5E Advanced Materials, Inc. 10-Q

Item 1. Financial Statements. 5E ADVANCED MATERIALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except per share data) March 31, June 30, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 4,032 $ 4,896 Prepaid expenses and other current assets 547 1,913 Total current assets 4,579 6,809 Mineral rights and properties, net 7,622 7,616 Construction in progress 2,052 608 Properties, plant and equipment, net 58,665 73,872 Reclamation bond deposit 319 311 Right of use asset 172 282 Other assets — 6 Total assets $ 73,409 $ 89,504 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 6,056 $ 9,567 Lease liabilities, current 91 141 Total current liabilities 6,147 9,708 Long-term debt, net 33 64,831 Convertible note derivative liabilities — 3,315 Lease liabilities 90 149 Asset retirement obligations 877 795 Total liabilities 7,147 78,798 Commitments and contingencies (Note 13) Stockholders’ equity: Common stock, $ 0.01 par value; 360,000 shares authorized; 17,996 and 2,753 shares outstanding March 31, 2025 and June 30, 2024, respectively 180 28 Additional paid-in capital 287,924 210,679 Retained earnings (accumulated deficit) ( 221,842 ) ( 200,001 ) Total stockholders’ equity 66,262 10,706 Total liabilities and stockholders’ equity $ 73,409 $ 89,504 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 5E ADVANCED MATERIALS, INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) Three months ended March 31, Nine months ended March 31, 2025 2024 2025 2024 Operating expenses: Project expenses $ 1,050 $ 1,155 $ 4,283 $ 4,169 Small-scale facility operating costs 897 — 3,564 — General and administrative 3,265 2,997 11,342 16,431 Research and development — — — 45 Depreciation and amortization expense 4,992 53 14,955 159 Total operating expenses 10,204 4,205 34,144 20,804 Income (loss) from operations ( 10,204 ) ( 4,205 ) ( 34,144 ) ( 20,804 ) Non-operating income (expense): Interest income 21 73 68 215 Other income — 4 4 7 Gain (loss) on extinguishment of debt 17,333 ( 20,953 ) 17,333 ( 20,953 ) Derivative gain (loss) — — 1,357 — Interest expense ( 1,869 ) ( 822 ) ( 6,454 ) ( 4,348 ) Other expense ( 1 ) ( 2 ) ( 5 ) ( 8 ) Total non-operating income (expense) 15,484 ( 21,700 ) 12,303 ( 25,087 ) Income (loss) before income taxes 5,280 ( 25,905 ) ( 21,841 ) ( 45,891 ) Income tax provision (benefit) — — — — Net income (loss) $ 5,280 $ ( 25,905 ) $ ( 21,841 ) $ ( 45,891 ) Net income (loss) per common share: Basic $ 0.73 $ ( 10.18 ) $ ( 5.05 ) $ ( 21.56 ) Diluted $ ( 0.97 ) $ ( 10.18 ) $ ( 5.05 ) $ ( 21.56 ) Weighted average common shares outstanding — basic 7,207 2,544 4,329 2,129 Weighted average common shares outstanding — diluted 10,452 2,544 4,329 2,129 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 5E ADVANCED MATERIALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine months ended March 31, 2025 2024 Cash Flows From Operating Activities: Net income (loss) $ ( 21,841 ) $ ( 45,891 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 14,955 159 Share based compensation 1,841 2,088 Loss on extinguishment of debt ( 17,333 ) 20,953 Unrealized (gain) loss on convertible note derivatives ( 1,357 ) — Transaction costs incurred in troubled debt restructuring ( 837 ) — Accretion of asset retirement obligations 59 53 Amortization of debt issuance costs and discount — convertible notes 1,095 3,306 Amortization of right of use asset 110 120 Interest earned on reclamation bond ( 8 ) — Change in: Prepaid expenses and other current assets 1,366 ( 204 ) Accounts payable and accrued liabilities 4,543 ( 221 ) Net cash used in operating activities ( 17,407 ) ( 19,637 ) Cash Flows From Investing Activities: Construction in progress ( 1,377 ) ( 5,790 ) Properties, plant and equipment additions ( 104 ) ( 88 ) Refund on previously acquired equipment 86 — Net cash used in investing activities ( 1,395 ) ( 5,878 ) Cash Flows From Financing Activities: Proceeds from issuance of common stock and warrants, net of issuance costs 3,018 15,794 Proceeds from debt exchange transaction, net of issuance costs 4,891 — Proceeds from issuance of convertible notes 11,000 — Debt issuance costs ( 764 ) ( 2,586 ) Payments on note payable ( 31 ) ( 30 ) Taxes withheld for equity award vesting ( 176 ) — Net cash provided by financing activities 17,938 13,178 Net increase (decrease) in cash and cash equivalents ( 864 ) ( 12,337 ) Cash and cash equivalents at beginning of period 4,896 20,323 Cash and cash equivalents at end of period $ 4,032 $ 7,986 Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 3 $ 22 Noncash Investing and Financing Activities: Accounts payable and accrued liabilities change related to capital additions $ ( 220 ) $ 2,365 Accounts payable and accrued liabilities change related to equity issuance costs — — Accounts payable and accrued liabilities change related to debt issuance costs ( 271 ) — Recognition of operating lease liability and right of use asset — 234 Interest paid through issuance of additional convertible notes (Note 7) 7,441 3,961 Increase in asset retirement costs $ 23 $ — Convertible note derivatives liability reclassification to equity (Note 8) 3,601 — Net fair value of equity interest exchanged for convertible notes (Note 7) 65,059 — Increase in net long-term debt resulting from modification (Note 7) — 20,954 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 5E ADVANCED MATERIALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (In thousands) Additional Total Common Stock Paid-in Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at June 30, 2023 1,921 $ 19 $ 191,535 $ ( 137,988 ) $ 53,566 Vesting of restricted share units 2 — ( 31 ) — ( 31 ) Share based compensation expense — — 599 — 599 Net income (loss) — — — ( 9,370 ) ( 9,370 ) Balance at September 30, 2023 1,923 $ 19 $ 192,103 $ ( 147,358 ) $ 44,764 Vesting of restricted share units — — ( 62 ) — ( 62 ) Share based compensation expense — — 906 — 906 Net income (loss) — — — ( 10,616 ) ( 10,616 ) Balance at December 31, 2023 1,923 $ 19 $ 192,947 $ ( 157,974 ) $ 34,992 Issuance of common stock, net of offering costs 829 9 15,785 — 15,794 Share based compensation expense — — 583 — 583 Net income (loss) — — — ( 25,905 ) ( 25,905 ) Balance at March 31, 2024 2,752 $ 28 $ 209,315 $ ( 183,879 ) $ 25,464 Additional Total Common Stock Paid-in Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance at June 30, 2024 2,753 $ 28 $ 210,679 $ ( 200,001 ) $ 10,706 Issuance of common stock, net of offering costs 232 2 1,520 — 1,522 Issuance of warrants, net of offering costs — — 1,502 — 1,502 Vesting of restricted share units 10 — ( 127 ) — ( 127 ) Share based compensation expense — — 1,350 — 1,350 Net income (loss) — — — ( 12,859 ) ( 12,859 ) Balance at September 30, 2024 2,995 $ 30 $ 214,924 $ ( 212,860 ) $ 2,094 Vesting of restricted share units 1 — ( 9 ) — ( 9 ) Share based compensation expense — — 179 — 179 Convertible note derivative liability reclassification — — 3,601 — 3,601 Net income (loss) — — — ( 14,262 ) ( 14,262 ) Balance at December 31, 2024 2,996 $ 30 $ 218,695 $ ( 227,122 ) $ ( 8,397 ) Shares issued in debt exchange: Debt exchange, net of issuance costs 13,587 136 56,962 — 57,098 Common stock, net of issuance costs 1,408 14 4,362 — 4,376 Warrants, net of issuance costs — — 7,639 — 7,639 Vesting of restricted share units 5 — ( 46 ) — ( 46 ) Share based compensation expense — — 312 — 312 Net income (loss) — — — 5,280 5,280 Balance at March 31, 2025 17,996 $ 180 $ 287,924 $ ( 221,842 ) $ 66,262 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 5E ADVANCED MATERIALS, INC. