0001621832
Aqua Metals, Inc.
false
--12-31
Q3
2024
0.001
0.001
300,000,000
300,000,000
6,855,991
6,826,572
5,415,433
5,394,005
29,419
21,428
34
744
87
1,713
372
31
1,713
372
119
0
0
0
0
0
0
100
100
100
24
1
3
3
3
3
9
false
false
false
false
See Footnote 9.
Securities are presented on a weighted average outstanding calculation as required if the securities were dilutive and adjusted to give effect to the November 4, 2024 reverse stock split.
Deposits for equipment to be acquired and utilized at the Company's Phase One build-out of our recycling campus at Tahoe-Reno Industrial Center (TRIC).
00016218322024-01-012024-09-30
xbrli:shares
00016218322024-11-12
thunderdome:item
iso4217:USD
00016218322024-09-30
00016218322023-12-31
iso4217:USDxbrli:shares
00016218322024-07-012024-09-30
00016218322023-07-012023-09-30
00016218322023-01-012023-09-30
0001621832aqms:CommonStockOutstandingMember2024-06-30
0001621832us-gaap:AdditionalPaidInCapitalMember2024-06-30
0001621832us-gaap:RetainedEarningsMember2024-06-30
0001621832us-gaap:TreasuryStockCommonMember2024-06-30
00016218322024-06-30
0001621832aqms:CommonStockOutstandingMember2024-07-012024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-30
0001621832us-gaap:RetainedEarningsMember2024-07-012024-09-30
0001621832us-gaap:TreasuryStockCommonMember2024-07-012024-09-30
0001621832aqms:ATMMember2024-07-012024-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:ATMMember2024-07-012024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:ATMMember2024-07-012024-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:ATMMember2024-07-012024-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:ATMMember2024-07-012024-09-30
0001621832aqms:CommonStockOutstandingMember2024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2024-09-30
0001621832us-gaap:RetainedEarningsMember2024-09-30
0001621832us-gaap:TreasuryStockCommonMember2024-09-30
0001621832aqms:CommonStockOutstandingMember2023-12-31
0001621832us-gaap:AdditionalPaidInCapitalMember2023-12-31
0001621832us-gaap:RetainedEarningsMember2023-12-31
0001621832us-gaap:TreasuryStockCommonMember2023-12-31
0001621832aqms:CommonStockOutstandingMember2024-01-012024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2024-01-012024-09-30
0001621832us-gaap:RetainedEarningsMember2024-01-012024-09-30
0001621832us-gaap:TreasuryStockCommonMember2024-01-012024-09-30
0001621832aqms:PublicOfferingMember2024-01-012024-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:PublicOfferingMember2024-01-012024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:PublicOfferingMember2024-01-012024-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:PublicOfferingMember2024-01-012024-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:PublicOfferingMember2024-01-012024-09-30
0001621832aqms:ATMMember2024-01-012024-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:ATMMember2024-01-012024-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:ATMMember2024-01-012024-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:ATMMember2024-01-012024-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:ATMMember2024-01-012024-09-30
0001621832aqms:CommonStockOutstandingMember2023-06-30
0001621832us-gaap:AdditionalPaidInCapitalMember2023-06-30
0001621832us-gaap:RetainedEarningsMember2023-06-30
0001621832us-gaap:TreasuryStockCommonMember2023-06-30
00016218322023-06-30
0001621832aqms:CommonStockOutstandingMember2023-07-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-30
0001621832us-gaap:RetainedEarningsMember2023-07-012023-09-30
0001621832us-gaap:TreasuryStockCommonMember2023-07-012023-09-30
0001621832aqms:PublicOfferingMember2023-07-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:PublicOfferingMember2023-07-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:PublicOfferingMember2023-07-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:PublicOfferingMember2023-07-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:PublicOfferingMember2023-07-012023-09-30
0001621832aqms:YulhoAgreementMember2023-07-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:YulhoAgreementMember2023-07-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:YulhoAgreementMember2023-07-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:YulhoAgreementMember2023-07-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:YulhoAgreementMember2023-07-012023-09-30
