Aqua Metals Inc

Previous wording

Aqua Metals is engaged in the business of applying its commercialized clean, water-based, recycling technology principles to develop cost-efficient recycling solutions for both lead and lithium-ion (“Li”) batteries. Our recycling process is a patented hydro and electrometallurgical technology that is a novel, proprietary and patented process we developed and named AquaRefining. AquaRefining is a low-emissions, closed-loop recycling technology that has the potential to replace polluting furnaces and hazardous chemicals with electricity-powered electroplating to recover valuable metals and materials from spent batteries with higher purity, lower emissions, and with minimal waste. The modular “Aqualyzers” cleanly generate ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy.

Current wording

Aqua Metals is engaged in the business of applying its commercialized clean, water-based, recycling technology principles to develop cost-efficient recycling solutions for both lead and lithium-ion (“Li”) batteries. Our recycling process is a patented hydro and electrometallurgical technology that is an innovative, proprietary and patented process we developed and named AquaRefining. AquaRefining is a low-emissions, closed-loop recycling technology that has the potential to replace polluting furnaces and hazardous chemicals with electricity-powered electroplating to recover valuable metals and materials from spent batteries with higher purity, lower emissions, and with minimal waste. The modular “Aqualyzers” cleanly generate ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy.

Previous wording

We are also applying our commercialized clean, water-based recycling technology principles with the goal of developing the cleanest and most cost-efficient recycling solution for lithium-ion batteries. We believe our process has the potential to produce higher quality products at a lower operating cost without the damaging effects of furnaces and greenhouse emissions. Aqua Metals estimates the total addressable market for lithium-ion battery recycling will be approximately $9 billion by 2025 and grow to exceed lead battery recycling by the end of the decade.

Current wording

We are also applying our commercialized clean, water-based recycling technology principles with the goal of developing the cleanest and most cost-efficient recycling solution for lithium-ion batteries. We believe our process has the potential to produce higher quality products at a lower operating cost without the damaging effects of furnaces and greenhouse emissions.

Previous wording

During 2022, we conducted environmental comparisons based on Argonne National Lab’s modeling of lithium battery supply chains – called EverBatt. The initial results indicate that AquaRefining is a cleaner approach to LiB recycling, producing far less CO2 waste streams than smelting or chemical-driven hydrometallurgical processes currently on the market. In December 2022, we completed equipment installation and began to operate our first-of-a-kind LiB recycling facility, utilizing electricity as the catalyst to recycle instead of intensive chemical processes, fossil fuels, or high-temperature furnaces. In January of 2023, Aqua Metals recovered its first metals from recycling lithium batteries using the patent-pending Li AquaRefining process.

Current wording

During 2022, we conducted environmental comparisons based on Argonne National Lab’s modeling of lithium battery supply chains – called EverBatt. The initial results indicate that AquaRefining is a cleaner approach to LiB recycling, producing far less CO2 waste streams than smelting or chemical-driven hydrometallurgical processes currently on the market. In December 2022, we completed equipment installation and began to operate our first-of-a-kind LiB recycling facility, utilizing electricity as the catalyst to recycle instead of intensive chemical processes, fossil fuels, or high-temperature furnaces. In January 2023, Aqua Metals recovered its first metals from recycling lithium batteries using the patent-pending Li AquaRefining process.

Previous wording

In February 2023, we acquired a five-acre recycling campus at the TRIC. When fully developed, the facility we envision is designed to process up to 10,000 tonnes of lithium-ion battery material each year using our proprietary Li AquaRefining technology. Subject to our receipt of the required additional capital, we expect to complete development of phase one, including all equipment installation, by mid-2024 and to commence the commissioning and operation at the new campus in the second half of 2024. The Company is planning for a phased development of the campus, beginning with the already commenced redevelopment of an existing building on-site into the first commercial-scale Li AquaRefinery, targeting 3,000 tons per annum (tpa) capacity in phase one. In January and February of 2024, we made significant progress on the construction of the planned first phase of the commercial Li AquaRefinery.

Current wording

In February 2023, we acquired a five-acre recycling campus at the TRIC. When fully developed, the facility we design will process up to 10,000 tonnes of lithium-ion battery material each year using our proprietary Li AquaRefining technology. Subject to our receipt of the required additional capital, we expect to complete development of phase. The Company is planning for a phased development of the campus, beginning with the already commenced redevelopment of an existing building on-site into the first commercial-scale Li AquaRefinery, targeting 3,000 tons per annum (tpa) capacity in phase one. In the first half of 2024, we made significant progress on the construction of the planned first phase of the commercial Li AquaRefinery.

