Aqua Metals, Inc.

Good day and thank you for standing by. Welcome to the Aqua Metals Announcement Schedule for Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand over the conference to your speaker for today, Mr. Glenn Axelrod, please go ahead, sir. Good day and thank you for standing by. Welcome to the Aqua Metals Announcement Schedule for Third Quarter Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker for today. Mr. Glenn Axelrod, you may begin.

Thank you, Operator, and welcome everybody to AquaMetals' third quarter 2021 conference call. Earlier today, AquaMetals released financial results for the quarter ended September 30, 2021. This release is available in the investor section of the company's website at www.aquametals.com. Joining us for today's call for management is Steve Cotton, President and CEO, as well as Judd Merrill, the company's Chief Financial Officer. During today's call, management will be making forward-looking statements. Please refer to the company's report on the Form 10-Q filed today, November 4th, for a summary of the forward-looking statements and the risks, uncertainties, and other factors associated that could cause actual results to differ materially 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 its statements to reflect new circumstances or unanticipated events as they occur, except as required by law. As a reminder, after Steve's and Judd's formal remarks, we will take questions. Questions will be accepted over the telephone from analysts and other investors can submit a question using the online webinar portal provided in today's and last week's press release. We will take as many questions as we can in our available time slot. And with that, I'd like to turn the call over to Steve Cotton, CEO of AquaMetals. Steve, please go ahead.

Thank you, Glenn, and welcome everybody to today's quarterly call. I'm going to start off with slide number one, which is our title slide, which is that AquaMetals is truly leading a revolution in lead in and lithium battery recycling. And today we're going to be talking about our third quarter results. If you would like a more in-depth view of aqua metals, you can refer to our investor website and play back, register for and play back the presentation that we made last week, which has more in-depth information. Today's call is focused on our quarterly results. Slide number two, you will see the safe harbor that Glenn just read, so I won't reread that to you, and that's there in writing for your reference. Moving on to slide three, our mission. And our mission is to provide sustainable metal recycling for materials that are strategic for energy storage applications, be it lead or lithium. Our proven breakthrough technology, which we'll talk about today, aqua refining, returns raw materials to the manufacturing supply chain in a clean way, in an economical way that will help vastly reduce the reliance on mining to meet the growing demand for both the lead acid and the lithium ion industries. Moving on to slide four, change is really imperative in the way that the industrial processes need to electrify and get away from fossil fuels and become clean processes that support the clean initiatives. As you see in the right, the U.S. Department of Energy themselves have said that the vision is for global production of metals using just air, water, and clean energy as inputs. That's the only way we're going to drive towards net zero emissions, which is quite the topic these days as we talk about global climate change in the recent COP26 meetings. So that change is imperative because today smelting produces around 7% of global greenhouse gas emissions amongst other emissions. This is going to go up significantly if we don't change and if we don't make the way that we recycle and even build batteries powered through electrical processes that are powered from renewable energy. So these recycling technologies need to really be incorporated in order to complete that transition. So it's not just in the transportation sector and the energy storage sector, but in that closed loop of recycling. Moving on to slide number five, let's talk about AquaMetal's milestones. If you look at the left side, you'll see that the company was founded not too terribly long ago in August of 2014. And that's when we made our first prototype of an aqualizer, which is our novel room temperature, water-based, organic, biodegradable methodology with low emissions to recycle lead. In July of 2016, we commenced operations after building about a 135,000-square-foot facility in the Tahoe-Reno Industrial Center. And after turning on that facility, by October of 2018, we became a North American-certified lead supplier in ingot form to one of the largest battery companies in the world. And we produced about 35,000 ingots of aqua-refined lead in 2018 and 2019 worldwide. And during that period of time, we did reach 24 hours a day, seven days a week, commercial proving ground technology de-risking operations with the commercial production of that capability to deliver those 35,000 ingots. By February of 2021, as a part of our transition from a