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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Aqua Metals Announces Third Quarter 2021 Results

November 4, 2021 GMT

Third Quarter and Recent Highlights:

  • Established Aqua Metals Innovation Center for development of lithium-ion battery recycling solution utilizing proven AquaRefining technology

  • Completed third generation Aqualyzer; achieved production over 300% of original model

  • Finalized definitive agreement to deploy AquaRefining technology in Taiwan to ACME Metal Enterprise Co. and partner to further develop direct to oxide process

  • Signed collaboration agreement with LINICO for clean lithium-ion battery recycling technology

  • Received $1.25 million payment from LINICO; non-refundable deposit for the purchase of McCarran Nevada facility

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  • Received final insurance payment of $5.25 million; achieved a total of $30.25 million collected

  • Further advanced discussions with additional potential licensees

RENO, Nev., Nov. 04, 2021 (GLOBE NEWSWIRE) -- Aqua Metals, Inc. (NASDAQ: AQMS) (“Aqua Metals” or the “Company”), which is reinventing metals recycling with its AquaRefining™ technology, today announced results for its third quarter ended September 30, 2021.

Steve Cotton, President and Chief Executive Officer, commented, “Aqua Metals continues to deliver on our stated objectives regarding the deployment of clean AquaRefining technology for recycling of lead-acid batteries. In addition, I am very excited about our advancements in applying AquaRefining technology to the recycling of lithium-ion batteries, which can significantly augment Aqua Metals capabilities and more than doubles our addressable market. During the third quarter, we finalized our first ever agreement to deploy AquaRefining technology at the facility of our new partner in Taiwan. Plans are currently being finalized for the shipping and installation of the phase 1 deployment package to the ACME Taiwan facility this quarter with plans for installation and initial operations during the first quarter of 2022. This operation will benefit from the enhancements recently made to our third generation Aqualyzer, that has achieved production over 300% of the original model. Also, during the third quarter, we established our new Innovation Center that is focused on developing the capability to utilize AquaRefining technology to recover metals from recycled lithium-ion batteries. Lab scale testing has already begun with promising results. In addition, we believe that our just announced collaboration agreement with LINICO will enable and evidence that our already proven technology can be applied to recycling lithium-ion batteries.”

Third Quarter 2021 Financial Results

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During the third quarter of 2021, the Company achieved a historic milestone of finalizing its first agreement to deploy AquaRefining technology and equipment to a third-party facility, which was completed on July 28, 2021. As Aqua Metals concentrated its efforts on this agreement and further enhancing its product offerings for future partners, the Company did not generate revenue during the third quarter of 2021.

Cost of product sales increased slightly to $1.7 million compared to $1.6 million for the same period in 2020. The increase in cost of product sales was driven by accounting for legacy plant clean-up costs in preparation for the  $14.25 million/$15.25 million lease-to-sale of the AquaRefinery in the Tahoe-Reno Industrial Center to our partner LINICO, which has been leasing the facility since April, 2021. General and administrative expenses for the third quarter of 2021 increased approximately 62% compared to the third quarter of 2020, driven primarily by non-cash costs. Increases in general and administrative expenses included changes in non-cash stock-based compensation as well as increased legal and insurance expenses.

Aqua Metals received an insurance payment of $5.25 million during the third quarter of 2021 related to the 2019 fire. This is the final insurance payment bringing the total collected to $30.25 million. As the amounts received have exceeded the original insurance receivable balance, that was limited by GAAP accounting standards, payments are reported as other income and are netted against related expenses.

During the third quarter of 2021, the Company reclassified certain assets with a net book value of $0.2 million to assets held for sale. Company management determined these are non-core assets and are no longer necessary for Aqua Metals future operating plans. In addition, in conjunction with the plant clean-up, the Company disposed of assets held for sale with a book value of approximately $1.4 million. These changes resulted in a non-cash loss on the disposal of fixed assets of $1.4 million for the quarter ended September 30, 2021, and total assets held for sale of $3.2 million as of September 30, 2021.

