Aqua Metals (AQMS) 5 Aug 242024 Q2 Earnings call transcript

Good afternoon, and welcome to the Aqua Metals First Quarter Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the call over to your host, Bob Myers of FNK IR. Please go ahead, Bob.

Kevin, can we start the recording?

proceed. may you Yes, please. moment, One and gentlemen, by. please stand Ladies We'll start momentarily. begin to you We for thank patience. your do my now Bob. to turn It's to pleasure the call over you. Thank

Judd Thank XX, press you, Aqua you, results for update thank joining. quarter financial operator, today, ended second are Earlier June the Merrill, Executive and everybody, discussing Metals aquametals.com. Hosting at This available the in website Chief providing Officer. release release for a Financial and Investor the call an XXXX. Chief company's Steve today is Officer; President and operational Relations section issued on and Cotton, the

Before for Metals reliance new we making cause during company except not forward-looking undertake like summary update statements by forward-looking materially a XX-K company's unanticipated statements. required investors any obligation risks, remind be reflect such the refer Please to participants Form from to the of or The they as and events could the begin, that that statements. or cautions I the as law. other would factors statements. report actual and forward-looking to will revise undue Aqua XX call, statements uncertainties to place March does management results specifically any disclaims on to to forward-looking those circumstances and differ occur, not on filed

question accepted a reminder, releases. after submit press phone the over from in be the taking be investors today's analysts, portal will can provided a As all earlier Questions the formal will online remarks, questions. and and other webcast we using

to with turn is And we Steve, as of our take time in the Steve that, slot. yours. Aqua CEO like will call questions Metals. I'd as to the Cotton, can We many call over available

Since control. seen This where quite industry you control a we who have thank also quite Starting and have do time and past bit that a our has up update million period in to sheet world. critical in we last today. held term the we general environment bit XX-plus battery privately everyone Bob, example have to call, carbonate is QX minerals development retracted lithium since activity with control. of another companies we and with prices of specific largest what you, the where X an subsequent quarter, loan not just cannot has us joined Thank signed $XX plunged. One May of percent

during us lithium-related seen following For significant and, we capitalization period. time of also market those price drops have the companies, of course, in same share

our negative interest of of metals concur lender have use covenants economics onetime will with point note, our that become debt diligence also economics not is this worker battery after technology remain macro untenable in trends have we dynamics, stubbornly these payments high this time. squeeze concluded and rates the I and that after upon service seen taken and exhaustive and place. Based stock at coupled and We that prices while due processes our we market calculations metals our produce processes, front-end, today's margin still debt costs, that however, with and testament that both metal waste diligence agreed a along Aqua even our electrically to environmental can prices, that driven lender and benefits. process require without Metals or service, chemicals favorable does and at of AquaRefining expensive back-end the stream safety on

circumstances. a lender still terms macro solid and on maintain this with for good better longer-term relationship amicable under are We a very foundation

for alternative are We given and I CRR which data on, macro how the What commercial to past path executed control approaches on financing the this completion well that NDAs, and described accelerated plant, for circumstances of is believe the inclusive the cannot can Moving path completing what of the have positive we appropriate we unfavorable to The and/or control the and finance whole middle. just it finance time can we quarter. discussions, taken bit joint complete strategic as models we to our down technoeconomic operate service the are potential place on considering we engagement project regular these At models, is success include alternatives the investors. for economics. most this with rooms, ARC engagements. facility more time, a venture beget debt with this

absolutely on Now to we what can control.

and people cash First, burn.

that financing Innovation Center As commissioning, alternative that of This was a continue completion such all operate you courage, in related shared rate our that operations want positive go-forward cash aligns Metals. our to quarterly of the burn staff and plant year each seeking build, I to also with primarily to the a our continue while retaining to thank company Aqua moment state-of-the-art downsized support released team deeply saw CRR pilot the employee to another their cash facility. vision, for and, of today and as rapid course, press has and impact release, the staff are our to make longer commitment runway happen. to every at take

were we only the lithium-related people year, that this at Nevada, culture in testament Places for and have Just we Metals. to Aqua finalist Best a to Work and Northern great the is

