Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included in this Report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results may differ materially from those anticipated in these forward-looking statements.

Introduction

Alpha-En is a development-stage company focused on commercializing our proprietary Reductive Lithium Extraction (RLE) process for the production of high-purity lithium metal and cell-ready lithium metal electrodes. Our operations during the periods presented consisted primarily of research and development activities funded by government awards, together with activities required to maintain the Company and to re-establish compliance with our SEC reporting obligations. We have not generated any commercial revenue from our technology, and our operating results have been driven principally by research and development activities, grant and contract funding, and expenses associated with maintaining our public company status and rebuilding our operations.

The Company has been delinquent in its Exchange Act reporting since the fiscal year ended December 31, 2019. This Report is a comprehensive annual report intended to bring the Company current in its reporting obligations, and accordingly the discussion below addresses our results of operations and financial condition for the fiscal years ended December 31, 2025, 2024 and 2023. See the Explanatory Note at the beginning of this Report.

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Recent Developments

Re-engagement with SEC reporting.

On March 18, 2026 we engaged WWC, P.C. as our independent registered public accounting firm to audit our financial statements for the fiscal years ended December 31, 2023, 2024 and 2025, and commenced preparation of this comprehensive Report.

Pilot unit development and partnerships.

We are continuing to develop our pilot Reductive Lithium Extraction coating unit. We are engaged with multiple battery cell manufacturers under non-disclosure agreements regarding potential joint development agreements, although no such agreement has been executed as of the date of this Report. The execution of one or more joint development agreements and the further scale-up of the RLE process remain important milestones in our commercialization strategy.

Results of Operations

The focus of the Company's business has been developing new technologies for manufacturing highly pure lithium metal, a raw material for use in lightweight, high energy density batteries, in an environmentally friendly manner for commercial purposes. The Company is still in the early stages of research and development and product testing. Therefore, period over period comparisons of our results of operations are not indicative of future results.

Because the Company has not generated product revenue and remains in the development stage, management believes that operating expenses, grant and contract income, liquidity and capital resources are the most meaningful indicators for understanding the Company's operating performance.

The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended December 31, 2025, 2024 and 2023, which are included herein.

Our results of operations for the years ended December 31, 2025, 2024 and 2023 are summarized below:

		Years Ended
		December 31,												2025 vs 2024				2024 vs 2023
		2025				2024				2023				Change				Change
Revenue		$	-			$	-			$	-			$	-			$	-
Operating expenses			1,498,594				1,047,421				780,171				451,173				267,250
Net loss from operating			(1,498,594	)			(1,047,421	)			(780,171	)			(451,173	)			(267,250	)
Other income (loss)			851,910				(389,122	)			303,931				1,241,032				(693,053	)
Net loss		$	(646,684	)		$	(1,436,543	)		$	(476,240	)		$	789,859			$	(960,303	)

Revenue / Grant Income

To date, we have not generated any revenue and we may not generate any revenue from the sale of products or from other sources in the near future.

Operating Expenses

		Years Ended
		December 31,												2025 vs 2024				2024 vs 2023
		2025				2024				2023				Change				Change
General and administrative		$	450,132			$	218,538			$	189,840			$	231,594			$	28,698
Rent expense - related party			179,781				176,256				172,800				3,525				3,456
Payroll and management fee			640,865				524,990				233,618				115,875				291,372
Professional fees			227,816				127,637				183,913				100,179				(56,276	)
		$	1,498,594			$	1,047,421			$	780,171			$	451,173			$	267,250

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The increase in operating expenses was primarily attributed to increases in payroll and management compensation and general and administrative expenses.

General and administrative

General and administrative expenses consist primarily of laboratory supplies, travel, insurance, office-related expenses and other administrative costs. General and administrative expenses increased during 2025 compared to 2024 primarily due to higher laboratory supply expenses and other operational expenses associated with increased research and development activities. General and administrative expenses increased during 2024 compared to 2023 primarily due to higher supply and insurance expenses.

Payroll and management fee

Payroll and management compensation increased during 2025 compared to 2024 primarily due to an increase of approximately $92,000 in salaries and $17,500 in management fees, and increased during 2024 compared to 2023 primarily due to an increase of approximately $295,000 in salaries as the Company rebuilt its technical staff to support its government-funded research and development programs, partially offset by a decrease of approximately $24,000 in management fees.

