Aqua Metals Inc logo

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 Third Quarter 2020 Results

Thu 22nd October, 2020 9:01pm
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20201022:nGNX1stCL7


Recent Highlights:
* Received additional insurance payment of $0.7 million on October 20,
bringing total collected to $22.6 million; potential to collect up to $30.0
million for the replacement value of damaged assets, not including potential
business interruption recovery proceeds

 
* Escrow balance has grown to $7.9 million, allocated for the retirement of
the Veritex loan; the Company anticipates retiring the $8.5 million net
balance on the Veritex loan, leaving it debt free by the end of 2020


* Successful and regular operation of the second of three iterations of the
V1.25 electrolyzer program, ahead of schedule

 
* Fabrication and continued testing of the V1.25b electrolyzer have validated
anticipated improvements, including reduced build cost, higher throughput and
lower maintenance costs

 
* Poised to begin operating the V.125L electrolyzer by the end of October,
ahead of schedule

 
* Patent portfolio enhanced through the grant of a new patent; robust
intellectual property assets now consist of 45 patents allowed or granted in
17 countries/regions

 
* $5.6 million of cash on hand at quarter end; made further progress regarding
ongoing rate of cash spend


* Company has implemented its capital light, AquaRefining™ equipment supply
and licensing business model

 
* Began the sale process of non-core assets and several parties have expressed
interest in potential acquisition of the McCarran, Nevada facility

 
* Continued progress with potential licensing partners; ongoing discussions
with several parties, inclusive of Clarios
MCCARRAN, Nev., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Aqua Metals, Inc.
(NASDAQ:AQMS) (“Aqua Metals” or the “Company”), which is reinventing
lead recycling with its AquaRefining™ technology, today announced financial
and operational results for its third quarter ended September 30, 2020.

Steve Cotton, President and Chief Executive Officer, commented “I continue
to be pleased with Aqua Metals’ progress as we focus on our low capital,
equipment supply and licensing business model. The V1.25L program is moving
forward and remains ahead of schedule. The redesign of the frame and tank
utilized for V1.25b validated our expectations regarding improved build and
maintenance costs, among other enhancements. These improvements have
simplified the overall electrolyzer design and improved the maintenance
efficiency. In addition, development of further advancements that will be
utilized for the final iteration of the program, are well underway. We remain
very encouraged by the results of the V1.25 program and believe the results
will continue to fortify Aqua Metals’ game changing technology that will be
utilized by our future licensees. Additionally, I believe Aqua Metals is well
positioned financially. We have significantly reduced our rate of cash spend
and we have made substantial progress collecting insurance proceeds and
anticipate more payments are on the way. At the end of the quarter we had a
cash balance of $5.6 million, not including the escrow balance we have built
up to $7.9 million that will be utilized to pay off the $8.5 million net
balance on the Veritex loan – which we anticipate happening prior to
year-end, reducing our monthly debt service cash burn by ~$74,000 or nearly
$0.9 million annually. We also have begun the process of monetizing non-core
assets through the sale of plant equipment and have engaged with multiple
interested parties after placing the McCarran facility for sale.”   

Third Quarter 2020 Financial Results

The Company recognized minimal revenue during the third quarter ended
September 30, 2020, because of the plant fire and the focus on its licensing
strategy. The revenue earned during the quarter resulted from the sale of
inventory consisting of lead compounds that were generated during pre-fire
operations. By comparison, during the quarter ended September 30, 2019, the
Company recognized revenue of $2.4 million. Product sales for the
third quarter of 2019 consisted of high-purity lead from the AquaRefining
process, as well as lead bullion, lead compounds and plastics.

Cost of product sales decreased by approximately 80% for the third quarter of
2020 to $1.6 million, compared to $8.2 million for the third quarter of
2019. Cost of product sales were lower in 2020 due to the suspension of
production resulting from the fire.

General and administrative expenses for the third quarter of 2020 decreased
approximately 68% to $1.7 million, from $5.1 million in the third quarter of
2019. The decrease is attributed to the suspension of operations and expenses
under the Operations, Maintenance and Management Agreement with Veolia,
reduced Company payroll and efficiencies in nearly all other expense
categories.