Second, direct commercial impact. partner development continues strongly with no

material showcase We to battery-grade with producer industry partner, samples our still partnership in pilot, major first or our directly and CAM providing cathode XK are industry operating OEMs active Energy.

processes have out the throughout can this safety massive AI-powered energy impact environment conviction also age. control battery center and of battery but with our industry, we all a are economic the that, electrification energy increasingly technology on know the is make not worker and data huge world inevitability. positive we all transportation, of what storage We systems storage, and renewable burgeoning battery Third, that an that the rolling

that supply as We to in player loop a our this closes Metals industry domestic ever the convicted can leading how Aqua a belief as ultimately support growing in are be chain.

our we will Going forward, with counterparties. continue financing our engagement

more provisioning continue the for carefully will and Sierra equipment term. albeit the We near in ARC, slowly

facilitate the safest, we with most operations pursue facility. for Anyone economical America's perhaps and recycling and I'm to is welcome created. for have which battery see of continue strategic continued the themselves what lithium will We that exciting in cleanest, report to visit world's North to we future, some partnerships hopeful and

development. the Judd keep apprised of will market to course, over of turn will, it And our now quarter. Merrill, the our continued for We discuss CFO, financials to I

Steve. Thanks,

XX-Q today. reporting Q will before or up August deadline. These some final not reviews finishing XX and be on the final is completed and expect reviews will file filed shortly, be Our we to the

just We have included we our today. the in press that balance sheet income statement and release filed

now. those So review for available are numbers your

on Based financials, a you. financial key with share few will items I those

our Let me with balance start sheet. my comments

approximately and total related of As equipment with of continuation June XX, go-forward which equipment of continued cash $X.X Cash on hand includes engaging and/or and our XXXX, to the the ARC facility finance quarter partnerships strategy, support the of with costs solidifying lenders leasing pilot million. ended operations. the enhancing to we will purchases remainder

assets and the property, $X.X other balance I also and out ready million. by are allowing million for equipment, approximately fully to On the construction. sheet, purchase These will and and for be us ARC plant deposit equipment have the related increases we approximately $X.X point increased by that to installation

by our statement. for so to for plant $X.X million quarterly changes were the There X represents XX% on and was to report, costs the and on Phase are This first driven respectively, income million of mainly The to no other quarter our balance a the the preparing approximately operations XXXX over an last related increase the increase, I'll half year-to-date. and ARC move sheet quarter prior XX% turn year. during facility. significant $X.X the The since

year. the expect going half significantly expenses as costs into to We second of these decrease we this reduced have

were little expenses administrative the year, changed year-to-date. and General and both prior compared quarter to

head into this We of expect year we G&A the as second decrease into costs XXXX. and to half

same net share for loss of compared or per negative $X.X to were X diluted or diluted in quarter for XXXX. negative Our share per XX, million basic a basic and a net ended approximately months million the a $X.XX XXXX, and $X.XX June $X.X loss the

ended the net same XX, and a and for net per were of to million or a $X.X diluted loss a $X.XX $XX.X in XXXX, share period Our approximately loss million per basic basic negative June the negative for share compared months XXXX. $X.XX or diluted X

dispositions, approximately Our X more provide the hand, management in certain From standard a financials. that of along and year I expenses and it believes XX the asset perspective, financial force, cash for the will for equity once deferral the nonessential equipment runway. we Q&A. concludes available footnotes will moderator file statement of cash August reduction on leasing, my turn stockholders' will That back review along the cash with XX-Q flow cash with company over deadline. before to your or now the flow on remarks and be on

Legg [Operator Instructions] from is first Benchmark from coming question the Company. Michael Our today

were update Could on you the the on for vying also an you USDA? and give grant us DOE

initiative, Mesa for grant decisions we've applied that grant, the Yes. not past they and there for made October have [ that have -- The is an ] a applicants all the March DOE, towards decision. situation last guided this XXX and on

