Aqua Metals, Inc.
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 30, 2026
AQMS$1.26+7.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001437749-26-017038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0001437749-26-025091
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 43 current paragraphs.
13 unchanged; 20 reworded; 10 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Aqua Metals is commercializing a domestic critical minerals processing platform centered on its proprietary AquaRefining™ technology. The Company’s near-term commercialization strategy is focused on Project Headwaters ARC, a planned phased critical minerals processing campus designed to begin with commercially proven lithium iron phosphate (“LFP”) battery preprocessing and expand over time through the integration of AquaRefining™ into higher-value critical mineral production.
Current report
The Company’s phased commercialization strategy is intended to reduce execution risk by establishing initial processing operations and commercial relationships before integrating AquaRefining™ into the project. Aqua Metals believes this staged approach supports disciplined capital deployment while creating a scalable platform capable of expanding beyond LFP into additional battery chemistries and selected critical mineral feedstocks over time.
Current report
AquaRefining™ is Aqua Metals’ patented hydrometallurgical and electrochemical process designed to recover valuable battery materials while reducing one-time-use process chemicals, minimizing waste generation and supporting a safer, lower-cost processing architecture compared with conventional approaches. The Company believes AquaRefining™ can become an important differentiator as it advances the commercial deployment of Project Headwaters ARC.
Current report
Project Headwaters ARC is intended to serve as the Company’s first commercial critical minerals processing campus and the initial node in a broader domestic processing platform. During the quarter, the Company continued advancing multiple project development workstreams, including site diligence, engineering, equipment evaluation, commercial discussions, project financing alternatives, incentive programs and permitting activities. The timing and scope of the project remain subject to financing, commercial agreements, permitting, engineering and Board approval.
Current report
The Company continues to prioritize preserving financial flexibility while advancing Project Headwaters ARC through disciplined, milestone-based capital deployment. Consistent with this strategy, management is evaluating multiple potential sources of capital, including project equity, equipment financing, real estate financing, working capital facilities and government incentives, with the objective of matching each capital source to the appropriate project use.
Current report
The Company also continues to advance its broader technology platform, which is intended to support future processing of additional lithium-ion battery chemistries and selected critical mineral feedstocks as commercial opportunities develop.
Current report
For the three and six months ended June 30, 2025, the Company recognized a non-cash impairment and loss on disposal of property, plant and equipment of $3,765,000 and $9,012,000, respectively, in connection with the sale of the facility located at TRIC and related equipment.
Current report
On May 5, 2025, the Company repaid its $1,500,000 bridge loan prior to its December 31, 2025 maturity date. Under the terms of the bridge loan, the Company was required to pay a guaranteed interest amount of $300,000 regardless of early repayment. For the six months ended June 30, 2025, the Company recognized $435,000 in interest expense (including amortization of issuance costs), and recorded a $825,000 loss on extinguishment of debt related to the write-off of unamortized financing costs and the remaining unaccrued portion of the guaranteed interest.
Current report
Management estimated the allowance using a probability-weighted analysis that considered full, partial, and no-recovery scenarios. The most sensitive assumptions include the probabilities assigned to the recovery scenarios and the estimated recovery for each outcome. Based on the latest reliable information available as of June 30, 2026, management estimated probability-weighted recovery rate of approximately 40% and recorded an allowance for credit losses of approximately $2,496,000.
Current report
The estimate remains highly subjective and subject to substantial uncertainty. Actual recoveries and realized credit losses could differ materially from the recorded allowance based on collateral realization, recovery costs, market conditions, the availability and enforceability of credit support, and other developments affecting the Company’s recovery. Changes in any of these assumptions or factors could result in a material adjustment to the allowance for credit losses in future periods.
