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 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 nine months ended September 30, 2025 and 2024, the Company reported a net loss of $18,206,000 and $17,112,000, respectively, and negative cash from operations of $7,648,000 and $11,637,000, respectively. As of  September 30, 2025, the Company had cash and cash equivalents of approximately $3,586,000, current liabilities of $3,459,000 and an accumulated deficit of $265,976,000. The increase in net loss during the nine months ended September 30, 2025 reflects a non-cash impairment and loss on disposal of property, plant, and equipment of $9,037,000 associated with the sale of the TRIC facility. During the nine months ended September 30, 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 $1,500,000 as disclosed in Note 10 - Notes payable. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future.

On October 16, 2025, the Company closed a registered direct offering and a concurrent private placement with an institutional investor. After the deduction of the placement and legal fees payable by us, the aggregate net proceeds from the registered direct offering and warrant placement were approximately $12,000,000. Additional information regarding this transaction is disclosed in Note 16 - Subsequent events.

As an additional liquidity source, the Company maintains an At-the-Market (“ATM”) offering program as a potential source of liquidity. Under the ATM Sales Agreement (the “Sales Agreement”) with The Benchmark Company, LLC (“Benchmark”), the Company may offer and sell shares of its common stock, par value $0.001 per share, having an aggregate offering price of up to $30,000,000 million, from time to time through Benchmark, acting as sales agent. Sales of common stock, if any, under the ATM program are deemed to be “at-the-market” offerings as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended. During the nine months ended September 30, 2025, the Company sold an aggregate of 833,219 shares of common stock under the ATM program for net proceeds of approximately $5,921,000, after deducting commissions and offering expenses. As of September 30, 2025, no additional capacity remains available for issuance under the ATM program. Further details of the agreement are included in Note 12 – 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. Through September 30, 2025, the Company had sold approximately $903,000 under the facility, leaving $9,097,000 of capacity available for future issuances. Further details of the agreement and accounting treatment are included in Note 12 – Stockholders’ Equity.

Management believes that there is substantial doubt about the entity’s ability to continue as a going concern within one 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 be no 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 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.