Previous wording

During the quarter ended March 31, 2024, we issued 4,155,611 shares of common stock pursuant to an at the market issuance sales agreement ("ATM") for net proceeds of $2.1 million. During the year ended December 31, 2023, we issued 3,244,302 shares of common stock pursuant to an at the market issuance sales agreement for net proceeds of $3.8 million. We raised a net of $18.3 million in the third quarter of 2023 from the public offering of our common shares and a net of $4.6 million from the sale of our common stock to Yulho.

Current wording

During the six months ended June 30, 2024, we issued 5,039,383 shares of common stock pursuant to an at the market issuance sales agreement ("ATM") for net proceeds of $2.5 million. On May 14, 2024, we completed a public offering of 20,125,000 shares of our common stock, at the public offering price of $0.39 per share. In connection with the sale of common stock, the Company issued warrants to purchase shares of common stock at the rate of one warrant for every share of purchased common stock, at the price of $0.01 per share. After the deduction of the underwriter’s discount and expenses payable by us, we received net proceeds of $7.3 million. During the year ended December 31, 2023, we issued 3,244,302 shares of common stock pursuant to an at the market issuance sales agreement for net proceeds of $3.8 million. We raised a net of $18.3 million in the third quarter of 2023 from the public offering of our common shares and a net of $4.6 million from the sale of our common stock to Yulho.

Previous wording

We are in the process of demonstrating that Li AquaRefining, which is fundamentally non-polluting, can create the highest quality and highest yields of recovered minerals from lithium-ion batteries with lower waste streams and lower costs than existing alternatives. We have already demonstrated at our pilot facility our ability to recover key valuable minerals in lithium-ion batteries, such as lithium hydroxide, copper, nickel, cobalt, and other compounds. Our goal is to recycle commercial quantities of nickel, cobalt, and copper in a pure metal form that can be sold to the general metals and superalloy markets and can be made into battery precursor compound materials with known processes already used in the mining industry. We also intend to recycle commercial amounts of lithium that can be sold to lithium-ion battery manufacturers. We have installed, commissioned, and began to operate the first Li AquaRefining pilot plant at the end of 2022, scaling towards a commercial demonstration plant operation with capacity of processing approximately 3,000 tonnes of black mass per year. The location for the pilot demonstration is currently the Innovation Center with expansion to happen at our new 5-acre recycling campus starting with processing ~3,000 tonnes of black mass per year and growing to commercial quantities of ~10,000 tonnes per year or more of production starting in 2025 and 2026, which would be enough material to build ~100,000 average EVs or ~400,000 average home energy storage systems. At 2023 year average metals prices, ~10,000 tonnes per year capacity could also generate $200 million of revenues for the company.

Current wording

We are in the process of demonstrating that Li AquaRefining, which is fundamentally non-polluting, can create the highest quality and highest yields of recovered minerals from lithium-ion batteries with lower waste streams and lower costs than existing alternatives. We have already demonstrated at our pilot facility our ability to recover key valuable minerals in lithium-ion batteries, such as lithium hydroxide, copper, nickel, cobalt, and other compounds. Our goal is to recycle commercial quantities of nickel, cobalt, and copper in a pure metal form that can be sold to the general metals and superalloy markets and can be made into battery precursor compound materials with known processes already used in the mining industry. We also intend to recycle commercial amounts of lithium that can be sold to lithium-ion battery manufacturers. We have installed, commissioned, and operated our pilot plant since December of 2022. During the first half of 2024 we have been building a commercial demonstration plant operation with capacity of processing approximately 3,000 tonnes of black mass per year. The location for the pilot demonstration is currently the Innovation Center with the commercial demonstration plant to be constructed at our 5-acre recycling campus starting with processing ~3,000 tonnes of black mass per year and growing to commercial quantities of ~10,000 tonnes per year or more of production. Equipment installation and construction at the demonstration plant is currently paused. These activities will resume once the company obtains funding. The remaining construction and installation are expected to take approximately 6 months from the date of funding.

