Ascend Elements - Chapter 11 Case Summary

Business Description

Headquartered in Westborough, MA, Ascend Elements, Inc. ("Ascend Elements") and Ascend Elements, US, LLC ("AEL" and, collectively with Ascend Elements, the "Debtors" and, together with their non-Debtor affiliates, the "Company") specialize in recovering critical minerals from used lithium-ion batteries and giga-factory scraps to produce Black Mass — a valuable intermediate generated during the battery recycling process — and refining it into high-performance precursor cathode active material (pCAM) and lithium carbonate at commercial scale.

• The Company holds a portfolio of 154 patents worldwide, anchored by its proprietary Hydro-to-Cathode technology, which enables recycling approximately 90% cleaner than traditional processes by converting mixed battery chemistries directly into a single cathode chemistry product while simultaneously removing impurities — shortening qualification cycles and reducing manufacturing complexity for customers.
• Beyond commercial applications, the Company's domestically produced battery materials serve as critical inputs for defense technology systems and national security platforms, including autonomous systems and next-generation military technologies that the U.S. government has prioritized securing through domestic supply chains.

Ascend Elements currently operates a research and development facility in Westborough, Massachusetts, a production facility in Covington, Georgia ("Apex 0"), and an international joint-venture factory in Zawiercie, Poland ("Poland JV"). Additional facilities are in various stages of development in Hopkinsville, Kentucky ("Apex 1") and Poland ("Apex 2").

The Company is positioned amid a fundamental shift in global energy production and storage. Global demand for lithium batteries and the underlying materials required to manufacture them is projected to grow nearly four-fold over the next decade, driven by increasing demand for stationary energy storage, data center and grid resilience needs, and electric vehicle adoption in the U.S. and abroad.

The Company reports over $2 billion of future commitments from customers and contract counterparties, though near-term liquidity constraints have prevented the Company from fully realizing this commercial pipeline.

• The Company's strategy addresses a structural imbalance in the global battery materials market, where China's dominance in refining and processing — backed by industrial supply and scale — has created dependence risks for Western manufacturers. Ascend Elements offers a closed-loop, low-carbon alternative for North American and European supply chains, aligned with U.S. policy priorities concerning critical minerals, national security, and supply chain resilience.
• Reflecting this positioning, the Company has secured two DOE grants totaling $480 million, significant grant funding from the Republic of Poland, financing commitments from the European Bank for Reconstruction and Development, and nearly a billion dollars in total investor funding.

As of the Petition Date, the Debtors employ approximately 102 employees, all employed by Debtor Ascend Elements, Inc. and none represented by a union or covered by a collective bargaining agreement. The Debtors have also retained 14 independent contractors and sub-contractors, with the largest workforce concentrations in Georgia, Kentucky, Massachusetts, and Texas.

Ascend Elements, Inc. and Ascend Elements, US, LLC filed for Chapter 11 protection on April 9, 2026 (the "Petition Date").

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Corporate History

The Company traces its origins to research conducted at the Worcester Polytechnic Institute, where the founding team developed technology capable of recovering approximately 80% of the mass of spent lithium-ion batteries. Following the filing of provisional patents, the founders formed Battery Resourcers, LLC in 2015 to commercialize the breakthrough technology.

• Over the ensuing years, the Company steadily expanded its production capabilities, recorded its first cathode output sales, and obtained additional patents.
• Early recognition came in the form of grants from the National Science Foundation and the Massachusetts Clean Energy Center, as well as partnership agreements with Apple, Dell, and Honda.

Rapid Expansion and Rebranding

• Beginning in 2021, the Company entered a period of rapid expansion, securing multiple rounds of equity and debt financing. It rebranded as Ascend Elements, launched industrial-scale operations in Georgia, and significantly expanded its workforce.
• Over the next several years, the Company scaled production capacity to commercial levels, secured two DOE grants totaling $480 million, and broadened its geographic footprint into Europe, including forming a joint venture in Poland.
• This growth trajectory was accompanied by growing industry recognition: the Company was named Fastmarkets 2024 Recycler of the Year and appeared on TIME Magazine's "Top Green Tech Companies" list for two consecutive years.

Organizational Structure

Debtor Ascend Elements is a corporation organized in 2017 under the laws of the State of Delaware. It serves as the direct parent of Debtor AEL and the direct or indirect parent of all non-Debtor affiliates that comprise the Company. Debtor AEL is a limited liability company organized in 2025 under the laws of Texas.

