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AQMS - Aqua Metals Inc News Story

$3.12 0.2  5.8%

Last Trade - 16/04/21

Sector
Basic Materials
Size
Small Cap
Market Cap £152.9m
Enterprise Value £148.4m
Revenue £78.1k
Position in Universe 4470th / 6850

Aqua Metals Announces 2020 Results

Thu 25th February, 2021 9:01pm
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Recent Highlights:
* Completed V1.25L Aqualyzer program; achieved a 100% improvement in lead
production throughput, in addition to improved equipment and operating costs


* Continued progress with potential licensing partners; ongoing discussions
with several parties on three continents, inclusive of Clarios


* Submitted provisional patent to protect process enabling ultra-pure
AquaRefined material to be utilized directly in the production of oxide for
new batteries


* Established partnership with BASF, including a commitment to supply
AquaRefining electrolyte to licensees and commercial cooperation to offer Aqua
Metals services


* Secured investment in LINICO Corporation (“LiNiCo”), a cleantech
lithium-ion battery recycling innovator


* Established plans to form an eco-network with other innovative companies to
advance recycling technologies for lithium-ion batteries


* Submitted provisional patent to protect the process for the application of
AquaRefining technology to plate metals used in lithium-ion batteries


* Retired $9.0 million debt obligation through utilization of insurance escrow
and CD collateral funds, resulting in Aqua Metals being debt free


* Raised approximately $10.7 million ($3.7 million in 2020, remainder in 2021)
through opportunistic share sales utilizing the At The Market Issuance Sales
Agreements (“ATM”); established second ATM for up to $30.0 million for
strategic optionality


* Finalized triple-net lease-to-buy agreement for non-core plant facility with
a strategic lessee; includes non-refundable purchase deposits totaling $3.25
million, to be paid during the lease term


* Received additional insurance payment of $0.1 million on February 10,
bringing the total collected to $23.5 million; anticipate additional proceeds
for the replacement value of damaged assets, not including potential business
interruption recovery proceeds
MCCARRAN, Nev., Feb. 25, 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 the year
ended December 31, 2020.

Steve Cotton, President and Chief Executive Officer, commented, “Aqua Metals
ended 2020 with tremendous momentum that has continued into 2021. After a
difficult end to 2019, our team rose to the challenge, showing tremendous
resiliency and demonstrated the ability to deliver on our stated objectives.
We have achieved numerous milestones that strengthen the organization and
validate our value proposition to future technology license and equipment
supply partners. Specifically, through the V1.25L program, we have
dramatically improved AquaRefining with a 100% increase in production over
previously achieved volumes, in addition to other enhancements including the
Pure Metrics™ integrated, real-time software portal.

“Our recent decision to enter into a lease-to-buy agreement with LiNiCo, a
company focused on lithium-ion battery recycling, resulted in a shift from a
planned plant sale to a strategic lease. As we announced on February 16
(https://www.globenewswire.com/Tracker?data=V5zGz7pMXeMHsempitjR1PPSSP0QRxQ_P_ZkquL2N4-41GXBb5nFR0H3Tn63JFYwr4oSdnJpHw3Bh2hTr-jpuNLrKww8OH07A_6zG3EnB8c8zq4gAzUtDuVFTYwda71HicNvz6YTkiN5T0hcnGpaYDc4y-BrK1B7JwCrXcKLo8n2gWFqtviORsvzaQF3ZWw_zHiwT0VuvMsDMO-iKQcOUg==),
the arrangement created many advantages for Aqua Metals. To offset our
decision to defer immediate cashflow from an outright plant sale in favor of
this strategic relationship, we decided to utilize our existing ATM to further
strengthen our balance sheet and reduce potential risk to cashflow and the
Company. As a result, we have further strengthened our financial position.
With no debt and a combination of insurance proceeds, ATM share sales, future
purchase deposits for the facility, proceeds from the expected sale of
equipment and the non-core McCarran, Nevada facility, as well as a decreased
cash burn due to the triple-net plant lease beginning in April, we are
confident our balance sheet is in good shape and provides us with the
flexibility we need. Any future ATM share sales will be strategic and
opportunistic to grow our business and build long term shareholder value. I
would like to thank the Aqua Metals team for their dedication, resulting in a
very successful 2020. I am more confident than ever as I envision the future
of this Company and the accomplishments we are on the cusp of achieving.”