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Financial Statement Presentation These unaudited condensed consolidated financial statements (herein after referred to as “financial statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and should be read in the context of the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on September 9, 2024. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of March 31, 2025, results of operations for the three and nine months ended March 31, 2025 and 2024 and cash flows for the nine months ended March 31, 2025 and 2024 have been included. Operating results for the three and nine months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2025. Effective April 1, 2024, the Company placed the Small-Scale Facility (the “SSF”) into full operation, and accordingly all direct operating costs associated with the SSF, including raw materials, labor, and maintenance, have been separately classified as Small-scale operating costs within the Company’s condensed consolidated statements of operations after such date. Prior to April 1, 2024, these direct costs have not been reclassified and remain either as Project expenses or General and administrative costs, as appropriate. Basis of Consolidation The unaudited condensed consolidated financial statements comprise the financial statements of 5E Advanced Materials, Inc. and its wholly owned subsidiaries, American Pacific Borates Pty Ltd. and 5E Boron Americas, LLC (formerly Fort Cady (California) Corporation, (“5EBA”)), (collectively, the “Company”). The Company holds 100 % of the mineral rights through ownership and lode claims filed with the United States Bureau of Land Management in the 5E Boron Americas (Fort Cady) Complex (the “Project”) located in southern California, through its ownership of 5EBA. In preparing the condensed consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-company transactions have been eliminated. Reverse Stock Split On January 21, 2025, at an annual meeting of stockholders, the Company’s stockholders approved amendments to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock, par value $ 0.01 (“Common Stock”) at a ratio ranging from any whole number between 1-for- 10 and 1-for- 25 , with the exact ratio within such range to be determined by the Company’s Board of Directors (the “Board”) in its discretion. On February 3, 2025, the Board approved a 1-for- 23 Reverse Stock Split, which became effective at 5:00 p.m., Eastern Time on February 14, 2025 (the “Effective Time”), upon filing of an amendment to the Amended and Restated Certificate of Incorporation (the “Charter Amendment”) with the Secretary of State of the State of Delaware (the “Reverse Stock Split”). As a result of the Reverse Stock Split, at the Effective Time, every 23 shares of the Company's issued and outstanding shares of Common Stock immediately prior to the Effective Time, were automatically converted, without any action on the part of the holder thereof, into one validly issued, fully-paid and non-assessable share of Common Stock, subject to the treatment of fractional shares as described below. The Charter Amendment did not affect the number of authorized shares of Common Stock or the par value of each share of Common Stock. The number of CHESS Depositary Interests (“CDIs”) in respect of the Company’s shares of Common Stock outstanding immediately prior to the effectiveness of the Reverse Stock Split was proportionately reduced by the final split ratio, subject to rounding. The 1: 10 share-to-CDI ratio was not affected by the Reverse Stock Split. No fractional shares of Common Stock or CDIs were issued as a result of the Reverse Stock Split. Holders who otherwise would have been entitled to receive a fractional share of Common Stock in connection with the Reverse Stock Split received a cash payment in lieu thereof. As a result of the Reverse Stock Split, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options and warrants to purchase shares of the Company's Common Stock, and a proportionate adjustment was made to the number of shares issuable upon the vesting of all outstanding Restricted Stock Units and Performance Stock Units. These notes to the unaudited condensed consolidated financial statements and the accompanying unaudited condensed consolidated financial statements give retroactive effect to the Reverse Stock Split for all periods presented. 8 Debt Exchange and Related Agreements On January 14, 2025, the Company entered into a Restructuring Support Agreement (the “Restructuring Support Agreement”) with BEP Special Situations IV LLC (“Bluescape”), Meridian Investments Corporation (“Meridian”) and Ascend Global Investment Fund SPC, for and on behalf of Strategic SP (together with Meridian, “Ascend”) in connection with certain restructuring and recapitalization transactions with respect to the Company’s capital structure (collectively the “Exchange Transaction”), including the Company’s Convertible Notes (as defined in Note 7– Debt ) issued pursuant to the Amended and Restated Note Purchase Agreement (as defined in Note 7– Debt ) by and among the Company, Bluescape, Ascend, the Guarantors from time to time party thereto and Alter Domus (US) LLC, as collateral agent. Pursuant to the Restructuring Support Agreement, the parties agreed to implement the Exchange Transaction either as an: • Out-of-Court Restructuring: Subject to the satisfaction of customary conditions, including approval by the Company’s stockholders, a recapitalization through, among other things: (i) pursuant to an Exchange Agreement dated January 14, 2025 among the Company, Ascend and Bluescape (the “Exchange Agreement”), the issuance of an aggregate of 13,586,524 shares of the Company’s Common Stock, to Ascend and Bluescape upon exchange of all of the outstanding Convertible Notes (as defined in Note 7– Debt ) (the “Exchange”); (ii) pursuant to a Securities Subscription Agreement dated January 14, 2025 among the Company, Ascend and Bluescape (the “January 2025 Subscription Agreement”), the issuance and sale by the Company of an aggregate of $ 5.0 million of Common Stock to Ascend and Bluescape at a price per share equal to the lesser of (a) $ 6.716 per share and (b) the volume weighted average price for the Common Stock on the five consecutive trading days immediately following the date of the Exchange (the “Subscription Price”); (iii) pursuant to the January 2025 Subscription Agreement, the issuance by the Company to Ascend and Bluescape of warrants with a one-year term (the “Restructuring Warrants”) to purchase an aggregate number of shares of Common Stock represented by up to $ 20.0 million divided by the Subscription Price, at a price per share equal to the Subscription Price; and (iv) pursuant to a Fourth Amended and Restated Investor and Registration Rights Agreement dated January 14, 2025 among the Company, Ascend and Bluescape (the “IRRA”), the right of each of Ascend and Bluescape to designate two directors to serve on the Company’s Board following the consummation of the Exchange Transaction for so long as such party beneficially owns 25 % of the Company’s Common Stock and one director to serve on the Company's Board for so long as such party beneficially owns 10 % of the Company's Common Stock (clauses (i) through (iv), together, the “Out-of-Court Restructuring”); or • In-Court Restructuring: To the extent that the terms of or the conditions precedent to the Out-of-Court Restructuring could not be timely satisfied or waived, the Company would file voluntary pre-packaged cases under chapter 11 of title 11 of the United States Code in a United States Bankruptcy Court (the “Bankruptcy Court”) pursuant to a pre-packaged plan of reorganization (the “Pre-Packaged Chapter 11 Plan”) pursuant to which, among other things, all existing equity interests of the Company would be