Aqua Metals and American Battery Factory Announce Proposed Strategic Collaboration to Advance Domestic Circular Supply of Battery Materials

Rhea-AI Summary

Aqua Metals (NASDAQ: AQMS) and American Battery Factory announced a proposed strategic collaboration under a non-binding MOU to evaluate co-locating an Aqua Metals commercial lithium-ion recycling facility adjacent to ABF’s planned Tucson cell manufacturing site.

The plan contemplates AquaRefining™ recycling of manufacturing scrap to produce battery-grade lithium carbonate, a commercial-scale facility up to 10,000 metric tons annually, potential use of the 45X production tax credit, and a targeted start of commercial operations in 2028, subject to financing, permits, and regulatory approvals.

Positive

• Proposed co-location to process up to 10,000 metric tons annually
• AquaRefining™ aims to produce battery-grade lithium carbonate for reuse
• Targeted commercial start in 2028 aligns with US manufacturing growth
• Potential eligibility for the 45X Advanced Manufacturing Production Tax Credit

Negative

• Agreement is a non-binding MOU — no definitive commitments yet
• Project subject to financing, permitting, and regulatory approvals
• Commercial outcome depends on securing third-party feedstock and ABF scrap

Argus Feb 3 session

+1.03% close to close Open Argus

Details

News Market Reaction – AQMS

On Feb 3, the day this news came out, AQMS closed 1.03% above the previous close.

Data tracked by StockTitan Argus for the Feb 3 session.

Key Figures

Recycling capacity: 10,000 metric tons annually Target start of operations: 2028 Net loss (quarter): $3,121,000 +5 more

Recycling capacity

10,000 metric tons annually

Planned commercial-scale lithium-ion materials recycling facility under the MOU

Target start of operations

2028

Proposed co-located recycling facility adjacent to ABF in Tucson

Net loss (quarter)

$3,121,000

Q3 2025 net loss from Form 10-Q

Net loss (nine months)

$18,206,000

Nine months ended Q3 2025, Form 10-Q

Cash and equivalents

$3,586,000

As of September 30, 2025, from Form 10-Q

Registered direct & private placement proceeds

$12,000,000

Approximate net proceeds from October 16, 2025 transactions

Shelf registration size

$100,000,000

Form S-3 base shelf filed October 17, 2025

Warrant gross proceeds

$12,857,224

If all 1,133,794 registered warrants at $11.34 are exercised for cash

Historical Context

4 past events · Latest: Jan 21

4 events

1. Jan 21

   Supply agreement

   24h Move

   -6.3%

   Multi‑year supply deal with 6K Energy for nickel and lithium carbonate.

2. Nov 12

   Earnings update

   24h Move

   +15.7%

   Q3 2025 results and progress toward AquaRefining™ commercialization.

3. Nov 10

   LOI partnership

   24h Move

   -4.2%

   LOI with Westwin Elements for 500–1,000 MT recycled nickel carbonate.

4. Nov 04

   Business update call

   24h Move

   -3.1%

   Announcement of quarterly business update and Q3 2025 results timing.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

lithium iron phosphate (lfp), lithium-ion battery, memorandum of understanding (mou), battery-grade lithium carbonate, +3 more

7 terms

lithium iron phosphate (lfp) medical

"American Battery Factory (ABF), a lithium iron phosphate (LFP) battery cell manufacturer"

A lithium iron phosphate (LFP) battery is a common type of rechargeable lithium-ion battery that uses iron and phosphate in its internal chemistry, prized for being stable, safe and long-lived. For investors, LFP matters because it trades higher safety and longer life for lower energy density—think of it as a sturdy, long-lasting suitcase that holds less per pound—so it affects product cost, vehicle range and total lifecycle value.

lithium-ion battery technical

"a commercial Aqua Metals lithium-ion battery recycling facility adjacent to ABF’s"

A lithium-ion battery is a rechargeable energy cell that stores and releases power by moving lithium ions between two electrodes, like a pump moving water back and forth to hold and deliver energy. Investors care because these batteries power electric vehicles, portable electronics and grid storage, so factors such as cost, energy density, lifespan, and raw-material supply directly affect manufacturing costs, product competitiveness and long-term company profits.

memorandum of understanding (mou) regulatory

"Under a non-binding Memorandum of Understanding (MOU), the companies intend"

A memorandum of understanding (MOU) is a written outline where two or more parties describe their shared intentions, key terms and roles for a proposed deal without forming a full binding contract. For investors it acts like a concrete handshake: it signals the seriousness and likely direction of partnerships, mergers or supply arrangements, helping assess the probability, timing and potential impact of future agreements on a company’s value.

battery-grade lithium carbonate technical

"recycle lithium-ion battery manufacturing scrap ... and return battery-grade lithium carbonate"