Removed paragraphs (11)
Previous report
Aqua Metals is engaged in the development and commercialization of clean, water-based recycling technologies designed to provide cost-efficient solutions for the recycling of both lead and lithium-ion (“Li”) batteries. The Company’s core technology, AquaRefining, is a patented hydrometallurgical and electrochemical process that uses electricity to recover high-purity metals from spent batteries. This process is designed to reduce emissions, eliminate the need for high-temperature furnaces, and minimize waste compared to conventional recycling methods. AquaRefining was initially applied to the lead-acid battery (“LAB”) recycling industry.
Previous report
The Company is applying its AquaRefining technology to lithium-ion battery recycling, with a focus on developing a cost-efficient process to recover critical minerals such as lithium, nickel, cobalt, and copper. The Company believes its process has the potential to produce higher quality materials with lower environmental impact compared to conventional recycling methods.
Previous report
In 2021, the Company expanded its focus to lithium-ion battery recycling, including the establishment of its Innovation Center located at the Tahoe Reno Industrial Center (“TRIC”), which supports research, development, and pilot-scale operations. In 2022, the Company demonstrated the ability to recover key battery materials from lithium-ion battery black mass at bench scale and subsequently constructed a fully integrated pilot system at its Innovation Center. In late 2022, the Company began operating its initial lithium-ion battery recycling system, and in early 2023, it recovered its first recycled metals using its Li AquaRefining process. The Company is evaluating alternative, lower-cost locations for future development and is exploring potential co-location opportunities with strategic partners to reduce capital expenditures and operating costs.
Previous report
In February 2025, the Company refined its development strategy to focus on increasing lithium carbonate production by deferring the plating of nickel and cobalt into metal form. This approach is intended to simplify the initial product mix to lithium carbonate and mixed hydroxide precipitate (“MHP”), reduce capital requirements, improve scalability, and enhance projected operating margins and return on investment. The Company continues to seek financing to construct its first commercial lithium-ion battery recycling facility.
Previous report
During the third quarter of 2025, the Company expanded its feedstock diversification strategy by evaluating the application of its AquaRefining technology to polymetallic deep-sea nodules as a potential additional source of critical minerals. In September 2025, the Company entered into a memorandum of understanding (“MOU”) with Impossible Metals Inc. to collaborate on the development of a domestic supply chain for essential minerals, including nickel, cobalt, copper, manganese, and rare earth elements, recovered from deep-sea nodules and refined through the AquaRefining process.
Previous report
In November 2025, the Company entered into an additional MOU with MOBY Robotics Inc. to explore robotic harvesting and precision sorting of nodules and to conduct bench-scale testing of AquaRefining for these materials. These initiatives remain exploratory and are intended to assess the technical and economic feasibility of applying the Company’s process to nodule-derived feedstocks.
Previous report
The Company's current focus is site selection, construction, and operation of an initial lithium-ion battery recycling facility utilizing electricity-based processes in place of conventional high-temperature or chemical-based methods. The Company is also pursuing potential partnerships, joint ventures, and licensing arrangements as its Li AquaRefining technology continues to develop. The Company believes its technology may provide an environmentally and economically competitive approach to critical minerals recovery and may support opportunities for strategic collaborations and potential government funding.
Previous report
Our business strategy is based on the pursuit of building, operating and licensing Li AquaRefining recycling capacity to meet the growing demand for critical battery metals in lithium-ion batteries driven by innovations in automobile batteries, growth in internet data centers being rapidly accelerated by artificial intelligence (AI), and alternative energy applications, including solar, wind, and grid-scale storage.
Previous report
We are continuing to validate and optimize 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. Throughout 2023 and 2024, we have demonstrated at our pilot facility our ability to recover key valuable minerals in lithium-ion batteries, such as lithium hydroxide or lithium carbonate, copper, nickel, cobalt, and other compounds. These demonstrations ran for 24 hours x 5 days a week for many weeks in 2024 and an extended 24 hours x 7 days a week endurance run in November-December of 2024 that produced the results the Company believes makes the process commercial scale ready. Our next goal for lithium AquaRefining is to process commercial quantities of nickel, cobalt, and copper in a pure metal form that can be sold to the general metals and superalloy markets and can be made into battery precursor compound materials with known processes already used in the mining industry. The location for the pilot demonstration facility is in our Innovation Center in Tahoe-Reno Industrial Center. Our next phase is constructing our first commercial ARC and we are actively working with multiple potential supply, off-take, and funding partners to determine the optimal timing and location. The construction of the first commercial facility is subject to our receipt of additional financing.
