Risk Factors Dashboard

Item 1A. Risk Factors

Investing in our securities involves a high degree of risk. Before making an investment decision, you should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K and in our other filings with the SEC. Our business, operating results, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, operating results, financial condition and prospects could be adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment. References to “we,” “our,” or “us” generally refer to the Company, unless otherwise specified.

Summary Risk Factors

Risks Relating To Our Business

Our business is subject to numerous risks and uncertainties. The following is a summary of the principal risks we face:

Risks Relating to Ownership of Our Securities

Risks Relating to Our Business

We may require significant additional financing within the next 12 months to fund operations and develop our recycling, extraction, and refining facilities, but there is no assurance such capital will be available on acceptable terms, or at all, which could jeopardize our business plan and continued operations.

We may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all. We may need to raise capital over the next 12 months to satisfy such requirements, the receipt of which cannot be assured. We may also require capital in order to fully develop our recycling, extraction, and refining operations. We intend to seek additional funds through various financing sources, including the private sale of our equity and debt securities, potential joint ventures with capital partners, grants, government loans, and project financing of our recycling facilities. However, there can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose your entire investment.

We have a limited operating history and have incurred substantial losses since inception, and we may never achieve or sustain profitability.

We first generated revenue in the fourth quarter of fiscal year 2024 and have a limited operating history upon which investors may evaluate our business. We have incurred operating losses in each period since inception, including a net loss of $73.4 million for the fiscal year ended June 30, 2026, and we had an accumulated deficit of $333.5 million and negative cash flows from operating activities of $24.2 million as of and for that fiscal year. We expect to continue to incur significant expenditures to ramp our recycling operations and to advance the Tonopah Flats Lithium Project. Our ability to achieve and sustain profitability depends on increasing production volumes and realized prices while controlling costs, none of which can be assured. If we are unable to do so, we may be required to curtail operations, seek additional financing on unfavorable terms, or delay or abandon planned projects, and the value of our common shares could decline.

We may face challenges in executing our growth strategy and effectively managing any expansion. Strategic transactions we pursue could be disruptive, result in shareholder dilution, or otherwise negatively impact our operations.

We are engaged in the business of lithium-ion battery recycling through proprietary recycling technology. While lithium-ion battery recycling is an established business, most existing processes rely on bulk high-temperature processes or bulk shredding techniques. In contrast, we have developed a highly strategic recycling processing train that avoids these non-selective treatments of the full battery. Having commenced commercial operations, we are continuing to ramp up and expand production capacity within our current facility. The uniqueness of our process presents potential risks associated with scaling an unproven business model, and there can be no assurance that as we advance large-scale manufacturing and operations, we will not encounter unexpected costs or hurdles that could restrict our intended scale or negatively impact projected gross profit margins.

The Company is in the process of exploring and developing a mineral resource near Tonopah, Nevada, with the intent of progressing the project to mining and processing activities. The Company has no prior history of completing the development of a mining project or conducting mining operations. If found to be economically feasible, the future development of mineral resources will require the construction and operation of a mine, processing plant, and related infrastructure. While certain members of management have mining development and operational experience, the Company does not have any such experience as a collective organization. As a result of these factors, the Company’s future success is more uncertain than if it had a proven operating history.

If the Tonopah Flats project advances, the Company is and will continue to be subject to all risks inherent with establishing new mining operations including: the time and costs of construction of mining and processing facilities and related infrastructure; the availability and costs of skilled labor and mining equipment and supplies; the need to obtain necessary environmental and other governmental approvals, licenses and permits, and the timing of the receipt of those approvals, licenses and permits; the availability of funds to finance construction and development activities; potential opposition from non-governmental organizations, indigenous peoples, environmental groups or local groups which may delay or prevent development activities; and potential increases in construction and operating costs due to various factors, including changes in the costs of fuel, power, labor, contractors, materials, supplies and equipment.

It is common in new mining operations to experience unexpected costs, problems and delays during construction, commissioning and mine start-up, as well as delays in the early stages of mineral production.

We depend on federal grants, cooperative agreements, and tax credits that are subject to conditions, milestones, appropriations, audit, suspension, and termination, and the loss or delay of these awards could materially impair our development plans.

