Aqua Metals has entered into a term sheet to acquire Lion Energy, a U.S.-based provider of commercial, residential and distributed energy storage systems and proprietary energy management software.

Aqua Metals, Inc. (NASDAQ: AQMS), a pioneer in battery metals recycling and refining, today announced that it has entered into a term sheet to acquire Lion Energy, LLC, a U.S.-based provider of commercial, residential, and distributed energy storage systems, consumer power solutions, and proprietary energy management software.

Following the closing of the transaction, Aqua Metals plans to leverage Lion Energy's solutions, brand, intellectual property, capital, technical talent and manufacturing capabilities to transform Aqua Metals into a comprehensive domestic power player capable of managing the entire battery lifecycle, from manufacturing and deployment to intelligent grid participation and end-of-life recovery.

Management Commentary

"This transaction is intended to add meaningful revenue to Aqua Metals while expanding our participation in the rapidly growing energy storage market," said Steve Cotton, President and Chief Executive Officer of Aqua Metals. "Energy storage is a natural extension of our battery materials strategy, and Lion Energy has built a complementary platform that spans systems, software, and customer relationships. Together, we believe this combination would strengthen our path toward a more vertically integrated, U.S.-based battery supply chain and supports our long-term vision for a robust domestic battery materials industry led by our new combined entity."

Strategic Rationale

Revenue Generation: Lion Energy achieved approximately $50 million in revenue in 2025, providing immediate scale to Aqua Metals.

Software-Driven Intelligence: Lion's integrated firmware and mobile applications allow for real-time optimization of energy assets, a critical requirement for AI data centers and grid-connected environments.

Expanded Ecosystem: Aqua Metals will acquire Lion Energy's minority stake in American Battery Factory (ABF), further strengthening the strategic link between domestic battery manufacturing and sustainable recycling.

Expansion into Distributed Energy Market: Positions Aqua Metals to support advanced use cases such as demand response, fleet-level orchestration, and the aggregation of distributed assets into virtual power plants over time.

Unmatched Market Demand: With U.S. battery storage capacity growing by 59% annually, according to the U.S. Energy Information Administration (EIA), the combined company is positioned to capture a market driven by electrification and the need for decentralized power.

 

Founded in Utah, Lion Energy has built a growing presence in the U.S. energy storage market through the deployment of software-enabled residential and commercial energy systems. Over a 12-year period, Lion Energy has advanced its business from delivering portable power stations and power banks and into more robust energy storage systems and software for home, commercial, and industrial applications. Lion achieved approximately $50 million in revenue in 2025 (subject to year-end audit adjustments).

In addition to its hardware portfolio, Lion Energy has developed a vertically integrated energy software and systems platform that includes proprietary energy management systems software, cloud connectivity, mobile applications, and wireless update capabilities. This platform enables intelligent control, monitoring, and optimization of distributed energy storage assets across residential, commercial, and grid-connected environments, and positions Aqua Metals to support advanced use cases such as demand response, fleet-level orchestration, and the aggregation of distributed assets into virtual power plants.

The U.S. energy storage market has expanded rapidly in recent years, driven by rising demand for AI data centers, grid resilience, electrification, and reliable distributed power solutions. According to Wood Mackenzie and the Solar Energy Industries Association (SEIA), the U.S. battery energy storage market is growing at more than a 30% compound annual rate, with utility-scale deployments up approximately 66% in 2024 and nearly 13 gigawatt hours added through the first three quarters of 2025.

At the same time, demand for battery materials and recycling is expected to accelerate significantly as energy storage deployments and electric vehicles scale and policymakers and customers prioritize domestic, secure supply chains. Together, these trends position the combined company to advance across three areas of potential growth simultaneously: energy storage systems, battery manufacturing, and critical minerals recycling.

Aqua Metals' CEO brings extensive experience as a founder and chief executive scaling integrated battery reserve power platforms supporting millions of batteries deployed globally. These solutions were standardized by several major data center operators and financial institutions, competing successfully against traditional OEM offerings across both distributed and mission-critical environments.

Transaction Details and Closing Timeline

As contemplated by the term sheet, Aqua Metals would acquire Lion Energy through an all-stock transaction that preserves executive and board control of the combined company. At the closing, Lion Energy owners would receive approximately $25.8 million of Aqua Metals capital stock, with the number of shares issued to Lion Energy owners determined based on an exchange ratio calculated using the volume weighted average price over the 20 trading days preceding close. The Lion Energy owners would also be entitled to receive up to $65 million of additional shares of Aqua Metals' capital stock based on Lion Energy's revenue and EBITDA over the 12 month-period following the closing of the transaction. The proposed transaction remains subject to completion of customary due diligence, audit and valuation work, negotiation, execution and delivery of a definitive agreement, regulatory review, approval by Aqua Metals' shareholders and other customary closing conditions.

As part of the transaction, Aqua Metals would also acquire Lion Energy's minority ownership interest in American Battery Factory, building upon Aqua Metals' recently announced proposed strategic collaboration with American Battery Factory, a Utah-based company focused on advancing domestic battery materials and manufacturing capabilities. Together, the combination is intended to support a responsible, full-lifecycle approach to batteries, connecting deployment and intelligent operation with end-of-life recovery and recycling within a single platform.

Following the close of the transaction, Lion Energy is expected to operate as a wholly-owned subsidiary and separate business unit of Aqua Metals, with Lion Energy's present executive and management team remaining in place.

"From the beginning, Lion Energy has focused on building more than batteries," said Tyler Hortin, Chief Executive Officer of Lion Energy. "We have invested heavily in a U.S.-based energy management platform combining software, firmware, hardware, and cloud connectivity designed to give customers intelligent control over their energy systems. This transaction could accelerate that vision, our energy management systems and virtual power plant capabilities, and help extend our platform across portable, residential, commercial, and grid-connected applications. We believe the companies' platforms are complimentary across the battery lifecycle, from deployment and operation through end-of-life recovery and recycling."

The companies expect to complete the transaction in the second quarter of 2026, although there can be no assurance that the parties will enter into a definitive agreement or that the proposed transaction will be completed on that timeline or at all.

Advisors

Hilco Corporate Finance and The Benchmark Company, a StoneX Company, are acting as advisors to Aqua Metals in connection with the transaction. Cantor Fitzgerald & Co. is acting as the exclusive financial advisor to Lion Energy.

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