Previous report
Our focus for the critical battery minerals market includes operating our first-of-a-kind lithium battery recycling facility, utilizing electricity to recycle instead of traditional approaches involving intensive and dangerous and expensive one time use chemical processes, fossil fuels, or high-temperature furnaces which also produce very large gas (CO2) and solid (sodium sulfate) waste streams our process avoids. Because of the cost savings (labor, chemical, waste streams, footprint), the Company believes it is the low cost producer giving a material economic advantage to lithium AquaRefining compared to other processes. We are also exploring partnership and/or joint venture agreements, particularly as our Li AquaRefining matures. We believe that Aqua Metals is in a position to become one of the few critical minerals recovery players for which our environmental and economic value proposition should generate both great commercial wins and potentially government grants and support to accelerate our expansion and progress.
Previous report
For the three months ended March 31, 2025, the Company recognized a non-cash impairment expense of $5,247,000 related to construction-in-progress for the facility located at TRIC. The impairment was the result of a strategic shift and revised capital allocation priorities, which led management to discontinue development of the facility for its originally intended use. As a result, the carrying amount of the facility was reduced to reflect its fair value.
Reworded paragraphs (20)
Previous wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026, or our 2025 Annual Report.
Current wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the SEC including our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026, or our 2025 Annual Report.
Previous wording
In this report we make, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.
Current wording
In this report we make, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.
Previous wording
During the three months ended March 31, 2026, we issued 198,780 shares of common stock pursuant to an at the market, or ATM, sales agreement for net proceeds of $1,295,000 and 131,569 shares of common stock pursuant to the 2026 employee stock purchase plan for the net proceeds of $621,000.
Current wording
During the six months ended June 30, 2026, we issued 379,772 shares of common stock pursuant to the ATM program, sales agreement for net proceeds of $1,876,000 and 131,569 shares of common stock pursuant to the 2026 ESPP for the net proceeds of $621,000.
Previous wording
During the three months ended March 31, 2025, we issued 59,648 shares of common stock pursuant to the ATM facility for net proceeds of $1,214,000.
Current wording
During the six months ended June 30, 2025, we issued 211,474 shares of common stock pursuant to the ATM program for net proceeds of $2,735,000.
Previous wording
We did not engage in commercial operations in 2026 or 2025. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the three months ended March 31, 2026, we focused on the continued operation of the pilot facility and advancing the underlying processes that support our recycling capabilities. We did not earn any revenue during the three months ended March 31, 2026 and 2025. The following table summarizes our results of operations with respect to the items set forth below for the three months ended March 31, 2026 and 2025 together with the dollar and percentage changes in those items (in thousands).
Current wording
We did not engage in commercial operations in 2026 or 2025. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the six months ended June 30, 2026, we focused on the continued operation of the pilot facility and advancing the underlying processes that support our recycling capabilities. We did not earn any revenue during the three and six months ended June 30, 2026 and 2025. The following table summarizes our results of operations with respect to the items set forth below for the three and six months ended June 30, 2026 and 2025 together with the dollar and percentage changes in those items (in thousands).
Previous wording
Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations decreased approximately $223,000, or 30.8%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease in plant operations for the three months ended March 31, 2026 was primarily driven by a reduction in payroll and related costs of approximately $166,000, resulting from continued workforce reductions implemented during the first quarter of 2025. Additionally, supplies, materials, inventory adjustments and other overhead expenses decreased by $188,000 offset by professional fees increased by approximately $131,000.