Professional fees

The professional fees are primarily legal, accounting, consulting and transfer agent fees. Professional fees increased during 2025 compared to 2024 primarily due to an increase of approximately $66,000 in accounting, audit and legal fees associated with the audit of the Company's financial statements for the years ended December 31, 2023, 2024 and 2025 and the preparation of this Report, and an increase of approximately $34,000 in intellectual property costs, including patent prosecution and maintenance costs and the costs of the petition to reinstate U.S. Patent No. 11,076,981. Professional fees decreased during 2024 compared to 2023 primarily due to lower legal and consulting fees.

Other income (expense)

The following table summarizes government grant and contract income recognized during the years ended December 31, 2025, 2024, and 2023:

		Years Ended
		December 31,												2025 vs 2024				2024 vs 2023
		2025				2024				2023				Change				Change
DOE SBIR		$	608,632			$	470,272			$	141,823			$	138,360			$	328,449
DoD SBIR			208,280												208,280				-
NYSERDA			16,266				39,864				162,108				(23,598	)			(122,244	)
Hudson Valley Technology Development Center			11,400				-				-				11,400				-
Columbia University / NYSERDA CEN			5,000				-				-				5,000				-
		$	849,578			$	510,136			$	303,931			$	339,442			$	206,205

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Grant income in 2025 was derived primarily from the DOE SBIR Fast-Track award ($608,632) and the U.S. Army SBIR Phase I contract ($208,280), with the balance from NYSERDA milestone payments, the Hudson Valley Technology Development Center award and the Columbia University / NYSERDA ClimateTech Expertise Network program. Grant income in 2024 and 2023 was derived primarily from the DOE SBIR Fast-Track award and NYSERDA milestone payments. The initial $99,863 tranche received in May 2025 under the Empire State Development / NYSTAR Innovation Matching Grant was recorded as deferred grant income at December 31, 2025 and has not been recognized as income, because the related project completion and documentation requirements had not been satisfied.

In 2024, the Company recognized a loss on settlement of debt of approximately $899,000. The 2024 settlement of debt related to accounts payable and amounts due to a related party, settled in exchange for the issuance of 32,800,000 shares of the Company's common stock.

Net Loss

The net loss for the year ended December 31, 2025, decreased by approximately $790,000 as compared to the year ended December 31, 2024, primarily due to the increase in other income offset by the increase in operating expense.

The net loss for the year ended December 31, 2024, increased by approximately $960,000 as compared to the year ended December 31, 2023, primarily due to the increase in operating expenses and other expense offset by the increase in grant income.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses and negative cash flows from our operations. Our net loss was approximately $647,000, $1.4 million and $476,000 for the years ended December 31, 2025, 2024 and 2023, respectively. During the periods presented, our operations were funded principally by government grant and contract income and by advances from, and operating expenses paid on our behalf by NRL, our principal stockholder. We did not complete any debt or equity offering during fiscal 2025, 2024 or 2023.

Working Capital

		December 31,				December 31,				December 31,				2025 vs 2024				2024 vs 2023
		2025				2024				2023				Change				Change
Current Assets		$	24,007			$	70,297			$	79,170			$	(46,290	)		$	(8,873	)
Current Liabilities			534,762				114,149				2,470,452				420,613				(2,356,303	)
Working Capital (Deficiency)		$	(510,755	)		$	(43,852	)		$	(2,391,282	)		$	(466,903	)		$	2,347,430

As of December 31, 2025, 2024 and 2023, the current assets consisted of cash of $5,729, $54,666 and $57,914, prepaid expenses of $18,278, $15,631 and $0 and grant receivable of $0, $0, and $21,256, respectively.

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As of December 31, 2025, 2024 and 2023, the current liabilities consisted of accounts payable and accrued liabilities of $132,457, $9,972 and $32,316, accounts payable -related party of $0, $0, and $ 1,708,459, due to related parties of $302,442, $104,177 and $729,677 and deferred grant income of $99,863, $0 and $0, respectively.

The increase in working capital deficiency in 2025 was primarily due to an increase in due to related parties, accounts payable and accrued liabilities, deferred grant income and a decrease in cash.

The decrease in the working capital deficiency in 2024 was primarily due to a decrease in amounts due to a related party and accounts payable -related party which were settled through the issuance of 32,800,000 shares of the Company's common stock.

Cash Flows

For the years ended December 31, 2025, 2024 and 2023

		Years Ended
		December 31,												2025 vs 2024				2024 vs 2023
		2025				2024				2023				Change				Change
Cash used in operating activities		$	(157,202	)		$	(285,248	)		$	(42,156	)		$	128,046			$	(243,092	)
Cash provided by financing activities			108,265				282,000				100,070				(173,735	)			181,930
Net change in cash for the period		$	(48,937	)		$	(3,248	)		$	57,914			$	(45,689	)		$	(61,162	)

Operating Activities

We have not generated positive cash flows from operating activities.

