Aqua Metals, Inc.

Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 includes certain risk factors that could materially affect our business, financial condition or future results. There have been no material changes to those risk factors, except as described below:

We will need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all*.* 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 $4,047,000. As of the date of this report, we believe that we will require additional capital in order to fund our current level of ongoing costs and our proposed business plan over the next 12 months as we move forward with our business strategy. We intend to acquire the necessary capital through debt financing, sale of assets or through the sale of equity. Funding that includes the sale of our equity may be dilutive. If such funding 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.

The report of our independent registered public accounting firm for the year ended December 31, 2025 states that there is substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

Our allowance for credit losses related to our Lion Energy exposure may not be adequate to cover actual credit losses, which could adversely affect our financial condition and results of operations. As of June 30, 2026, we had approximately $4,160,000 of gross amortized-cost exposure related to Lion Energy through a subordinated participation interest, including accrued interest. During the second quarter of 2026, the senior loan position and participation-related rights and obligations were assigned to an entity that we believe is affiliated with an owner of Lion Energy. Following the assignment, our access to certain current financial, operating, and collateral information concerning Lion Energy was significantly reduced. Consequently, our estimate of expected credit losses is based on the latest reliable information available to us.

In accordance with U.S. GAAP, we maintain an allowance for expected credit losses under the CECL model. As of June 30, 2026, we recorded an allowance for credit losses of approximately $2,496,000 related to the Lion Energy exposure. The estimate requires significant management judgment, including judgments regarding the probabilities and estimated recoveries associated with potential full, partial, and no-recovery outcomes.

Actual credit losses could exceed the recorded allowance due to changes in collateral values, recovery costs, market and operating conditions, the availability and enforceability of credit support, the senior lender’s priority claim, the outcome of commercial or legal recovery efforts, the unavailability of additional information regarding Lion Energy's financial condition and operations, and other circumstances beyond management’s control. If actual recoveries are lower than estimated, we may be required to record additional material provisions for credit losses in future periods, which could materially adversely affect our financial condition, results of operations, and liquidity.