0001621832aqms:ATMMember2023-07-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:ATMMember2023-07-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:ATMMember2023-07-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:ATMMember2023-07-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:ATMMember2023-07-012023-09-30
0001621832aqms:CommonStockOutstandingMember2023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2023-09-30
0001621832us-gaap:RetainedEarningsMember2023-09-30
0001621832us-gaap:TreasuryStockCommonMember2023-09-30
00016218322023-09-30
0001621832aqms:CommonStockOutstandingMember2022-12-31
0001621832us-gaap:AdditionalPaidInCapitalMember2022-12-31
0001621832us-gaap:RetainedEarningsMember2022-12-31
0001621832us-gaap:TreasuryStockCommonMember2022-12-31
00016218322022-12-31
0001621832aqms:CommonStockOutstandingMember2023-01-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-30
0001621832us-gaap:RetainedEarningsMember2023-01-012023-09-30
0001621832us-gaap:TreasuryStockCommonMember2023-01-012023-09-30
0001621832aqms:PublicOfferingMember2023-01-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:PublicOfferingMember2023-01-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:PublicOfferingMember2023-01-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:PublicOfferingMember2023-01-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:PublicOfferingMember2023-01-012023-09-30
0001621832aqms:YulhoAgreementMember2023-01-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:YulhoAgreementMember2023-01-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:YulhoAgreementMember2023-01-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:YulhoAgreementMember2023-01-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:YulhoAgreementMember2023-01-012023-09-30
0001621832aqms:ATMMember2023-01-012023-09-30
0001621832aqms:CommonStockOutstandingMemberaqms:ATMMember2023-01-012023-09-30
0001621832us-gaap:AdditionalPaidInCapitalMemberaqms:ATMMember2023-01-012023-09-30
0001621832us-gaap:RetainedEarningsMemberaqms:ATMMember2023-01-012023-09-30
0001621832us-gaap:TreasuryStockCommonMemberaqms:ATMMember2023-01-012023-09-30
xbrli:pure
0001621832aqms:ReverseStockSplitMemberus-gaap:SubsequentEventMember2024-11-052024-11-05
0001621832aqms:AquaMetalsRenoIncMemberaqms:LoanAgreementMemberaqms:SummitInvestmentServicesLLCMember2023-02-01
0001621832srt:RestatementAdjustmentMember2023-01-012023-09-30
0001621832aqms:AsCorrectedMember2023-01-012023-09-30
0001621832srt:ScenarioPreviouslyReportedMember2023-01-012023-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-30
0001621832us-gaap:EmployeeStockOptionMember2024-07-012024-09-30
0001621832us-gaap:EmployeeStockOptionMember2023-07-012023-09-30
0001621832us-gaap:EmployeeStockOptionMember2024-01-012024-09-30
0001621832us-gaap:EmployeeStockOptionMember2023-01-012023-09-30
0001621832us-gaap:WarrantMember2024-07-012024-09-30
0001621832us-gaap:WarrantMember2023-07-012023-09-30
0001621832us-gaap:WarrantMember2024-01-012024-09-30
0001621832us-gaap:WarrantMember2023-01-012023-09-30
0001621832aqms:SaleOfInventoryMember2024-07-012024-09-30
0001621832aqms:SaleOfInventoryMember2024-01-012024-09-30
0001621832aqms:SaleOfInventoryMember2023-07-012023-09-30
0001621832aqms:SaleOfInventoryMember2023-01-012023-09-30
0001621832us-gaap:TradeAccountsReceivableMember2024-09-30
0001621832us-gaap:TradeAccountsReceivableMember2023-12-31
0001621832aqms:LiNiCoMember2023-12-31
0001621832aqms:LiNiCoMember2023-01-012023-12-31
0001621832aqms:LiNiCoMember2024-09-30
utr:Y
0001621832aqms:OperationalEquipmentMembersrt:MinimumMember2024-09-30
0001621832aqms:OperationalEquipmentMembersrt:MaximumMember2024-09-30
0001621832aqms:OperationalEquipmentMember2024-09-30
0001621832aqms:OperationalEquipmentMember2023-12-31
0001621832aqms:LaboratoryEquipmentMember2024-09-30
0001621832aqms:LaboratoryEquipmentMember2023-12-31
0001621832us-gaap:ComputerEquipmentMember2024-09-30
0001621832us-gaap:ComputerEquipmentMember2023-12-31
0001621832aqms:OfficeFurnitureAndEquipmentMember2024-09-30
0001621832aqms:OfficeFurnitureAndEquipmentMember2023-12-31
0001621832us-gaap:LeaseholdImprovementsMember2024-09-30
