Aqua Metals, Inc.

Greetings and welcome to the AquaMetals first quarter 2024 investor conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bob Myers with Investor Relations. Thank you. You may begin.

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 first quarter ended March 31, 2024. This release is available in the Investment Relations section on the company's website at 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, May 15th, for a summary of the forward-looking statements and the risks, uncertainties, and other factors that could cause actual results that differ materially from most 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, we will be taking questions. Questions will be accepted over the phone from analysts, and all other investors can submit a question using the online webcast portal provided in today's and earlier press releases. 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, the call is yours.

Thank you, Bob, and thank you to everyone who joined us today. Though it's only been a short time since we shared our Q4 and annual update, AquaMetals has continued to make strides towards our core focus of developing the circular supply chain that we believe will set the standard for low-cost, low-carbon recycling of lithium-ion batteries. We continue to establish and expand key partnerships while simultaneously commissioning and commercializing the Sierra Aquaree Finding Campus and advancing operational capacity with additional funding and financial flexibility. I'll start with some comments on the news of the day. As most of you have already read, we announced a major capitalization milestone for the company today, primarily through an up to $33 million loan term sheet for the completion of Phase 1 of the Sierra Arc. We have executed the term sheet for this loan with one of the world's largest privately held companies that is focusing their investments on decarbonization initiatives at a global scale. This term sheet was executed after months long and thorough due diligence on the company, technology, and the CRR's ability to generate cash. This involved detailed reviews of our announced and unannounced feedstock, processing, and offtake partners, as well as the economics, We will be able to reveal more about our loan partner upon execution of the definitive agreement by the July timeframe. It is also important to note that this term sheet allows the company to finance up to an additional $8 million beyond what had been previously contemplated with a $25 million USDA loan guarantee. The USDA loan guarantee is still in process, but now targeted for a future phase of build out as the decision timeline for phase one has simply taken too long. In conjunction with the signing of this up to $33 million loan agreement term sheet, a condition was for the company to apply a boost to our cash position to maintain a healthy balance sheet. We received great support from our key shareholders and partners and successfully raise the amount needed to accomplish this requirement. I will also add that we had unanimous and meaningful participation from our board and named executive officers, as well as our VPs and directors and other managers in the company. I think that says a lot about our team's confidence and resolve. As we all know, the capital markets are challenging now, which is why we strategically chose to finance the completion of the Sierra Arc primarily through a loan while utilizing our access to the capital markets prudently to maintain a healthy and loan-qualifying cash balance. So to conclude on our capital infusion and general comments, we are quite pleased with our loan agreement for Sierra Arc Phase 1 coupled and our qualifying equity support. I would like to thank our to-be-named loan partner, shareholders, partners, and employees for the continued confidence and support. Moving on to additional updates. First, we remain confident that our methodical approach is the best way to pursue the massive and growing opportunity for lithium ion battery recycling. Unlike others who attempted to leapfrog to industrial scale, we are taking a more staged approach that reduces risk. We are building a circular supply chain of partners, and we have secured a durable supply of black mass to process, currently at our pilot plant and soon at the Sierra Arc. With our announced and unannounced agreements with off-takers, We also have buyers in place to offtake the recycled materials for the manufacturing of new low cost recycled batteries. Towards the send in Q1, we secured a strategic offtake agreement with 6K Energy in a first of its kind collaboration designed to address the escalating demand for recycling lithium ion batteries to support CAM or cathode active material manufacturing. This novel agreement will offer battery manufacturers access to low cost, low carbon, domestically produced critical battery materials. This offtake agreement with 6K Energy is what both companies believe is the first decarbonized black mass to cam supply chain, with what we together believe are at favorable economics on the global stage. And our partnership with 6K Energy continues to expand and has demonstrated success first with a non-recurring engineering agreement that accomplished key technology objectives, next to our strategic supply agreement and important developments looking ahead, including further technology advancements and co-location potential. As we've talked about our competitive advantages, this partnership is a clear indication and important validation of the company's strategy. The combination of the innovative technologies of both AquaMetals and 6K provides cost and environmental advantages as both processes are electrified and more efficient than traditional processes like pyro and hydro. Even hydro processes that purport to improve environmental outcomes over pyro use massive quantities of one-time use chemicals that are expensive, hazardous to humans, hazardous to the environment, and create a similar volume of waste streams as their input material. As a distinct and unique advantage, our technology regenerates and repeatedly recycles the necessary chemicals for reuse. This is not found with other industry participants. Through patented processes, both Aqua Metals and 6K eliminate the production of thousands of tons of waste streams, which enable a cleaner, more sustainable solution for closing the loop between recycling and lithium battery manufacturing. Our progress at the CRR continues. We have completed the vast majority of the building uplift, including brand new concrete floors and coatings, steel superstructure, and equipment platforms, full laboratory operations already staffed 24 by 5, offices, utility power drop, and switch gear, and power distribution. We are shifting our focus now to mechanical electrical plumbing, along with receiving and installing and pre-commissioning equipment, and will be commissioning systems in the coming months leading up to the introduction of first black mass feedstock later this year. I encourage everyone to see further updates of our progress on our website blog. The entire AquaMetals team feels immense pride in seeing that facility come to life with progress made every day. Additionally, we have managed our commercial scale expansion plans prudently through our methodical approach, and because of this discipline, the project to date remains on time and under budget. Recently, the company received additional recognition and third party validation by being named Top Project Winner in the Environment Plus Energy Leader Awards program for 2024. which highlights the company's significant strides in environmental stewardship and innovative energy solutions. It's a testament to the understanding that responsible, sustainable recycling solutions are critical in the electrification of the transportation sector. We also made a finalist position in the 17th annual Best Places to Work in Northern Nevada Awards. In the first year, we applied and as the only finalist in the lithium sector. We made that accomplishment in our first year of application because of the very positive results of our employee survey and our competitive benefits, which allows us to continue to attract and retain our employees and build momentum in our organizational capabilities. And referencing some earlier remarks, the clean energy industry is still growing and maturing. There are over $92 billion of announced investment to date in North America to stand up 80 plus battery manufacturing and materials facilities with a goal of reaching approximately 200x the infrastructure by 2030 as there was in 2020. Nearly all of these facilities produce scrap material that needs to be sustainably recycled. We remain quite convinced in our belief that as we enter commercial and sustainable production, we will be a strong partner for these battery materials and automotive companies to close the battery loop in an economically favorable and decarbonized way. In addition to these exciting developments, Aqua Metals remains committed to achieving key milestones in the coming months and quarters. And that includes but is not limited to scaling and commissioning of phase one of the Sierra Arc to enable us to provide the first recycled material to 6K Energy and other offtake partners late this year and scaling rapidly into next year. Our intent to sign a licensing agreement with ULHO Materials. Further development of our commercial partnership providing updates on future growth capital, including government-backed loans and grants and project financing. With the support of our investors, partners, and dedicated team, we are well-positioned to accelerate our growth and continue to make meaningful strides in creating a domestic closed-loop supply of critical battery materials. We believe our unique technology, cost advantages, and superior environmental outcomes will disproportionately benefit Aqua Metals in the coming quarters and years ahead. And I look forward to sharing further updates with you all soon. And I'll turn it over now to our Chief Financial Officer, Judd Merrill, to discuss the financial results for the first quarter.