Aqua Metals, Inc. Q2 FY2025 earnings call

• Technology: Produced lithium carbonate with fluorine below 30 ppm, over 1 metric ton of high-purity NMC, explored alternative feedstocks (e.g., nickel refinery residue), and began trials for sodium sulfate regeneration.
• Scalability: Began designing a modular, scalable commercial ARC facility capable of processing 10,000-60,000 metric tons of black mass annually.
• Cost Competitiveness: Internal analysis shows AquaRefining is cost competitive with Chinese hydrometallurgical recycling and half the cost of traditional US hydrometallurgical methods.
• Partnerships: Engaged with strategic partners, hosted event with NAAT Battery (positive feedback on innovation center, materials quality), and secured a US patent allowance for AquaRefining technology.
• Financial: Strengthened balance sheet by paying off the Summit building loan, no long-term debt, and improved cash runway.

In the second quarter, Aqua Metals reported a net loss of approximately $6.8 million. Cash and cash equivalents ended the quarter at ~$1.9 million, with ~$3.2 million as of the call. Operating expenses were $0.8 million (down from $2.4 million YoY), and G&A was $2.2 million (down from $3.4 million YoY). Year-to-date cash used in operating activities was $5.3 million, improving from prior year. Investing activities provided $4.9 million from equipment sales, while financing activities used $1.8 million year-to-date.

• Continue commercialization roadmap for successful market entry.
• Pursue licensing, joint ventures, and other tech enablement deals enabled by the patent allowance.
• Focus on securing supply and offtake partnerships for the first commercial ARC facility.
• Explore new feedstocks like refinery residues and undersea nodules for expanded reach.

• Regulatory and policy uncertainties, including potential impacts on incentives and trade policies affecting competitiveness.
• Uncertainty around other policies from entities like the DOE and DoD that could impact recycling infrastructure development.

Q: Talk more about technology progress, cost breakdown, and customer views.

A: Discussed lithium carbonate quality (fluorine below 30 ppm), flow sheet flexibility, and positive feedback from strategic partners on materials quality.

Q: Details on NAAT Battery event.

A: Encouraging engagement, positive feedback on innovation center cleanliness, materials quality, and flow sheet design from attendees.

Q: Impact of regulations and trade policies.

A: Importance of policies incentivizing domestic black mass production, support from industry groups like the National Battery organization.

Q: Flexibility in partnerships with no long-term debt.

A: Strong cash position allows time for strategic partnerships and developing relationships.

Q: Patent allowance and its impact on partnerships.

A: Patent unlocks licensing and joint ventures, providing a defensible IP foundation for discussions with potential partners.

Q: Take on lithium market surge.

A: Impact of China plant closure on lithium prices, underscoring need for viable US supply chains and Aqua Metals' role in enabling sustainable domestic recycling.

Q: Next steps and milestones.

A: Focus on securing partnerships, testing new feedstocks, and using financial runway to pursue right deals with right economics.

Q: Eric's key objectives.

A: Continue strong fiscal momentum, financial modeling for partner interfaces, and optimizing opportunities while maintaining solid financial footing.

Q: Reason for reverse stock split.

A: To regain NASDAQ listing compliance, benefit from liquidity and visibility for shareholders.

Q: Cost comparison study.

A: AquaRefining cost competitive with China, half the cost of traditional US methods, avoids costly chemical disposal and sodium sulfate waste stream.