0001621832us-gaap:LeaseholdImprovementsMember2023-12-31
0001621832us-gaap:LandMember2024-09-30
0001621832us-gaap:LandMember2023-12-31
0001621832us-gaap:BuildingMember2024-09-30
0001621832us-gaap:BuildingMember2023-12-31
0001621832us-gaap:ConstructionInProgressMember2024-09-30
0001621832us-gaap:ConstructionInProgressMember2023-12-31
utr:M
0001621832aqms:RealEstateLeaseOneMember2024-09-30
0001621832aqms:RealEstateLeaseTwoMember2024-09-30
0001621832aqms:HeadquartersLeaseMember2024-03-142024-03-14
0001621832aqms:InnovationCenterMember2024-06-092024-06-09
0001621832aqms:AquaMetalsRenoIncMemberaqms:LoanAgreementMemberaqms:SummitInvestmentServicesLLCMember2023-02-012023-02-01
0001621832aqms:SummitInvestmentServicesLLCMember2024-09-30
0001621832aqms:SummitInvestmentServicesLLCMember2023-12-31
0001621832aqms:ManagementAndEmployeesMember2024-01-012024-09-30
0001621832aqms:ReissuedTreasuryStockMemberaqms:ManagementAndEmployeesMember2024-01-012024-09-30
0001621832aqms:BoardMembersMember2024-01-012024-09-30
0001621832srt:DirectorMember2024-01-012024-09-30
0001621832aqms:FormerEmployeeMember2024-01-012024-09-30
0001621832aqms:May2024PublicOfferingWarrantsMember2024-05-012024-05-01
0001621832aqms:May2024PublicOfferingWarrantsMember2024-05-01
0001621832aqms:May2024PublicOfferingMember2024-05-012024-05-01
0001621832aqms:ManagementAndEmployeesMember2023-01-012023-09-30
0001621832aqms:ReissuedTreasuryStockMemberaqms:ManagementAndEmployeesMember2023-01-012023-09-30
0001621832aqms:BoardMembersMember2023-01-012023-09-30
0001621832srt:DirectorMember2023-01-012023-09-30
0001621832aqms:July2023PublicOfferingMember2023-07-012023-07-31
0001621832aqms:YulhoOfferingMember2023-08-012023-08-31
0001621832aqms:May2024WarrantsMemberaqms:UnderwriterMember2024-05-01
0001621832aqms:May2024WarrantsMemberaqms:UnderwriterMember2024-05-012024-05-01
0001621832aqms:May2024WarrantsMember2024-05-012024-05-01
0001621832aqms:May2024WarrantsMember2024-05-01
0001621832aqms:PublicOfferingWarrantMember2023-07-31
0001621832aqms:YulhoSpaUnderwriterWarrantMember2023-08-31
0001621832us-gaap:CostOfSalesMember2024-07-012024-09-30
0001621832us-gaap:CostOfSalesMember2023-07-012023-09-30
0001621832us-gaap:CostOfSalesMember2024-01-012024-09-30
0001621832us-gaap:CostOfSalesMember2023-01-012023-09-30
0001621832us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-30
0001621832us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-30
0001621832us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-30
0001621832us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-30
0001621832us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-30
0001621832us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-30
0001621832us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-30
0001621832us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-30
0001621832aqms:The2019StockIncentivePlanMember2024-05-232024-05-23
0001621832aqms:The2019StockIncentivePlanMember2024-05-23
0001621832aqms:The2019StockIncentivePlanMembersrt:MaximumMember2019-01-012019-12-31
0001621832aqms:The2019StockIncentivePlanMember2024-09-30
0001621832us-gaap:StockCompensationPlanMember2023-12-31
0001621832us-gaap:RestrictedStockUnitsRSUMember2023-12-31
0001621832us-gaap:StockCompensationPlanMember2024-01-012024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-30
0001621832us-gaap:StockCompensationPlanMember2024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-31
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-04-012024-06-30
0001621832us-gaap:RestrictedStockUnitsRSUMemberaqms:BoardMembersMember2024-07-012024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-30
0001621832us-gaap:RestrictedStockUnitsRSUMemberaqms:EmployeeMember2024-07-012024-09-30
0001621832aqms:ReverseStockSplitMemberus-gaap:SubsequentEventMember2024-11-042024-11-04
0001621832us-gaap:SubsequentEventMember2024-11-03
0001621832us-gaap:SubsequentEventMember2024-11-04
Table of Contents
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 September 30, 2024
OR
| ☐ | 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 November 12, 2024, there were 7,131,786 outstanding shares of the common stock of Aqua Metals, Inc.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AQUA METALS, INC.
