Aqua Metals, Inc.

Hello, and welcome to the Aqua Metals third quarter investor call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may ask a question at any time by typing it into the ask a question feature on the left side of your screen. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Bob Myers of FNK Investor Relations. Please go ahead, sir.

Thank you, Operator, and thank you, everybody, for joining. Earlier today, Aqua Metals issued a press release providing an operational update and discussing financial results for the third quarter ended September 30, 2022. This release is available on the investor relations section of the company's website, www.aquametals.com. Hosting the call today are Steve Cotton, President and Chief Executive Officer, and Judd Merrill, Chief Financial Officer. Before we begin, I would like to remind participants that during the call, management will be making forward-looking statements. Please refer to the company's report on Form 10-Q filed today, November 3rd, for a summary of forward-looking statements and the risks, uncertainties, and other factors 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 such statements to reflect new circumstances or unanticipated events as they occur except as required by law. As a reminder, after the formal remarks, management will be taking questions. Questions will be accepted over the phone from analysts, and investors can submit a question using the online webcast 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 would now like to turn the call over to Steve Cotton, CEO of AquaMetals. Steve, the call is yours.

Thank you, Bob, and thank you to everyone who joins us today. This was an important quarter for AquaMetals, laying the groundwork for key milestones as we move rapidly towards revenue generation. We are making progress in several fronts and on two continents. As we have deployed both our lithium and lead operefining equipment this quarter, our confidence that operefining represents a game-changer for the industry has only increased. We continue to advance our technology, recovering high-purity, critical battery minerals, improving our solution. We are already producing ultra-pure lead metal in Taiwan, and over the next few months, our now well-trained partner and licensee, Acme Metal, will regularly operate the Phase I system in Taiwan as a showcase. for industry partners to witness firsthand. Acme and aqua metals are currently in discussions for what Phase 2 and beyond could look like, and we will have further updates to share on next steps by later this quarter or Q1. Our state-of-the-art lithium aqua refining pilot plant in our Innovation Center at the Tahoe Reno Industrial Center is nearly completed, and we expect to commence operations this month. giving us the ability to demonstrate our lithium recycling capabilities to several potential suppliers, partners, and customers the rest of this year and into 2023. This is clearly a very exciting time for Aqua Metals. The demand for a clean, sustainable, and affordable recycling solution for lithium ion batteries grows each day. Batteries are everywhere in all sorts of technologies, from wearables and phones to electric vehicles, buses, and forklifts. The current processes for recycling batteries are inherently dirty and economically inefficient. Smelting does not recover many of the rare materials that are needed for making new lithium-ion batteries. Proposed chemical-based alternatives, many based on an older mining leaching technique, have not been successfully demonstrated at scale with acceptable environmental and economic outcomes, and in several cases are not yet successful at all. A better solution is needed, and we believe that aqua refining is the answer. To date, lithium aqua refining is the only solution that has recovered high-grade pure lithium hydroxide, cobalt in pure metal form, nickel in pure metal form, copper in pure metal form, and manganese dioxide. And we do it cost-effectively with a closed-loop sustainable process that is inherently clean using renewable energy. Turning now to our strategic initiatives and progress in lithium. To date, we have successfully recovered all the high-value metals and minerals from used lithium ion batteries, including high-fury lithium hydroxide, copper metal, nickel metal, cobalt metal, and manganese dioxide. Our technology is proven at bench scale. Our first lithium ion recycling plant operation, which is located at our Innovation Center in Tahoe-Reno Industrial Center, continues to be on schedule to begin operations later this month. Interest in our lithium occupying process has been extremely strong, and having the pilot plan up and running to showcase our technology is a critical next step. In fact, it's really a critical inflection point for the company. We have prioritized and scheduled visits for Tier 1 potential partners and customers beginning next week through December and Q1. We are also looking forward to welcoming investors and analysts as we more broadly open the Innovation Center and pilot after the new year. In the slide deck accompanying this call, and also in our current investor deck on our website, we have a slide that shows the black mass that we've taken into our Innovation Center and the metals and compounds recovered from our aqua refining process, starting with the lithium hydroxide, which we make natively with our unique process. We believe that we'll be one of the, if not the, first U.S. producers of lithium hydroxide from a recycling versus a mining source. That's a double benefit for meeting critical U.S. produced mineral requirements and for a totally sustainable production when compared to mining lithium. The metals we produce are extremely pure, making them highly valuable both to customers and to our revenue model. We can sell these directly into the general metals and super alloys markets to a large array of customers that are looking for these metals right now, or, of course, into the battery materials market with a shorter qualification process to other recycling methods due to uniquely being able to start with pure metal with cobalt, nickel, and copper. We have already produced PCAM, meaning pre-cathode active material, and we'll have more to say soon about taking these metals to CAM, meaning cathode active material. We have already signed the letter of intent with Dragonfly Energy Corporation, a lithium ion battery producer based right here in Tahoe, Reno, to provide aqua metals, spent lithium ion cells and manufacturing scrap, as well as for the purchase of commercial quantities of lithium hydroxide from aqua metals. We plan for Dragonfly to use our sustainably produced lithium hydroxide and their next generation solid state lithium ion battery technologies and future manufacturing activities And in addition to samples already provided, we will be sending them production representative samples from our pilot operation very soon. Today, just 5% of lithium ion batteries are recycled, while the other 95% end up in landfills. Lithium aqua refining recovers the high-value lithium that's currently lost in the smelting process today. In fact, today's commercial method for lithium battery recycling, smelting, recovers 0% of lithium and only a fractional percentage of the other minerals, while lithium aqua refining recovers over 96% of the lithium. At up to $82,000 per metric ton just this year, this is an important achievement not only for our environment but for our business model. Demand for lithium is growing rapidly, and industry analysts project a deficit in the lithium market as soon as 2025 due to the electrification of transportation and the rapid deployment for energy storage systems, such as those produced by Dragonfly. There will be significant demand for recovered lithium in the future, especially for North American companies, as China dominates lithium refining today. With the goal of rapidly building our partnership eco network, we are in active discussions with cell manufacturers, black mass providers, cell component manufacturers, and CAM manufacturers. As our pilot plant comes online and potential partners who have already reviewed our process flow sheets and mass balances under non-disclosure agreements visit our innovation center and witness this process and the materials we recover from Black Mass, we expect to forge additional partnerships. Interest in our technology is increasing and this provides significant confidence as we look towards 2023. Finally, let me speak to our progress with grants and specifically the Department of Energy. Recently, the DOE announced over $2.8 billion in grants for the first round of critical battery materials. Many of these grants went to parties in the general critical battery materials space. As Aqua Metals completes our pilot plant operation and identifies the location where we intend to scale beyond our initial pilot plant in the coming months, along with our strong environmental advantages, We believe we will be in a great position to receive one or more grants in 2023, earmarked particularly for sustainable battery recycling. We have our CFO and Chief Business Officer and a top-tier K Street Washington, D.C. firm working hard on these efforts in conjunction with partnerships we are cultivating, and we expect we'll have more to say about these efforts in the coming months. And speaking of our CFO, I'm now going to hand it over to Judd Merrill for the financial overview.