A significant portion of our planned capital program depends on federal awards, including the $57.7 million DOE cooperative agreement for a lithium hydroxide refinery, the $10.0 million DOE award for next-generation recycling technologies, the $143.6 million DOE award for a new recycling facility, and $60.0 million of tax credits selected under the through the Qualifying Advanced Energy Project Credits program (“48C program”). These awards are reimbursement-based, are conditioned on our satisfaction of technical, commercial, cost-share, reporting, and compliance requirements, and remain subject to governmental appropriations, audit, and unilateral action. On October 9, 2025, the DOE notified us that the $57.7 million grant was terminated effective as of the end of the budget period ending August 31, 2025; we appealed, and following a series of technical and commercial reviews the award was subsequently reinstated in its entirety. As of June 30, 2026, we had invoiced only 11% of eligible reimbursements under that award, 27% under the $10.0 million award, and 1% under the $143.6 million award, and we had not recognized any amounts in respect of the 48C program tax credits. There is no assurance that these awards will not again be terminated, suspended, reduced, descoped, or delayed, that we will satisfy the applicable conditions and milestones, that we will be able to fund the required cost share, or that we will realize the tax credits, and any such outcome could require us to curtail or abandon planned projects and would adversely affect our business and financial condition.

Our ability to source, recover, and recycle lithium-ion battery materials in an economical and efficient manner may be limited, which could affect our ability to meet market demand.

The success of our lithium-ion battery recycling operations is fundamentally dependent on our ability to secure adequate quantities of spent lithium-ion batteries and other feedstock materials of sufficient quality and at economically viable prices. The availability of feedstock is subject to numerous factors beyond our control, including the growth rate of stationary energy storage batteries, electric vehicle adoption, battery replacement cycles, consumer and commercial battery disposal practices, competition from other recycling facilities, and the development of alternative disposal or reuse methods for spent batteries.

The quality and composition of feedstock can vary significantly depending on battery chemistry, age, usage patterns, and storage conditions prior to collection. Degraded, damaged, or contaminated feedstock may yield lower recovery rates of valuable materials, require additional processing steps, or result in higher operating costs, all of which could negatively impact our profitability. Additionally, the presence of foreign materials, different battery chemistries than expected, or hazardous contaminants in feedstock could disrupt our operations, require costly remediation, or pose safety and environmental risks.

The feedstock market is still developing, and pricing mechanisms and supply contracts are not yet standardized across the industry. We may face increasing competition for feedstock from other recycling facilities, battery manufacturers seeking to secure their own supply chains, and international buyers, potentially driving up feedstock costs. Furthermore, changes in battery technology, such as the development of longer-lasting batteries or alternative battery chemistries, could reduce the availability of feedstock or alter the economics of our recycling processes. If we are unable to secure adequate quantities of suitable feedstock at economically viable prices, our recycling operations may operate below capacity or become unprofitable, which could materially adversely affect our business and financial results.

If we are unable to continue to operate our recycling facility and improve efficiency, our business could be materially harmed. Our operations depend on the continued performance and availability of our recycling facilities, as well as on securing sufficient feedstock.

Our future business depends in large part on its ability to economically and efficiently source, recycle, and recover lithium-ion battery materials (including end-of-life batteries, manufacturing scrap, and third-party black mass) and to meet the growing market demand for an environmentally sustainable, closed-loop recycling solution. Although we have commenced operations at our McCarran, Nevada facility, we will need to continue to operate this facility and improve efficiency.

While we have developed and begun to implement our proprietary recycling processes at our McCarran location, we have not yet operated at full commercial scale to consistently produce and sell battery-grade materials. It is uncertain whether we will be able to develop and sustain efficient, automated, low-cost recycling capabilities and processes, or secure sufficient reliable sources of feedstock, in a manner that allows it to meet production standards, volumes, and costs necessary to achieve its business objectives. Even if we are successful in expanding production, we may not be able to do so without delays, cost overruns, or supply chain challenges, some of which may be outside of our control.

Our ability to manage costs over time may be limited in the near term by fixed expenses associated with facility operations, while long-term cost reductions will require ongoing investment to support growth and process improvements. Any failure to scale operations and achieve production and cost targets within projected timelines could have a material adverse effect on our business, results of operations, and financial condition.

Our ability to achieve and sustain profitability depends heavily on volatile global metal product prices—driven by global economic, political, and market factors as well as product quality and customer specifications—and unfavorable pricing could reduce revenues, hinder customer demand, and negatively impact our business value and share price.

The ability to reach and sustain profitable operations on the recycling and extraction projects, if and to the extent the projects are developed and enter full commercial operation, will be significantly affected by changes in the market price of global metal products. The market price of these products fluctuates widely and is affected by numerous factors beyond the Company’s control, including world supply and demand, pricing characteristics for alternate energy sources such as oil and gas, government policy and laws, interest rates, the rate of inflation and the stability of currency exchange rates, and other geopolitical and global economic factors. Such external economic factors are influenced by changes in international investment patterns, various political developments and macro-economic circumstances. Furthermore, the price of lithium products is significantly affected by their purity and performance, and by the specifications of end-user battery manufacturers. If the products produced from the Company’s projects do not meet battery-grade quality and/or do not meet customer specifications, pricing will be reduced from that expected for battery-grade product. In turn, the company may lose or fail to attract customers. The Company may not be able to effectively mitigate pricing risks for its products. Depressed pricing for the Company’s products will affect the level of revenue expected to be generated by the Company, which in turn could affect the value of the Company, its share price and the potential value of its properties. Depressed pricing for the Company’s products will affect the level of revenues expected to be generated by the Company, which in turn could affect the value of the Company, its share price and the potential value of its properties.