Condensed Consolidated Balance Sheets - Unaudited
(in thousands, except share and per share amounts)
| | | September 30, 2024 | | | December 31, 2023 | |
| ASSETS | | | | | | | | |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | $ | 2,950 | | | $ | 16,522 | |
| Note receivable - LINICO | | | 250 | | | | 600 | |
| Accounts receivable | | | 486 | | | | 67 | |
| Inventory | | | 330 | | | | 929 | |
| Prepaid expenses and other current assets | | | 148 | | | | 181 | |
| Total current assets | | | 4,164 | | | | 18,299 | |
| | | | | | | | | |
| Non-current assets | | | | | | | | |
| Property, plant and equipment, net | | | 16,615 | | | | 10,347 | |
| Intellectual property, net | | | 164 | | | | 281 | |
| Other assets | | | 7,540 | | | | 4,673 | |
| Total non-current assets | | | 24,319 | | | | 15,301 | |
| | | | | | | | | |
| Total assets | | $ | 28,483 | | | $ | 33,600 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable | | $ | 1,477 | | | $ | 1,836 | |
| Accrued expenses | | | 2,314 | | | | 2,467 | |
| Lease liability, current portion | | | 286 | | | | 275 | |
| Note payable, current portion | | | 2,988 | | | | 35 | |
| Total current liabilities | | | 7,065 | | | | 4,613 | |
| | | | | | | | | |
| Non-current liabilities | | | | | | | | |
| Lease liability, non-current portion | | | 520 | | | | — | |
| Note payable, non-current portion | | | — | | | | 2,923 | |
| Total liabilities | | | 7,585 | | | | 7,536 | |
| | | | | | | | | |
| Commitments and contingencies (see Note 12) | | | | | | | | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
| Common stock; $0.001 par value; 300,000,000 shares authorized; 6,855,991 and 6,826,572, shares issued and outstanding as of September 30, 2024, respectively and 5,415,433 and 5,394,005 shares issued and outstanding as of December 31, 2023, respectively | | | 7 | | | | 5 | |
| Additional paid-in capital | | | 261,410 | | | | 249,790 | |
| Accumulated deficit | | | (240,327 | ) | | | (223,215 | ) |
| Treasury stock, at cost; common shares: 29,419 and 21,428 as of September 30, 2024 and December 31, 2023, respectively | | | (192 | ) | | | (516 | ) |
| Total stockholders’ equity | | | 20,898 | | | | 26,064 | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 28,483 | | | $ | 33,600 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AQUA METALS, INC.