So are through conversations terms line we're we back our the we in probably ongoing, expect time to and with to them it USDA, for those earliest appeal get And anything to us what expect to don't from October, DOE. at the on to until relates hear of the trying work as them. would a

to have be in you for going assuming build-out, are chain at pace to that issues going intact? supply over place the can at Okay. the chain the the you look is financing having -- Great. current when to XX of And X, when there then now, any look change the with we remain months, supply get you disruptions getting next any

So Mike? supply chain mean, you us, for

and any as to of place, procured far but -- Yes, in I that impacted? running. being of the know as far mean as had up is the getting put I facility as you equipment most

deploy are non going solid, other lead receipt supply vendors. we've we've that's that got team still of but capital as expenses some chain that the is to necessary, supportive long of and time to deferring equipment. take So the and for They're continue being us. equipment, the very with in And securing we cautiously terms equipment already of working purchased we're the

good what lead then and long them? relationships with on and Obviously, time XK that's stuff. the the Yes. hear. I hearing And what The That's from here, are Dragonfly, meant. component key you that's to

relationships Dragonfly bit overall, continuing work a with solid are and the So XK. with quite and to XK we're

to be them the we with strategic meeting continues a work week. process. right with this Energy our towards Dragonfly desire later down road in their out fact, to potential from here are In partner

conversations going macro those and the a in whole, commensurate mentioning do with the partnerships. We the those as industry was and challenges earlier call strong very I are on challenges the we're So well. but

we couple Okay. of saw obviously week an ] [ ago. days I albe mean release Yes. a

your and So it. time. coming Appreciate where from understood thanks you're for

Next from question H.C. is Wainright. coming Joshi from Sameer

you know mineral of a what you debt positive remind be [ I Europe level right the us be optimal material can level still have Could for would But battery without be you to good prices of ]? services what prices, mentioned margins prices you now. profitable? for would level

Thanks Sameer, for Judd. your this question. is

the the company, the even kind metals with costs of we and plant company way positive still margin. structure our at price, generates So today's conversion what seeing, we're low things,

see what we're years, looking at would It's not We debt -- positive. high right are to now. the these is And rates that's said probably so for like debt. X And interest it's we to it service that high the -- pretty higher. enough terms

the in And period high. turnaround cost makes kind a so that short of is

and well metals are only us that look be we And prices predict for range reports we're to would we able but at analyst look the would when we that's heading 'XX other choose better do would to to and to that are to we not add prices people be that. who improvement the of within well if of if us. to of some in Those that, kind moving very be forward. seeing at for do 'XX the any what should and prices, some where what service follow metals So beyond to see

us of Understood. Yulho, possible that, And adding some partners? Michael's on just with discussions engaged. if to it up know and to following kind going Or financing like being had? Dragonfly, let still on sort you are those get Is of these can since XK, question, are they

at financing, is business moment own looking every That your there's in terms think the question? this at partners. no at then I its answers of we're those business co-financing point time. with in And So financing that

Metals. a some Is into Yes. them possibility? Aqua investment like I mean that from

Yes.

each other all that's seeking of And are stage. that is financing their what companies basically was less now So in this saying own. are investing I at

time to cost-cutting Should items to smaller last that onetime then And incur CapEx Understood. expect some the we forward, to these lead for current costs you what going then expect question severance-related on initiatives. do continue quarter? in you level the of going procure? And are

there hits for expense be of terms some can't QX. severance but going purchased that actually CapEx most then Yes, we will in the have in forward, And of building. equipment detail, I comment the in

in that on we equipment that to year $X see released to hold steady deposits. You in that that our we of we million bought over that to where plan balance And need keep it and today, this sheet be. we

there just bringing some a those ready. of is equipment And we're of the bring in, CapEx, so to be won't there idea once to in And whole that items the us sitting we stuff, lot move a balance sheet be will allow to they're deposits those in. on few

funding that constructed. at sources and plant different fully some looking will get are alternative We out that us help

long bring and that have And in few so that time want items. are that equipment the need critical still pieces received already to maybe keep we lead that we that we've

a going all previous. into So second of kind we Almost spend of done won't CapEx half of of year. that see was whole the this lot

for Got good luck. And it. Thanks that.