For the quarter ended September 30, 2020, the Company had an operating loss of
$3.4 million compared to an operating loss of $11.3 million for the
third quarter of 2019, and a negative cash flow from operations of only $0.7
million for the third quarter of 2020 compared to $8.3 million for the first
half of 2020. The net loss for the third quarter of 2020 was $1.8 million,
or $0.03 per basic and diluted share, compared to a net loss of $11.3 million,
or $0.20 per basic and diluted share, in the third quarter of 2019.

As of September 30, 2020, the Company had $5.6 million in cash and cash
equivalents. In addition, at the end of the third quarter, the Company had
$7.6 million in escrow, to be used for the retirement of the Veritex loan. The
increase in other assets during the third quarter of 2020 to $10.6 million,
from $7.9 million at the end of the second quarter, was driven by the growth
of escrow balance. Subsequent to quarter end, as a result of an additional
insurance payment, the escrow total grew to $7.9 million.  

Aqua Metals received insurance proceeds of $6.8 million during the
third quarter of 2020. The insurance proceeds receivable balance has now 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.       

Conference Call and Webcast

Aqua Metals will hold a conference call on Thursday, October 22, 2020 at 4:30
p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time) to discuss
third quarter results and corporate developments. The call may be accessed by
dialing: 1-855-327-6837 (toll free) or 1-631-891-4304 for international
callers. A simultaneous webcast of the conference call will be available at:
http://public.viavid.com/index.php?id=142036. 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 November 22, 2020 by dialing
1-844-512-2921 (toll free) or 1-412-317-6671 and using pin number 10011537.

About Aqua Metals

Aqua Metals, Inc. (NASDAQ: AQMS) is reinventing lead recycling with its
patented AquaRefining™ technology. Unlike smelting, AquaRefining is a room
temperature, water-based process that emits less pollution. The modular
systems are intended to allow the Company to vastly reduce environmental
impact and scale lead acid battery recycling production capacity by licensing
the AquaRefining technology to partners. This could help meet the growing
demand for lead to power new applications including stop/start automobile
batteries which complement the vehicle’s main battery, lead acid batteries
which are in electric vehicles, Internet data centers, alternative energy
applications including solar, wind, and grid scale storage. Aqua Metals is
based in McCarran, Nevada. To learn more, please visit www.aquametals.com.

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 (@aquamatalsinc), 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 land and
building at our McCarran facility; the sufficiency of any sale proceeds
coupled with any further insurance recovery to fund our operations and the
development and completion of our V1.25 electrolyzer; the benefits of the
V1.25 electrolyzer; 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 be
able to sell the land, building and non-core equipment at our McCarran
facility on a timely basis, (2) the risk that we may not realize the sale
proceeds we hoped for from the sale of the land, building and non-core
equipment, (3) the risk that the terms of any such sale may include
indemnities or other provisions that pose potential contingent liability to
Aqua Metals, (4) the risk that we may not be able to complete the development
of our V1.25 electrolyzer; (5) the risk that we may not realize the expected
benefits from our V1.25 electrolyzer; (6) the risk that our insurance recovery
from our claims relating to the November 2019 fire at our TRIC facility and
proceeds from the sale of legacy assets will not be sufficient to fund our
accelerated licensing strategy; (7) 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; (8) 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;
(9) the risk that we may not realize the expected economic benefits from any
licenses we may enter into; (10) the risk that we will have to engage in
additional sales of our equity securities in order to fund our future
operations; (11) the risk that further funding, by any means, may not be
available at all; (12) 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; (13) the risk that our patents and any other patents that
may be issued to it may be challenged, invalidated, or circumvented; (14) the
risk that we may not be able to successfully conclude our proposed joint
development agreement with Clarios or, if we do, realize the expected benefits
of such agreement; (15) changes in the federal, state and foreign laws
regulating the recycling of lead acid batteries; (16) our ability to protect
our proprietary technology, trade secrets and know-how and (17) those other
risks disclosed in the section "Risk Factors" included in our Quarterly Report
on Form 10-Q filed on October 22, 2020 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, 2020           December 31, 2019        
                                                                                                                                                                                      (unaudited)                                           
 ASSETS                                                                                                                                                                                                                                     
 Current assets                                                                                                                                                                                                                             
 Cash and cash equivalents                                                                                                                                                            $           5,635            $          7,575         
 Accounts receivable                                                                                                                                                                              —                           244           
 Insurance proceeds receivable                                                                                                                                                                    —                           17,446        
 Inventory                                                                                                                                                                                        1,135                       1,257         
 Prepaid expenses and other current assets                                                                                                                                                        489                         981           
 Total current assets                                                                                                                                                                             7,259                       27,503        
                                                                                                                                                                                                                                            