Condensed Consolidated Statements of Operations - Unaudited
(in thousands, except share and per share amounts)
| |
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
| |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Product Sales |
|
$ |
— |
|
|
$ |
25 |
|
|
$ |
— |
|
|
$ |
25 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating cost and expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Plant operations |
|
|
1,617 |
|
|
|
1,770 |
|
|
|
6,198 |
|
|
|
4,316 |
|
| Research and development cost |
|
|
398 |
|
|
|
389 |
|
|
|
1,349 |
|
|
|
1,359 |
|
| Loss (gain) on disposal of property, plant and equipment |
|
|
448 |
|
|
|
— |
|
|
|
448 |
|
|
|
(23 |
) |
| General and administrative expense |
|
|
2,748 |
|
|
|
2,815 |
|
|
|
9,170 |
|
|
|
8,670 |
|
| Total operating expense |
|
|
5,211 |
|
|
|
4,974 |
|
|
|
17,165 |
|
|
|
14,322 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(5,211 |
) |
|
|
(4,949 |
) |
|
|
(17,165 |
) |
|
|
(14,297 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income and (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
(83 |
) |
|
|
(87 |
) |
|
|
(273 |
) |
|
|
(518 |
) |
| Interest and other income |
|
|
84 |
|
|
|
489 |
|
|
|
329 |
|
|
|
903 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total other income, net |
|
|
1 |
|
|
|
402 |
|
|
|
56 |
|
|
|
385 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before income tax expense |
|
|
(5,210 |
) |
|
|
(4,547 |
) |
|
|
(17,109 |
) |
|
|
(13,912 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax expense |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(5,210 |
) |
|
$ |
(4,547 |
) |
|
$ |
(17,112 |
) |
|
$ |
(13,912 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding, basic and diluted |
|
|
6,816,190 |
|
|
|
5,080,889 |
|
|
|
6,171,512 |
|
|
|
4,455,199 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net loss per share |
|
$ |
(0.76 |
) |
|
$ |
(0.89 |
) |
|
$ |
(2.77 |
) |
|
$ |
(3.12 |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AQUA METALS, INC.
Condensed Consolidated Statements of Stockholders’ Equity - Unaudited
(in thousands, except share amounts)
| | | | | | | | | | | Additional | | | | | | | | | | | | | | | Total | |
| | | Common Stock | | | Paid-in | | | Accumulated | | | Treasury Stock | | | Stockholders' | |
| | | Shares | | | Amount | | | Capital | | | Deficit | | | Shares | | | Amount | | | Equity | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, June 30, 2024 | | | 6,690,027 | | | $ | 7 | | | $ | 260,681 | | | $ | (235,117 | ) | | | 22,832 | | | $ | (360 | ) | | $ | 25,211 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | — | | | | — | | | | 638 | | | | — | | | | — | | | | — | | | | 638 | |
| Common stock issued to employees and directors, includes RSUs vesting and withholdings to satisfy tax withholdings on RSUs vesting | | | 57,183 | | | | — | | | | (359 | ) | | | — | | | | 6,587 | | | | 168 | | | | (191 | ) |
| Common stock issued for consulting fees | | | 20,111 | | | | — | | | | 150 | | | | — | | | | — | | | | — | | | | 150 | |
| Common stock issued for ATM share sales, net of $34 transaction costs | | | 54,080 | | | | — | | | | 277 | | | | — | | | | — | | | | — | | | | 277 | |
| Common stock issued for director fees | | | 5,171 | | | | — | | | | 23 | | | | — | | | | — | | | | — | | | | 23 | |
| Net loss | | | — | | | | — | | | | — | | | | (5,210 | ) | | | — | | | | — | | | | (5,210 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, September 30, 2024 | | | 6,826,572 | | | $ | 7 | | | $ | 261,410 | | | $ | (240,327 | ) | | | 29,419 | | | $ | (192 | ) | | $ | 20,898 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, December 31, 2023 | | | 5,394,005 | | | $ | 5 | | | $ | 249,790 | | | $ | (223,215 | ) | | | 21,428 | | | $ | (516 | ) | | $ | 26,064 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | — | | | | — | | | | 2,163 | | | | — | | | | — | | | | — | | | | 2,163 | |
| Common stock issued to employees and directors, includes RSUs vesting and withholdings to satisfy tax withholdings on RSUs vesting | | | 91,542 | | | | — | | | | (875 | ) | | | — | | | | 7,991 | | | | 324 | | | | (551 | ) |
| Common stock issued for employee stock purchase plan sales | | | 3,444 | | | | — | | | | 35 | | | | — | | | | — | | | | — | | | | 35 | |