A small number of customers account for a substantial majority of our revenue, and the loss of any of them, or a change in their purchasing practices, could materially reduce our revenue.

Revenue from five major customers accounted for approximately 86% of our revenue for the fiscal year ended June 30, 2026 and three major customers accounted for approximately 74% for the fiscal year ended June 30, 2025. Our sales are generally not supported by long-term, fixed-volume commitments, and our customers may reduce, delay, or discontinue purchases, seek price concessions, qualify alternative suppliers, or reject product that does not meet their specifications. The loss of, or a material reduction in purchases by, any one of these customers, or a disruption in our relationship with a significant supplier, could cause our revenue to decline materially, increase our credit exposure, and adversely affect our results of operations, financial condition, and cash flows.

Safety concerns in handling lithium-ion batteries, changes in battery chemistry or technology, slower-than-expected adoption of electric vehicles or stationary energy storage batteries, or reduced government support for critical minerals could all negatively impact our revenues and operating results.

The Company’s operations are subject to all the hazards and risks normally incidental to the exploration for, and the development and operation of, mineral properties. The Company strives to implement comprehensive health and safety measures designed to comply with government regulations and protect the health and safety of the Company’s workforce in all areas of its business. The Company also strives to comply with environmental regulations in its operations. Nonetheless, risks associated with the Company’s planned operations include fires, power outages, shutdowns due to equipment breakdown or failure, aging of equipment or facilities, unexpected maintenance and replacement expenditures, human error, labor disruptions or disputes, inclement weather, higher than forecast precipitation, flooding, shortages of water, explosions, releases of hazardous materials, landslides, earthquakes, industrial accidents and explosions, protests and other security issues, and the inability to obtain adequate machinery, equipment or labor due to shortages, strikes or public health issues such as pandemics.

We may be held responsible for the costs of remediating contamination at the site of current or former activities or at third party sites or be held liable to third parties for exposure to hazardous substances should those be identified in the future. Under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) and its state law equivalents, current or former owners of properties may be held jointly and severally liable for the costs of site cleanup or required to undertake, remedial actions in response to unpermitted releases of hazardous substances at such property, in addition to, among other potential consequences, liability to governmental entities for the cost of damages to natural resources, which may be significant.

We rely in part on third parties to collect, transport, and store lithium-ion battery feedstock that is regulated as hazardous material, and any accident, release, thermal event, or non-compliance in the supply chain could result in liability, penalties, and operational disruption.

We depend on third-party collectors, brokers, carriers, and storage providers to aggregate and deliver end-of-life batteries, manufacturing scrap, and black mass to our facility. Spent lithium-ion batteries and related materials are subject to extensive hazardous materials, waste, and transportation regulation, including requirements administered by the U.S. Department of Transportation and analogous state authorities, and are susceptible to thermal runaway, fire, and the release of hazardous substances during handling, packaging, transport, and storage. We do not control the operations or compliance practices of these third parties. An accident, release, fire, or regulatory violation in our inbound or outbound supply chain, or the loss of a significant logistics provider, could expose us to personal injury, property damage, remediation, and third-party claims, result in fines or the suspension of shipments, increase our insurance and freight costs, damage our reputation, and interrupt our ability to receive feedstock or deliver product.

Our operations are subject to development and execution risks, as well as potential limitations in obtaining applicable permits and obtaining or maintaining insurance coverage.

Our operations in the United States are subject to the federal, state and local environmental, health and safety laws applicable to the reclamation of lithium-ion batteries and exploration for, and the development and operation of, mineral properties. Depending on how any particular operation is structured, our operations and related facilities will have to obtain environmental permits or approvals to operate, including those associated with, among other things, air emissions, water discharges, waste management and storage, and exploration and development of mineral properties on federal lands and related processing facilities. We may face opposition from local residents or public interest groups to the installation and operation of our facilities. Failure to secure (or significant delays in securing) the necessary approvals could prevent us from pursuing some of our planned operations and adversely affect our business, financial results and growth prospects. Additionally, there can be no certainty that current permits will be maintained, permitting changes will be approved, estimated permitting timelines will be met, estimated costs will be accurate, or additional permits or approvals required to carry out recycling, extraction and refining will be obtained. There is the risk that existing permits will be subject to challenges of regulatory administrative processes and similar litigation and appeal processes. Litigation and regulatory review processes can result in lengthy delays, with uncertain outcomes. Such issues could impact the expected timelines of the Company’s projects and consequently have a material adverse effect on the Company’s prospects and business.