For the year ended December 31, 2025, net cash flows used in operating activities consisted of a net loss of $647,000, reduced by deemed capital contribution of $180,000, and decreased by net changes in operating assets and liabilities of $310,000.

For the year ended December 31, 2024, net cash flows used in operating activities consisted of a net loss of $1.4 million, reduced by deemed capital contribution of $176,000 and loss on settlement of debt of $899,000, and decreased by net changes in operating assets and liabilities of $76,000.

For the year ended December 31, 2023, net cash flows used in operating activities consisted of a net loss of $476,000, reduced by deemed capital contribution of $173,000, and decreased by net changes in operating assets and liabilities of $261,000.

Investing Activities

We did not use any funds for investing activities during the year ended December 31, 2025, 2024 and 2023.

Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities consisted of $165,000 advance from a related party and repayments to a related party of $56,500.

For the year ended December 31, 2024, net cash provided by financing activities consisted of $337,000 advance from a related party and repayments to a related party of $55,000.

For the year ended December 31, 2023, net cash provided by financing activities consisted of $145,000 advance from a related party and repayments to a related party of $45,000.

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Going Concern

As reflected in the financial statements, the Company had an accumulated deficit of approximately $35.7 million and a negative working capital of approximately $511,000 at December 31, 2025. For the years ending December 31, 2025, 2024 and 2023, the Company had a net loss of approximately $647,000, $1.4 million, and $476,000, respectively, and net cash used in operating activities of approximately $157,000, $285,000 and $42,000, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company is attempting to further develop the intellectual property associated with its technology; broaden its patent portfolio; scale up its production of various products; and begin generating revenue; however, the Company's cash position is not sufficient to support its daily operations for the foreseeable future. While the Company believes in the viability of its technology and in its ability to raise additional funds by way of a public or private offering, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional funds by way of a public or private offering and its ability to further develop its technology and generate sufficient revenue.

Management's plans to address these conditions also include continued funding under the Company's government grants and contracts; continued funding from NRL, the Company's principal stockholder, which has historically funded, and has indicated its intention to fund, the Company's non-SBIR (Small Business Innovation Research) operating expenses through commercialization, contingent on the continued service of Dr. Landon Oakes as Chief Technology Officer; and the pursuit of joint development agreements with battery cell manufacturers. NRL is not obligated to provide future funding, and there can be no assurance that NRL will continue to fund the Company's operations. There can be no assurance that these plans will be successful. If the Company is unable to obtain additional financing, secure continued support from NRL, obtain future government funding or successfully commercialize its technology, it may be required to significantly reduce or discontinue operations.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Contractual Obligations

As a smaller reporting company, we are not required to provide tabular disclosure of contractual obligations. At December 31, 2025, our principal obligations consisted of amounts due to related parties, including advances from NRL that were subsequently documented under the Loan and Security Agreement, Revolving Promissory Note and Patent Security Agreement dated August 19, 2026, and the amount owed to Mr. Feldman, each as described in "Item 13. Certain Relationships and Related Transactions, and Director Independence" and in Note 5 to the financial statements. We have no long-term debt, capital lease obligations, operating lease obligations or purchase obligations. Our cash position is not sufficient to fund our operations for the next twelve months without continued government funding and continued support from NRL, as described under "Going Concern" above.

Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to us, but which will only be resolved when one or more future events occur or fail to occur. In consultation with its legal counsel as appropriate, our management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we, in consultation with legal counsel, evaluate the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is likely, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

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Known Trends, Events and Uncertainties

We will require additional external financing for the foreseeable future. Our ability to continue our development efforts depends on continued government funding, continued investment by our principal investor (which is contingent on the continued service of our Chief Technology Officer) and our ability to secure joint development agreements with commercial partners. The construction and operation of a larger pilot unit is a critical next step in demonstrating the commercial viability of the RLE process. Lithium market conditions, including commodity price volatility and the concentration of lithium refining capacity outside the United States, may affect demand for our technology and the availability of government support for domestic lithium supply chain initiatives. We are also subject to risks and costs related to our SEC reporting remediation, including audit, legal and compliance costs that are significant relative to the size of our operations.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), which require management to make estimates, judgments and assumptions that affect the amounts reported in our financial statements and accompanying notes.

While our estimates and assumptions are based on our knowledge of current events and on actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company's significant accounting policies, refer to Note 3 of Notes to Financial Statements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.