IBATF 10-K & 10-Q changes, risk factors and insider trading

The following Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto (“Financial Statements”) in Item 1 and the Special Note Regarding Forward-Looking Statements later in this Item 2. All Note references herein refer to the Notes to the Financial Statements. Tabular amounts are displayed in millionsthousands of U.S. dollars except per share and unit count amounts, or as otherwise specifically identified. All references to “CAD$” are to the currency of Canada. Percentages may not recompute due to rounding. You should review the “Risk Factors” set forth in the Company’s SECForm filings10-K filed with the Securities and Exchange Commission on June 17, 2026 for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following MD&A.

We are an advanced technology and manufacturing company focused on exploiting our proprietary and patented technology used in our modular direct lithium extraction plants, or modular direct lithium extraction plant (“MDLE Plants,Plant”), to assist owners of lithium brine deposits to extract lithium chloride at sufficient concentration and purity to economically facilitate the production of Lithium Carbonate, an integral component in the manufacture of batteries. Our proprietary and patented MDLE Plant is (1) modular, meaning it can be deployed and then redeployed at a different brine deposit when the resource source is spent and (2) scalable, meaning the component-driven system can specifically configure valves, pumps, our proprietyproprietary columns and media and many other pieces to customize the plant to a customer’s requirements based on the needs and resource concentration and that multiple MDLE Plants can be linked together based on the characteristics of the resource location. In addition, our proprietary absorption extraction process is designed to be an environmentally responsible, low-cost method of producing high-quality commercial grade lithium chloride to be converted into Lithium based products.

We believe our MDLE Plants can be utilized by owners on a variety of different brine deposits including, (i) salar or salt lake brine deposits, such as those found in the Lithium Triangle of Argentina, Chile and Bolivia, (ii) brine reservoirs in the US and Canada, including in the US states of North Dakota, Wyoming, Utah, Nevada, Oklahoma, Pennsylvania, Arkansas and Texas (including the Smackover geological formation found in Arkansas and Texas), and (iii) any other naturally occurring lithium brine deposits around the world.world, including through our collaboration agreement with a major Middle East energy services provider. In addition, we plan to market our technology to industrial customers who have lithium rich brine by-products from their operations. While our existingExisting MDLE Plant was initially designed for potential customers in the Lithium Triangle, we believe that the US owners of brine reservoirs, especially within the Smackover geological formation in Arkansas and Texas, are currently best positioned to benefit from our existing MDLE Plant. Consequently, we are actively marketing our currentExisting MDLE Plant and our technology to US and foreign owners of brine reservoirs and anticipate that we will need to spend approximately between $1.0$2.0 million and $10.0$12.0 million to customize the existingExisting MDLE Plant to meet the needs of this initial customer depending on the reservoir’s lithium concentration and purity. In addition, we will have costs to transport the MDLE Plant to the new owner. We have not yet delivered MDLE Plants nor licensed our technology to customers and are therefore a pre-revenue company.

Our strategy is to deploy our currentExisting MDLE Plant and continue to build upon our proprietary DLE technology developed by Dr. BurbaJohn Burba, our founder and Chief Technology Officer, to develop and deploy additional MDLE plants. We believe that our advanced brine extraction technologies and methodologies for selective mineral extraction is less capital intensive and a more environmentally responsible approach compared to traditional lithium extraction processes of hard rock mining and solar evaporation. We believe that this approach is environmentally sustainable because our process does not deconstruct land structures as is the case from hard rock mining nor does it waste precious water as is the case in solar evaporation. Instead, our technology is designed to extract the desired lithium chloride from subsurface brine and typically re-injects the spent or used brine into the aquifer to maintain pressure after lithium extraction.

We are currently in the preliminary stages of researching and developing the media and design for the next generation of our MDLE Plant Technology which we anticipate could provide customers with additional options for processing brine solutions and increasing lithium chloride production. We have recently purchased two larger diameter columns and isare currently conducting laboratory and field studies to determine the optimal process for utilizing these columns. We currently estimate that the cost for instrumentation and engineering related to the next generation module and columns of the MDLE Plant will be approximately $500,000 with an additional estimated $250,000 relating to the construction and testing of the larger diameter columns.

Operating Costs and Expenses

Three months ended DecemberJune 31,30, 2025,2026, as compared to the three months ended DecemberJune 31,30, 20242025

The operating results for the three months ended DecemberJune 31,30, 20252026 and 2024,2025, are summarized as follows (in thousands):

For the three months ended DecemberJune 31,30, 20252026 we generated testing revenue on brine content for athree potential customer.customers. For the comparative period ended DecemberJune 31,30, 2024,2025, we did not generate anygenerated revenue testing brine content from operations.one potential customer.

Operating CostCost, excluding depreciation

For the three months ended DecemberJune 31,30, 20252026 and 2024,2025, we incurred operating costs of $0.5$0.4 million and $0.5$0.6 million, respectively, consistingthe ofdecrease salariesin andcosts are due to lower research and development costs.costs for the three months ended June 30, 2026.