extinguished, with Ascend and Bluescape each owning their respective pro rata share of 100 % of the new equity interests in the Company upon the effective date of the Pre-Packaged Chapter 11 Plan (the “In-Court Restructuring”). The Restructuring Support Agreement further provided that Ascend and Bluescape would provide a $ 10.0 million debtor-in-possession financing facility pursuant to a debtor-in-possession credit agreement to be agreed upon by the parties and, as necessary, approved by the Bankruptcy Court. On March 4, 2025, at a special meeting of stockholders, the Company’s stockholders voted in favor of the Out-of-Court Restructuring, and on March 5, 2025 the Exchange was completed and resulted in 13,586,524 shares of the Company’s Common Stock issued to Bluescape and Ascend, the termination of the Amended and Restated Note Purchase Agreement and the extinguishment of all indebtedness owed by the Company under the Amended and Restated Note Purchase Agreement. On March 13, 2025, pursuant to the January 2025 Subscription Agreement, the Company issued and sold an aggregate of 1,408,173 shares of Common Stock to Bluescape and Ascend, at a Subscription Price of $ 3.5507 per share for aggregate gross proceeds of $ 5.0 million (the “March 2025 Subscription”). Also pursuant to the January 2025 Subscription Agreement, the Company issued Restructuring Warrants to purchase up to an aggregate of 5,632,692 shares of Common Stock to Bluescape and Ascend. The Restructuring Warrants are immediately exercisable and expire on March 13, 2026 , and have an exercise price per share equal to the Subscription Price. Going Concern Management evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that these condensed consolidated financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates 9 substantial doubt about the Company's ability to continue as a going concern. The mitigating effect of management's plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the condensed consolidated financial statements are issued. In performing this analysis, management concluded there continues to exist substantial doubt regarding the Company’s ability to continue as a going concern. Although the August 2024 Equity Offering (as further described and defined in Note 10– Equity ) provided net cash proceeds of approximately $ 3.0 million, the issuance of the September 2024 Notes and January 2025 Notes (each as further described and defined in Note 7– Debt ) provided aggregate net cash proceeds of approximately $ 10.2 million, the March 2025 Subscription provided net cash proceeds of approximately $ 4.9 million, and the May 2025 Subscription (as further described and defined in Note 14- Subsequent Events provided proceeds to the Company before costs payable by the Company of approximately $ 7.0 million, each of which improved the Company’s cash position, and while the Company continues to operate under a business plan that includes reductions in certain spending, management anticipates the need for additional financing within the next twelve months to maintain its operations . The receipt of potential funding cannot be considered probable at this time because these plans are not entirely within management's control as of the date of these condensed consolidated financial statements. Therefore, there exists substantial doubt regarding the Company's ability to continue as a going concern. Even if additional financing is successfully consummated, available liquidity may still not be sufficient to eliminate the aforementioned substantial doubt regarding the Company's ability to continue as a going concern. If the Company is unable to raise additional capital or generate cash flows necessary to fund our operations, we will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect our business, financial condition, results of operations, and prospects. These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Financial Instruments The Company's financial instruments consist of cash and cash equivalents, vehicle notes, and accounts payable and accrued liabilities. Management believes the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair values of these instruments, due to their short-term nature, with the exception of the vehicle notes, approximate their carrying value. Concentrations of Risk The Company maintains cash deposits at several major banks, which at times may exceed amounts covered by insurance provided by the United States Federal Deposit Insurance Corporation. Management monitors the financial health of the banks and believes the Company is not exposed to any significant credit risk, and the Company has not experienced any such losses. The Company’s operations are predominately focused on the Project, which results in the Company being dependent upon a single mining operation in a single geographic region in the western United States in California. The geographic concentration of the Company’s operations may disproportionately expose it to disruptions if the region experiences severe weather, transportation capacity constraints, constraints on the availability of required equipment, facilities, personnel or services, significant governmental regulation, or natural disasters. Risks and Uncertainties The Company is subject to a number of risks that its management believes are similar to those of other companies of similar size and industry, including but not limited to, the success of its exploration activities, need for significant additional capital (or financing) to fund operating losses, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, tariff and trade policy impacts on operating and construction costs, and dependence on key individuals. The Company currently generates no revenue from operations and will need to rely on raising additional capital or financing to sustain current and planned operations in the long term. There can be no assurance that management will be successful in its efforts to raise additional capital on terms favorable to the Company, or at all, or in management's ability to adequately reduce expenses, if necessary, to maintain sufficient liquidity or capital resources. Refer to the Going Concern discussion above for additional details. Recently Issued and Adopted Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. 10 In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) (“ASU 2023-07”). ASU 2023-07 is intended to enhance reportable segment disclosure requirements, including significant segment expenses and interim disclosures. The guidance allows for disclosure of multiple measures of a segment’s profit or loss, and it requires that public entities with a single reportable segment provide all disclosures required by ASU 2023-07 and all existing disclosures required by the existing segment disclosure guidance. ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments are to be applied retrospectively, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-07 will have on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income (loss) from continuing operations, income tax expense (benefit) and income taxes paid, net disclosures by federal, state, and foreign jurisdictions, among others. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and early adoption is permitted. The Company is evaluating the impact that ASU 2023-09 will have on the consolidated financial statements and its plan for adoption, including the adoption date and transition method. In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expenses in the notes of the financials, to provide enhanced transparency into the expense captions presented on the face of the income statement. In January 2025, the FASB issued Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”), which clarified the effective dates of ASU 2024-03. