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 both lead and lithium-ion (“Li”) batteries. Our recycling process is a patented 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 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 metal one 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 our first-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 November 5, 2024, the Company effected a one-for-20 reverse stock split of its issued and outstanding common shares. Subsequently, on  August 4, 2025, the Company effected a one-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 the six months ended June 30, 2025 and 2024, the Company reported a net loss of $15,085,000 and $11,902,000, respectively, and negative cash from operations of $5,299,000 and $8,002,000, respectively. As of  June 30, 2025, the Company had cash and cash equivalents of approximately $1,933,000, current liabilities of $3,633,000 and an accumulated deficit of $262,855,000. The increase in net loss during the six months ended June 30, 2025 reflects a non-cash impairment and loss on disposal of property, plant, and equipment of $9,012,000 associated with the sale of the TRIC facility. During the second quarter of 2025, the Company paid off the note payable with Summit Investment Services, LLC in the amount of approximately $3,000,000, and notes payable with eight accredited investors in the amount of approximately $1,000,000 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future.

Management believes that the Company does not have sufficient capital resources 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 for the foreseeable future it 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. On May 15, 2025, the Company, entered into an equity-line-of-credit purchase agreement and a registration rights agreement with Lincoln Park Capital Fund, LLC (“the ELOC”), pursuant to which Lincoln Park has committed to purchase up to $10,000,000 of the Company’s common stock, subject to limitation under Nasdaq Listing Rule 5635(d). Sales under the agreement are subject to various additional limitations, including pricing formulas, volume caps, and ownership percentage restrictions. On June 6, 2025, the Company registered 177,283 shares of common stock that the Company may elect 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 Rule 5635(d), the potential issuance and sale of up to $10,000,000 of common stock under the ELOC. The Company intends to register, from time to time, additional shares for resale under the ELOC as required for liquidity purposes. Notwithstanding, 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.

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 do not 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.