While the Company maintains insurance to protect against certain risks associated with its business, insurance may not be available to insure against all risks, or the costs of such insurance may be uneconomic. The Company may also elect not to obtain insurance for other reasons. Insurance policies maintained by the Company may not be adequate to cover the full costs of actual liabilities incurred by the Company or may not be continued by insurers for reasons not solely within the Company’s control. The Company maintains liability insurance in accordance with industry standards. However, losses from uninsured and underinsured liabilities have the potential to materially affect the Company’s financial position and prospects.

Substantially all of our operations are concentrated at a single recycling facility and a single exploration-stage project in Nevada, and any casualty, natural disaster, utility interruption, or other disruption at those locations could halt production.

All of our revenue-generating operations are conducted at our recycling facility in McCarran, Nevada, and our principal mineral property interests are concentrated at the Tonopah Flats Lithium Project in Nye and Esmeralda Counties, Nevada. We do not maintain redundant processing capacity at an alternative site. A fire, thermal runaway event, explosion, equipment failure, extended power or water interruption, labor disruption, earthquake, flood, wildfire, or other casualty or force majeure event affecting these locations, or the loss of a permit or a governmental order suspending operations, could interrupt or halt production for an extended period. Our insurance may not be available on commercially reasonable terms, may not cover all losses, and may not compensate us for lost revenue or the costs of resuming operations, and any such interruption could have a material adverse effect on our business, results of operations, and financial condition.

Physical effects of climate change, including drought and constraints on water availability, and evolving climate-related disclosure and permitting requirements could increase our costs and delay our projects.

Our recycling and planned refining and mining operations require reliable access to water and power in an arid region of Nevada, and we depend on a limited portfolio of acquired water rights, including an 18.45 acre-foot annual portion of the Truckee-Carson Irrigation District and water rights purchased in the City of Fernley. Prolonged drought, reduced snowpack, changes in the administration or curtailment of water rights, extreme heat, wildfire, or severe precipitation and flooding events could restrict our operations, increase our operating and capital costs, and delay permitting and construction. In addition, federal and state climate-related disclosure, greenhouse gas, and permitting requirements continue to evolve and may impose additional compliance obligations and costs on us, and we may be subject to increased scrutiny or litigation concerning our environmental practices and the environmental benefits attributed to our products and processes. Any of the foregoing could have a material adverse effect on our business, results of operations, and financial condition.

Declines in demand, volatility in benchmark metal prices, or shifts in the quantity and composition of lithium-ion battery feedstock available to us could materially affect our costs, revenues, and results of operations.

The Company is exposed to commodity price movements for the inventory it holds and the products it plans to produce. Commodity price risk management activities are currently limited to monitoring market prices. The Company’s future revenues, if any, are sensitive to the market prices of the metals contained in its planned products.

The Company’s projects are highly dependent on the demand for and uses of lithium-based end products. This includes lithium-ion batteries for electric vehicles, stationary energy storage systems, and other large format batteries that currently have limited market share and whose projected adoption rates are not assured. To the extent that such markets do not develop in the manner contemplated by the Company, then the long-term growth in the market for lithium products will be adversely affected. This would inhibit the potential for development of the projects, their potential commercial viability and would otherwise have a negative effect on the business and financial condition of the Company. In addition, as a commodity, lithium market demand is subject to the substitution effect in which end-users adopt an alternate commodity as a response to supply constraints or increases in market pricing. These circumstances could limit the quantity of customers and prices paid for our products. To the extent that these factors arise in the market for lithium, it could have a negative impact on overall prospects for growth of the lithium market and pricing, which in turn could have a negative effect on the Company and its projects.

We depend on the skills and experience of our senior management team and key employees. The loss of any such personnel could have a material adverse effect on our business.

The Company is concurrently overseeing the advancement of our major critical mineral projects. Working to advance these projects requires dedication of considerable time and resources by the Company and its management team. Working to advance these projects requires the dedication of considerable time and resources by the Company and its management team. The advancement of the projects concurrently brings with it the associated risk of strains on managerial, human and other resources. The Company’s ability to successfully manage each of these processes will depend on a number of factors, including its ability to manage competing demands on time and other resources, financial or otherwise, and successfully retain personnel and recruit new personnel to support its growth and the advancement of its projects.

