Financial Analysis

20. Commitments and Contingencies From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Except as otherwise identified herein, management is currently not aware of any such legal proceedings or claims that could have, individually or in aggregate, a material adverse effect on our business, financial condition, or operating results. Operating Leases The Company leases its principal office location in Reno, Nevada. It also leases lab space at the University of Nevada, Reno on short term leases. The principal office location lease expires on November 30, 2027, and the Lab lease expires on January 31, 2027. Consistent with the guidance in ASC 842, Leases, the Company has recorded the principal office lease in its consolidated balance sheet as an operating lease. For further information on operating lease commitments, see Note 12. Financial Assurance Nevada and other states, as well as federal regulations governing mine operations on federal land, require financial assurance to be provided for the estimated costs of mine reclamation and closure, including groundwater quality protection programs. The Company has satisfied financial assurance requirements using a combination of cash bonds and surety bonds. The amount of financial assurance the Compan …

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16. Equity Compensation Awards The Company has established the Retention Plan to issue shares in the effort to retain key executives, directors, and employees. The Retention Plan allows for several different types of awards to be granted, including but not limited to, restricted share units and restricted share awards, collectively referred to as share awards. Share awards generally have the same expense characteristics under US GAAP and generally vest over a four-year period at a rate of 25 % per annum. Under the Retention Plan, the Company is authorized to issue shares of common stock to employees and non-employees up to ten percent ( 10 %) of the total number of shares of common stock outstanding as of December 31, each year, on a fully diluted basis, while the Retention Plan remains in effect. During fiscal years 2026 and 2025, the Company granted 12.4 million and 9.5 million share awards under the Retention Plan, respectively. The table below reflects the share award activity for the fiscal years ended June 30, 2026 and 2025: Schedule of Restricted Shares and Restricted Share Units Non-Vested Units Weighted- Average Grant Date Fair Value per Unit Unvested share awards at June 30, 2024 3,428,604 5.02 Granted 9,454,729 1.03 Vested (3,135,227 ) 2.59 Forfeitures (1,164,640 ) 1.94 Unvested share awards at June 30, 2025 8,583,466 $ 1.93 Granted 12,395,923 2.78 Vested (6,563,778 ) 2.74 Forfeitures (1,434,229 ) 2.14 Unvested awards at June 30, 2026 12,981,382 $ 2.31 As awards ar …

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17. Income Taxes The Company has not recognized any income tax provisions for the fiscal years ended June 30, 2026 and 2025. Domestic and foreign pretax loss from continuing operations for the fiscal years ended June 30: Schedule of Income (loss) Before Provision for Income Taxes 2026 2025 Domestic $ (73,379,021 ) $ (46,762,625 ) Foreign - - Domestic and foreign pre-tax loss $ (73,379,021 ) $ (46,762,625 ) The components of the provision (benefit) for income taxes for the fiscal years ended June 30: Schedule of Provision for Income Taxes 2026 2025 Current Federal $ - $ - State - - Total Current $ - $ - 2026 2025 Deferred Federal $ - $ - State - - Total Deferred $ - $ - Tax Rate Reconciliation The reconciliation from the statutory federal income tax rate to the Companys effective income tax rate, applying ASU 2023-09 prospectively, follows: Schedule of Statutory Federal Income Tax Rate For the Fiscal Year Ended June 30, 2026 Percent Income taxes (benefit) at statutory rates $ (15,409,595 ) 21.0 % State and local income taxes, net of federal benefit - 0.0 % Tax Credits Research and development (897,404 ) 1.2 % Changes in valuation allowance 11,727,272 (16.0 )% Nontaxable or nondeductible items Permanent 291,364 (0.4 )% Stock compensation (949,004 ) 1.3 % Section 162(m) Officers Compensation 5,204,519 (7.1 )% Other, net 32,848 0.0 % Income tax provision (benefit) $ - 0.0 % The reconciliation from the statutory federal income tax rate to our effective income tax rate, applying AS …

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12. Leases Right-of-use (RoU) assets represent the Companys right to use an underlying asset for the lease term and operating lease liabilities represent the Companys obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. RoU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The terms used to calculate the RoU assets for certain properties include the renewal options that the Company is reasonably certain to exercise. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company estimates a rate of 8.0% for the fiscal year ended June 30, 2026 and 2025, based primarily on historical lending agreements. RoU assets include lease payments required to be made prior to commencement and exclude lease incentives. Both RoU assets and the related lease liability exclude variable payments not based on an index or rate, which are treated as period costs. The Companys lease agreements do not contain significant residual value guarantees, restrictions, or covenants. The Company leases office space under a non-cancelable operating lease agreement. The lease commenced December 1, 2024, and has a lease …