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its related disclosures, including the adoption date and transition method. 2. Mineral Rights and Properties, Net Mineral rights and properties, net consisted of the following at the end of each period presented. March 31, June 30, 2025 2024 (in thousands) Mineral properties $ 6,733 $ 6,733 Hydrology wells 547 547 Asset retirement cost, net of accumulated amortization of $ 59 and $ 44 as of March 31, 2025 and June 30, 2024, respectively (1) 342 336 Mineral rights and properties, net $ 7,622 $ 7,616 (1) Represents the carrying value of capitalized costs associated with asset retirement obligations, as discussed in Note 5– Asset Retirement Obligations . 3. Construction in Progress Construction in progress consisted of the following at the end of each period presented. March 31, June 30, 2025 2024 (in thousands) Engineering services and vendor testing $ 1,967 $ 608 Capitalized interest 85 — Total construction in progress $ 2,052 $ 608 11 4. Properties, Plant and Equipment, Net Properties, plant and equipment, net consisted of the following at the end of each period presented. Depreciation Estimated useful March 31, June 30, Asset category method life (in years) 2025 2024 (in thousands) Land N/A — $ 1,533 $ 1,533 Small-scale facility — plant Straight-line 3.75 69,328 69,619 Injection and recovery wells Straight-line 5 6,134 6,134 Buildings Straight-line 7 - 15 979 979 Vehicles Straight-line 3 - 5 344 345 Other plant and equipment Straight-line 5 - 10 754 729 79,072 79,339 Less accumulated depreciation ( 20,407 ) ( 5,467 ) Properties, plant and equipment, net $ 58,665 $ 73,872 The Company recognized depreciation expense of approximately $ 5.0 million and $ 48 thousand for the three months ended March 31, 2025 and 2024, respectively. The Company recognized depreciation expense of $ 14.9 million and $ 145 thousand for the nine months ended March 31, 2025 and 2024 , respectively. 5. Asset Retirement Obligations The change in the Company’s asset retirement obligations during the period presented and the balance of its accrued reclamation liabilities at the end of the period are set forth below. Nine months ended March 31, 2025 (in thousands) Asset retirement obligation — beginning of period $ 795 Obligation incurred during the period 23 Revisions to previous estimates — Accretion 59 Asset retirement obligation — end of period $ 877 6. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consisted of the following at the end of each period presented. March 31, June 30, 2025 2024 (in thousands) Accounts payable - trade (1) $ 1,132 $ 854 Accrued expenses 860 603 Accrued capital expenditures 3,193 3,309 Accrued payroll 827 2,263 Accrued interest — 2,496 Current portion of debt 44 42 Accounts payable and accrued liabilities $ 6,056 $ 9,567 (1) Includes $ 45 thousand and $ 235 thousand related to capital expenditures as of March 31, 2025 and June 30, 2024 , respectively. 12 7. Debt Long Term Debt Long-term debt consisted of the following at the end of each period presented. March 31, June 30, 2025 2024 (in thousands) August 2022 notes $ — $ 65,671 June 2024 notes — 6,000 September 2024 notes — — January 2025 notes — — Vehicle notes payable 77 108 Total debt 77 71,779 Current portion of debt 44 42 Long-term debt 33 71,737 Unamortized convertible note discount — ( 4,035 ) Unamortized debt issuance costs — ( 2,871 ) Long-term debt, net $ 33 $ 64,831 Interest expense consisted of the following for each period presented. Three months ended March 31, Nine months ended March 31, 2025 2024 2025 2024 (in thousands) Convertible notes interest $ 1,555 $ 1,500 $ 5,441 $ 3,393 Vehicle notes payable interest 1 1 3 4 Amortization of debt issuance costs and discount — convertible notes 337 402 1,095 3,306 Other interest — — — 19 Gross interest expense 1,893 1,903 6,539 6,722 Less: amount capitalized to construction in progress 24 1,081 85 2,374 Interest expense, net of amounts capitalized $ 1,869 $ 822 $ 6,454 $ 4,348 Effective interest rate — convertible notes (1) 13.9 % 13.7 % 13.2 % 19.9 % (1) The effective interest rate represents a weighted-average interest rate applicable for the respective period, for the period of time which the Convertible Notes were outstanding. Interest expense utilized in the calculation is based upon the gross interest expense in the table above, and the principal balance utilized in the calculation is based on the ending net long-term debt applicable to each interest period inclusive of unamortized debt issuance costs and discount, changes in the principal balance resulting from the issuance of any Convertible Notes, interest paid-in-kind and any adjustments resulting from the Amended and Restated Note Purchase Agreement. Convertible Notes - Background On August 11, 2022, the Compa ny executed a $ 60.0 million private placement of senior secured convertible notes (the “August 2022 Notes”) with Bluescape , which were secured by substantially all of the Company’s assets. On January 18, 2024 (the “Modification Date”) , the Company entered into an amended and restated note purchase agreement (the “January 2024 Amended and Restated Note Purchase Agreement”) which modified certain terms of the August 2022 Notes, including to extend the maturity date of the August 2022 Notes to August 15, 2028 , a reduction to the conversion rate applicable to the August 2022 Notes, and fifty percent ( 50 %) of the outstanding August 2022 Notes being acquired by Ascend and Meridian. Under the terms of the January 2024 Amended and Restated Note Purchase Agreement, the Convertible Notes bore interest at an annual rate of 4.50 % if paid in cash, and 10.00 % if paid through the issuance of additional notes. Interest was paid semi-annually on February 15 and August 15 of each year. On May 28, 2024, the Company entered into a second amendment (“Amendment No. 2”) to the January 2024 Amended and Restated Note Purchase Agreement and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as the August 2022 Notes, as amended, in an aggregate principal amount of $ 6.0 million (the “June 2024 Notes”) to Bluescape, Ascend and Meridian, and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 2 (the “May 2024 Amended and Restated Note Purchase Agreement”). 13 On August 15, 2024, the Company elected to issue additional notes as payment for approximately $ 3.4 million of interest accrued on the August 2022 Notes during the period from February 16, 2024 through August 15, 2024, and on the June 2024 Notes during the period from issuance through August 15, 2024. On September 16, 2024, the Company entered into a third amendment (“Amendment No. 3”) to the January 2024 Amended and Restated Note Purchase Agreement and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as the June 2024 Notes, in an aggregate principal amount of $ 6.0 million (the “September 2024 Notes”) to Bluescape, Ascend and Meridian, and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 3 (the “September 2024 Amended and Restated Note Purchase Agreement”). On January 14, 2025, the Company entered into a fourth amendment (“Amendment No. 4”) to the January 2024 Amended and Restated Note Purchase Agreement and agreed, among other things, to (i) issue and sell new senior secured convertible notes in substantially the same form and under the same terms as the September 2024 Notes, in an aggregate principal amount of $ 5.0 million (the “January 2025 Notes” and, together with the August 2022 Notes, the June 2024 Notes and the September 2024 Notes, the “Convertible Notes”) to Bluescape, Ascend and Meridian, and (ii) amend and restate the