capital heavy proving ground mode to a capital light mode of providing equipment and licensing, which we'll talk about, We made an investment in Linigo, which is a lithium-ion battery recycling company, and we'll talk more about our relationship with Linigo today and our recent press announcement today. But at the time in February of 2021, we made that investment, and we also filed a provisional patent associated with taking the arc refining technologies and applying them towards the goal of recycling lithium-ion batteries. And also Linneco purchased the plant, the aqua refinery, in a lease-to-buy scenario, which we'll talk about an update on that front as that has progressed since then. So in July of 2021, we established our first commercial agreement for aqua refining with Acme Metals in Japan. And that is a big milestone for the company because we are in the process of preparing to ship as a product that is a licensable product to this client and partner to develop aqua refining in the Asia Pacific region. August of 2021, we did complete our third generation aqualizer, which we were able to rapidly iterate, focused on innovation through the past year of 2020, which now triples the throughput over the first generation where we've made those 35,000 ingots up to 1,296 kilograms per day per aqualizer. amongst many other improvements that allow the product to be monitorable with our pure metric software suite, as well as additional electrical efficiencies and capabilities of that equipment. Recently, now on a today and moving forward basis where you see the green arrow, September 21, we completed the lab-scale testing of our initial testing on the lithium ion recycling technology. And by December of this year, we expect that we will be shipping the lead equipment in form of aqualizer and other supporting equipment to our partner in Taiwan. So a very important milestone coming up this quarter as we continue to commercialize the lead recycling aspects while we continue to develop the lithium recycling applications. In August, we expect to do operational testing of our full-size lithium ion aqua refining recycling unit and circuit. And by January of 2023, we have the potential to deploy the first full-scale aqua refining process with lithium batteries. Our ticker on NASDAQ is AQMS. We're headquartered in Tahoe, Reno, Nevada. And again, we were incorporated in 2014. We have about 69.8 million shares outstanding. And our cash in hand, which we just reported, is $11.7 million as of September 30th, and Judd will speak more about our financials, inclusive of the fact that the company is a very strong balance sheet and, importantly, is debt-free. Moving on to slide six, aqua refining is really a de-risked technology at its core because we did produce those 35,000 ingots, and we expect to take the many principles from our aqua refining for lead into the lithium-ion industry. recycling aspects and apply what you see in the right important aspects, which is room temperature, closed loop, recycle the chemical that you're using to do the recycling with a fundamentally non-polluted process, as I was speaking about before, which is critical in order to make this transition to electrification of not only transportation and energy storage, but the industrial processes that support the production and recycling of those materials. We have a very strong patent portfolio, which we'll speak to, and we have commercially de-risked a lot of the aspects of the technology through the process that we've gone through to this date to produce our first product. Our solution is cleaner and more cost-efficient in form of recovery as a recycling process. We also produce a higher quality product, and we'll talk about how that applies to not only the ultra-pure lead that we produce, as you see in the background in this picture, where we make the metal one atom at a time through a continuous process, but also apply that 99 plus percent, in the case of lead, 99.996 plus percent purities to expanding to other metals and plating those metals in the lithium space, such as cobalt, nickel, and manganese, and even other products. Recent highlights from our quarter, which we'll focus on today, is that we did establish our Aqua Metals Innovation Center, recently announced, for the development of our lithium ion battery recycling solution and utilizing that aqua refining technology. That is just less than a mile away from the aqua refinery, which is now the Linico facility that is about to turn up as they migrate into next year, with the lithium ion adaptation of the aqua refining facility that we had just down the street there in Tahoe Reno industrial center. So we're very excited about that innovation center and the capability for us to rapidly innovate as we did with the aqualizer program over the past year for lead and get that lithium program where it needs to be. And we'll talk about how we're going to be doing that with a recent press release that we just issued this morning. Completed the third generation aqualizer, as I mentioned before, and we achieved production at over 300% of the original model. We also finalized in