Aqua Metals, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Aqua Metals, Inc., third quarter 2020 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, You may signal operator by pressing star and zero. I would now like to turn the conference over to Glenn Axelrod, President of Bristol Capital. Please go ahead.

Thank you, operator. Welcome to the Aqua Metals third quarter 2020 conference talk. Earlier today, Aqua Metals released financial results for the quarter ended September 30, 2020. This release is available in the investor section of the company's website at www.aquametals.com. Joining us for today's call from management is Steve Cotton, President and CEO, as well as Jed Merrill, the company's Chief Financial Officer. During today's call, management will be making forward-looking statements. Please refer to the company's quarterly report on Form 10Q filed today, October 22nd, for a summary of the forward-looking statements and the risks, uncertainties, and other factors that could cause actual results to differ maturely from those forward-looking statements. Aqua Metals cautions investors 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. And with that, I'd like to turn the call over to Steve Cotton, CEO of Aqua Metals. Steve, please go ahead.

Thanks, Glenn. Good afternoon and welcome, everyone. First off, I'm happy to report that the company has made substantive progress in the past 90 days by every measure. Our V1.25 electrolyzer program has progressed well through the B iteration and has returned meaningful cost and operational improvements that have been built right into our off-refining sales proposals. The program remains on or even a little ahead of schedule for completion by year end, which we believe will put us into a product-ready state to finalize our various detailed sales proposals with the V1.25 build and operating specifications required for detailed configuration and pricing. I'm quite proud of our team's diligence and progress to achieve and then even overachieve the goal that we laid out for the program earlier in the year. Judd will go into more details about our financials and the headline is that we have further strengthened our balance sheet through a combination of careful cash management and the largest quarter of insurance collections to date. We are also very close to retiring the Veritex loan and emerging debt-free by the end of this year, putting us on or ahead of our previously communicated schedule. We have also made substantial progress on the activities related to the sale of the Aqua Refinery facility as a key part of our transition to being a capitalized equipment and services provider and technology licensor. We publicly announced on September 22nd our intention to engage with potential buyers and set December 11th as the final date for receiving formal bids for the land plus building. We also indicated that we are interested in engaging with buyers to consider including the plants and equipment with their bid as a package deal. I'm happy to report that we have had quite a bit of interest and activity for the building ranging from lead-acid battery recycling use to lithium-ion battery recycling use to other industrial use. While there are certainly no guarantees we will be able to enter into a contract by December of this year with a buyer, The level of interest and amount of interest since our announcement has exceeded our expectations. Coupled with our anticipated insurance collections, we remain optimistic that we will be able to harvest cash from this asset in time to fuel the company's efforts towards licensing our technology. If a battery recycler purchases the property, we'll also have a great prospect for selling off-refining equipment and services and licensing our technology right here in our backyard in the Tahoe Reno Industrial Center. I'd also like to provide an update on our intellectual property. The company was recently granted a new patent in the United States, which adds to the large and growing number of patents that we own and we believe continues to add value to our company and our technology. It has been our strategy since we developed Docker Refining to license our technology worldwide. As a result of that vision, our intellectual property strategy has been global in scope since the beginning. Today, we have 45 patents allowed or granted in 17 countries or regions. Just this year alone, Aqua Metals has secured 15 patents in 10 countries or regions. Of the 15 new patents, 3 are right here in the U.S. and 12 are international. In addition, we have 67 applications pending, both in the U.S. and in foreign jurisdictions. We are very pleased with the stable of intellectual property that we have developed and anticipate ongoing opportunities to augment. We believe that our patent portfolio alone carries significant monetary value. Now that we have accelerated our licensing strategy, we believe this strong patent portfolio with its broad geographic coverage provides Aqua Metals with very broad opportunity for potential licensees. Regarding our sales and partnership development efforts, we've made substantive progress both growing and progressing our sales funnel, inclusive of Clarios. Our discussions and proposals continue to the next stage as we drive towards selecting our first customer and licensee. I provided some color on what our licensing model will look like in terms of revenues and one of our prior calls. Given that we are now much closer to executing on our first customer, I thought I would spend a few minutes reminding our shareholders on what this means and what it could look like. Once a prospective customer agrees with the proposal and technical package, we would expect to move on to a paid-for engineering package similar to architectural plans where a portion of the revenues could be recognized. The engineering package would be the first revenues we record for our licensing business and potentially range up to significantly over $1 million, depending, of course, on the size and scope of the application. Once the engineering package is accepted, the next step would be to move forward with an equipment supply and licensing and services agreement. This agreement is expected to provide specific cost breakdowns of engineering, furnishing, installing, and commissioning of the Aqua Metals provided equipment and third-party equipment from Aqua Metals supplier partners