Aqua Metals(AQMS) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements Unaudited statements show a deteriorating financial position, a net loss of $8.3 million, and a "going concern" warning Financial Statements (Unaudited) The balance sheet, income statement, and cash flow statement reveal significant asset impairment and operational losses Condensed Consolidated Balance Sheet (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $1,589 | $4,079 | | Total current assets | $2,219 | $4,644 | | Non-current Assets | | | | Property, plant and equipment, net | $11,109 | $16,473 | | Total assets | $18,065 | $26,365 | | Liabilities & Equity | | | | Total current liabilities | $7,164 | $8,182 | | Total liabilities | $8,534 | $10,121 | | Total stockholders' equity | $9,531 | $16,244 | Condensed Consolidated Statement of Operations (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total operating expense | $8,683 | $5,792 | | Impairment expense | $5,247 | $— | | Loss from operations | $(8,683) | $(5,792) | | Net loss | $(8,315) | $(5,752) | | Basic and diluted net loss per share | $(1.03) | $(1.05) | Condensed Consolidated Statement of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,753) | $(4,251) | | Net cash used in investing activities | $(375) | $(5,579) | | Net cash provided by financing activities | $638 | $1,602 | | Net decrease in cash | $(2,490) | $(8,228) | | Cash at end of period | $1,589 | $8,294 | Notes to Condensed Consolidated Financial Statements Notes disclose the "going concern" issue, a $5.2 million impairment charge, and details on debt and equity - The company's business is focused on applying its patented AquaRefining technology to recycle lead-acid and lithium-ion batteries[20] - Management has substantial doubt about the company's ability to continue as a going concern for the next 12 months[23][24] - A $5.2 million impairment charge was recognized on a facility at TRIC, which the Board approved for sale in April 2025[50] - On May 2, 2025, the company fully repaid $1.0 million in notes payable to accredited investors[62][85] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses its technology commercialization, a significant net loss, and a critical liquidity situation Business Overview and Strategy The company's strategy centers on its AquaRefining technology and licensing, with a recent shift to sell assets - The company's core business is applying its commercialized clean, water-based recycling technology, AquaRefining, to batteries[90] - The primary business strategy is to build, operate, and license Li AquaRefining recycling capacity[101] - Subsequent to Q1 2025, the company entered a contract to sell its Sierra ARC property to retire all debt and add cash[96] Results of Operations The company reported no revenue and an $8.7 million operating expense, driven by a $5.2 million impairment charge Operating Expenses Comparison (in thousands) | | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Plant operations | $724 | $2,209 | $1,485 | (67.2)% | | Research and development | $336 | $588 | $252 | (42.9)% | | Impairment expense | $5,247 | $— | $(5,247) | N/A | | General and administrative | $2,376 | $2,995 | $619 | (20.7)% | | Total operating expense | $8,683 | $5,792 | $(2,891) | 49.9% | - A non-cash impairment expense of $5,247,000 was recognized related to a facility at TRIC[107] - Plant operations and R&D costs decreased significantly, driven by workforce reductions and other cost-cutting measures[105][106] Liquidity and Capital Resources The company faces a severe liquidity crisis with a $4.9 million working capital deficit and a going concern warning Liquidity Position as of March 31, 2025 (in thousands) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $1,589 | | Current liabilities | $7,164 | | Working capital deficit | $(4,945) | - Management states there is "substantial doubt regarding the Company's ability to continue operating as a going concern"[115] Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,753) | $(4,251) | | Net cash used in investing activities | $(375) | $(5,579) | | Net cash provided by financing activities | $638 | $1,602 | Quantitative and Qualitative Disclosures about Market Risk The company states this item is not applicable, indicating no significant market risk disclosures for the period - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[121] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the quarter-end - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[122] - No material changes in internal control over financial reporting occurred during the quarter[123] PART II - OTHER INFORMATION Risk Factors The company highlights a critical need for financing and substantial doubt about its ability to continue as a going concern - The company requires additional financing to execute its business plan, which may not be available on reasonable terms[126] - As of March 31, 2025, the company had cash of approximately $1.6 million and a working capital deficit of $4.9 million[126] - The independent auditor's report expresses substantial doubt about the company's ability to continue as a going concern[127] Exhibits This section lists exhibits filed with the report, including governance documents and required certifications - This section lists all exhibits filed with the report, including corporate governance documents and Sarbanes-Oxley Act certifications[129]