• Ascend Elements is the main operating entity, owning the substantial majority of the Debtors' property, plant, and equipment; employing all staff; and holding the vast majority of the intellectual property associated with operations.
• Non-Debtor subsidiaries include Ascend Elements UK, Ltd., Ascend Elements France, Ascend Elements Poland Holdco, and Ascend Elements Poland SP Z.O.O., all wholly owned by Ascend Elements.
  • Ascend Elements Poland SP Z.O.O. and non-Debtor Elemental Strategic Metals each own a 50% interest in AE Elemental SP Z.O.O., the joint venture operating the Poland JV facility.
  • Ascend Elements Poland Holdco owns a 100% interest in Ascend Elements Poland 2, the entity established to develop the Apex 2 facility.

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Operations Overview

The Company's core business is advanced critical-minerals refining and engineered materials manufacturing. Rather than merely collecting and processing end-of-life batteries, Ascend Elements produces battery-grade, specification-driven materials — including lithium carbonate and pCAM — suitable for integration into U.S. and European battery supply chains at commercial scale.

• The Company's patented Hydro-to-Cathode process combines the strengths of hydrometallurgy and direct recycling while avoiding the toxic waste and emissions associated with other upstream processes. Unlike conventional metallurgical approaches that separate metals and then recombine them, this proprietary technology converts mixed battery chemistries directly into a single cathode chemistry product, reducing cost and lead time for manufacturers and enabling reintroduction of critical materials into the domestic battery supply chain at or below competitor costs.

Apex 0 (Covington, GA) — Black Mass / Lithium Carbonate

Apex 0 is a 154,000 sq. ft. facility in Covington, Georgia, approximately 35 miles east of Atlanta. The facility shreds factory scrap and used EV batteries to produce Black Mass, which feeds the Company's downstream lithium carbonate and pCAM production, with excess volumes available for third-party sale.

• Shredding operations began in 2022, with Black Mass operations restarted in the third quarter of 2025 following operational reconfiguration. The Company is currently producing Black Mass. At nameplate capacity and with required capital expenditures, the facility is projected to process roughly 30 kilotons of lithium battery feedstock into 20–30 kilotons of Black Mass annually.
• In August 2025, the Company achieved a landmark milestone: it became the first company in U.S. history to produce lithium carbonate from 100% recycled battery content at commercial scale — a result verified by a third-party engineering report and confirmed through industry QC/QA testing with multiple potential customers.
  • Upon completion of planned utility upgrades, Covington is expected to become the first and only U.S. commercial recycled lithium carbonate production facility operating at scale.
• The facility also houses a pCAM pilot line used to produce commercial samples for customer qualification.
• No comparable facility exists in the United States; replicating the Company's proprietary process technology, purpose-built infrastructure, regulatory approvals, and customer-validated products would require years of development and substantial capital investment by any new entrant. These recent milestones have been achieved under the Company's current leadership team, the substantial majority of which joined within the past year.

Apex 1 (Hopkinsville, KY) — Lithium Carbonate / pCAM

Apex 1 is under construction in Hopkinsville, Kentucky, approximately 70 miles northwest of Nashville, Tennessee. If completed, the facility will encompass roughly 500,000 sq. ft., making it the Company's largest site, with an initial focus on lithium carbonate production.

• As of the Petition Date, construction is approximately 60% complete and has been paused pending resolution of outstanding disputes with the Company's primary contractor.
• The facility is not operational and does not currently generate revenue. Future development remains subject to completion of construction, resolution of contractor disputes, and additional capital investment, with initial revenue targeted shortly after extraction facilities are brought online.

Poland JV (Zawiercie, Poland) — Black Mass

The Poland JV facility in Zawiercie, Poland, is a state-of-the-art multi-metal extraction operation focused on the recovery of battery metals and platinum group metals. Operational since 2024, the joint venture is engaged in spent battery disassembly, discharge, and shredding, providing strategic access to EU OEMs and feedstock sources.

• Small amounts of Black Mass are currently produced at the facility. With required capital expenditures, the facility is expected to process 12 kilotons of lithium batteries per year into 6–8 kilotons of Black Mass, which will serve as the primary feedstock for the Company's planned Apex 2 operations.

Apex 2 (Poland) — Lithium Carbonate / pCAM

Non-Debtor affiliate Ascend Elements Poland Holdco holds a 100% interest in Ascend Elements Poland 2, an entity established to develop lithium carbonate and pCAM extraction facilities in Poland.

• The facility is planned to include both production lines, to be built in phases, with Black Mass feedstock supplied by the Poland JV facility.
• Construction is supported by a $340 million grant from the Polish government, among other significant financial backing from the Polish government and the European Bank for Reconstruction and Development.
• Apex 2 is at the project development stage, with a suitable site identified and secured and no material capital deployed beyond the existing JV. The Company is also developing a joint venture partnership with an experienced industry partner expected to contribute equity, operational expertise, and supply chain access.