like Thank Bob I'd turn the you. questions. floor any to further over for to

the a not few asked. here financials Yes, were that on

First there question, a fee? was breakup

Yes.

actually better them in lenders agreed isn't it's could probably fee. of and Aqua kind worked lender. fee but We I that a now have relationship future, this the X again It's ever mutually of right So no great have And We professional with there the time. was the with. very from breakup Metals. working no be that just with

unconventional Have question. as lending? options Next about thought such IP you

about but of of valuation. did to our a We actually They recur It with recent back lot And third-party ]. have. ]. asset a large done can't was a that number ongoing by IP complete disclose, a [ with talking actually discussions they it's a pretty valuable meaningful, these. we very came [ do counterparties. part Yes, we those It's

Great.

operational pivoting question, to activity. Next

XK. of this worked pretty The been shipped but some to out? specific. discussed, And of Has ARC material this be is an to for was means extension the extension that

Jackson, ARC was ahead of ] CAM facility the actually X Tennessee. in line The plus XK [ time

of their proposition produce can to as We OEMs a with value [ process from recycled materials more have active course, those work combined both and little really samples cathode a we at content meantime, to believe In both So that facility. impact recycled input turn engineering from ability for significant that to partnership however, And about path. this further XK the those we are U.S.-based our through produce produce on that previously to of cathode in also This nitrates our our partnership our see announced to our enable pilot do Virgin Mind down these decarbonized ] -- point, we're through our our of and, the to lower-cost as continuing or Energy produce any materials. active is supply going not with yet XK operation materials engaged with towards. them. say activities get and this work nonrecurring to them nitration to ongoing development we to an we're CAM low-cost

bit Next but Metals of of you market that? question, offer the the broadly color around past remarks, some -- getting on some you continuation and little also of materials headwinds. can a recent battery projections the a Aqua about Do industry early

for Sure. question. the Thanks

from by place X.X decade. be So the terawatt was on that X was build X there's in That terawatt the U.S. in manufacturing cell projected this of a to hour hand, hour. end upgraded

industry's ultimately new back right? all a recycled end-of-life new these recycled products. closing recycled inclusive So And batteries of at of consumers already critical the also source value of manufacturers certain first so emissions And second, from the in key of of producing to looking course, the that's loop. talked gigafactories cells And produced is ecosystem. battery particularly frankly, from ecosystem The goals. for and scrap going tax benefits lot. their U.S.-based into of for, being into towards recycled these are And X in and OEMs put and materials and for past, materials. for from And about recycled that the is U.S. decarbonized it's are we've being X and production sources, come that competitive cell minerals as from credit to are net those entire the put being materials all production that materials, contribute costs

hand, preventing to But precipitous the going recycling lack out in ecosystem due and little of the being to being term. mass other initially coupled to those squeezed on to the and out lower government on in exported my see the year-over-year a keep attention, capacities actually prices, than in we're projected in drop date incentives support opinion, hard. bit the from currently legislation loop, U.S. U.S. to really be And in black the of near metals likely is and/or closed a materials turn in the with

or will in still RC though, and in the believe, delay continue still that in The mid- term to have the regions to world its the U.S. example, other For frankly, of loop and are will we only closed of the ARC possible. solidify. within to Aqua the direct regions [indiscernible] that for short seeing see scale demonstrate that longer-term, the produce Metals' a production. in the ability opportunity at in loop. to completed ultimately as other our have first success, And as those truckloads and not also the will soon but U.S. a impact belief materials close really We

back will And Thank closing I'll to our slot the have Steve That's some operator. I it now comments. today. all turn over in have Great. you. the time we believe

more with for everybody, and thank Metals. support support ongoing you, you. your the We'll really and Well, updates Aqua appreciate soon. today back call joining Thank be of

today's conclude webcast. and does That you. teleconference Thank

a participation you We at disconnect You have for thank today. your wonderful and day. this lines may time, your