2020 Financial Results

Following the fire event during November of 2019, Aqua Metals has been focused
on its capital light technology licensing and equipment supply strategy. The
Company was not in commercial production during 2020 and, as a result,
generated minimal revenue during the year. The revenue recognized during the
year ended December 31, 2020, resulted from the sale of lead compounds in
inventory that were generated in 2019. The Company recognized revenue of $4.9
million during the year ended December 31, 2019. Product sales during 2019
consisted of high-purity lead from the AquaRefining process, lead bullion,
lead compounds, and plastics.

Cost of product sales decreased by approximately 78% during the year to $5.5
million compared to $24.8 million in 2019. Cost of product sales decreased
significantly in 2020 due to the suspension of commercial production at the
AquaRefinery.

General and administrative expenses for 2020 were $9.0 million, compared to
$19.3 million in 2019, a decrease of approximately 53%. The most significant
driver of this decrease was the suspension of activities under the Operations,
Maintenance and Management Agreement with Veolia. For the year ended December
31, 2019, the Company recognized $9.0 million in non-cash expense related to
the Veolia agreement. By comparison, the Company recognized $0.6 million in
non-cash expense related to the Veolia agreement in 2020. The Company also
reduced payroll and made improvements in nearly all other expense categories.

For the year ended December 31, 2020, the Company had an operating loss of
$15.4 million, compared to an operating loss of $40.8 million for the year
ended December 31, 2019. The net loss for 2020 was $25.8 million, or $0.42 per
basic and diluted share, compared to a net loss of $44.8 million, or $0.86 per
basic and diluted share, for the year ended December 31, 2019.

In conjunction with year-end 2020 accounting, the Company conducted a review
of its fixed assets. The fixed asset review concluded that the remaining
useful lives of certain equipment had decreased because of the anticipated
plant sale and the Company’s focus on a capital light business strategy. As
a result of this determination, Aqua Metals recognized an impairment expense
of $11.7 million during the fourth quarter of 2020. There were no impairment
expenses recognized during the year ended December 31, 2019. However, the net
loss for the year ended December 31, 2019, included $9.0 million of non-cash
expense related to the Veolia agreement. Aqua Metals also recognized $0.6
million in non-cash expense related to the Veolia agreement during 2020.
Excluding the impact of the impairment expense in 2020 and the Veolia expense
recognized in 2019 and 2020, the Company’s adjusted net loss(()(1)) for
December 31, 2020 was $13.4 million or $0.22 per basic and diluted share and
$35.8 million or $0.69 per basic and diluted share for the year ended December
31, 2019.

Aqua Metals received insurance proceeds of $20.9 million during 2020.
Subsequent to the end of 2020, the Company received an insurance payment of
$0.1 million, bringing the total collected to $23.5 million. The insurance
proceeds receivable balance has been reduced to zero as insurance payments
have exceeded the total established insurance proceeds receivable amount. The
$19.9 million of insurance proceeds receivable recorded during the fourth
quarter of 2019 was limited by GAAP accounting standards to the net book value
of assets written off as a result of the fire. Any amounts received in excess
of that total are reported as other income. It is anticipated that additional
insurance collections will be received, reflecting actual asset replacement
cost and business interruption coverage.

During the fourth quarter of 2020, Aqua Metals retired its loan with Vertex
Bank, leaving the Company essentially debt free. Aqua Metals utilized
insurance proceeds, including $7.9 million in escrow and a $1.0 million
certificate of deposit, both held by Veritex Bank, for the retirement of the
debt. The escrow balance and the certificate of deposit were previously
reflected in Other assets on the Company’s Consolidated Balance Sheets.

Aqua Metals has historically maintained an asset retirement obligation
liability based on the estimated future costs to close and restore the
Company’s AquaRefinery to pre-use condition. In addition, the Company has
maintained a trust account containing the required funds for this purpose. Due
to the change in the primary use of Aqua Metals’ McCarran, Nevada facility,
the state’s governing body terminated the Written Determination which
contained the requirement for the asset retirement obligation and the
corresponding trust account. As a result of this determination, the trust
account was closed, and the asset retirement obligation of approximately $0.8
million was written off.

As of December 31, 2020, the Company had $6.5 million in cash and cash
equivalents.