January 2024 Amended and Restated Note Purchase Agreement in the form attached as Annex A to Amendment No. 4 (as amended, the “Amended and Restated Note Purchase Agreement”). The Amended and Restated Note Purchase Agreement also extended the date to which the Company must comply with a financial covenant for the Company to maintain a cash balance of at least $ 7.5 million from December 31, 2024 to March 31, 2025 (the “Minimum Cash Covenant”). Concurrently with the execution of Amendment No. 4, the Company entered into the Restructuring Support Agreement, and other related agreements, as discussed in Note 1- Basis of Financial Statement Presentation. On February 17, 2024, the Company elected to issue additional notes as payment for approximately $ 4.0 million of interest accrued on the August 2022 Notes and June 2025 Notes during the period from August 15, 2024 through February 15, 2025, and on the June 2024 Notes and January 2025 Notes during the period from their respective issuance through February 15, 2025. In connection with its entry into the January 2024 Amended and Restated Note Purchase Agreement, May 2024 Amended and Restated Note Purchase Agreement, September 2024 Amended and Restated Note Purchase Agreement, and January 2025 Amended and Restated Note Purchase Agreement, the Company incurred approximately $ 2.6 million, $ 541 thousand, $ 454 thousand, and $ 283 thousand of debt issuance costs, respectively. As discussed in Note 1- Basis of Financial Statement Presentation , on March 4, 2025, at a special meeting of stockholders, the Company’s stockholders voted in favor of the Out-of-Court Restructuring, and on March 5, 2025 the Exchange was completed and resulted in 13,586,524 shares of the Company’s Common Stock issued to Bluescape and Ascend, the termination of the Amended and Restated Note Purchase Agreement and related Minimum Cash Covenant, and the extinguishment of all indebtedness owed by the Company under the Amended and Restated Note Purchase Agreement. Convertible Notes - Conversion Terms Prior to the Exchange, the Convertible Notes, including accrued interest paid-in-kind, were convertible into shares of the Company’s Common Stock at any time before the Convertible Notes matured, at conversion rates (the “Conversion Rates”) applicable to each separate issuance of Convertible Notes, at the election of the holder of the Convertible Notes. In addition, the Amended and Restated Note Purchase Agreement provided for certain adjustments to the Conversion Rates to increase the number of shares of Common Stock issuable upon conversion of the Convertible Notes in the event of certain change of control transactions or other events specified in the Amended and Restated Note Purchase Agreement (a “Make-Whole Fundamental Change”). The adjustment to the Conversion Rates in the event of a Make-Whole Fundamental Change was to be based on the timing of a Make-Whole Fundamental Change and the trading price of the Common Stock at such time or the cash received by holders of the Common Stock in connection with such Make-Whole Fundamental Change. The Conversion Rate applicable to the June 2024 Notes and September 2024 Notes was subject to adjustment if, after the issuance date of the respective Convertible Notes and on or prior to December 31, 2024, the Company sold Common Stock or any other equity-linked securities in one or more transactions at an effective price per share that was less than the respective conversion price then in effect, subject to certain exemptions (a “Degressive Issuance”). In the event of a Degressive Issuance, the Conversion Rate applicable to the respective Convertible Notes was subject to adjustment based on the weighted average issuance price of the securities sold in such Degressive Issuance, as set forth in the Amended and Restated Note Purchase Agreement. As part of the August 2024 Equity Offering (as further described and defined in Note 10– Equity ), a Degressive Issuance provision applicable to the June 2024 Notes resulted in an adjustment to the Conversion Rate applicable only to the June 2024 Notes. A Degressive Issuance did not occur with respect to the September 2024 Notes prior to the expiration of such feature on December 31, 2024. During the period over which the Convertible Notes were outstanding, and prior to the Exchange, no holder of Convertible Notes elected to convert such Convertible Notes into the Company’s Common Stock. 14 Convertible Notes - Derivatives The terms of the Amended and Restated Note Purchase Agreement permitted a change to the Conversion Rates applicable to the June 2024 Notes and September 2024 Notes upon a Digressive Issuance by the Company on or before December 31, 2024. As a result, these conversion features were deemed to be embedded derivatives requiring bifurcation and separate accounting as stand-alone derivative instruments (the “June 2024 Convertible Note Derivative” and “September 2024 Convertible Note Derivative,” respectively, and together, the “Convertible Note Derivatives”) through December 31, 2024. The June 2024 Notes were initially recorded at their face amount of $ 6.0 million less debt issuance costs of $ 541 thousand and the fair value of the June 2024 Convertible Note Derivative, which was determined to be $ 4.1 million. Similarly, the September 2024 Notes were initially recorded at their face amount of $ 6.0 million less debt issuance costs of $ 454 thousand and the fair value of the September 2024 Convertible Note Derivative, which was determined to be $ 1.6 million. The provisions that resulted in separate accounting for the Convertible Note Derivatives expired on December 31, 2024, and accordingly, the fair value of the Convertible Note Derivatives on such date was transferred to additional paid-in capital. Refer to Note 8– Convertible Note Derivatives and the discussion immediately below for additional details regarding the fair values of the Convertible Note Derivatives. January 2024 Convertible Notes – Loss on Extinguishment For accounting purposes, the modification of the terms of the Convertible Notes in connection with the January 2024 Amended and Restated Note Purchase Agreement was evaluated and determined to be representative of an in-substance extinguishment of the Convertible Notes outstanding at that date, and establishment of new debt, primarily due to the significance of the changes to the terms of the conversion features. As a result, the Company wrote-off the remaining principal, accrued interest, unamortized discount and debt issuance costs associated with the prior debt on the Modification Date and recognized the modified debt on the balance sheet at its fair value of $ 65.2 million. The fair value of the modified debt was determined utilizing a binomial lattice model. The difference in value between the prior debt and the modified debt resulted in a loss on extinguishment of debt of $ 21.0 million, the calculation of which is summarized in the following table. For the three and nine months ended March 31, 2024 (in thousands) Modified convertible notes, at fair value Principal $ 63,561 Accrued interest 1,621 Net long-term debt recognized $ 65,182 Convertible notes on modification date Principal $ 63,561 Accrued interest 1,621 Unamortized convertible notes discount ( 17,953 ) Unamortized debt issuance costs ( 3,000 ) Net long-term debt derecognized $ 44,229 Gain (loss) on extinguishment of debt $ ( 20,953 ) March 2025 Convertible Notes – Debt Exchange The Exchange Transaction described in Note 1- Basis of Financial Statement Presentation , was evaluated and constitutes a single transaction that is accounted for as troubled debt restructuring. The Exchange transaction is considered a troubled debt restructuring as the Company was experiencing financial difficulty at the time of the transaction and the noteholders granted a concession to the Company. A concession was determined to be granted to the Company, as the fair value of equity interests received by the noteholders was less than the net carrying value of the long-term debt on such date. In accordance with the accounting for troubled debt restructurings, the Company derecognized the remaining principal, accrued interest, unamortized discount and debt issuance costs associated with the Convertible Notes upon the effectiveness of the Exchange, and recognized the equity interest issued to the noteholders at fair value, less issuance costs paid. Refer to Note 10– Equity , for information related to the determination of fair value of the equity interests issued and issuance costs paid. The difference in value between the prior debt and the fair value of the equity interest issued, less proceeds received by the Company in the Exchange Transaction, resulted in a gain on extinguishment of debt of approximately $ 17.3 million, the calculation of which is summarized in the following table. 