The Company highly values the contributions of its key personnel. The success of the Company continues to depend largely upon the performance of key officers, employees, and consultants who have advanced the Company to its current stage of development and contributed to its potential for future growth. The market for qualified talent has become increasingly competitive, with shortages of qualified talent relative to the number of available opportunities being experienced in all markets where the Company conducts its operations. The ability to remain competitive by offering higher compensation packages and programs for growth and development of personnel, with a view to retaining existing talent and attracting new talent, has become increasingly important to the Company and its operations in the current climate. Any prolonged inability to retain key individuals, or to attract and retain new talent as the Company grows, could have a material adverse effect upon the Company’s growth potential and prospects.

Additionally, the Company has not purchased any “key-man” insurance for any of its directors, officers, or key employees and currently has no plans to do so.

We may be exposed to litigation, foreclosure, or regulatory actions, any of which could adversely affect our financial condition and results.

The Company may be subject to a variety of regulatory requirements, and resulting investigations, claims, lawsuits and other proceedings in the ordinary course of its business, because of its status as a publicly traded company and because of its mining exploration and development business. Litigation related to environmental and climate change-related matters, the Company’s environmental practices, the environmental benefits of the Company’s products or services, ESG disclosure, and securities class actions arising from share price volatility is also on the rise. The occurrence and outcome of any legal proceedings cannot be predicted with any reasonable degree of certainty due to the inherently uncertain nature of litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. Defense and settlement costs of legal claims can be substantial, even with respect to claims that are determined to have little or no merit.

Litigation may be costly and time-consuming and can divert the attention of management and key personnel away from day-to-day business operations. The Company and its projects are, from time to time, subject to legal proceedings or the threat of legal proceedings. If the Company were to be unsuccessful in defending any such claims against it, or unable to settle claims on a satisfactory basis, the Company may be faced with significant monetary damages, injunctive relief or other negative impacts that could have a material adverse effect on the Company’s business and financial condition. To the extent the Company is involved in any active litigation, the outcome of such matters may not be determinable, and it may not be possible to accurately predict the outcome or quantum of any such proceedings at a given time.

Geopolitical competition over critical minerals and government policies aimed at securing domestic supply chains may restrict our ability to access certain markets, partners, or suppliers, which could increase costs and limit growth opportunities.

Lithium has become central to national security strategies focused on energy independence and technological competitiveness, particularly in the context of electric vehicle adoption and renewable energy storage. The ongoing strategic competition between the United States, China, and other major powers has resulted in increased scrutiny of critical mineral supply chains, with governments implementing policies to reduce dependence on foreign sources and secure domestic supply chains. This competition may limit our ability to engage in business relationships with companies from certain countries, access international markets, or utilize the most cost-effective suppliers and partners regardless of their geographic location.

Changes in international trade policies, tariffs, or trade disputes—particularly involving major lithium-producing countries—could disrupt supply chains, increase costs, or limit market access, materially impacting our operations and profitability.

The Company’s operations and profitability may be significantly impacted by changes in international trade policies, tariffs, and trade disputes. As a lithium recycling and mining company, we may be subject to tariffs on imported equipment, raw materials, or components necessary for our operations. Additionally, retaliatory tariffs imposed by other countries could affect demand for our products or increase costs of doing business internationally. Changes in trade relationships, particularly between the U.S. and major lithium-producing countries like China, could disrupt supply chains, increase operational costs, or limit market access. The Company has limited ability to mitigate these risks, and significant changes in trade policy could materially adversely affect our business, financial condition, and results of operations.

Changes in government policies or funding priorities for critical minerals could reduce or eliminate incentives, grants, or programs we rely on, adversely affecting our operations and growth.

Government policies regarding critical minerals are subject to frequent changes based on national security priorities, supply chain assessments, and political considerations. Changes to critical minerals lists, or government funding priorities related to commercial facilities for the mining or manufacturing of critical minerals, could affect our eligibility for government incentives, grants, or preferential treatment in government procurement. The termination of existing grants or the modifications of programs such as the Defense Production Act, the Infrastructure Investment and Jobs Act, or the Inflation Reduction Act could impact available funding, tax incentives, or regulatory streamlining that we currently benefit from or expect to benefit from in the future. Additionally, changes in government priorities or budget constraints could further result in the elimination or reduction of programs that support domestic critical mineral production and processing.

Export controls or trade restrictions on lithium, black mass, equipment, or technology could limit our market access, sourcing options, or partnerships, and create compliance conflicts across jurisdictions.