Battery-grade lithium carbonate is a highly pure chemical compound used as a key ingredient in the manufacture of lithium-ion battery cathodes and electrolytes. Think of it as the flour in a baking recipe: its quality affects the final product’s performance and safety. Investors care because its availability, purity and price influence battery makers’ costs, electric vehicle and storage supply chains, and therefore the revenue and margins of companies across the clean-energy ecosystem.

black mass technical

"rather than exporting manufacturing scrap and black mass to overseas markets"

Black mass is the dark, powdery mixture produced when end-of-life lithium‑ion batteries are shredded and processed; it contains concentrated metals and active battery materials such as lithium, nickel, cobalt, manganese, copper and graphite. It matters to investors because it is the key raw material for recycling these valuable metals—like extracting coins from old electronics—so its availability, purity and processing costs affect supply, commodity prices, and the economics of battery makers, miners and recyclers.

hydrometallurgical technical

"for conventional hydrometallurgical processing"

Hydrometallurgical describes methods that use water-based chemistry to dissolve, separate and recover metals from ores, concentrates or recycled materials, much like dissolving sugar to separate it from tea and then collecting the sugar back out. It matters to investors because these processes determine how much metal a project can realistically produce, the operating cost and environmental footprint, and therefore influence revenue potential, capital needs and regulatory risk.

45x advanced manufacturing production tax credit financial

"including the 45X Advanced Manufacturing Production Tax Credit, could further support"

A 45x advanced manufacturing production tax credit is a government incentive that gives manufacturers a fixed tax benefit for each eligible unit they produce of certain advanced products, effectively acting like a per-item rebate on production. It matters to investors because it increases a producer’s after-tax profit and can lower break-even costs—similar to getting a discount on materials—making companies more competitive, improving margins, and potentially raising future cash flow and valuation.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Strategic collaboration would highlight a cost-competitive, domestic alternative to overseas battery materials processing

TUCSON, Ariz. and RENO, Nev. , Feb. 03, 2026 (GLOBE NEWSWIRE) -- Aqua Metals, Inc. (NASDAQ: AQMS), a pioneer in clean metals recycling and refining, and American Battery Factory (ABF), a lithium iron phosphate (LFP) battery cell manufacturer, today announced a proposed strategic collaboration focused on advancing a more competitive, domestic battery materials supply chain through recycling and circular manufacturing.

Under a non-binding Memorandum of Understanding (MOU), the companies intend to evaluate the co-location of a commercial Aqua Metals lithium-ion battery recycling facility adjacent to ABF’s planned battery cell manufacturing operations in Tucson, Arizona. The proposed collaboration would enable Aqua Metals to recycle lithium-ion battery manufacturing scrap generated by ABF and return battery-grade lithium carbonate for reuse in U.S. based battery production.

The collaboration is designed to address a key challenge facing the U.S. battery industry: how to economically process battery materials domestically rather than exporting manufacturing scrap and black mass to overseas markets, primarily in Asia, for conventional hydrometallurgical processing. By integrating recycling directly with battery manufacturing, the companies aim to improve cost competitiveness, reduce logistics complexity, and strengthen domestic supply chain resilience.

Aqua Metals’ proprietary AquaRefining™ technology replaces high-temperature furnaces and chemical-intensive hydrometallurgical processes with an electricity-powered, closed-loop system. This approach is designed to operate more efficiently in the U.S. regulatory and labor environment while creating safer, higher-quality manufacturing jobs and producing battery-grade materials suitable for direct reuse.

“This strategic collaboration reflects our belief that domestic battery recycling must be economically viable, not just environmentally preferable,” said Steve Cotton, President and CEO of Aqua Metals. “By working alongside American Battery Factory, we are evaluating a model that would keep valuable materials in circulation, support U.S. manufacturing jobs, and offer a realistic alternative to exporting battery scrap overseas for processing methods that simply do not translate well to the United States.”

American Battery Factory is developing large-scale LFP battery cell manufacturing capacity in the United States, supported by federal and state initiatives aimed at expanding domestic battery production. Through the contemplated collaboration, Aqua Metals would develop a co-located recycling facility that would process manufacturing scrap using AquaRefining™ and supply battery-grade lithium carbonate back into ABF’s supply chain or to designated downstream partners.

“This collaboration is intended to reflect the next evolution of battery manufacturing in the United States,” said John S. Kem, President of American Battery Factory. “Integrating nearby-adjacent recycling directly into the production ecosystem supports our commitment to domestic sourcing, supply security, and long-term competitiveness.”

The MOU also outlines plans to evaluate a commercial-scale recycling facility capable of processing up to 10,000 metric tons of lithium-ion battery materials annually, including both manufacturing scrap and third-party feedstock. Co-locating recycling and manufacturing operations is expected to improve logistics efficiency, reduce transportation costs, and enhance overall operational economics.