15 For the three and nine months ended March 31, 2025 (in thousands) Values exchanged in debt exchange, at fair value Equity interests, at fair value $ 70,059 Cash proceeds received ( 5,000 ) Net value exchanged for extinguishment of debt $ 65,059 Convertible notes on extinguishment date Principal $ 90,112 Accrued interest 497 Unamortized convertible notes discount ( 5,109 ) Unamortized debt issuance costs ( 3,108 ) Net long-term debt derecognized $ 82,392 Gain (loss) on extinguishment of debt $ ( 17,333 ) The gain on extinguishment of debt increased basic earnings per share of Common Stock for the three and nine months ended March 31, 2025, by $ 2.41 and $ 4.00 , respectively. 8. Convertible Note Derivatives The June 2024 Convertible Note Derivative and September 2024 Convertible Note Derivative, each which relate to the June 2024 Notes and September 2024 Notes, respectively, described above in Note 7– Debt , were valued upon initial recognition and at each reporting period at fair value using a with-and-without methodology utilizing a binomial lattice model (a model which utilizes Level 3 fair value inputs). The valuation model for the Convertible Note Derivatives requires the input of subjective assumptions including expected share price volatility, risk-free interest rate and debt rate. Changes in the input assumptions as well as the Company's underlying share price can materially affect the fair value estimates. The significant assumptions used in the fair value model for the Convertible Note Derivatives include the following, with changes in volatility, debt rate and stock price having the most significant impact on the related fair values. Sep. 16, 2024 Dec. 31, 2024 (Sep. 2024 Notes) Jun. 30, 2024 Risk-free interest rate 4.4 % 3.4 % 4.5 % Volatility 60.0 % 60.0 % 50.0 % Debt rate 21.6 % - 32.6 % (1) 23.7 % 28.7 % - 36.7 % (2) Stock price per share $ 14.72 $ 11.50 $ 27.83 (1) Debt rates of 24.5 %, 32.6 % and 21.6 % were utilized in the valuation of the August 2022 Notes, June 2024 Notes and September 2024 Notes, respectively. (2) Debt rates of 28.7 % and 36.7 % were utilized in the valuation of the August 2022 Notes and June 2024 Notes, respectively. Changes in the fair value were recognized in Derivative gain (loss) in the statement of operations but had no related impact on the Company’s cash position or cash flows. The provision that resulted in separate accounting for the June 2024 Convertible Note Derivative began June 11, 2024 in connection with the issuance of the June 2024 Notes, and on September 16, 2024 for the September 2024 Convertible Note Derivative in connection with the issuance of the September 2024 Notes. Each of these provisions expired on December 31, 2024, and accordingly, the Convertible Note Derivatives were derecognized and the remaining fair values were transferred to additional paid-in capital. The components of changes to the fair value of the Convertible Note Derivatives for the period presented are summarized below. Derivative (Asset)/Liability (in thousands) Convertible note derivatives (asset) liability — June 30, 2024 $ 3,315 Additions, at fair value, September 16, 2024 1,643 Fair value adjustments (gain) loss, net ( 1,357 ) Reclassified to additional paid-in capital, at fair value ( 3,601 ) Convertible note derivatives (asset) liability — March 31, 2025 $ — 16 9. Financial Instruments and Fair Value Measurements At March 31, 2025, cash equivalents as well as trade and other payables approximated their fair value due to their short-term nature. The Company’s financial instruments also consist of environmental reclamation bonds which are invested in certificates of deposit and money market funds which are classified as Level 1, and the Convertible Note Derivatives which were classified as Level 3. The reconciliation of changes in the fair value of the Convertible Note Derivatives can be found in Note 8– Convertible Note Derivatives . 10. Equity The Company is authorized to issue up to 360,000,000 shares of common stock, par value $ 0.01 per share, and 20,000,000 shares of preferred stock, par value, $ 0.01 per share. The Company has no outstanding shares of preferred stock. Debt Exchange Transaction As further described in Note 1- Basis of Financial Statement Presentation and Note7- Debt , the Exchange Transaction resulted in (i) the issuance of 13,586,524 shares of Common Stock issued in the Exchange for the termination of the Amended and Restated Note Purchase Agreement and the extinguishment of all indebtedness owed by the Company under the Amended and Restated Note Purchase Agreement, (ii) the issuance of 1,408,173 shares of Common Stock for an aggregate purchase price of $ 5.0 million in the March 2025 Subscription, and (iii) the issuance of Restructuring Warrants with a one-year term to purchase an aggregate 5,632,692 shares of Common Stock. For accounting purposes, and as described in Note 7- Debt , the Exchange Transaction was determined to constitute a single transaction accounted for as a troubled debt restructuring. As such, the equity interests issued in the Exchange Transaction were recognized in shareholders’ equity at fair value on their respective issuance dates, less issuance costs incurred, which were allocated based upon the relative fair value of the underlying equity interests. The table below summarizes the method by which fair value was determined, the fair value, the allocation of transaction costs incurred, and net amounts recognized in shareholders’ equity for each equity interest issued in the Exchange Transaction. Equity Interest Issued / Transaction Fair Value Method Units Fair Value per Unit Fair Value (in thousands) Transaction Costs Incurred Amount Recognized in Equity Common Stock / Exchange Closing price 13,586,524 $ 4.26 $ 57,879 $ ( 781 ) $ 57,098 Common Stock / Subscription Closing price 1,408,173 $ 3.15 4,436 ( 60 ) $ 4,376 Warrants / Subscription Black Sholes 5,632,692 $ 1.37 7,744 ( 105 ) $ 7,639 Total $ 70,059 $ ( 946 ) $ 69,113 August 2024 Equity Offering On August 27, 2024, the Company completed an offering (the “August 2024 Equity Offering”) of (i) 231,884 shares (the “Shares”) of Common Stock, (ii) Series A warrants to purchase up to an aggregate of up to 231,885 shares of Common Stock (the “Series A Warrants”) and (iii) Series B warrants to purchase an aggregate of 231,885 shares of Common Stock (the “Series B Warrants”, and collectively with the Series A Warrants, the “2024 Warrants”). The Shares and 2024 Warrants were offered and sold on a combined basis for consideration equating to $ 