Governments may impose export controls, licensing requirements, or outright bans on the export of lithium and related materials, processing equipment, or technology. Such restrictions could limit our access to international markets for our products, prevent us from sourcing equipment or materials from certain countries, or restrict our ability to engage in technology transfer or joint ventures with foreign partners. The extraterritorial application of export controls by various countries could also create compliance conflicts where adherence to one country’s export control regime violates another’s requirements.

Mineral Resources and Reserves are estimates subject to inherent uncertainties, including geological, engineering, and economic assumptions; actual tonnage, grades, recoveries, or costs may differ materially, which could adversely affect the Company’s operations and financial results.

Mineral Resources and Mineral Reserves figures are estimates only. Estimated tonnages and grades may not be achieved if the projects are brought into production; differences in grades and tonnage could be material; and, estimated levels of recovery may not be realized. The estimation of Mineral Resources and Mineral Reserves carries with it many inherent uncertainties, of which many are outside the control of the Company. Estimation is by its very nature a subjective process, which is based on the quality and quantity of available data, engineering assumptions, geological interpretation and judgements used in the engineering and estimation processes. Estimates may also need to be revised based on changes to underlying assumptions, such as commodity prices, drilling results, metallurgical testing, production, and changes to mine plans of operation. Any material decreases in estimates of Mineral Resources or Mineral Reserves, or an inability to extract Mineral Reserves could have a material adverse effect on the Company, its business, results of operations and financial position.

Any estimates of Inferred Mineral Resources are also subject to a high degree of uncertainty and may require a significant amount of exploration work to determine if they can be upgraded to a higher confidence category. Risks associated with upgrading the Tonopah project to a higher confidence category include the accuracy of fault modeling and offset of lithium-hosting lithologies on western-side of mineral resource, the lack of project-specific lithologic density data, the accuracy of processing cost used in the pit optimization to define the resource which can potentially affect resource cut-off grades, and the large fluctuations in commodity prices which can potentially affect resource cut-off grades.

There is no assurance that economically recoverable mineral reserves exist on our properties, and even though reserves have been identified, exploration and development risks could prevent their extraction or the generation of revenue, adversely affecting our business and operations.

We cannot assure you about the existence of economically extractable mineralization at this time, nor about the quantity or grade of any mineralization we may have found. Because the probability of an individual prospect ever having reserves is uncertain, our properties may not contain any reserves and any funds spent on evaluation and exploration may be lost. Even though reserves have been confirmed on our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are mined. Even if we confirm reserves on our properties, any quantity or grade of reserves we indicate must be considered as estimates only until such reserves are mined. We do not know with certainty that economically recoverable minerals exist on our properties. In addition, the quantity of any reserves may vary depending on commodity prices. Any material change in the quantity or grade of reserves may affect the economic viability of our properties. Further, our lack of established reserves means that we are uncertain about our ability to generate revenue from our operations.

Even though we have discovered a mineral reserve on one or more of our properties, there can be no assurance that they can be developed into producing mines and that we can extract those minerals. Both mineral exploration and development involve a high degree of risk, and few mineral properties that are explored are ultimately developed into producing mines.

Evolving federal and state regulations on battery recycling and extended producer responsibility may create new compliance obligations, increase operating costs, or affect the economics of our recycling operations.

The regulatory landscape governing battery recycling and extended producer responsibility (EPR) is rapidly evolving at both federal and state levels. Many states are considering or have implemented EPR programs that require battery manufacturers to take responsibility for the end-of-life management of their products, including collection, recycling, and proper disposal. While such regulations could increase the availability of feedstock for our recycling operations, they may also impose new compliance obligations, reporting requirements, and operational standards on recycling facilities. Changes to battery transportation regulations, hazardous waste classifications, or recycling performance standards could require costly modifications to our operations or result in penalties for non-compliance. Additionally, regulations mandating specific recycling rates, recovery efficiencies, or product quality standards could affect the economics of our recycling operations.

Changes in income tax rates or laws, or disputes with tax authorities, could materially affect our results of operations and financial condition.

Changes to U.S. tax laws could adversely affect the Company or holders of the Common Shares. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.

We are subject to review and audit by U.S. federal, state, local tax authorities. Tax authorities may disagree with or challenge tax positions we take, which if successful could harm our business. We may be subject to additional tax liabilities due to changes in non-income based taxes resulting from changes in federal, state or local tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies, and positions, results of tax examinations, settlements, or judicial decisions, changes in accounting principles, changes to our business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period. In the future, the company may also be subject to foreign jurisdictions where tax law changes may pose a similar risk.

If we fail to adequately protect our intellectual property, or if third parties assert claims of infringement against us, we could face significant costs, potential damages, and restrictions on our ability to use certain technologies.