| Common stock issued for consulting fees | | | 20,111 | | | | — | | | | 150 | | | | — | | | | — | | | | — | | | | 150 | |
| Common stock and warrants issued for public offering, net of $744 transaction costs | | | 1,006,250 | | | | 1 | | | | 7,305 | | | | — | | | | — | | | | — | | | | 7,306 | |
| Common stock issued for ATM share sales, net of $87 transaction costs | | | 306,049 | | | | 1 | | | | 2,819 | | | | — | | | | — | | | | — | | | | 2,820 | |
| Common stock issued for director fees | | | 5,171 | | | | | | | | 23 | | | | — | | | | — | | | | — | | | | 23 | |
| Net loss | | | — | | | | — | | | | — | | | | (17,112 | ) | | | — | | | | — | | | | (17,112 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, September 30, 2024 | | | 6,826,572 | | | $ | 7 | | | $ | 261,410 | | | $ | (240,327 | ) | | | 29,419 | | | $ | (192 | ) | | $ | 20,898 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, June 30, 2023 | | | 4,175,372 | | | $ | 4 | | | $ | 224,958 | | | $ | (208,642 | ) | | | 25,532 | | | $ | (577 | ) | | $ | 15,743 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | — | | | | — | | | | 593 | | | | — | | | | — | | | | — | | | | 593 | |
| Common stock issued to employees and directors, includes RSUs vesting and withholdings to satisfy tax withholdings on RSUs vesting | | | 33,202 | | | | — | | | | (576 | ) | | | — | | | | (4,104 | ) | | | 61 | | | | (515 | ) |
| Common stock issued for public offering, net of $1,713 transaction costs | | | 909,650 | | | | 1 | | | | 18,317 | | | | — | | | | — | | | | — | | | | 18,318 | |
| Common stock issued for Yulho agreement, net of $372 transaction costs | | | 227,273 | | | | — | | | | 4,629 | | | | — | | | | — | | | | — | | | | 4,629 | |
| Warrant expense related to Yulho agreement | | | — | | | | — | | | | 181 | | | | — | | | | — | | | | — | | | | 181 | |
| Common stock issued for ATM share sales, net of $31 transaction costs | | | 41,730 | | | | — | | | | 1,005 | | | | — | | | | — | | | | — | | | | 1,005 | |
| Common stock issued for director fees | | | 1,362 | | | | — | | | | 32 | | | | — | | | | — | | | | — | | | | 32 | |
| Net loss | | | — | | | | — | | | | — | | | | (4,547 | ) | | | — | | | | — | | | | (4,547 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, September 30, 2023 | | | 5,388,589 | | | $ | 5 | | | $ | 249,139 | | | $ | (213,189 | ) | | | 21,428 | | | $ | (516 | ) | | $ | 35,439 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, December 31, 2022 | | | 3,974,088 | | | $ | 4 | | | $ | 220,189 | | | $ | (199,277 | ) | | | — | | | $ | — | | | $ | 20,916 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | | | — | | | | — | | | | 1,878 | | | | — | | | | — | | | | — | | | | 1,878 | |
| RSUs issued for consulting services | | | 789 | | | | — | | | | 12 | | | | — | | | | — | | | | — | | | | 12 | |
| Common stock issued to employees and directors, includes RSUs vesting and withholdings to satisfy tax withholdings on RSUs vesting | | | 77,240 | | | | — | | | | (575 | ) | | | — | | | | 21,428 | | | | (516 | ) | | | (1,091 | ) |
| Common stock issued for public offering, net of $1,713 transaction costs | | | 909,650 | | | | 1 | | | | 18,317 | | | | — | | | | — | | | | — | | | | 18,318 | |
| Common stock issued for Yulho agreement, net of $372 transaction costs | | | 227,273 | | | | — | | | | 4,629 | | | | — | | | | — | | | | — | | | | 4,629 | |
| Warrant expense related to Yulho agreement | | | — | | | | — | | | | 181 | | | | — | | | | — | | | | — | | | | 181 | |
| Common stock issued for employee stock purchase plan sales | | | 9,635 | | | | — | | | | 122 | | | | — | | | | — | | | | — | | | | 122 | |
| Common stock issued for class action settlement | | | 23,468 | | | | — | | | | 501 | | | | — | | | | — | | | | — | | | | 501 | |
| Common stock issued for ATM share sales, net of $119 transaction costs | | | 162,215 | | | | — | | | | 3,789 | | | | — | | | | — | | | | — | | | | 3,789 | |
| Common stock issued for director fees | | | 4,231 | | | | — | | | | 96 | | | | — | | | | — | | | | — | | | | 96 | |
| Net loss | | | — | | | | — | | | | — | | | | (13,912 | ) | | | — | | | | — | | | | (13,912 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances, September 30, 2023 | | | 5,388,589 | | | $ | 5 | | | $ | 249,139 | | | $ | (213,189 | ) | | | 21,428 | | | $ | (516 | ) | | $ | 35,439 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
AQUA METALS, INC.