Interest expense decreased approximately 97% for the third quarter of 2021 compared to the same period in 2020. The decrease resulted from the retirement of the Veritex loan during the fourth quarter of 2020, leaving the Company debt free.

During the third quarter ended September 30, 2021, the Company recognized interest and other income of $0.3 million compared to $18,000 for the quarter ended September 30, 2020. The increase was primarily due to the payments received for scrap material salvaged during the plant clean-up process and a payment for electricity credits.

For the third quarter of 2021, the Company had an operating loss of $4.6 million, compared to an operating loss of $3.4 million for the quarter ended September 30, 2020. The net loss for the third quarter was $1.4 million, or $0.02 per basic and diluted share, compared to a net loss of $1.8 million, or $0.03 per basic and diluted share, for the quarter ended September 30, 2020. The net loss reported for the third quarter of 2021 included the non-cash amount of $1.4 million recognized for the loss related to the disposal of property and equipment. 

As of September 30, 2021, the Company had $11.7 million in cash and cash equivalents. This balance does not reflect the $1.25 million deposit for the purchase of the McCarran Nevada facility, which was received subsequent to quarter end.

The previously announced lease-to-buy agreement related to the Company’s McCarran, Nevada plant commenced on April 1, 2021. The Company accounted for the lease-to-buy agreement as a sale-type lease. As a component of the accounting for this agreement, Aqua Metals recognized the estimated fair value of the land and plant of $17.0 million as a lease receivable. The Company applies the monthly lease payments received as a reduction to lease receivable and interest income. The lease receivable balance as of September 30, 2021, is reflected on the Company’s condensed consolidated balance sheets and allocated between a current and non-current portion.

Accrued expenses as of the quarter ended September 30, 2021, totaled $4.7 million, compared to $1.3 million for the quarter ended September 30, 2020. The most significant driver of the increase was $2.3 million for building repair costs that were accrued as part of the plant lease-to-buy agreement.

Conference Call and Webcast

The Company will conduct a conference call to discuss these results today at 4:30 p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time). The conference call may be accessed by dialing: (833) 579-0902 or (778)-560-2608 for international callers and referencing conference ID: 4252469. A simultaneous webcast of the conference call, that will include presentation slides, will be available at: https://onlinexperiences.com/Launch/QReg/ShowUUID=B2363336-CC17-485F-9D71-B3836249241A. In addition, the live webcast or a replay of the conference call will be available via the Company website at:  https://ir.aquametals.com/ir-calendar. A telephone replay of the conference call will be available until December 4, 2021, by dialing (800) 585-8367 (toll free) or (416) 621-4642 and using conference ID: 4252469.

About Aqua Metals

Aqua Metals, Inc. (NASDAQ: AQMS) is reinventing metals recycling with its patented hydrometallurgical AquaRefining™ technology. Unlike smelting, AquaRefining is a room temperature, water-based process that emits less pollution. The modular Aqualyzers™ cleanly generates ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy. The Company’s offerings include equipment supply, services, and licensing of the AquaRefining technology to recyclers across the globe. Aqua Metals is based in Reno, Nevada. To learn more, please visit: www.aquametals.com.

Aqua Metals Social Media

Aqua Metals has used, and intends to continue using, its investor relations website ( https://ir.aquametals.com ), in addition to its Twitter, LinkedIn and YouTube accounts at  https://twitter.com/AquaMetalsInc  (@AquaMetalsInc),  https://www.linkedin.com/company/aqua-metals-limited and https://www.youtube.com/channel/UCvxKNWcB69K0t7e337uQ8nQ respectively, as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Safe Harbor