The Company relies on the ability to protect its intellectual property rights and depends on patent, trademark and trade secret legislation to protect its proprietary know-how. There is no assurance that the Company has adequately protected or will be able to adequately protect its valuable intellectual property rights or will at all times have access to all intellectual property rights that are required to conduct its business or pursue its strategies, or that the Company will be able to adequately protect itself against any intellectual property infringement claims. There is also a risk that the Company’s competitors could independently develop similar technology, processes or know-how; that the Company’s trade secrets could be revealed to third parties; that any current or future patents, pending or granted, will be broad enough to protect the Company’s intellectual property rights; or, that foreign intellectual property laws will adequately protect such rights. The inability to protect the Company’s intellectual property could have a material adverse effect on the Company’s business, results of operations and financial condition. Additionally, the applied science industry is characterized by frequent allegations of intellectual property infringement. Though we do not expect to be subject to any of these allegations, any allegation of infringement could be time consuming and expensive to defend or resolve, result in substantial diversion of management resources, cause suspension of operations or force us to enter into royalty, license, or other agreement, rather than dispute the merits of such allegation. If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation. We may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all.

Despite mitigation measures, increasing cybersecurity threats and potential attacks could compromise our systems, disrupt operations, expose sensitive data, and materially and adversely impact the Company’s business.

Threats to information technology systems associated with cybersecurity risks and cyber incidents or attacks continue to grow and evolve in terms of severity and sophistication, particularly with the increase in remote work that began during the COVID-19 pandemic. A cybersecurity attack has the potential to compromise the business, financial and other systems of the Company, and could go unnoticed for some time. Risks associated with cybersecurity threats include, among other things, loss of intellectual property, disruption of business operations and safety procedures, loss or damage to worksite data delivery systems, privacy and confidentiality breaches, and increased costs and time to prevent, respond to or mitigate cybersecurity incidents. The Company has implemented a cybersecurity policy and provided training to its personnel as mitigation measures. System and network maintenance, upgrades and similar best practices are also followed. However, despite these measures, the occurrence of a significant cybersecurity incident could have a material adverse effect on the Company’s business and result in a prolonged disruption to it.

A recently-issued federal directive may prevent us from exporting black mass to foreign customers, which would materially adversely affect our revenue, results of operations, financial condition, and ability to fund ongoing operations.

A recently-issued federal directive (the “Directive”), which became effective on August 27, 2026, essentially prohibits the export of black mass by any domestic company from the United States, unless an exception or adjustment is obtained from the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”). The Directive will remain in effect for approximately one year from the date of publication. Sales of black mass represent the majority of the Company’s total revenue, and substantially all of its current black mass customers are located outside the United States in OECD countries. The Company has submitted a request to BIS for an exception from the Directive’s domestic allocation requirement and is actively engaging with Congressional representatives, government affairs advisors, and other stakeholders regarding this matter, but it cannot predict the outcome of these efforts. There can be no assurance that the Company’s request for an exception will be granted, that any exception will be granted on terms that are commercially favorable to the Company, or that any exception will be granted within a timeframe that avoids material disruption to its business and operations. If the Company is unable to obtain an exception or other relief from the Directive, or if any exception is subject to conditions that are commercially impracticable, the Company may be unable to sell black mass to all of its foreign customers. The loss of its foreign black mass sales revenue would have a material adverse effect on the Company’s revenue, results of operations, financial condition, cash flows, and ability to fund ongoing operations and growth initiatives. The Company may be required to seek alternative income sources, reduce operating costs, or pursue additional financing. Additionally, even if the Company is able to identify and develop domestic customers for black mass over time, such development efforts may take considerable time, and the terms of domestic sales may be significantly less favorable than existing international arrangements. See Note 19, “Subsequent Events,” to the consolidated financial statements.

Risks Relating to Ownership of Our Securities

We may issue additional equity securities in the future without seeking shareholder approval. Any such issuance could dilute existing ownership and potentially place downward pressure on the market price of our common shares. In addition, the interests of our directors and executive officers may not always align with those of other shareholders.

We may issue additional common shares or other equity securities in the future in connection with capital raises, acquisitions, repayment of indebtedness, or grants under the Company’s 2021 Retention Plan (“the Retention Plan”), in many cases without shareholder approval. We are actively exploring financing options and strategic alternatives, and any fundraising through equity or convertible debt could result in significant dilution to existing shareholders. In addition, newly issued securities may have rights, preferences, or privileges senior to those of our common shares.

We may issue common shares upon conversion, redemption, or exercise of related equity securities. We may also issue common shares upon the exercise of outstanding warrants.

The issuance of additional equity securities could:

Our common shares have experienced and may continue to experience significant volatility, and the trading price of our common shares may decline regardless of our operating performance.