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Prepetition Obligations

As of the Petition Date, the Debtors reported approximately $103.5 million in total funded debt obligations on a consolidated basis (excluding interest, hedging arrangements, letters of credit, and other charges). Beyond funded debt, the Company faces significant statutory lien claims exceeding $145 million and an estimated $40 million in unsecured obligations. The Debtors' prepetition capital structure is summarized below:

Secured Convertible Notes

• Senior Secured Convertible Notes: Approximately $20.0 million in principal remains outstanding under a Senior Secured Convertible Note and Warrant Purchase Agreement dated December 22, 2025, with Alter Domus (US), LLC serving as collateral agent.
  • The notes mature on June 12, 2027 and are secured by first-priority liens on substantially all of the Debtors' personal property, including cash and cash equivalents.
  • In connection with the agreement, the Company also issued warrants to purchase 27,925,000 shares of common stock at an exercise price of $0.01 per share, expiring on the earlier of the 10th anniversary of issuance or a deemed liquidation event or IPO.
• Junior Secured Convertible Notes: Approximately $83.1 million in principal remains outstanding under a Subordinated Secured Convertible Note Purchase Agreement dated June 13, 2025, also agented by Alter Domus (US), LLC.
  • The notes mature on June 12, 2027 and are secured by second-priority liens on substantially all of the Debtors' personal property, including cash and cash equivalents.
  • A Subordination Agreement dated December 22, 2025 governs the payment and lien priority between the Senior and Junior Secured Noteholders with respect to the notes and the collateral securing them.

Kentucky Mortgage Debt

• Approximately $0.4 million remains outstanding under a Commercial Term Promissory Note originally issued in November 2022 in the principal amount of $2.9 million in favor of Hopkinsville Industrial Foundation, Inc., a Kentucky non-profit corporation.
  • The note was executed in connection with the purchase of 146 acres in Hopkinsville Industrial Park, Kentucky, where the Debtors' Apex 1 battery precursor production facility is under construction. The obligation is secured by a mortgage on the property.

Statutory Lien Claims

• As of the Petition Date, contractors, subcontractors, materialmen, and various suppliers had recorded or noticed mechanics, warehouse, and materialman's liens in connection with the Debtors' Apex 0 and Apex 1 facilities in an aggregate amount exceeding approximately $145 million.
  • The claims are comprised primarily of an approximately $140 million lien asserted by the prime contractor for the Apex 1 facility, along with additional claims from its subcontractors and suppliers. The Debtors note that the total asserted claims substantially exceed their alleged liability for the work, goods, and services allegedly provided.

Government Grants

• U.S. Department of Energy Grant: In 2022, the DOE awarded Ascend Elements a $311 million federal grant to construct an industrial-scale battery precursor production facility -- the Apex 1 facility in Hopkinsville, Kentucky.
  • The grant was canceled in 2025 due to spending cuts recommended by the Department of Government Efficiency. As of the Petition Date, the Company had received $207 million of the total award.
  • The DOE asserts an undivided reversionary interest in equipment acquired by the Debtors with grant funds.
• City of Hopkinsville Conditional Grant: The Company received approximately $3.6 million from the City of Hopkinsville as an incentive for the acquisition of the Hopkinsville Property, subject to certain recapture obligations.

Unsecured Debt

• The Debtors estimate approximately $40 million in unsecured debt obligations as of the Petition Date, including amounts owed to trade creditors, suppliers, vendors, and contract counterparties, all of which remain subject to the Debtors' rights to dispute.

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Events Leading to Bankruptcy

Construction Delays, Cost Overruns, and Project Setbacks

• Ascend Elements' path to chapter 11 was shaped by a widening gap between the Company's long-term commercial promise and the near-term liquidity required to realize it. In 2023-2024, the Company raised approximately $650 million to fund the buildout of its Apex 0 facility in Georgia and its Apex 1 facility in Hopkinsville, Kentucky. Despite this substantial capital raise, both projects encountered significant setbacks that delayed revenue generation and intensified cash pressures.
  • Apex 1, the Company's flagship pCAM and lithium carbonate production facility, is approximately 60% complete as of the Petition Date and has come to a standstill. In late 2024, the primary contractor, Turner-Kokosing Joint Venture ("TKJV"), notified Ascend Elements of unforeseen cost escalations requiring an additional capital raise to complete the project.
  • Following an internal review in early 2025, the Company's new management team identified cost overruns and suspected fraudulent billing by TKJV, prompting the Debtors to pause all further capital expenditures on Apex 1 and instead invest in preserving and winterizing the construction site to conserve limited liquidity.
  • Apex 0, the Company's Georgia facility, has been unable to ramp lithium carbonate production to commercially viable levels due to necessary upgrades to its utility connection. Although the Debtors have identified a solution, implementing it will require time and capital, further delaying the facility's contribution to profitability and reinforcing the near-term liquidity shortfall.