Condensed Consolidated Statements of Cash Flows - Unaudited
(in thousands)
| |
|
Nine Months Ended September 30, |
|
| |
|
2024 |
|
|
2023 |
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(17,112 |
) |
|
$ |
(13,912 |
) |
| Reconciliation of net loss to net cash used in operating activities |
|
|
|
|
|
|
|
|
| Depreciation and ROU asset amortization |
|
|
867 |
|
|
|
770 |
|
| Amortization of intellectual property |
|
|
117 |
|
|
|
135 |
|
| Fair value of common stock issued for director fees |
|
|
23 |
|
|
|
96 |
|
| Fair value of common stock issued for consulting services |
|
|
150 |
|
|
|
12 |
|
| Stock-based compensation |
|
|
2,163 |
|
|
|
1,880 |
|
| Warrant expense |
|
|
— |
|
|
|
181 |
|
| Amortization of deferred financing costs |
|
|
29 |
|
|
|
119 |
|
| Loss (gain) on disposal of property, plant and equipment |
|
|
448 |
|
|
|
(23 |
) |
| Inventory net realizable value adjustment |
|
|
268 |
|
|
|
— |
|
| Write off of debt issuance costs |
|
|
563 |
|
|
|
— |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
| Proceeds from leasing of building |
|
|
— |
|
|
|
12,278 |
|
| Accounts receivable |
|
|
(419 |
) |
|
|
(64 |
) |
| Inventory |
|
|
330 |
|
|
|
(612 |
) |
| Prepaid expenses and other current assets |
|
|
33 |
|
|
|
91 |
|
| Accounts payable |
|
|
(43 |
) |
|
|
322 |
|
| Accrued expenses |
|
|
1,030 |
|
|
|
1,181 |
|
| Other assets and liabilities |
|
|
(84 |
) |
|
|
(232 |
) |
| Net cash provided by (used in) operating activities |
|
|
(11,637 |
) |
|
|
2,222 |
|
| |
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
| Purchases of property, plant and equipment |
|
|
(7,452 |
) |
|
|
(6,142 |
) |
| Proceeds from sale of equipment |
|
|
15 |
|
|
|
70 |
|
| Proceeds from note receivable |
|
|
350 |
|
|
|
— |
|
| Equipment deposits |
|
|
(3,975 |
) |
|
|
(222 |
) |
| Net cash used in investing activities |
|
|
(11,062 |
) |
|
|
(6,294 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
| Proceeds from issuance of common stock and warrants, net of transaction costs |
|
|
7,306 |
|
|
|
22,947 |
|
| Proceeds from employee stock purchase plan |
|
|
35 |
|
|
|
14 |
|
| Payments on note payable |
|
|
— |
|
|
|
(6,000 |
) |
| Principal payments on finance leases |
|
|
(58 |
) |
|
|
— |
|
| Proceeds from note payable, net |
|
|
— |
|
|
|
2,931 |
|
| Cash paid for tax withholdings on RSUs vesting |
|
|
(552 |
) |
|
|
(1,092 |
) |
| Debt issuance costs |
|
|
(424 |
) |
|
|
— |
|
| Proceeds from ATM, net |
|
|
2,820 |
|
|
|
3,788 |
|
| Net cash provided by financing activities |
|
|
9,127 |
|
|
|
22,588 |
|
| |
|
|
|
|
|
|
|
|
| Net decrease in cash and cash equivalents |
|
|
(13,572 |
) |
|
|
18,516 |
|
| Cash and cash equivalents at beginning of period |
|
|
16,522 |
|
|
|
7,082 |
|
| Cash and cash equivalents at end of period |
|
$ |
2,950 |
|
|
$ |
25,598 |
|
| |
|
Nine Months Ended September 30, |
|
| |
|
2024 |
|
|
2023 |
|
| Supplemental disclosure of cash flows information |
|
|
|
|
|
|
|
|
| Cash paid for income taxes |
|
$ |
3 |
|
|
$ |
— |
|
| Cash paid for interest |
|
$ |
249 |
|
|
$ |
399 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental disclosure of non-cash transactions |
|
|
|
|
|
|
|
|
| Acquisitions of property, plant and equipment included in accounts payable |
|
$ |
758 |
|
|
$ |
39 |
|
| Acquisitions of property, plant and equipment included in accrued expenses |
|
$ |
646 |
|
|
$ |
674 |
|
| Equity included in accrued expenses |
|
$ |
— |
|
|
$ |
608 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Notes to Condensed Consolidated Financial Statements
1. Organization