Previous wording

We did not engage in commercial operations in 2024 and 2023. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the three months ended March 31, 2024, Aqua Metals was focused on quickly advancing from the planning and validation phases to execution and operation of our pilot facility and the build out of our commercial facility. We did not earn any revenue during the three months ended March 31, 2024 and 2023. The following table summarizes our results of operations with respect to the items set forth below for the three months ended March 31, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).

Current wording

We did not engage in commercial operations in 2024 and 2023. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the six months ended June 30, 2024, Aqua Metals was focused on the continued operation of the pilot facility and the build out of our commercial facility. We did not earn any revenue during the three and six months ended June 30, 2024 and 2023. The following table summarizes our results of operations with respect to the items set forth below for the three and six months ended June 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).

Previous wording

Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations increased approximately $1,144,000 or 107.4% for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase in plant operations for the three months ended March 31, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $556,000, as we hired additional staff to operate the pilot facility and process black mass, as well as $286,000 increase in professional fees, $151,000 in supplies and materials and $106,000 in depreciation expenses.

Current wording

Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations increased approximately $892,000 or 60.2% and $2,036,000 or 80.0% for the for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. The increase in plant operations for the three month ended June 30, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $916,000, as we engaged our lab and engineering staff in operating the pilot facility and processing black mass, as well as $151,000 in supplies and materials offset by $196,000 decrease in professional fees. The increase in plant operations for the six month ended June 30, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $1,472,000, as we hired additional staff and we engaged our lab and engineering staff in operating the pilot facility and processing black mass, as well as $302,000 in supplies and materials, $126,000 increase in insurance expenses and $89,000 in professional fees.

Previous wording

Research and development cost includes expenditures related to the improvement of the AquaRefining technology and the development of our lithium-ion battery recycling process. During the three months ended March 31, 2024, research and development costs increased $143,000, or approximately 32.1% compared to the three months ended March 31, 2023. The increase was driven by an increase in payroll and payroll related fees of approximately $48,000, as well as $34,000 increase in outside services, and $57,000 in supplies and materials.

Current wording

Research and development cost includes expenditures related to the improvement of the AquaRefining technology and the development of our lithium-ion battery recycling process. During the three months ended June 30, 2024, research and development costs decreased $162,000, or approximately 30.9% compared to the three months ended June 30, 2023. The decrease was driven by a decrease in payroll and payroll related fees of approximately $86,000, as well as $54,000 in supplies and materials. For the six months ended June 30, 2024, research and developments costs decreased $19,000, or approximately 2.0%, compared to the six months ended June 30, 2023.

Previous wording

We didn't recognize a gain on disposal of property, plant and equipment during the three months ended March 31, 2024 compared to a gain of $20,000 for the three months ended March 31, 2023. For the three months ended March 31, 2023, the gain on property, plant and equipment resulted from the sales of fixed assets.

Current wording

We didn't recognize a gain on disposal of property, plant and equipment during the three and six months ended June 30, 2024 compared to a gain of $3,000 and $23,000 for the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2023, the gain on property, plant and equipment resulted from the sales of fixed assets.

Previous wording

The following table summarizes our other income and interest expense for the three months ended March 31, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).

Current wording

The following table summarizes our other income and interest expense for the three and six months ended June 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).

Previous wording

The decrease in interest expense for the three months ended March 31, 2024 is due to the reduction on the note payable outstanding balance.

Current wording

The decrease in interest expense for the three and six months ended June 30, 2024 is due to the reduction on the note payable outstanding balance.

Previous wording

We recognized approximately $146,000 in interest and other income during the three months ended March 31, 2024, an increase of $80,000 or 121.2% compared to the three months ended March 31, 2023. The increase in interest and other income is primarily due to the increase in interest received on our bank deposits.

Current wording

We recognized approximately $99,000 and $245,000 in interest and other income during the three and six months ended June 30, 2024, respectively, a decrease from $348,000 and $414,000 compared to the three and six months ended June 30, 2023, respectively. The decrease in interest and other income is primarily due to the decrease in miscellaneous income from the non-recurring engineering agreement with 6K Energy.

Previous wording

As of March 31, 2024, the Company had total assets of $31.4 million and working capital of $1.6 million.

Current wording

As of June 30, 2024, the Company had total assets of $33.7 million and working capital of $1.5 million.