17.25 for one Share and two 2024 Warrants. This transaction resulted in net proceeds to the Company of approximately $ 3.0 million after deducting the placement agent’s fees and other offering expenses. The aggregate net proceeds and issuance costs associated with the August 2024 Equity Offering were allocated to the Shares and 2024 Warrants based upon the relative fair value of such items on the offering date. Warrants The Series A Warrants and the Series B Warrants became exercisable on February 27, 2025. The Series A Warrants will expire on February 27, 2030 and the Series B Warrants will expire on February 27, 2027 . The exercise price for each of the 2024 Warrants is $ 18.3563 per share. The Restructuring Warrants were exercisable upon issuance and will expire on March 13, 2026 . The exercise price for the Restructuring Warrants is $ 3.5507 per share. The 2024 Warrants and Restructuring Warrants (collectively, the “Warrants”) contain standard adjustments to the exercise price including for stock splits, stock dividends, rights offerings and pro rata distributions. The Warrants also include certain rights upon the occurrence of a “fundamental transaction” (as described in the respective Warrant), including the right of the holder thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Common Stock in such fundamental transaction in the amount of the Black Scholes value (as described in the respective Warrant) of the unexercised portion of the Warrant on the date of the consummation of such fundamental transaction. The Warrants include cashless exercise rights to the extent the resale of the shares of Common Stock underlying the Warrants is not registered under the Securities Act. 17 Vesting of Equity Awards During the three months ended March 31, 2025 and 2024 , the Company issued approximately 5 thousand shares and zero shares of its Common Stock upon the vesting of equity awards, respectively. During the nine months ended March 31, 2025 and 2024 , the Company issued approximately 16 thousand shares and 2 thousand shares of its Common Stock upon the vesting of equity awards, respectively. The vesting events did not result in any cash proceeds to the Company. 2024 Equity Distribution Agreement On March 28, 2024, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC and D.A. Davidson & Co. (the “Agents”) pursuant to which the Company may offer and sell up to $ 15.0 million of shares of Common Stock from time to time through the Agents, acting as the Company’s sales agents, or directly to one or more of the Agents, acting as principal (the “ATM Program”). Neither of the Agents is required to sell any specific number or dollar amount of shares of the Company’s Common Stock, but each has agreed, subject to the terms and conditions of the Equity Distribution Agreement, to use its commercially reasonable efforts, consistent with its normal trading and sales practices, to sell the shares of Common Stock on the terms agreed upon by such Agent and the Company. The Company did not sell any shares of Common Stock nor receive any proceeds under the Equity Distribution Agreement during the three and nine months ended March 31, 2025 . As a result of the August 2024 Equity Offering, the Company is precluded from utilizing the ATM Program for one year following the closing of the offering, and as a result approximately $ 410 thousand of costs previously capitalized for the ATM Program were written-off to General and administrative expense during the three months ended September 30, 2024. 11. Share Based Compensation Share based compensation expense is included in general and administrative expense and represents costs associated with restricted share unit (“RSU”) and performance share unit (“PSU”) activity and options granted to directors, employees, and consultants of the Company. Share based compensation expense consisted of the following for the periods presented. Three months ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 (in thousands) Share based compensation expense — service based Employee share option plan $ — $ 88 $ 167 $ 293 2022 Equity Compensation Plan — Options 33 64 88 372 2022 Equity Compensation Plan — PSUs 35 23 60 147 2022 Equity Compensation Plan — RSU and DSUs 244 408 1,526 1,276 Total share based compensation expense $ 312 $ 583 $ 1,841 $ 2,088 As of March 31, 2025 , the Company had approximately $ 627 thousand of total unrecognized stock-based compensation expense related to unvested stock-based compensation awards that is expected to be recognized over a weighted average period of approximately 1.5 years. Stock Options Option grants are made under the 2022 Equity Compensation Plan and vest ratably over the vesting period which is generally three years or less. The significant assumptions used to estimate the fair value of stock option awards granted during the nine months ended March 31, 2025 and 2024, using a Black-Scholes option valuation model are as follows. Nine months ended March 31, 2025 2024 Exercise price $ 23.69 - $ 29.21 $ 177.68 Share price $ 10.61 - $ 14.25 $ 56.58 Volatility 99.2 % - 99.9 % 99.0 % Expected term in years 2.8 - 2.9 9.6 Risk-free interest rate 3.4 % - 4.1 % 4.3 % Dividend rate Nil Nil 18 The following table summarizes stock option activity for each of the periods presented. Nine months ended March 31, 2025 2024 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price (In thousands, except per share data) Outstanding at beginning of the period 174 $ 214.51 182 $ 250.82 Granted 24 26.70 13 177.68 Exercised — — — — Expired/forfeited ( 72 ) 120.98 ( 30 ) 341.78 Outstanding at end of the period 126 232.53 165 228.17 Vested at the end of the period 90 314.37 144 230.70 Unvested at the end of the period 36 $ 27.54 21 $ 210.83 The weighted average remaining life of vested options at March 31, 2025 and 2024 was approximately 1.7 years and 0.7 years, respectively. As of March 31, 2025 and 2024 , the maximum expiration date for vested options was approximately 8.1 and 1.5 years, respectively. As of March 31, 2025 , there was approximately $ 230 thousand of unrecognized compensation cost related to 36 thousand unvested stock options. This cost is expected to be recognized over a weighted-average remaining period of approximately 1.5 years. As of March 31, 2025 and 2024 , the maximum expiration date for unvested options was approximately 2.3 and 8.3 years, respectively. The following table summarizes the activity for unvested options for each of the periods presented. Nine months ended March 31, 2025 2024 Number of Options Weighted Average Grant Date Fair Value per share Number of Options Weighted Average Grant Date Fair Value per share (In thousands, except per share data) Unvested at beginning of the period 15 $ 41.12 36 $ 147.63 Granted 24 5.46 13 47.84 Vested ( 3 ) 141.22 ( 3 ) 142.71 Expired/forfeited — — ( 25 ) 140.87 Unvested at end of the period 36 $ 9.26 21 $ 94.57 As of March 31, 2025 and 2024 , all outstanding stock options and vested stock options had no intrinsic value as the exercise prices of the respective options exceeded the Company’s stock price on such dates. There were no options exercised during the nine months ended March 31, 2025 and 2024. 