The major components of selling, general and administrative expenses for the three months ended DecemberJune 31,30, 20252026 and December 31, 2024,2025, are as follows (in thousands):

Compensation expense increaseddecreased compared to the prior year period primarily due to large severance payments in the prior three months ended June 30, 2025 offset by higher payroll during the three months ended June 30. 2026 due to hiring permanentfull time employees compared to reducecontractors the use of outsideand consultants.

Professional fees increased compared to the prior year period as a result of additional accounting and auditing fees related to the additional work that lead to the filing of aour registration statement.statement during the prior year.

Legal fees decreased as compared to the prior year period dueas toa result of the timing of certainthe expenseschanges to executive management and additional work that was incurred related to ourthe registration statement process.activities.

Rent and miscellaneous office costs decreasedincreased compared to the prior year period due to reduced overalladditional costs atfor our PlanoHouston office including utilities and insurance.office.

Other expenses decreased minimally as compared to the prior year period primarily due to an accrual for a legal issue as of December 31, 2024 that was settled in the current fiscal year.period.

The Company values the outstanding warrant liabilities at each balance sheet date based on the Black-Scholes option pricing model. Any change in the fair value of the warrants is recognized as a change in fair value of warrant liability in the condensed consolidated statement of loss.income (loss). During the three months ended DecemberJune 31,30, 2025,2026, the Company recognized a gain of approximately $3.8$2.9 million as compared to a loss of approximately $7.6$5.3 million for the three months ended DecemberJune 31,30, 2024,2025, for the change in fair value of warrant liability during the period. The primary reason for the decrease in the warrant liability valuation was the change in our stock price.price offset by the addition of new warrants.

As previously discussed, our existing MDLE Plant was designed for a specific deployment in the Lithium Triangle in South America which had lithium concentrations of roughly 1,800 ppm and therefore required lower flow rates of approximately 300 gallons per minute of brine to efficiently recover lithium. However, the MDLE Plant is designed to be scalable and commercially flexible and was engineered to permit retrofitting to process a range of alternative brine resources of different lithium concentrations. We are currently targeting deploying our existing MDLE Plant at naturally occurring brine reservoirs either in the U.SUnited States, which have brine concentrations in the range of 250 ppm to as high as 800 ppm, althoughor in the Middle East, where brine concentrations in the Smackover play in Texas and Arkansas are generally estimatedexpected to be between 200 andapproximately 400 ppm based on publicly published recent brine resource lithium concentrations by a number of resource owners.ppm. Based on ongoing discussions with potential customers and their requirements based on their specific brine concentrations, we anticipate that we will need to spend between $1.0$2.0 million and $10.0$12.0 million for customizations, which would include adding components such as additional heat exchangers, pumps, condensate coolers, a reverse osmosis unit, chillers, tanks and pipelines to increase the flowrate to fully utilize the twelve-column absorption capacity and expand the MDLE Plant’s capacity. Management estimates that the full range of customizations at a cost of approximately $10.0 million could increase the MDLE Plant’s throughput to approximately 480 gallons per minute and have production capacity of approximately 2,000 metric tons per year of lithium chloride, on a lithium carbonate equivalent basis, based on a 400 ppm brine stream. The cash we have on hand as of DecemberJune 31,30, 20252026 will not be sufficient to fund the high end of these expenditures. We will have to raise additionalAdditional funds from current or new investors will be necessary to fund the modifications to the MDLE Plant to allow us to fully recover the current amounts capitalized on our balance sheet. We expect we will embark on a fund raising process for these proceeds within the next 6 months.

The cash flows for the ninethree months ended DecemberJune 31,30, 2025,2026 and December 31, 2024,2025, are as follows (in thousands):

Cash used in operating activities for the ninethree months ended DecemberJune 31,30, 20252026 was approximately $7.9$2.3 million as compared to $11.1$3.3 million for the ninethree months ended DecemberJune 31,30, 2024.2025. The decrease compared to prior year's period is mostly due to higher operating expenses in the ninethree months ended DecemberJune 31,30, 20242025 incurred inmostly connectionas witha theresult commissioningof andhigher runningdevelopment thecosts MDLEas Plant.well as severance costs.

Cash used in investing activities for the ninethree months ended DecemberJune 31,30, 20252026 decreased compared to the ninethree months ended DecemberJune 31,30, 20242025 becauseas we completedhad theadditional majorityinvestments offor completing the purchases related to the MDLE Plant build-out in the prior year and our purchase of equipment was limited in the current year.build-out.

Cash provided by financing activities for the ninethree months ended DecemberJune 31,30, 20252026 decreasedincreased compared to prior year period, as we raised net proceeds of $6.7$2.8 million for the proceeds of a private placementsplacement during the ninethree months ended DecemberJune 31,30, 20252026, aswith comparednone to $16.7 million forduring the ninethree months ended DecemberJune 31,30, 2024.2025.

There were no changes to our critical accounting policies from those disclosed in our FinalForm Prospectus10-K filed with the Securities and Exchange Commission on FebruaryJune 2,17, 2026.

A detailed summary of all the Company’s significant accounting policies is included in Note 3 to the audited consolidated financial statements for the year ended March 31, 2025,2026, found in our FinalForm Prospectus10-K filed with the Securities and Exchange Commission on FebruaryJune 2,17, 2026.