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11. Notes Payable On August 29, 2023, the Company and High Trail (the Buyers) entered into a Securities Purchase Agreement (the Purchase Agreement), pursuant to which the Company can sell to the Buyers up to $ 51.0 million of a new series of senior secured convertible notes (the Notes), of which $ 25.0 million was initially received. The Company analyzed the conversion features of the Notes for derivative accounting considerations under ASC 815-15, Derivatives and Hedging, and determined a freestanding call option should be bifurcated and separately accounted for as a derivative liability. Accordingly, the derivative liability is carried at fair value at each reporting date with the corresponding gain or loss reflected in earnings in the consolidated statements of operations. The Company determined the derivative liability to have a fair value of $ 0.4 million at issuance of the Notes. In fiscal year 2025, the Company recorded a gain of $ 0.7 million within the change in fair value of the derivative liability in the consolidated statements of operations. As of June 30, 2025, the fair value of the derivative liability was determined to be nil given the expiration of the freestanding call option on October 1, 2024. No derivative instruments requiring liability-classification were outstanding during the period from December 1, 2024 through June 30, 2025, and there has been no related activity since the options expiration; accordingly, fair value measurement was not required. The …

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y) Adoption of Recent Accounting Pronouncements The Company continually assesses new accounting pronouncements to determine their applicability. When it is determined a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a review to determine the consequences of the change to its consolidated financial statements and assures there are sufficient controls in place to ascertain the Companys consolidated financial statements properly reflect the change. In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures, which updates income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 during the fiscal year ended June 30, 2026. Reference footnote 17 for required disclosures. In November 2024, FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. As amended by ASU 2025-01, this guidance requires disclosures in the notes to financial statements of specified information about certain costs and expenses. It clarifies which certain costs and expenses that are …

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18. Segment and Other Information The Company has determined that its Chief Executive Officer is its chief operating decision maker (CODM). The Company operates as a single business operating segment, which includes all activities related to the exploration of new primary resources of battery metals, in the development and commercialization of new technologies for the extraction of these battery metals from primary resources, and in the commercialization of an internally developed integrated process for the recycling of lithium-ion batteries. Accordingly, the CODM uses consolidated net income to assess financial performance and inform decisions on how to allocate resources. The financial information provided to the CODM does not contain significant disaggregated expenses outside of what is already disclosed in the statements of operations. Revenue from five major customers during the fiscal year ended June 30, 2026 and three major customers for the fiscal year ended June 30, 2025 accounted for 86 % and 74 %, respectively of the revenue for those periods. Substantially all of the Companys long-lived assets and operating lease right-of-use assets were located in the United States as of June 30, 2026 and 2025. …

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3. Summary of Significant Accounting Policies and Recent Accounting Pronouncements a) Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (US GAAP) and are expressed in U.S. dollars. The Companys fiscal year end is June 30. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Oroplata Exploraciones E Ingenieria SRL (inactive) and LithiumOre Corporation (formerly Lithortech Resources Inc) and ABMC AG, LLC (inactive). All inter-company balances and transactions, if any, have been eliminated upon consolidation. b) Use of Estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company regularly evaluates estimates and assumptions related to revenue recognition, the fair value of stock-based compensation, valuation and recoverability of long-lived assets and intangible assets, and fair value less cost to sell assets held-for-sale. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that …

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14. Stockholders Equity Preferred Stock The Companys amended and restated articles of incorporation authorize shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. The Companys board of directors (the Board of Directors) is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board of Directors is able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of the Board of Directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring, or preventing a change of control of the Company or the removal of existing management. To date, the Company has authorized a total of 1,666,667 shares of preferred stock. Of this amount the Company has designated a total of 233,340 shares to four classes of preferred stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock. A description of each class of preferred stock is listed below. Series A Preferred Stock The Company has 33,334 shares of Series A Preferred Stock authorized with a par …

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21. Subsequent Events A recently-issued federal directive effectively prohibits the export of black mass for any domestic company from the United States, unless an exception or adjustment is obtained from the Department of Commerce The Directive took effect on August 27, 2026, and remains in effect for approximately one year from the date of publication. If the Company is unable to obtain an exception, the Company will not be able to sell black mass to foreign customers, which could result in a material adverse effect on its revenue, results of operations, financial condition, and ability to fund ongoing operations. Sales of black mass represent the majority of the Companys total revenue, and substantially all of its current black mass customers are located outside the United States. The Company has submitted a request for an exception from the Directives domestic allocation requirement and is actively engaging with Congressional representatives, government affairs advisors, and other stakeholders regarding this matter. Under the Directive, companies may submit exception requests on a rolling basis, and BIS intends to respond within 14 days of receipt. The Company is monitoring developments regarding the Directive, including the public comment period (which remains open until November 4, 2026), potential legislative action, and any modifications BIS may make to the Directive or exception process. The Company intends to pursue all available avenues to obtain relief, but it can …

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