the quarter a definitive agreement to deploy aqua refining technology in Taiwan to Acme Metal, which we'll be shipping, as I mentioned earlier, later this quarter, and partner with them to develop direct-to-oxide process. You can see that in a press release that we also issued about our direct-to-oxide capabilities, where we can take what comes off of our aqua refining machines and bypass the whole ingotization process and take the briquettes that we make that we squish from the materials that come off of the aqualizer and put those directly into the battery manufacturing process. So we're very excited about our partnership with Acme to take that technology and bring that to the largest battery manufacturers in Asia Pacific, whom they already have as clients. We have a signed collaboration agreement we announced today with Lineco for the clean lithium ion battery recycling technologies. We'll speak to that in a future slide, so I will just point that out for now. We also received a $1.25 million payment recently from Lineco as part of the lease to own, and that is a non-refundable deposit for the purchase of the McCarran Nevada facility, and that is the facility that's in Tahoe Renewal Industrial Center. We also received a final insurance payment and settlement of $5.25 million, and we achieved a total of $30.25 million collected, exceeding the guidance that we originally provided on that process. We're glad to have that completed and done and behind us. We also further advanced discussions with potential licensees and are very happy with our sales funnel as we continue to try to add additional aqua refining applications for customers throughout the world. Moving on to more details about the Acme Taiwan Agreement on slide number eight, you'll see that they're our first partner and really located in the largest and fastest-growing global lead market. The market for lead is mature, and it's very large. It's around $65 billion for lead-acid batteries globally, but it's growing fastest in the Asia-Pacific market simply because there's more industrialization, there's more cars getting put on the road, and many of those cars have two batteries that are lead-acid battery in them, inclusive of EVs that also have a lead-acid battery in them, and we're seeing quite a bit of growth in that market. This deployment will showcase our off-refining clean lead recycling in a market where these environmental drivers for not only building new facilities, but retrofitting existing facilities have been moving at a very rapid clip, and we see a very strong bend towards the need to have environmentally clean capabilities fuel this rapid growth in that marketplace and capacitization, etc., This also unlocks an opportunity for future partnerships with these global battery manufacturers that are partners and clients of Acme Metal to develop that direct-to-oxide methodology and really take aqua refining towards a much tighter link between battery recycling and battery manufacturing. So stay tuned for more updates as we continue to make that deployment come alive in the coming months. Moving on to slide nine, we'll talk about the collaboration agreement that we just announced today with Linneco. And phase one and phase two are defined here. Really phase one, the focus is immediately beginning to have Linneco process used lithium ion batteries into what's called black mass and take that black mass into the Aqua Metals Innovation Center and process black mass into those high value metals that I was describing earlier. And we will be doing that in our innovation mode with not large amounts of material, but meaningful enough amounts of material to de-risk, improve the technology, and support phase two, which is the goal for both parties, where Linneco licenses aqua refining equipment and technology. And Linneco has announced that they have a potential to process up to 100,000 metric tons of feedstock annually of lithium ion batteries. So it would be one of the largest, if not the largest, battery recycling facility in the world. And we're very pleased that we've established this collaboration agreement to get the lithium capabilities for aqua refining mature enough to deploy into that phase two, as I mentioned earlier in the timeline in an earlier slide. So moving on to slide 10, in order to support all these activities, we have and continue to prosecute a very robust strategic intellectual property portfolio. And we feel that we are well protected in our equipment supply and global licensing efforts throughout the globe. Where you see blue, you see where we have issued and allowed patents that they're not pending. And you'll see in the light blue and blue that we have additional pending patents. We've now achieved 71 total patents that have been issued and allowed with 44 additional applications that are pending, inclusive of lithium ion adaptation of aqua refining related IP that I mentioned earlier that we filed that key provisional patent for just a couple months ago. So with that, I'm going to turn it over to Judd Merrill, our CFO, to talk through the financial overview. Go ahead, Judd. Thank you, Steve.