Aqua Metals (AQMS) Q1 2021 Earnings Call Transcript


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Aqua Metals (NASDAQ:AQMS)
Q1 2021 Earnings Call
Apr 29, 2021, 4:30 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Thank you for standing by, and welcome to Aqua Metals pre-record. I would now like to turn the call over to Glen Akselrod. You may begin.

Glen AkselrodInvestor Relations

Thank you, operator, and welcome, everybody, to Aqua Metals first-quarter 2021 conference Call. Earlier today, Aqua Metals released financial results for the quarter ended March 31, 2021. This release is available on the investors section of the company’s website at Joining us for today’s call from management is Steve Cotton, president and CEO; as well as Judd Merrill, the company’s chief financial officer.

During today’s call, management will be making forward-looking statements. Please refer to the company’s report on the Form 10-Q filed today, April 29, for a summary of the forward-looking statements and the risks, uncertainties and other factors that could cause actual results to differ materially from those forward-looking statements. Aqua Metals cautions investors 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.

As a reminder, after Steve’s and Judd’s formal remarks, we will be taking questions. [Operator instructions] And with that, I’d like to turn the call over to Steve Cotton, CEO of Aqua Metals. Steve, go ahead.

Steve CottonPresident and Chief Executive Officer

Great. Thanks, Glen. And welcome, everybody, to our quarterly call. I’ll move from our title slide to Slide No.

2, which is our safe harbor, which Glen basically reviewed. So that’s for your reference. And now I’m going to move on to Slide No. 3.

And that’s our mission statement. And I just want to remind everybody that Aqua Metals’ mission statement is to provide sustainable metal recycling for material strategic to energy storage applications, inclusive of lead and lithium. Our proven breakthrough technology, AquaRefining, does deliver raw materials back into the manufacturing supply chain in a clean and economical way that reduces the overreliance on mining to meet demand. And with that, I’ll move to Slide 4 and summarize Aqua Metals at a glance.

We’ve already developed our technology, our core technology called AquaRefining, which is now commercially ready, and it’s a sustainable battery-recycling technology. What’s unique about AquaRefining is that it uses water and organic acids to create 99.996 plus percent ultra-pure lead, and we created one atom at a time for the $20 billion-and-growing lead recycling industry. We’re also seeking to extend, for some recent announcements, our AquaRefining technologies to apply to the metals recovery associated with the lithium-ion batteries. And we’ve evidenced our commitment to continuing to develop AquaRefining for this area through additional IP filing, through strategic investment and research and development that we’ll talk about a little further throughout the day today.

AquaRefining is also a transformative technology that benefits the industry and the earth itself. AquaRefining benefits the environment with reduced emissions, vastly reduced worker safety exposures, while they’re performing the act of every recycling. It also improves battery performance and life through the ultra-pure metal, resulting in better performance and better life span of batteries. And the economics of AquaRefining are becoming more and more favorable when the operators particularly look at all of the aspects of the cost that they spend on workers’ safety and environmental mitigation, coupled with the conversion cost of capital, cost-to-deploy AquaRefining compared to the incumbent methodologies to begin with.

The ticker on NASDAQ is AQMS, and we’re headquartered in Tahoe Reno in Nevada. The company was incorporated in 2014, and we have about 68 million shares outstanding, and cash on hand in our report of late is $11.7 million. And we have zero debt and a very strong balance sheet. Moving on to Slide No.

5, I’m going to talk about nine recent highlights of our quite active quarter since we last spoke to you. The first is that we continue to advance discussions with several potential licensing partners. As I’ve stated before, we’re currently working through multiple active engagements that are all continuing to progress very well. These engagements include opportunities for AquaRefining upgrades to existing battery-recycling centers, greenfield builds of new hybrid AquaRefining facilities with small, efficient furnace and greenfield builds of stand-alone AquaRefining facilities.

Some of these engagements also include a focus on our streamlined AquaRefining direct to oxide application, which we announced recently as well. And geographically, these active engagements currently cover North America, Europe, the Middle East, India and Southeast Asia. So with the progress we’ve made in the past quarter, we are still confident that the company will have more to say about this by the end of June, as previously guided. Second, we received first business interruption insurance payments of $1.4 million with a total collection to date of $25 million.

And we expect future insurance payments, but we made some great progress in the past quarter by breaking into the business interruption element, in addition to the property and casualty. Appointed two additional board members with key industry experience, and I’ll talk about those board members when we get further on in the deck, and we’re very pleased to welcome Molly and Eddie to the team. We also filed a provisional patent for the AquaRefining application to lithium-ion recycling. There’s a lot of companies that are talking about lithium-ion recycling and trade secrets.

Aqua Metals, of course, has trade secrets, but Aqua Metals is pursuing IP because, in order to be an equipment supplier and licensor of technology, it’s very important to secure the intellectual property of the technology and the processes. We’ve also evidenced our progress in lithium-ion by investing in a clean tech lithium-ion recycling innovator, LiNiCo. LiNiCo stands for lithium, nickel and cobalt, three of the metals in the multi-metal lithium-ion recycling environment. And LiNiCo purchased with a lease to purchase of our AquaRefinery, and we expect that we’ll be working with them toward helping stand LiNiCo up very quickly.

Commenced our lease to buy agreement for the noncore facility with LiNiCo, and that was an important step for us also from a financial perspective because it released the burden of the capital-heavy environment that Aqua Metals want to transition to our capital-light environment and allows us to have a better financial runway, which Joe will be talking about in a little bit here. We also filed another provisional patent, which is a patent around creating lead oxide directly from AquaRefining. And that, therefore, streamlines the overall link between battery recycling and battery production by eliminating the need to melt and cast and refine metal and instead take the briquettes to come off of the AquaRefining process and put them directly toward the battery-manufacturing process. We’ve also established a global partnership with BASF, which is one of the world’s largest chemical companies in the world, to help secure the supply of one of our key chemicals and work with us to market our solution on a global stage.

We also raised additional net proceeds of $0.5 million through some opportunistic ATM sales. So I’m going to go on to Slide 6 now and point out that the company, from an IP perspective and execution perspective in developing the technology, is quite mature. We have over…

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