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 leases expire on February 1, 2026. Consistent with the guidance in ASC 842, 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 10. 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 Company is requ …

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16. Equity Compensation Awards The Company established the 2021 Retention Plan (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, warrants, 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, 2022, on a fully diluted basis. The Company adjusts the authorized shares under the plan each December 31, while the Retention Plan remains in effect. During the fiscal year ended June 30, 2025 and 2024, the Company granted 9.5 million and 3.3 million share awards, respectively, under the Retention Plan. The table below reflects the share award activity for the periods ended June 30, 2025 and 2024: 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, 2023 1,736,376 8.25 Granted 3,290,268 3.51 Vested (1,306,480 ) 5.29 Forfeitures (291,560 ) 5.94 Unvested share awards at June 30, 2024 3,428,604 5.02 Granted 9,454,729 1.03 Vested ( …

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17. Income Taxes The Company has not recognized any income tax provisions for the fiscal years ended June 30, 2025 and 2024. The U.S. federal corporate statutory rate of 21.0 % is the applicable corporate tax rate used for fiscal years ended June 30, 2025 and 2024. The statutory rate differs from the Companys computed expected tax recovery rate due to the following adjustments for the fiscal years ended June 30: Schedule of Federal Income Tax provision 2025 2024 Net loss before taxes $ (46,762,625 ) $ (52,501,819 ) Statutory Rate 21 % 21 % Computed expected tax recovery (9,839,003 ) (11,025,382 ) State income tax (benefit), net of federal benefit (1,080,844 ) (315,287 ) Section 162(m) adjustments - 71,043 Other permanent tax differences 537,794 (121,985 ) Share-based compensation RSUs/PSUs 1,351,909 701,362 Uncertain tax positions - (219,450 ) Tax credit (11,697 ) - Deferred adjustments and other (501,191 ) (518,766 ) Change in valuation allowance 9,543,032 11,428,465 Total income tax provision $ - $ - The significant components of deferred income tax assets and liabilities at June 30, after applying the statutory corporate income tax rate, are as follows for the fiscal years ended June 30: Schedule of Deferred Income Tax Assets and Liabilities 2025 2024 Net operating losses $ 30,864,583 $ 25,676,852 Stock-based compensation 4,097,550 2,472,597 Section 174 capitalization 2,328,383 1,938,732 Other temporary differences 420,994 390,384 Fixed assets and intangibles 4,007,255 1,6 …

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10. Leases 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 years ending June 30, 2025 and 2024, 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 term of three …

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12. 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. For the three months ended September 30, 2024, 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 September 30, 2024, 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 December 1, 2024 through June 30, 2025, and there has been no related activity since the options expiration; accordingly, fair value measure …

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x) Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of a segments profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segments profit or loss in assessing segment performance and deciding how to allocate resources. The Company adopted ASU 2023-07 during the year ended June 30, 2025. See Note 18, Segment and Other Information, in the accompanying notes to the financial statements for further detail. In December 2023, the FASB issued 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. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of determining the effect this ASU will h …

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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 three major customers during the years ended June 30, 2025 and 2024 accounted for 74 % of the fiscal year ended June 30, 2025 revenue. 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, 2025 and 2024. …

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3. Basis of Presentation, 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 vari …

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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 v …

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21. Subsequent Events Subsequent to year end and up until filing, management has leveraged the Companys inclusion in the Russell 2000 to raise capital through the At-the-Market Offering facility, received proceeds from warrant exercises, and benefited from High Trails full debt conversion and release of restricted cash. As a result, the Companys net cash position improved significantly to $ 25.4 million as of September 15, 2025. On July 18, 2025, the Buyers converted $ 5,000,000 of the 2024 Notes into shares of common stock of the Company at a conversion rate of 1,333.33 shares of common stock per $ 1,000 of principal amount. Total common shares of 6,666,651 were issued with a fair market value of $ 16.0 million. On July 23, 2025, one of the Companys institutional investors exercised 4,000,000 common stock warrants at an exercise price of $ 1.10 per share. The warrant exercise resulted in gross proceeds of approximately $ 4.4 million to the Company. The shares were issued in accordance with the original warrant terms. As of June 30, 2025, the Company had $ 5.0 million classified as restricted cash. Subsequent to year-end, on July 29, 2025, the restrictions were lifted, and the funds became available for general use. As the restriction was still in place as of the balance sheet date, the cash remains classified as restricted. At June 30, 2025, the Company classified land and a building at its Fernley, Nevada location as assets held for sale. On July 28, 2025, a potential buyer …

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