Contractor Disputes and Legacy Liabilities

• The construction pause and subsequent investigation into cost overruns at Apex 1 gave rise to a substantial legacy accounts payable balance and contentious litigation with the project's primary contractor, with TKJV and other subcontractors — many of whom have recorded mechanics' and materialmen's liens — asserting claims in the aggregate amount of approximately $138.4 million for work performed on Apex 1.
  • TKJV also filed a lawsuit against Ascend Elements in Kentucky state court, though TKJV's claims have since been compelled to arbitration.
  • The state court declined to stay the additional lien claims asserted by subcontractors and suppliers pending the arbitration. Ascend Elements has appealed the denial of the stay, and the appeal remains pending.
  • Ascend Elements has asserted defenses and counterclaims against TKJV and one of its subcontractors, alleging they negligently and/or fraudulently overcharged the project by at least $16 million. Until these disputes are resolved and construction can resume, Apex 1 cannot be completed, placed into service, or contribute to revenue generation.

Market Volatility and Pricing Pressures

• Commodity price volatility for Black Mass, lithium carbonate, and pCAM compounded the Company's operational challenges by constraining its ability to profitably market the limited material it is currently able to produce.
  • China's dominant position in the battery material market -- supported by significant contributions from the Chinese government -- has enabled sustained exports of low-cost lithium carbonate, cobalt, and pCAM, exerting persistent downward pressure on global pricing. Although experts predict a market bottom in 2025 with a recovery anticipated in 2026, current pricing dynamics have limited cash generation and heightened the Debtors' liquidity constraints.
  • These market headwinds, combined with the operational setbacks at Apex 0 and Apex 1, left the Debtors delinquent on certain obligations to key vendors and trade creditors.

Leadership Refresh and Operational Controls

• Since 2025, the Company has substantially refreshed its senior leadership, with eight of eleven senior leaders joining the organization. This reconstituted management team inherited a set of pre-existing operational and financial challenges -- including near-term liquidity pressures, construction delays, and contractor cost disputes -- and moved quickly to assess the Company's position and implement corrective measures.
  • In Q1 2025, the new management team implemented weekly cash management and spend controls to support operational discipline and preserve remaining liquidity.

Strategic Alternatives and Prepetition Financing

• Beginning in the fall of 2025, the Debtors' management and advisors undertook a comprehensive review of strategic alternatives to address the Company's deteriorating liquidity position.
  • The Debtors negotiated with a group of prepetition noteholders holding a majority of outstanding indebtedness regarding bridge financing to stabilize operations. Those efforts resulted in the sale and issuance of Senior Notes in December 2025, providing liquidity to continue operations while the Company assessed long-term capital needs and explored restructuring alternatives.
  • Despite this temporary relief, it became clear that an out-of-court restructuring was impracticable given the Debtors' legacy liabilities, the magnitude of new capital required, continuing operational challenges, and deteriorating vendor relationships.
  • In the weeks preceding the filing, the Debtors and a third-party lender commenced negotiations on a term sheet for debtor-in-possession financing and an asset purchase agreement for the sale of substantially all of the Debtors' assets. Ultimately, those negotiations did not result in the execution of definitive agreements.

Chapter 11 Filing and Sale Process

• Concluding that chapter 11 offered the best available path to stabilize operations, preserve value, and address legacy liabilities in an orderly manner, the Debtors commenced these cases with the assistance of Jefferies LLC as their proposed investment banker.
  • The Debtors have initiated a marketing process for their assets and for debtor-in-possession financing, and are actively engaged in discussions with potential DIP lenders and prospective stalking horse purchasers.
  • Concurrently with the filing, the Debtors filed a Bid Procedures Motion seeking approval of a sale process for substantially all of their assets, including the designation of one or more stalking horse bidders to generate the highest or best recoveries for stakeholders.
  • The First Day Motions are narrowly tailored to preserve the value of the Debtors' assets, stabilize the enterprise, and maintain safety and regulatory compliance while strategic alternatives are evaluated. Notably, the First Day Motions do not seek authority to expand operations or restart construction.