Current wording
Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations decreased approximately $212,000, or 27.3%, and $436,000, or 29.0% for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025. The decrease in plant operations for the three months ended June 30, 2026 was primarily due to $122,000 reduction in insurance-related expenses. In addition, payroll and related costs decreased by approximately $56,000 while supplies, materials, inventory adjustments and other overhead expenses decreased by $34,000. The decrease in plant operations for six months ended June 30, 2026 was primarily due to a $244,000 reduction in insurance-related expenses and a decrease of approximately $221,000 in payroll and related costs, primarily resulting from continued workforce reductions implemented during the first quarter of 2025, as well as the reallocation of personnel and resources to general and administrative activities related to identifying and securing a site for the Company’s planned lithium-ion battery recycling campus. In addition, supplies, materials, inventory adjustments, and other overhead expenses decreased by approximately $76,000. These decreases were partially offset by an increase of approximately $105,000 in professional fees.
Previous wording
Research and development cost includes expenditures related to the continued enhancement of the AquaRefining technology and the development of our lithium-ion battery recycling process. During the three months ended March 31, 2026, research and development expenses decreased $54,000, or approximately 16.1%, compared to the three months ended March 31, 2025. This decrease was primarily due to lower payroll and related costs of approximately $56,000, offset by an increase in supplies, materials, and other overhead expenses of approximately $2,000.
Current wording
Research and development cost includes expenditures related to the continued enhancement of the AquaRefining technology and the development of our lithium-ion battery recycling process. For the three months ended June 30, 2026, research and development expenses decreased $47,000, or approximately 15.9%, compared to the three months ended June 30, 2025. This decrease was primarily due to lower payroll and related costs of approximately $38,000 and a decrease in supplies, materials, and other overhead expenses of approximately $9,000. For the six months ended June 30, 2026, research and development expenses decreased $101,000, or 16%, compared to the six months ended June 30, 2025. This decrease was primarily due to lower payroll and related costs of approximately $94,000, and a decrease in supplies, materials, and other overhead expenses of approximately $7,000.
Previous wording
For the three months ended March 31, 2026, the Company recognized a non-cash provision for credit losses of $437,000 related to the Lion Energy participation interest and related note receivable. The provision reflects management’s estimate of expected credit losses under ASC 326 based on a probability-weighted analysis of potential recovery scenarios, including expected collateral recoveries, estimated costs to realize collateral, and the senior lender’s priority claim.
Current wording
For the three and six months ended June 30, 2026, the Company recognized a non-cash provisions for credit losses of $2,059,000 and $2,496,000, respectively, related to the Lion Energy participation interest, including accrued interest. The provisions reflect management’s estimate of expected credit losses under ASC 326 based on a probability-weighted analysis of potential recovery scenarios.
Previous wording
General and administrative expense increased $544,000, or approximately 22.9%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase of approximately $625,000 in professional fees related to due diligence for our proposed acquisition of Lion Energy, partially offset by reductions in payroll and related costs of approximately $51,000 and other overhead expense of approximately $30,000.
Current wording
General and administrative expense decreased $472,000, or approximately 21.5%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decrease was primarily attributable to a reduction of approximately $498,000 in professional fees and a decrease of approximately $87,000 in other overhead expense. These decreases were offset by an increase of $113,000 in payroll and related costs, primarily resulting from the reallocation of personnel and resources to general and administrative activities related to identifying and securing a site for the Company’s planned lithium-ion battery recycling campus. For the six months ended June 30, 2026, general and administrative expense increased by $72,000, or 1.6%, compared to the six months ended June 30, 2025. The increase was primarily due to $127,000 increase in professional fees, $62,000 increase in payroll and related costs, and $40,000 in travel expenses offset by $157,000 in other overhead expenses. The $127,000 increase in professional fees for the six month period reflects an increase of approximately $625,000 during the first quarter of 2026 compared with the first quarter of 2025, partially offset by the $498,000 decrease during the second quarter of 2026. The first quarter increase was primarily attributable to professional fees related to due diligence and other professional services related to the contemplated acquisition of Lion Energy.
