors under incentive and non-statutory agreements, requires that the option price maynot* be less than the fair value of the stock at the date the option is granted. Option awards are exercisable until their expiration, which* maynot* exceed 10 years from the grant date.

Restricted stock units

During thefirst quarter of2026, the Company granted 53,385 RSUs to employees, all of which were subject to vesting, with a grant date fair value of $296,000. The shares vest insix equal semi-annual installments over athree-year period.

During thefirst quarter of2026, the NEOs voluntarily agreed to forfeit and cancel all outstanding PSUs previously granted under the Company’s2019 Stock Incentive Plan. In accordance with ASC718, Compensation—Stock Compensation, the Company recognized approximately $121,000 remaining unamortized compensation expense associated with the cancelled PSUs.

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12. Segment reporting

Aqua Metals, Inc. hasone operating segment: sustainable metals recycling. The Company's operations are focused on the development and commercialization of AquaRefining technology for the clean and efficient recovery of valuable metals from lead-acid and lithium-ion batteries. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates financial performance at a consolidated, entity-wide level and doesnot assess operating results by individual business unit or product line. Financial results are reviewed in line with the Company’s condensed consolidated financials, and resource allocation decisions are made based on overall Company performance.

The CODM assesses performance for the segment based on net loss, which is reported on the statement of operations as net loss. The measure of segment assets is reported on the balance sheet as total assets. Significant expenses within net loss, include plant operations, research and development cost, impairment expense, loss (gain) on disposal of property, plant and equipment, and general and administrative expenses, which are each separately presented on the Company’s Condensed Consolidated Statements of Operations.

13. Commitments and contingencies

We* may,from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we maybecome party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of any future matters could materially affect our future financial position, results of operations or cash flows. We evaluate such matters in accordance with ASC450* - Contingencies, and record a liability when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible butnot probable, or if the amount cannot be reasonably estimated, we disclose the nature of the contingency and an estimate of the possible loss or range of loss, if such an estimate can be made.

In* October 2021,we filed an action against Johnson Controls Fire Protections, LP (“Defendant”) relating to its involvement in the November 2019fire at our former TRIC facility (Aqua Metals, Inc., et. al v. Johnson Controls Fire Protections, LP, Second Judicial District of the State of NevadaCV21*-01891). Our complaint alleged Defendant’s liability for a portion of the fire loss based on Defendant’s negligence, breach of contract and other causes of action in connection with Defendant’s failure to properly inspect, maintain and repair the fire suppression system in the TRIC facility. On* March 25, 2025,the Court dismissed our complaint in response to a motion for summary judgment filed by Defendant. On May 12, 2025,Defendant filed a Memorandum for Costs seeking approximately $300,000 in litigation-related costs. On May 29, 2025,Defendant filed a motion to recover its attorney’s fees and costs in the aggregate approximate amount of $3.5 million, including approximately $300,000 of costs (the same costs identified in Defendant’s Memorandum of Costs) and approximately $3.2 million of legal fees. While it is reasonably possible that a loss maybe incurred, we believe that we have a strong defense to Defendant’s claim for recovery of fees and costs, especially with regard to Defendant’s claim for legal fees, and we intend to vigorously defend against Defendant’s motion. However, should Defendant be successful in obtaining an award for all or a substantial portion of the requested amount, such outcome could have a material adverse effect on our liquidity and mayrequire us to raise additional capital or liquidate assets to satisfy any such obligation. Based on the assessment of legal counsel, management concluded that a loss isnot* probable and, accordingly, no liability has been recorded.

14. Subsequent events

On* May 11, 2026,we elected to terminate the Lion Energy term sheet, although we continue to pursue discussions with Lion Energy concerning a business combination on different terms. There can beno* assurance we will be able to successfully conclude any agreement with Lion Energy.

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