(()(1))This is a non-GAAP measure; refer to the non-GAAP adjusted net loss
reconciliation for additional detail.

Conference Call and Webcast

The Company will conduct a conference call to discuss these results today at
4:30 p.m. Eastern Standard Time. The call may be accessed by dialing:
1-833-579-0902 (toll free) or 1-778-560-2608 for international callers and
referencing conference ID: 1943465. A simultaneous webcast of the conference
call will be available at:
https://onlinexperiences.com/Launch/QReg/ShowUUID=8D7D7D42-9764-4BF1-813B-E7CC4296EB9F.
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 March 25,
2021 by dialing 1-800-585-8367 (toll free) or 1-416-621-4642 and using pin
number conference ID: 1943465.

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 generate 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 McCarran, 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 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 the sale of the McCarran facility, the
benefits of our new methodology for producing battery manufacturing ready
active material and the future of lead acid battery recycling via traditional
smelters. 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 complete the
sale of our recycling facility to LiNiCo; (2) the risk that we may not realize
the expected benefits of our investment in LiNiCo; (3) the risk that we may
not be able to conclude an eco-network with Green Li-ion, LiNiCo and Comstock
Mining or, if we do, that we may not realize the expected benefits of the
eco-network; (4) the risk that we may not complete the development of our new
methodology for producing battery manufacturing ready active material; (5) the
risk that we may not realize the expected benefits from the new methodology;
(6) the risk that we may not be able to satisfactorily demonstrate to
potential licensees the technical and commercial viability of our V1.25
electrolyzer and AquaRefining process; (7) 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; (8) the risk that we may not
realize the expected economic benefits from any licenses we may enter into;
(9) the risk that we may not be able to access additional capital as and when
needed; 10) the fact that we have not generated any significant revenue to
date, thus subjecting us to all of the risks inherent in an early-stage
company; (11) the risk that our patents and any other patents that may be
issued may be challenged, invalidated, or circumvented; (12) changes in the
federal, state and foreign laws regulating the recycling of lead acid
batteries; (13) our ability to protect our proprietary technology, trade
secrets and know-how and (14) 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.

Non-GAAP Adjusted net loss

The Company believes the use of adjusted net loss allows management,
investors, and analysts to understand its net loss related to its primary
business. For the year ended December 31, 2020, effects of the fixed asset
impairment expense and the Veolia non-cash share payments have been excluded
from net loss. For the year ended December 31, 2019, effects of the Veolia
non-cash share payments have been excluded from net loss. Net loss is
reconciled to adjusted net loss in the table below (in thousands, except per
share amounts):

AQUA METALS, INC.
Reconciliation to Non-GAAP Net Loss
(Unaudited)

                                                   Year ended                                            
                                                   December 31, 2020            December 31, 2019        
 Net loss                                          $       (25,762  )           $       (44,795  )       
 Fixed asset impairment                            $       11,741               $       —                
 Veolia non-cash share payments                    $       591                  $       8,966            
 Adjusted net loss                                 $       (13,430  )           $       (35,829  )       
                                                                                                         
 Net loss per share, basic and diluted             $       (0.42    )           $       (0.86    )       
 Fixed asset impairment                            $       0.19                 $       —                
 Veolia non-cash share payments                    $       0.01                 $       0.17             
 Adjusted net loss per share, basic and diluted    $       (0.22    )           $       (0.69    )       
                                                                                                         

Note About Non-GAAP Financial Measures

In addition to the unaudited results presented in accordance with generally
accepted accounting principles, or GAAP, in this press release, Aqua Metals
presents adjusted net loss and adjusted net loss per share, which are non-GAAP
financial measures. Adjusted net loss and adjusted net loss per share are
determined by taking net loss and eliminating the impacts of our issuance of
shares of our common stock to Veolia in consideration of services provided to
us by Veolia and the elimination of the fixed asset impairment expense
recognized. Our definitions of adjusted net loss and adjusted net loss per
share may not be comparable to the definitions of similarly titled measures
used by other companies. We believe that these non-GAAP financial measures,
viewed in addition to and not in lieu of our reported GAAP results, provides
useful information to investors by providing a more focused measure of
operating results. These metrics are used as part of our internal reporting to
evaluate our operations and the performance of senior management. A table
reconciling this measure to the comparable GAAP measure is available in the
accompanying financial tables above.