19 Full Value Awards (Restricted Share Units and Performance Share Units) The following table summarizes RSU and PSU activity for each of the periods presented. Serviced-Based Shares Weighted Average Grant Date Fair Value per Share Performance- Based Shares Weighted Average Grant Date Fair Value per Unit Total Shares (In thousands, except per share data) Non-vested shares/units outstanding at June 30, 2024 16.0 58.95 4.1 $ 131.68 20.1 Granted 40.6 9.54 19.8 (1) 11.62 60.4 Vested ( 24.5 ) 30.95 — — ( 24.5 ) Forfeited ( 0.5 ) 13.60 ( 1.0 ) 56.58 ( 1.5 ) Non-vested shares/units outstanding at March 31, 2025 31.6 $ 17.86 22.9 $ 31.18 54.5 Serviced-Based Shares Weighted Average Grant Date Fair Value per Share Performance- Based Shares Weighted Average Grant Date Fair Value per Unit Total Shares (In thousands, except per share data) Non-vested shares/units outstanding at June 30, 2023 9.1 $ 155.97 6.0 $ 165.60 15.1 Granted 16.1 48.54 5.3 (2) 56.58 21.4 Vested ( 3.4 ) 144.75 — — ( 3.4 ) Forfeited ( 2.5 ) 112.27 ( 2.1 ) 123.46 ( 4.6 ) Non-vested shares/units outstanding at March 31, 2024 19.3 $ 74.33 9.2 $ 112.87 28.5 (1) During the nine months ended March 31, 2025, approximately 19.8 thousand PSUs were granted, which based on the achievement of certain financial and operational targets, could vest within a range of 0 % to 100 %. The targets are 1) construction of the large-scale commercial facility commencing prior to September 1, 2026; 2) an approved final investment decision in the large-scale commercial facility at a modeled internal rate of return of 20 %, 3) achievement of an enterprise value in excess of $ 200 million, and 4) achievement of an enterprise value in excess of $ 300 million. The determination of the percentage of shares that ultimately vest will be made at the three-year anniversary of the grant date based upon achievement of the performance targets over the period. (2) During the nine months ended March 31, 2024, approximately 5.3 thousand PSUs were granted, which based on the achievement of certain financial and operational targets, could vest within a range of 0 % to 100 %. The targets are 1) construction of the large-scale commercial facility commencing prior to September 1, 2026; 2) the budget for the large-scale commercial facility remaining within a range of $ 342 - 418 million; and 3) an approved final investment decision in the large-scale commercial facility at a modeled internal rate of return of 20 %. The determination of the percentage of shares that ultimately vest will be made at the three-year anniversary of the grant date based upon achievement of the performance targets over the period. During the nine months ended March 31, 2025 , the vesting of approximately 1.9 thousand RSUs was accelerated, and approximately 1 thousand PSUs were forfeited in accordance with the terms of severance agreements with former employees. This resulted in approximately $ 335 thousand of incremental share based compensation expense recognized during the same period as compared to the amount of expense that would have been recognized under the terms of the original awards. There was no similar activity for the nine-months ended March 31, 2024. 12. Earnings (Loss) Per Common Share Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if convertible securities, such as the Convertible Notes, Warrants, RSUs, PSUs, and stock options were exercised or converted into Common Stock. For the three months ended March 31, 2024 and the nine months ended March 31, 2025 and 2024, diluted loss per share equals basic loss per share as the effect of including dilutive securities in the calculation would be anti-dilutive, primarily because there was a net loss in such periods. For the three months ended March 31, 2025, diluted loss per share is less than basic loss per share, as there was net income in such period and the Convertible Notes had a dilutive effect. For a complete description of the terms of the warrants and outstanding equity awards, refer to Note 10- Equity and Note 11- Share Based Compensation , respectively. The following table includes a reconciliation of basic and dilutive earnings per share for each of the periods presented, as well as a summary of the potentially dilutive securities that were excluded from such computations as they would have had an anti-dilutive effect. 20 Three months ended March 31, Nine Months Ended March 31, 2025 2024 2025 2024 (in thousands, except per share data) Basic earnings (loss) per share: Net income (loss) - numerator $ 5,280 $ ( 25,905 ) $ ( 21,841 ) $ ( 45,891 ) Weighted-average shares — denominator 7,207 2,544 4,329 2,129 Basic earnings (loss) per share $ 0.73 $ ( 10.18 ) $ ( 5.05 ) $ ( 21.56 ) Diluted earnings (loss) per share: Net income (loss) $ 5,280 $ ( 25,905 ) $ ( 21,841 ) $ ( 45,891 ) Interest expense on convertible notes, net of amounts capitalized 1,868 — — — Gain on extinguishment of debt ( 17,333 ) — — — Net income (loss) - numerator $ ( 10,185 ) $ ( 25,905 ) $ ( 21,841 ) $ ( 45,891 ) Weighted-average shares (denominator): 7,207 2,544 4,329 2,129 Additional shares assuming conversion of convertible note 3,245 — — — Weighted-average shares — diluted 10,452 2,544 4,329 2,129 Diluted earnings (loss) per share $ ( 0.97 ) $ ( 10.18 ) $ ( 5.05 ) $ ( 21.56 ) Warrants excluded due to anti-dilutive effect 6,096 — 6,096 — Stock options, unvested restricted stock units and performance share units excluded due to anti-dilutive effect 180 193 180 193 Subsequent Equity Issuance – May 2025 As discussed in Note 14– Subsequent Events , subsequent to March 31, 2025, the Company issued an aggregate of 1,984,709 shares of its Common Stock in connection with the May 2025 Subscription (as defined in Note 14- Subsequent Events ) and an additional 37,042 shares of its Common Stock as an advisory fee in connection with the transactions. The impact of the equity issuance is not reflected in the computation of earnings per share for the three and nine months ended March 31, 2025 and 2024 . 13. Commitments and Contingencies Purchase Obligations As of March 31, 2025 , the Company had purchase order commitments of approximately $ 2.7 million primarily for raw materials for the operation of the SSF, engineering services and vendor testing for the Company’s proposed commercial-scale facility, and drilling services related to wellfield development. Litigation On July 17, 2023, the Company filed a complaint (the “Complaint”) against a previous construction contractor in the United States District Court for the Central District of California, Eastern Division, alleging, among other things, numerous breaches by the contractor of its contractual obligations to 5EBA under the Procurement and Construction Contract, effective April 26, 2022, by and between 5EBA and the contractor, relating to the construction of the SSF in California (the “Contract”). On August 10, 2023, the contractor filed an answer to the Complaint as well as a counterclaim for, among other things, alleged breaches by 5EBA of its contractual obligations to the contractor under the Contract and has requested relief in the approximate amount of $ 5.5 million. The Company plans on filing a response disputing the counterclaims asserted by the contractor and reaffirming the grounds for recovery raised in the Complaint. Discovery has begun and is ongoing. An estimate of reasonably possible losses, if any, cannot be made at this time. 14. Subsequent Events On May 12, 2025 and May 13, 2025, the Company entered into subscription agreements to issue and sell an aggregate of 1,984,709 shares of its Common Stock at a price of $ 3.55 per share (collectively, the “May 2025 Subscription”). In connection with the May 2025 Subscription, the Company also issued 37,042 shares of its Common Stock as partial payment for advisory services in connection with the transactions contemplated by the subscription agreements. The May 2025 Subscription closed on May 15, 2025 and resulted in aggregate proceeds to the Company of approximately $ 7.0 million before deducting fees and other offering expenses payable by the Company. The securities were offered in a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, or Regulation S under the Securities Act. 21