Aqua Metals(US:AQMS)2023-03-08 16:00Technology and Innovation - Aqua Metals has developed a proprietary AquaRefining technology that produces ultra-high purity metals, achieving lead purity of 99.996+%[25] - Aqua Metals has successfully recovered copper, lithium hydroxide, nickel, and cobalt from lithium-ion battery black mass at its Innovation Center[19] - The company has developed the AquaRefining process, a cleaner alternative to smelting, utilizing proprietary non-toxic solvents and electro-chemical methods to recover high purity metals from used batteries[39] - The lithium battery AquaRefining process has demonstrated the ability to generate cobalt, lithium hydroxide, copper, nickel, and manganese dioxide, achieving higher yields and purity compared to traditional smelting[40] - The company aims to recover key minerals from lithium-ion batteries, including lithium hydroxide, copper, nickel, and cobalt, with a focus on achieving higher purity and lower emissions[190] Production and Capacity - The company produced over 35,000 AquaRefined lead ingots in 2019, operating continuously at commercial production levels[15] - Aqua Metals aims to process up to 10,000 tonnes of lithium-ion battery material annually at its new recycling campus, expected to commence operations in Q1 2024[21] - The company has installed and begun operating its first lithium AquaRefining pilot plant, with plans for commercial demonstration operations throughout 2023[47] - The company aims to scale its lithium AquaRefining capacity to approximately 10,000 tonnes per year by 2024, which could generate over $200 million in revenue at current metal prices[47] Market and Demand - The global lithium-ion battery market was valued at approximately USD $9 billion in 2020, with a projected CAGR of 19.0% from 2020 to 2028[35] - The demand for lead acid batteries is expected to nearly double to $84 billion by 2025, driven by various applications including renewable energy storage[33] - More than 15 million tons of lithium-ion batteries are expected to retire between now and 2030, highlighting the need for effective recycling solutions[36] - Current lithium-ion battery recycling rates are only 5-7%, necessitating advancements to approach near 100% recycling to mitigate environmental impacts[38] - The total addressable market for lithium-ion battery recycling is estimated to reach approximately $9 billion by 2025, with expectations to exceed lead battery recycling by the end of the decade[45] Financial Performance - From inception through December 31, 2022, the company generated a total of $11.7 million in revenue, primarily from lead compounds and plastics[70] - The company reported product sales of $4 thousand for the year ended December 31, 2022, compared to $0.2 million in 2021, indicating a significant decrease in revenue[194] - The net loss for the year ended December 31, 2022, was $15.4 million, an improvement from a net loss of $18.2 million in 2021, representing a reduction of about 15.1%[1] - The company generated a net cash used in operating activities of $10.1 million in 2022, compared to $7.1 million in 2021, indicating increased cash outflow[186] - The accumulated deficit grew to $(199,277,000) in 2022 from $(183,846,000) in 2021, indicating a worsening financial position[177] Research and Development - The company has shifted its business model to focus exclusively on licensing its AquaRefining technology and has commenced research and development for lithium-ion battery recycling[70] - Research and development costs increased to $1.8 million in 2022 from $933 thousand in 2021, showing a growth of approximately 94.5%[1] - Research and development expenditures are expensed as incurred, indicating a focus on innovation and development[214] Intellectual Property - Aqua Metals has secured 9 US patents and 91 international patents, with an additional 50 patent applications pending across various jurisdictions[54] - The company has secured 9 US patents and 91 international patents related to its AquaRefining process, with additional applications pending in 21 jurisdictions[85] - The company may face challenges in enforcing its intellectual property rights internationally, which could increase costs and affect competitive positioning[89] - The company has not experienced any allegations of intellectual property infringement but acknowledges the potential for costly disputes in the applied science industry[87] Operational Challenges - The company has faced risks associated with its novel AquaRefining process, which has not yet been proven on a commercial scale[79] - The company anticipates beginning to realize revenues from lithium-ion battery recycling within the coming year, although specific timelines for meaningful operations remain uncertain[70] - The company faces potential labor issues that could negatively impact operations and results, particularly during critical operational periods[84] - Global economic conditions may adversely affect the demand for lead-acid batteries (LABs) and lithium-ion batteries (LIBs), impacting the company's growth prospects[88] - The company has faced regulatory scrutiny, including a citation from Nevada OSHA regarding compliance with lead standards, which has been settled[92] - The company is subject to risks associated with handling hazardous materials, which could lead to significant liabilities and operational restrictions[95] Financing and Capital Structure - Aqua Metals has financed the acquisition of a recycling campus with a $3 million loan at a fixed annual interest rate of 9.50%[21] - The company plans to require additional capital to fund ongoing costs and advance its lithium-ion battery recycling activities over the next twelve months[194] - The company entered into a loan agreement for $6 million with an interest rate of 8.50%, with principal due on September 29, 2024[251] - The company issued 6,742,069 shares of common stock in 2022, generating net proceeds of $6.5 million[257] - The company has authorized capital stock of 200 million shares of common stock, with no preemptive or conversion rights[253] Assets and Liabilities - As of December 31, 2022, the total assets of Aqua Metals, Inc. were $33,502,000, a slight increase from $33,269,000 in 2021[177] - The company's cash and cash equivalents decreased to $7,082,000 in 2022 from $8,137,000 in 2021, reflecting a decline of approximately 13%[177] - Total current liabilities increased to $12,311,000 in 2022 from $4,078,000 in 2021, marking an increase of approximately 201%[177] - The total stockholders' equity decreased to $20,916,000 in 2022 from $27,533,000 in 2021, a decline of approximately 24%[177] - The company recognized a lease receivable of $17.0 million at the inception of the Industrial Lease Agreement with LINICO Corporation[228] Stockholder Matters - The company has provisions in its bylaws that may limit stockholders' ability to engage in business combinations, potentially affecting stockholder value[107] - The company’s bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, which may impact stockholder dispute resolution[108]