Previous wording

As of March 31, 2024, the Company had cash and cash equivalents of approximately $8.3 million, current liabilities of $8.5 million and an accumulated deficit of $229.0 million. The Company's current liabilities of $8.5 million include the note payable with Summit Investment Services, LLC* *in the amount of approximately $3 million due on February 1, 2025 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company anticipates that it will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs for the next twelve months. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.

Current wording

As of June 30, 2024, the Company had cash and cash equivalents of approximately $7.8 million, current liabilities of $7.9 million and an accumulated deficit of $235.1 million. The Company's current liabilities of $7.9 million include the note payable with Summit Investment Services, LLC* *in the amount of approximately $3 million due on February 1, 2025 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company anticipates that it will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs for the next twelve months. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.

Previous wording

Net cash used in operating activities

Current wording

Net cash provided by (used in) operating activities

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $4.3 million. Net cash used in operating activities includes approximately $67,000 of cash received related to our non-recurring engineering arrangement with 6K Energy offset by operating expenses. Net cash used in operating activities for the three months ended March 31, 2023 was $2.9 million which includes approximately $283,000 of cash received related to our lease receivable offset by operating expenses. Net cash used in operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, stock-based compensation, and gain on the disposal of property, plant and equipment, as well as net changes in working capital.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $8,002,000. Net cash provided by operating activities for the six months ended June 30, 2023 was $5,472,000 which includes approximately $12,278,000 of cash received related to our lease receivable offset by operating expenses. Net cash used in or provided by operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, stock-based compensation, and gain on the disposal of property, plant and equipment, as well as net changes in working capital.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 was $5.6 million and consisted mainly of cash utilized towards equipment deposits and purchases of fixed assets related to the build out of our commercial facility offset by $150,000 of cash received related to our note receivable. Net cash used in investing activities for the three months ended March 31, 2023 was $5.2 million and consisted mainly of $4.3 million utilized towards the purchase of the building located at 2999 Waltham Way McCarran, NV 89434 and $0.9 million utilized towards purchases of fixed assets.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $9,762,000 and consisted mainly of cash utilized towards equipment deposits of $3,522,000 and purchases of fixed assets related to the build out of our commercial facility of $6,440,000, offset by $200,000 of cash received related to our note receivable. Net cash used in investing activities for the six months ended June 30, 2023 was $5,511,000 and consisted mainly of $4,300,000 utilized towards the purchase of the building located at 2999 Waltham Way McCarran, NV 89434 and $900,000 utilized towards purchases of fixed assets.

Previous wording

Net cash provided by financing activities of $1.6 million for the three months ended March 31, 2024, consisting of $2.1 million in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, offset by $360,000 related to tax withholdings to cover RSU vesting and $164,000 related to debt issuance costs. Net cash provided by financing activities for the three months ended March 31, 2023 was approximately $2.0 million in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $2.9 million in net proceeds from the loan agreement secured with the Summit Investment Services, LLC partially offset by the $0.6 million related to tax withholdings to cover RSU vesting.

Current wording

Net cash provided by financing activities was $9,075,000 for the six months ended June 30, 2024, consisting of $2,542,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $7,306,000 in net proceeds from our May 2024 public offering, offset by $360,000 related to tax withholdings to cover RSU vesting and $413,000 related to debt issuance costs. Net cash provided by financing activities of $847,000 for the six months ended June 30, 2023 was approximately $2,784,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $2,932,000 in net proceeds from the loan agreement secured with the Summit Investment Services, LLC offset by the $6,000,000 used to pay off the note payable and $577,000 related to tax withholdings to cover RSU vesting.

Previous wording

As of March 31, 2024, we had total cash of $8.3 million and working capital of $1.6 million. As of the date of this report, we believe that we will require additional capital in order to fund our current level of ongoing costs over the next twelve months and move forward with our current business strategy. There can be no assurance that we will be able to acquire the necessary funding on commercially reasonable terms or at all. We intend to seek funds through the sale of equity or debt financing. Funding that includes the sale of our equity may be dilutive. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.

Current wording

As of June 30, 2024, we had total cash of $7.8 million and working capital of $1.5 million. As of the date of this report, we believe that we will require additional capital in order to fund our current level of ongoing costs over the next twelve months and move forward with our current business strategy. There can be no assurance that we will be able to acquire the necessary funding on commercially reasonable terms or at all. We intend to seek funds through the sale of equity or debt financing. Funding that includes the sale of our equity may be dilutive. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.