The market price of the stock of a publicly traded company is affected by a number of variables, many of which are outside the Company’s control. Such factors include: the general condition of markets for resource stocks, and particularly for stocks of lithium exploration and development companies and other battery-metals stocks; the general strength of the economy; the availability and attractiveness of alternative investments; analysts’ recommendations and their estimates of financial performance; investor perception and reactions to disclosures made by the Company, and by the Company’s competitors; future securities sales; reputational risks of the Company; and the breadth of the public markets for the stock. Investors could suffer significant losses if the Company’s common stock is depressed or illiquid when an investor seeks liquidity.

We have identified material weaknesses in our internal controls over financial reporting (ICFR). If we fail to remediate the weaknesses and establish effective controls, our business, operating results, and the market price of our shares could be materially adversely affected. If we fail to remediate this weakness and establish effective controls, our business, operating results, and the market price of our shares could be materially adversely affected.

Our reporting obligations as a public company place a significant strain on our management, operational and financial resources and systems. Because we failed to maintain an effective system of internal control over financial reporting, we could experience delays or inaccuracies in our reporting of financial information, or non-compliance with the SEC, reporting and other regulatory requirements. This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things, cause our stock price to drop.

Compliance with the regulatory requirements applicable to U.S. domestic issuers is expected to require considerable time, cost, and resources.

As a public reporting company, we are subject to the information and reporting requirements of the Exchange Act, and other federal securities laws, rules and regulations. Complying with these laws and regulations requires more time and attention from our Board of Directors and management and requires additional employees compared to a privately-held company. Complying with these laws and regulations requires more time and attention of our Board of Directors and management and requires additional employees compared to a privately-held company. In addition, the costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC, furnishing audited reports to stockholders, maintaining more comprehensive compliance functions, policies and procedures, and corporate governance, are greater than that of a privately-held company.

If we fail to satisfy the continued listing requirements of The Nasdaq Stock Market, our common stock could be delisted, which would reduce liquidity and could impair our ability to raise capital.

Our common stock is listed on The Nasdaq Capital Market under the symbol “ABAT.” To maintain that listing we must satisfy continued listing standards, including minimum bid price, stockholders’ equity or market value, publicly held shares, market maker, and corporate governance requirements. Our share price has been volatile, and we rely substantially on equity issuances to fund our operations. If we fail to satisfy any applicable standard and are unable to regain compliance within any cure period, our common stock could be suspended or delisted. Delisting would likely reduce the liquidity and market price of our common stock, limit the willingness of institutional investors and market makers to trade in our securities, impair our eligibility to use short-form registration statements and our at-the-market program, and make it more difficult and more expensive for us to raise capital.

We do not currently intend to pay dividends on our common shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares.

The Company has not paid dividends on its Common Shares since incorporation. The Company anticipates that it will retain its earnings and other cash resources for future operations and the ongoing development of its business. As such, the Company does not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends is solely at the discretion of the Board, which will consider many factors including the Company’s operating results, financial condition and anticipated cash needs. Payment of any future dividends is solely at the discretion of the Board, which will take into account many factors including the Company’s operating results, financial condition and anticipated cash needs.

We may be required to record asset write-downs, impairments, restructurings, or other charges, any of which could materially and negatively impact our financial condition, operating results, and share value.

We make certain accounting estimates and projections in connection with our impairment analysis for long-lived assets in accordance with applicable accounting guidance. An impairment charge may be required if the impairment analysis indicates that the carrying value of an asset exceeds the sum of the expected undiscounted cash flows of the asset. The projection of future cash flows used in this analysis requires the use of judgment and a number of estimates and projections of future operating results. If actual results differ from Company estimates, additional charges for asset impairments may be required in the future. If impairment charges are significant, our financial results could be negatively affected.

Provisions of our charter documents, our authorized but unissued preferred stock, and Nevada law could delay or prevent a change of control and may depress the market price of our common shares.

Our amended and restated articles of incorporation authorize 1,666,667 shares of preferred stock issuable in one or more series, and our Board of Directors is authorized to fix the voting rights, designations, preferences, and other terms of each series without stockholder approval. The issuance of preferred stock with voting or other rights senior to our common stock could adversely affect the voting power and other rights of holders of our common stock and could have the effect of delaying, deferring, or preventing a change of control of the Company or the removal of existing management. In addition, we are a Nevada corporation and are subject to Nevada statutes governing combinations with interested stockholders and the acquisition of controlling interests, which may further discourage, delay, or prevent a transaction that stockholders might otherwise consider favorable, including a transaction at a premium to the then-current market price of our common shares.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

Risk Management and Strategy

Governance