aqms20230331

aqms20230331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 001-37515

Aqua Metals, Inc.

(Exact name of registrant as specified in its charter)

Delaware	47-1169572
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification no.)

5370 Kietzke Lane, Suite 201

Reno, Nevada 89511

(Address of principal executive offices, including zip code)

(775) 446-4418

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class of stock:	Trading symbol	Name of each exchange on which registered:
Common Stock	AQMS	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (as defined in Rule 12b-2 of the Act):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 27, 2023, there were 83,137,823 outstanding shares of the common stock of Aqua Metals, Inc.

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders' Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4.	Controls and Procedures	17
	PART II - OTHER INFORMATION
Item 1A.	Risk Factors	18
Item 6.	Exhibits	25

	*March 31, 2023*			*December 31, 2022*
	*(unaudited)*			*(Note 2)*
ASSETS
Current assets
Cash and cash equivalents	$	3,355		$	7,082
Accounts receivable		—			12
Lease receivable, current portion		15,244			15,527
Inventory		302			278
Assets held for sale		—			47
Prepaid expenses and other current assets		286			263
Total current assets		19,187			23,209

Non-current assets
Property, plant and equipment, net		11,894			7,343
Intellectual property, net		416			461
Investment in LINICO		2,000			2,000
Other assets		463			489
Total non-current assets		14,773			10,293

Total assets	$	33,960		$	33,502

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	770		$	1,075
Accrued expenses		1,508			1,780
Building purchase deposit		3,250			3,250
Lease liability, current portion		312			307
Notes payable, current portion		5,945			5,899
Total current liabilities		11,785			12,311

Non-current liabilities
Lease liability, non-current portion		197			275
Notes payable, non-current portion		2,902			—
Total liabilities		14,884			12,586

Commitments and contingencies (see Note 13)

Stockholders’ equity
Common stock; $0.001 par value; 200,000,000 shares authorized; 83,180,801 and 79,481,751 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		83			79
Additional paid-in capital		223,453			220,114
Accumulated deficit		(203,883	)		(199,277	)
Treasury stock, at cost; common shares: 510,632 and nil as of March 31, 2023 and December 31, 2022, respectively		(577	)		—
Total stockholders’ equity		19,076			20,916

Total liabilities and stockholders’ equity	$	33,960		$	33,502

	*Three Months Ended March 31,*
	*2023*			*2022*

Operating cost and expense
Plant operations and clean up	$	1,065		$	994
Research and development cost		445			551
General and administrative expense		3,006			2,765
Total operating expense		4,516			4,310

Loss from operations		(4,516	)		(4,310	)

Other income and (expense)
Gain (loss) on disposal of property, plant and equipment		20			(150	)
Interest expense		(176	)		—
Interest and other income		66			52

Total other expense, net		(90	)		(98	)

Loss before income tax expense		(4,606	)		(4,408	)

Income tax expense		—			(2	)

Net loss	$	(4,606	)	$	(4,410	)

Weighted average shares outstanding, basic and diluted		81,285,740			71,927,523

Basic and diluted net loss per share	$	(0.06	)	$	(0.06	)

					Additional										Total
	Common Stock				Paid-in		Accumulated			Treasury Stock					Stockholders'
	Shares		Amount		Capital		Deficit			Shares		Amount			Equity (Deficit)

Balances, December 31, 2022		79,481,751	$	79	$	220,114	$	(199,277	)		—	$	—		$	20,916

Stock-based compensation		—		—		686		—			—		—			686
Common stock issued for consulting services		15,781		—		12		—			—		—			12
Common stock issued to employees and directors, includes RSUs vesting		1,332,743		1		—		—			—		—			1
Common stock withheld to satisfy tax withholdings on RSUs vesting		—		—		—		—			510,632		(577	)		(577	)
Common stock issued for employee stock purchase plan sales		192,707		—		122		—			—		—			122
Common stock issued for class action settlement		469,366		1		500		—			—		—			501
Common stock issued for ATM share sales, net of $62 transaction costs		1,662,953		2		1,987		—			—		—			1,989
Common stock issued for director fees		25,500		—		32		—			—		—			32
Net loss		—		—		—		(4,606	)		—		—			(4,606	)

Balances, March 31, 2023		83,180,801	$	83	$	223,453	$	(203,883	)		510,632	$	(577	)	$	19,076

Balances, December 31, 2021		70,416,552	$	70	$	211,309	$	(183,846	)		—	$	—		$	27,533