The companies also expect to evaluate how domestic manufacturing incentives, including the 45X Advanced Manufacturing Production Tax Credit, could further support the economic competitiveness of U.S.-based battery materials production relative to foreign supply chains.

Any definitive agreements would be subject to financing, permitting, and regulatory approvals, with a targeted start of commercial operations in 2028.

For Aqua Metals, the collaboration builds on recent progress advancing its lithium-ion battery recycling strategy, including pilot-scale operations producing battery-grade materials, a growing portfolio of strategic partnerships across the battery materials ecosystem, and ongoing bench-scale testing and partnership development focused on rare earth element recovery. Through a closed-loop, made-in-USA recycling and refining platform, Aqua Metals is advancing the commercialization of critical battery materials including lithium, nickel, cobalt, copper, and manganese, while progressing rare earth recovery at the laboratory and bench scale. Together, these capabilities position the Company as an innovative leader in developing economically competitive, domestic recycling solutions aligned with emerging federal initiatives supporting secure processing, storage, and strategic stockpiling of critical minerals.

About Aqua Metals

Aqua Metals (NASDAQ: AQMS) is revolutionizing metals recycling with its proprietary AquaRefining™ technology, delivering high-purity, low-carbon battery materials to meet the growing demand for sustainable energy storage. The Company’s innovation-driven approach reduces emissions, eliminates waste streams, and supports the establishment of a circular supply chain for critical minerals essential to electric vehicles and grid storage. For more information, visit www.aquametals.com

About American Battery Factory

American Battery Factory Inc., a lithium iron phosphate (LFP) battery cell manufacturer, is dedicated to making an American-made supply of cells for energy storage, at scale, with the very latest equipment technology and enabling a domestic battery material-supply chain for LFP battery cells. Along with creating domestic manufacturing jobs, ABF cells are critical for reliable, abundant, and affordable power in the USA for energy grid and national security applications. For more information on American Battery Factory, please visit americanbatteryfactory.com.

Safe Harbor

This press release contains forward-looking statements concerning Aqua Metals, Inc. Forward-looking statements include, but are not limited to, our plans, objectives, expectations and intentions, and other statements that contain words such as "expects," "contemplates," "anticipates," "plans," "intends," "believes," "estimates," "potential" and variations of such words or similar expressions that convey the uncertainty of future events or outcomes, or that do not relate to historical matters. The forward-looking statements in this press release include our ability to enter into a definitive agreement with American Battery Factory, our acquisition of the capital required to design and construct our co-located recycling facility and American Battery Factory’s ability to construct its manufacturing facility to be co-located with our recycling facility. Those forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially. Among those factors are: (1) the risk that we may not be able to enter into a definitive agreement with American Battery Factory, (2) the risk that we may not be able to acquire the necessary capital to construct our recycling facility, (3) the risk that American Battery Factory may not be able to construct its manufacturing facility, (4) the risk that we may not achieve the expected benefits from such relationship, (5) the risk that we may not be able to obtain the additional capital necessary to expand our recycling facilities or even sustain our current level of operations; and (5) those other risks disclosed in the section "Risk Factors" included in our Annual Report on Form 10-K filed on March 31, 2025. Aqua Metals cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law.

Contacts

For Media and Investor Inquiries: aquametals@icrinc.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did Aqua Metals (AQMS) and American Battery Factory announce on February 3, 2026?

They announced a proposed strategic collaboration to evaluate co-locating a commercial recycling facility beside ABF’s Tucson cell plant. According to the company, the non-binding MOU would assess recycling manufacturing scrap into battery-grade lithium carbonate for domestic reuse.

How much material would the proposed Aqua Metals recycling facility process for AQMS and ABF?

The companies plan to evaluate a commercial-scale facility processing up to 10,000 metric tons annually. According to the company, that capacity would include manufacturing scrap and third-party feedstock to support domestic battery materials supply.

What technology will Aqua Metals use to recycle lithium-ion scrap in the AQMS collaboration?

Aqua Metals would use its proprietary AquaRefining™ electricity-powered, closed-loop process to replace hydrometallurgy. According to the company, AquaRefining™ is designed to produce safer, battery-grade materials suitable for direct reuse in U.S. battery production.

When could commercial operations from the AQMS and ABF collaboration begin?

The companies have a targeted start of commercial operations in 2028, subject to conditions. According to the company, any definitive agreements depend on financing, permitting, and regulatory approvals before that timeline can be confirmed.

How could the AQMS and ABF project benefit U.S. battery supply chains?

The collaboration aims to reduce exports of scrap and lower logistics costs by recycling domestically adjacent to manufacturing. According to the company, integrating recycling seeks to improve cost competitiveness and strengthen domestic supply chain resilience.