Aqua Metals, Inc.

Good afternoon and welcome to AquaMetals' second quarter 2026 earnings conference call and webcast. My name is Paul and I will be your operator this afternoon. At this time, all participants have been placed on a listen-only mode. Following management's prepared remarks, we will open the floor for questions. It is now my pleasure to turn the floor over to your host, Dan Scott, Investor Relations. Dan, please proceed.

Thank you, operator, and thank you, everyone, for joining us today. Earlier today, Aqua Metals issued a press release providing an operational update and discussing results for the second quarter ended June 30th, 2026. This release is available in the investor relations section of the company's website at aquametals.com. Hosting the call today are Steve Cotton, President and Chief Executive Officer, and Eric West, Chief Financial Officer. Before we begin, I would like to remind participants that during this call, management will be making forward-looking statements. Please refer to the company's report on Form 10-K for a summary of the 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, we will conduct a question and answer session. With that, I'd like to turn the call over to Steve Cotton, President and CEO of AquaMetals.

Thank you, Dan, and good afternoon, everyone, and thank you for joining us for our second quarter financial results and business update call. AquaMetals has now shifted from proving a technology to commercial execution. Over the last several years, we've proven that aqua refining works. We've demonstrated battery-grade products. We've expanded our operating hours and we validated multiple process flows. Everything we're doing today is centered around building a profitable, critical minerals processing business here in the United States. You will also hear us describe the company a little differently moving forward, and that is deliberate. Aqua Minerals is a U.S. critical minerals processing company commercializing lower-cost recovery and refining technologies. That is not a new business. It's a sharper description of the business we've been building. We continue to believe one of the largest opportunities in the domestic battery supply chain isn't another battery factory. It's the infrastructure needed to process manufacturing scrap and end-of-life batteries as those factories ramp production. That's exactly what Headwaters Arc is designed to become. We are completing final diligence on a Midwest site with approximately 150,000 square feet of existing industrial infrastructure and approximately 50 or more acres. and it's just a short drive from six major LFP Gigafactory projects. Feedstock proximity drives the economics of this business and that location puts us next to one of the fastest growing sources of LFP manufacturing scrap in the country. At full campus configuration, Headwaters is designed for approximately 20,000 tons per year of processing capacity. That scope and timing remains subject to financing, permitting and commercial agreements. One thing I'd like to emphasize is that we've intentionally evolved our commercialization strategy. Instead of attempting to build everything on day one, we've broken the project into logical commercial phases. Phase one is designed to use commercially proven pre-processing equipment to domestically recover valuable aluminum, copper, and high-specification black mass from segregated LFP battery materials. That approach gives us a much earlier pathway toward commercial revenue while substantially reducing execution risk. Once that operating foundation is established, we integrate aqua refining in Phase II to recover battery-grade lithium carbonate, iron phosphate, and graphite from that same black mass. That second step is where we believe aqua metals create significantly greater long-term value. were intentionally deploying capital in stages while increasing value at each step. We believe that's a much smarter commercialization strategy. And some of you have heard us describe commercial plans before, so let me be direct about our standard. We said we would build once and build right, with feedstock, off-take, and financing in place before deploying off-refining at commercial scale. That standard has not changed. The phased Headwaters model is how we satisfy those gates one step at a time. During the quarter, we made meaningful progress across every major workstream required to make that happen. We've advanced site diligence. We've advanced engineering. We've continued evaluating commercially proven pre-processing partners. We've expanded discussions with feedstock suppliers and future offtake customers. We've progressed multiple financing structures, and our intent is to fund Headwaters substantially at the project level rather than off our balance sheet. Eric will walk through that in more detail. And we've continued operating the Innovation Center, which now has exceeded 5,000 cumulative operating hours supporting commercial engineering. None of those work streams are happening in isolation. are all converging toward the same objective, bringing headwaters into commercial operation as efficiently and with as little execution risk as possible. One point I'd like investors to appreciate is why we're initially concentrating on LFP materials. LFP, or lithium iron phosphate, is becoming the chemistry of choice across energy storage systems and an increasing percentage of electric vehicles. Gigafactory capacity is expanding rapidly. That means manufacturing scrap is expanding just as rapidly. Our market analysis informed by third-party industry research projects, recyclable LFP scrap will grow roughly 15-fold by 2030, and Bloomberg NEF projects U.S. storage capacity of approximately 235 gigawatt hours by 2035. We believe that creates one of the largest underserved critical minerals processing opportunities in North America. Unlike nickel and cobalt rich batteries, LFP requires a different economic model. Our phase commercialization strategy is specifically designed around that opportunity. And I want to be clear that LFP is where we start, not where we stop. The same platform architecture, mechanical, pre-processing, followed by refining and product recovery is intended to extend to NMC materials, or nickel, manganese, cobalt, and over time to selected mined materials and industrial waste streams. We have already tested the process on mined feedstocks. Headwaters is designed to be the first node in that platform, not the whole business. And at the same time, off-refining remains the technology that differentiates this company. Our process is designed to eliminate one-time-use chemicals, reduce waste, improve worker safety and lower operating costs compared with conventional processing methods. The Innovation Center continues validating commercial process flows while supporting engineering for Headwaters. So that technology foundation remains very strong. And another area we're pleased with is our financial discipline. We've entered this commercial phase debt-free. We're intentionally matching capital deployment with commercial milestones. and our objective isn't simply to build a facility. Our objective is to build a profitable business with disciplined capital allocation, and that's an important distinction. Looking ahead, our priorities for the balance of 2026 are straightforward. Complete the site diligence, secure long-term site control, select our phase one processing partner, advance key stock and offtake agreements, continue engineering, complete capital formation, advance permitting, and continue moving toward a final investment decision. Those are tangible milestones investors can follow over the coming quarters, and I want to be clear about when the economics arrive. At a final investment decision on Phase 1, we intend to provide capital cost, expected throughput, product mix, and expected operating cost. I'll close with this. We believe Aqua Metals has reached an important inflection point. The technology foundation has been established, and the market opportunity continues to strengthen. Our commercialization strategy is now clearly defined, and our team is focused every day on executing that plan with discipline. We're excited about the opportunity ahead, and we appreciate the continued support of our shareholders. With that, let's have Eric review the financial results before opening the line for questions.