Stock-based compensation		—		—		604		—			—		—			604
Common stock issued to employees and directors, includes RSUs vesting		1,119,648		1		—		—			—		—			1
Common stock issued for ATM share sales, net of $121 transaction costs		3,397,999		4		3,886		—			—		—			3,890
Net loss		—		—		—		(4,410	)		—		—			(4,410	)

Balances, March 31, 2022		74,934,199	$	75	$	215,799	$	(188,256	)		—	$	—		$	27,618

	*Three Months Ended March 31,*
Excluded potentially dilutive weighted average securities (1):	*2023*		*2022*

Options to purchase common stock		994,068		1,026,712
Unvested restricted stock units		5,355,725		4,111,573
Financing warrants to purchase common stock		6,372		6,372
Total potential dilutive weighted average securities		6,356,165		5,144,657

	March 31, 2023		December 31, 2022

Finished goods	$	28	$	28
Work in process		—		—
Raw materials		274		250
Total inventory	$	302	$	278

	Useful Life
Asset Class	(Years)		March 31, 2023			December 31, 2022

Operational equipment		3 - 10	$	1,336		$	1,445
Lab equipment		5		730			730
Computer equipment		3		6			6
Office furniture and equipment		3		90			90
Leasehold improvements		2.5		80			80
Land		-		1,141			—
Building		39		3,131			—
Equipment under construction				6,778			6,486
				13,292			8,837
Less: accumulated depreciation				(1,398	)		(1,494	)

Total property, plant and equipment, net			$	11,894		$	7,343

	*March 31, 2023*		*December 31, 2022*

Property, plant and equipment related	$	560	$	770
Class action settlement		—		500
Payroll related		601		418
Professional services		77		51
Other		270		41
	$	1,508	$	1,780

	Three Months Ended
	March 31,
	2023		2022
Cash paid for operating lease liabilities	$	66	$	150
Operating lease cost	$	65	$	141

Cash paid for finance lease liabilities	$	15	$	15
Interest expense	$	2	$	3

	March 31, 2023
Weighted-average remaining lease term (years) - operating leases		1.6
Weighted-average discount rate - operating leases		6.16	%

Weighted-average remaining lease term (years) - finance leases		1.0
Weighted-average discount rate - finance leases		7.49	%

	Three Months Ended March 31,
	2023			2022

Net cash used in operating activities	$	(2,863	)	$	(3,404	)
Net cash provided by (used in) investing activities	$	(5,222	)	$	417
Net cash provided by financing activities	$	4,358		$	3,890

	•	our ability to demonstrate that our AquaRefining technology can recycle either LABs or lithium-ion batteries on a commercial scale; and
	•	our ability to license our AquaRefining process and sell our AquaRefining equipment to ACME Metal Enterprise Co., Ltd and other recyclers of LABs and lithium-ion batteries.

Due in 12-month period ended March 31,
	Operating Leases			Finance Leases
2023	$	267		$	66
2024	$	170		$	32
2025	$	—		$	—
Less imputed interest	$	(21	)	$	(5	)
Total lease liabilities	$	416		$	93

Current lease liabilities	$	250		$	62
Non-current lease liabilities	$	166		$	31
	$	416		$	93

	Three Months Ended March 31,
	2023		2022
Plant operations and clean up	$	29	$	25
Research and development cost		18		18
General and administrative expense		640		562
Total	$	687	$	605

	Three Months Ended March 31,
					Favorable			%
	2023		2022		(Unfavorable)			Change

Plant operations and clean up	$	1,065	$	994	$	(71	)		7.1	%
Research and development cost		445		551		106			(19.2	)%
General and administrative expense		3,006		2,765		(241	)		8.7	%
Total operating expense	$	4,516	$	4,310	$	(206	)		4.8	%

Exhibit No.	Description	Method of Filing

3.1	First Amended and Restated Certificate of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on July 22, 2015.
3.2	Third Amended and Restated Bylaws of the Registrant	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on January 21. 2022.
3.3	Certificate of Amendment to First Amended and Restated Certificate of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
3.4	Certificate of Amendment to the First Amended and Restated Certificate of Incorporation	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on May 9, 2019
31.1	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith
31.2	Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).	Filed electronically herewith

101.INS	Inline XBRL Instance Document	Filed electronically herewith
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Filed electronically herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed electronically herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	Filed electronically herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed electronically herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed electronically herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

		AQUA METALS, INC.

Date:	May 4, 2023	By:	/s/ Stephen Cotton
			Stephen Cotton,
			President, Chief Executive Officer and Director (Principal Executive Officer)

Date:	May 4, 2023	By:	/s/ Judd Merrill
			Judd Merrill,
			Chief Financial Officer
			(Principal Financial Officer)

SEC Form 10-Q filed by Aqua Metals Inc.