Previous wording
The following table summarizes our other income and interest expense for the three months ended March 31, 2026 and 2025 together with the dollar and percentage changes in those items (in thousands).
Current wording
The following table summarizes our other income and interest expense for the three and six months ended June 30, 2026 and 2025 together with the dollar and percentage changes in those items (in thousands).
Previous wording
The decrease in interest expense for the three months ended March 31, 2026, is due to the decrease in the notes payable outstanding balance.
Current wording
Interest expense decreased approximately $239,000, or 97.6%, and $633,000, or 97.8%, for the three and six months ended June 30, 2026 as compared to the three and six months ended June 30, 2025. The decrease in interest expense is due to the decrease in the notes payable outstanding balance.
Previous wording
We recognized approximately $149,000 in interest and other income during the three months ended March 31, 2026, a decrease of $131,000 or 46.8%, compared to the three months ended March 31, 2025. The decrease was primarily due to the recognition of a payroll tax employee retention credit in the first quarter of 2025.
Current wording
We recognized approximately $51,000 and $201,000 in interest and other income during the three and six months ended June 30, 2026, a decrease of $446,000 and $576,000 compared to the three and six months ended June 30, 2025. The decrease was primarily driven by the approval of a payroll tax employee retention credit during the six months ended June 30, 2025.
Previous wording
For the three months ended March 31, 2026, the Company recognized a $47,000 change in the fair value of its warrant liability, primarily due to the remeasurement of warrants issued in December 2024.
Current wording
For the three and six months ended June 30, 2026, the Company recognized a $69,000 and $115,000 change in the fair value of its warrant liability, primarily due to the remeasurement of warrants issued in December 2024.
Previous wording
As of March 31, 2026, we had cash and cash equivalents of approximately $6,816,000, current liabilities of $3,617,000 and working capital of approximately $7,479,000. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.
Current wording
As of June 30, 2026, we had cash and cash equivalents of approximately $4,744,000, current liabilities of $2,828,000 and working capital of approximately $4,047,000. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.
Previous wording
Management believes that the Company's capital resources remain insufficient to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses and continue utilizing cash in operations for the foreseeable future, the Company will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through the next twelve months from the date of this filing.
Current wording
Management believes that the Company's capital resources remain insufficient to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses and continue utilizing cash in operations for the foreseeable future, the Company will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, cannot be assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through the next twelve months from the date of this filing.
Previous wording
Looking ahead, Aqua Metals plans to continue pilot operations, advance site selection and permitting for its first commercial AquaRefining facility and pursue additional strategic partnerships to support commercialization.
Current wording
Looking ahead, Aqua Metals intends to continue pilot operations, advance site selection and permitting for its first commercial AquaRefining facility and pursue additional strategic partnerships to support commercialization.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2026 and three months ended March 31, 2025 was $3,844,000 and $2,753,000, respectively. Net cash used in operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, amortization of deferred financing costs, provision for credit loses, stock-based compensation, impairment and loss on disposal of property, plant and equipment, as well as net changes in working capital. During the three months ended March 31, 2025, we recognized approximately $5,247,000 non-cash impairment expense related to the construction-in-progress for the facility located at TRIC.
Current wording
Net cash used in operating activities for the six months ended June 30, 2026 and six months ended June 30, 2025 was $6,474,000 and $5,299,000, respectively. Net cash used in operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, amortization of deferred financing costs, provision for credit losses, stock-based compensation, impairment and loss on disposal of property, plant and equipment, as well as net changes in working capital. During the six months ended June 30, 2026, the Company recognized a non-cash provision for credit losses of $2,496,000 related to the Lion Energy participation interest. During the six months ended June 30, 2025, we recognized approximately $9,012,000 non-cash impairment expense related to the construction-in-progress for the facility located at TRIC.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2026 was $2,000,000 and consisted mainly of cash advanced to acquire a subordinated participation interest in Lion Energy’s senior secured credit facility. Net cash used in investing activities for the three months ended March 31, 2025 was $375,000 and consisted mainly of cash utilized towards equipment deposits of $186,000 and purchases of fixed assets related to the build out of our commercial facility of $289,000, offset by $100,000 of cash received related to our note receivable.