This press release contains forward-looking statements concerning Aqua Metals, Inc. Forward-looking statements include, but are not limited to, our plans, objectives, expectations and intentions and other statements that contain words such as “expects,” “contemplates,” “anticipates,” “plans,” “intends,” “believes”, “estimates”, “potential” and variations of such words or similar expressions that convey the uncertainty of future events or outcomes, or that do not relate to historical matters. The forward-looking statements in this press release include our expectations for our Aqua Metals Innovation Center, our ability to develop our AquaRefining technologies for the recycling of lithium-ion batteries and the expected benefits of our Innovation Center, the recycling of lithium-ion batteries and our deployment of AquaRefining technology and equipment to our Taiwan partner’s facility. Those forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially. Among those factors are: (1) the risk that we may not derive the expected benefits from our Aqua Metals Innovation Center; (2) the risk we may not be able to recycle lithium-ion batteries using our AquaRefining process or, if we do, derive the expected benefits from such recycling; (3) the risk that we may experience COVID-19 related delays in deploying equipment and technology to our Taiwan partner; (4) the risk that licensees may refuse or be slow to adopt our AquaRefining process as an alternative to smelting in spite of the perceived benefits of AquaRefining; (5) the risk that we may not realize the expected economic benefits from any licenses we may enter into; (6) the risk that we may not be able to access additional capital as and when needed and (7) those other risks disclosed in the section “Risk Factors” included in our Annual Report on Form 10-K filed on February 25, 2021, and subsequent SEC filings. Aqua Metals cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law.

AQUA METALS, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)

   September 30,
2021
   December 31,
2020
 
  (unaudited)  (Note 2) 
ASSETS        
Current assets        
Cash and cash equivalents $11,700  $6,533 
Accounts receivable  250   32 
Lease receivable, current portion  821    
Inventory  333   1,091 
Assets held for sale  3,179    
Prepaid expenses and other current assets  309   702 
Total current assets  16,592   8,358 
         
Non-current assets        
Property and equipment, net  1,822   24,883 
Intellectual property, net  685   819 
Investment in LINICO  1,500    
Lease receivable, non-current portion  15,811    
Other assets  917   1,078 
Total non-current assets  20,735   26,780 
         
Total assets $37,327  $35,138 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
         
Current liabilities        
Accounts payable $1,063  $1,552 
Accrued expenses  4,705   1,253 
Lease liability, current portion  501   620 
Notes payable, current portion     29 
Total current liabilities  6,269   3,454 
         
Lease liability, non-current portion  269   242 
Notes payable, non-current portion     303 
Total liabilities  6,538   3,999 
         
Commitments and contingencies        
         
Stockholders’ equity        
Common stock; $0.001 par value; 100,000,000 shares authorized; 69,823,664 and 64,461,065 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively  70   64 
Additional paid-in capital  209,860   196,728 
Accumulated deficit  (179,141)  (165,653)
Total stockholders’ equity  30,789   31,139 
         
Total liabilities and stockholders’ equity $37,327  $35,138 

AQUA METALS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(Unaudited)

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
  2021  2020  2021  2020 
                 
Product sales $  $90  $  $108 
                 
Operating cost and expense                
Cost of product sales  1,670   1,635   5,417   4,395 
Research and development cost  273   210   738   669 
General and administrative expense  2,681   1,656   7,109   6,286 
Total operating expense  4,624   3,501   13,264   11,350 
                 
Loss from operations  (4,624)  (3,411)  (13,264)  (11,242)
                 
Other income and (expense)                
Insurance proceeds net of related expenses  4,344   1,722   4,792   1,467 
PPP loan forgiveness        332    
Loss on disposal of property and equipment  (1,411)     (5,665)   
Interest expense  (5)  (166)  (15)  (513)
Interest and other income  310   18   334   43 
                 
Total other income (expense), net  3,238   1,574   (222)  997 
                 
Loss before income tax expense  (1,386)  (1,837)  (13,486)  (10,245)
                 
Income tax expense        (2)  (2)
                 
Net loss $(1,386) $(1,837) $(13,488) $(10,247)
                 
Weighted average shares outstanding, basic and diluted  69,609,070   60,998,971   68,223,115   60,242,093 
                 
Basic and diluted net loss per share $(0.02) $(0.03) $(0.20) $(0.17)

Contact: Glen Akselrod, Bristol Capital
(905) 326-1888, Ext. 1
glen@bristolir.com