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

                                                                                                                                                                                       December 31,              December 31,            
                                                                                                                                                                                       2020                      2019                    
 ASSETS                                                                                                                                                                                                                                  
 Current assets                                                                                                                                                                                                                          
 Cash and cash equivalents                                                                                                                                                             $      6,533              $      7,575            
 Accounts receivable                                                                                                                                                                          32                        244              
 Insurance proceeds receivable                                                                                                                                                                —                         17,446           
 Inventory                                                                                                                                                                                    1,091                     1,257            
 Prepaid expenses and other current assets                                                                                                                                                    702                       981              
 Total current assets                                                                                                                                                                         8,358                     27,503           
                                                                                                                                                                                                                                         
 Non-current assets                                                                                                                                                                                                                      
 Property and equipment, net                                                                                                                                                                  24,883                    37,643           
 Intellectual property, net                                                                                                                                                                   819                       999              
 Other assets                                                                                                                                                                                 1,078                     3,309            
 Total non-current assets                                                                                                                                                                     26,780                    41,951           
                                                                                                                                                                                                                                         
 Total assets                                                                                                                                                                          $      35,138             $      69,454           
                                                                                                                                                                                                                                         
 LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                    
                                                                                                                                                                                                                                         
 Current liabilities                                                                                                                                                                                                                     
 Accounts payable                                                                                                                                                                      $      1,552              $      4,829            
 Accrued expenses                                                                                                                                                                             1,253                     4,133            
 Lease liability, current portion                                                                                                                                                             620                       552              
 Notes payable, current portion                                                                                                                                                               29                        296              
 Total current liabilities                                                                                                                                                                    3,454                     9,810            
                                                                                                                                                                                                                                         
 Lease liability, non-current portion                                                                                                                                                         242                       861              
 Asset retirement obligation                                                                                                                                                                  —                         790              
 Notes payable, non-current portion                                                                                                                                                           303                       8,404            
 Total liabilities                                                                                                                                                                            3,999                     19,865           
                                                                                                                                                                                                                                         
 Commitments and contingencies                                                                                                                                                                                                           
                                                                                                                                                                                                                                         
 Stockholders’ equity                                                                                                                                                                                                                    
 Common stock; $0.001 par value; 100,000,000 shares authorized; 64,461,065 and 57,997,780 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively           64                        58               
 Additional paid-in capital                                                                                                                                                                   196,728                   189,422          
 Accumulated deficit                                                                                                                                                                          (165,653  )               (139,891  )      
 Total stockholders’ equity                                                                                                                                                                   31,139                    49,589           
                                                                                                                                                                                                                                         
 Total liabilities and stockholders’ equity                                                                                                                                            $      35,138             $      69,454           
                                                                                                                                                                                                                                         

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

                                                           Year ended December 31,                             
                                                           2020                          2019                  
 Product sales                                             $     108                     $     4,874           
                                                                                                               
 Operating cost and expense                                                                                    
 Cost of product sales                                           5,476                         24,799          
 Research and development cost                                   1,027                         1,555           
 General and administrative expense                              8,998                         19,314          
 Total operating expense                                         15,501                        45,668          
                                                                                                               
 Loss from operations                                            (15,393     )                 (40,794     )   
                                                                                                               
 Other income and expense                                                                                      
 Insurance proceeds net of related expenses                      2,946                         (792        )   
 Impairment expense                                              (11,741     )                 —               
 Interest expense                                                (1,620      )                 (3,477      )   
 Interest and other income                                       48                            270             
                                                                                                               
 Total other expense, net                                        (10,367     )                 (3,999      )   
                                                                                                               
 Loss before income tax expense                                  (25,760     )                 (44,793     )   
                                                                                                               
 Income tax expense                                              (2          )                 (2          )   
                                                                                                               
 Net loss                                                  $     (25,762     )           $     (44,795     )   
                                                                                                               
 Weighted average shares outstanding, basic and diluted          60,861,450                    52,263,885      
                                                                                                               
 Basic and diluted net loss per share                      $     (0.42       )           $     (0.86       )   
                                                                                                               

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

(https://www.globenewswire.com/NewsRoom/AttachmentNg/871fef23-e7df-4995-ba01-56582ad62f9e)



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