 Non-current assets                                                                                                                                                                                                                         
 Property and equipment, net                                                                                                                                                                      37,266                      37,643        
 Intellectual property, net                                                                                                                                                                       864                         999           
 Other assets                                                                                                                                                                                     10,554                      3,309         
 Total non-current assets                                                                                                                                                                         48,684                      41,951        
                                                                                                                                                                                                                                            
 Total assets                                                                                                                                                                         $           55,943           $          69,454        
                                                                                                                                                                                                                                            
 LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                       
                                                                                                                                                                                                                                            
 Current liabilities                                                                                                                                                                                                                        
 Accounts payable                                                                                                                                                                     $           1,714            $          4,829         
 Accrued expenses                                                                                                                                                                                 2,179                       4,133         
 Lease liability, current portion                                                                                                                                                                 602                         552           
 Notes payable, current portion                                                                                                                                                                   364                         296           
 Total current liabilities                                                                                                                                                                        4,859                       9,810         
                                                                                                                                                                                                                                            
 Lease liability, non-current portion                                                                                                                                                             403                         861           
 Asset retirement obligation                                                                                                                                                                      827                         790           
 Notes payable, non-current portion                                                                                                                                                               8,456                       8,404         
 Total liabilities                                                                                                                                                                                14,545                      19,865        
                                                                                                                                                                                                                                            
 Commitments and contingencies                                                                                                                                                                                                              
                                                                                                                                                                                                                                            
 Stockholders’ equity                                                                                                                                                                                                                       
 Common stock; $0.001 par value; 100,000,000 shares authorized; 61,117,926 and 57,997,780 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively              61                          58            
 Additional paid-in capital                                                                                                                                                                       191,475                     189,422       
 Accumulated deficit                                                                                                                                                                              (150,138    )               (139,891   )  
 Total stockholders’ equity                                                                                                                                                                       41,398                      49,589        
                                                                                                                                                                                                                                            
 Total liabilities and stockholders’ equity                                                                                                                                           $           55,943           $          69,454        
                                                                                                                                                                                                                                            

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,                            
                                                         2020                                2019                     2020                                2019                   
                                                                                                                                                                                 
 Product sales                                           $       90                          $       2,361            $       108                         $       4,281          
                                                                                                                                                                                 
 Operating cost and expense                                                                                                                                                      
 Cost of product sales                                           1,635                               8,231                    4,395                               20,097         
 Research and development cost                                   210                                 282                      669                                 1,240          
 General and administrative expense                              1,656                               5,107                    6,286                               13,458         
 Total operating expense                                         3,501                               13,620                   11,350                              34,795         
                                                                                                                                                                                 
 Loss from operations                                            (3,411      )                       (11,259     )            (11,242     )                       (30,514     )  
                                                                                                                                                                                 
 Other income and (expense)                                                                                                                                                      
 Insurance proceeds net of related expenses                      1,722                               —                        1,467                               —              
 Interest expense                                                (166        )                       (142        )            (513        )                       (3,234      )  
 Interest and other income                                       18                                  85                       43                                  225            
                                                                                                                                                                                 
 Total income (expense), net                                     1,574                               (57         )            997                                 (3,009      )  
                                                                                                                                                                                 
 Loss before income tax expense                                  (1,837      )                       (11,316     )            (10,245     )                       (33,523     )  
                                                                                                                                                                                 
 Income tax expense                                              —                                   —                        (2          )                       (2          )  
                                                                                                                                                                                 
 Net loss                                                $       (1,837      )               $       (11,316     )    $       (10,247     )               $       (33,525     )  
                                                                                                                                                                                 
 Weighted average shares outstanding, basic and diluted          60,998,971                          57,053,982               60,242,093                          50,491,786     
                                                                                                                                                                                 
 Basic and diluted net loss per share                    $       (0.03       )               $       (0.20       )    $       (0.17       )               $       (0.66       )  

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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