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 was $2,000,000 and consisted mainly of cash advanced to acquire a subordinated participation interest in Lion Energy’s senior secured credit facility. Net cash provided by investing activities for the six months ended June 30, 2025 was $4,936,000 and consisted mainly of $4,347,000 cash received from the sale of the building and equipment, $1,141,000 from equipment deposits, the payment of our $100,000 related to our note receivable, offset by cash utilized towards equipment deposits of $231,000 and purchases of fixed assets of $421,000.
Previous wording
Net cash provided by financing activities was $1,850,000 for the three months ended March 31, 2026, consisting of $1,295,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $621,000 of net proceeds from the sale of Aqua Metals shares pursuant to the 2026 employee stock purchase plan agreement, or ESPP, offset by $56,000 related to tax withholdings to cover RSU vesting and $10,000 principal payments on finance leases. Net cash provided by financing activities of $638,000 for the three months ended March 31, 2025 consisted of $1,214,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, offset by $66,000 related to tax withholdings to cover RSU vesting and $500,000 principal payments on notes payable.
Current wording
Net cash provided by financing activities was $2,408,000 for the six months ended June 30, 2026, consisting of $1,876,000 in net proceeds from the sale of Aqua Metals shares pursuant to the ATM program, and $621,000 of net proceeds from the sale of Aqua Metals shares pursuant to the 2026 ESPP, offset by $78,000 related to tax withholdings to cover RSU vesting and $11,000 principal payments on finance leases. Net cash used in financing activities was $1,783,000 for the six months ended June 30, 2025, consisting of $2,735,000 in net proceeds from the sale of Aqua Metals shares pursuant to the ATM program, and $69,000 of net proceeds from the sale of Aqua Metals shares pursuant to the ELOC with Lincoln Park Capital Fund, LLC, offset by $66,000 related to tax withholdings to cover RSU vesting and $4,500,000 principal payments on notes payable.
Previous wording
The Company’s estimate of expected credit losses on its $4,100,000 exposure to Lion Energy requires significant management judgment due to the borrower-specific nature of the exposure, the Company’s subordinated position relative to the senior secured lender, and the uncertainty regarding future recovery outcomes. Management identified changes in facts and circumstances during the three months ended March 31, 2026, because the equity transaction originally contemplated is no longer expected to proceed as originally structured. As a result, the Company’s recovery may be dependent on collateral realization, inventory monetization, accounts receivable collections, available credit support, and ongoing discussions regarding alternative transaction structures. Management estimated the allowance using a probability-weighted scenario analysis that considered multiple recovery outcomes, expected collateral recoveries, the senior lender’s priority claim, estimated costs to realize collateral, and available credit support. The most sensitive assumptions in the analysis are the probability assigned to each recovery scenario and the related estimated collateral recoveries. Based on information available as of March 31, 2026, management recorded an allowance for credit losses of approximately $437,000. However, the estimate remains highly judgmental and subject to change as facts and circumstances evolve. Although management believes its estimate reflects the best information currently available, actual recoveries and realized credit losses could differ materially from the recorded allowance if collateral recoveries are lower than expected, costs to realize collateral increase, market conditions deteriorate, or available credit support becomes unavailable or unenforceable.
Current wording
The Company’s estimate of expected credit losses on its $4,160,000 exposure to Lion Energy requires significant management judgment due to the borrower-specific nature of the exposure, the Company’s subordinated position relative to the senior secured lender, limited access to certain current financial, operating, and collateral information, and uncertainty regarding future recovery outcomes. As described in Note 3 to the condensed consolidated financial statements, management identified changes in facts and circumstances during the six months ended June 30, 2026.