Aqua Metals (NASDAQ: AQMS) is engaged in the business of applying its commercialized clean, water-based recycling technology principles to develop the clean and cost-efficient recycling solutions for both lead and lithium-ion (“Li”) batteries. Our recycling process is a patented hydro- and electrometallurgical technology that is an innovative, proprietary and patented process we developed and named AquaRefining. AquaRefining is a low-emissions, closed-loop recycling technology that replaces polluting furnaces and hazardous chemicals with electricity-powered electroplating to recover valuable metals and materials from spent batteries with higher purity, lower emissions, and with minimal waste. The modular “Aqualyzers” cleanly generate ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy.
We are in the process of demonstrating that Li AquaRefining, which is fundamentally non-polluting, can create the highest quality and highest yields of recovered minerals from lithium-ion batteries with lower waste streams and lower costs than existing alternatives.
Our focus for the lead market is providing equipment and licensing of our lead acid battery recycling technologies in an enabler model which allows us to work with anyone in the industry globally and address the entire marketplace. Our focus for the lithium market includes operating our first-of-a-kind lithium battery recycling facility, utilizing electricity to recycle instead of intensive chemical processes, fossil fuels, or high-temperature furnaces and licensing.
Reverse Stock Split
Effective November 5, 2024, the Company effected a one-for-20 reverse stock split of its issued and outstanding common shares. Accordingly, all common share, stock option, per common share and warrant amounts for all periods presented in the condensed consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this reverse stock split.
Liquidity and Going Concern Assessment
For the nine months ended September 30, 2024 and 2023, the Company reported a net loss of $17.1 million and $13.9 million, respectively, and negative cash from operations of $11.6 million and a cash inflow $2.2 million, respectively, including non-recurring proceeds of $12.3 million from the leasing and sale of the building during the nine months ended September 30, 2023. As of September 30, 2024, the Company had cash and cash equivalents of approximately $3.0 million, current liabilities of $7.1 million and an accumulated deficit of $240.3 million. The Company's current liabilities of $7.1 million include the note payable with Summit Investment Services, LLC in the amount of approximately $3 million due on February 1, 2025 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future.
Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through the next twelve months from the date of this filing.
The accompanying condensed consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.
Reclassification of Prior Period Financial Statements
For the nine months ended September 30, 2023, the gain on disposal of property, plant and equipment was presented in the Condensed Consolidated Statement of Operations within loss from operations. This reclassification was made for the year ended December 31, 2023 and presented in the Annual Report on Form 10-K for the year then ended.
We have reclassified the prior period Condensed Consolidated Statement of Operations included in this filing to conform to the current period presentation, as shown in the following table (in thousands):
| | | Nine Months Ended September 30, 2023 | |
| | | As Reported | | | Reclassification | | | As Reclassified | |
| Operating cost and expense | | | | | | | | | | | | |
| Gain on disposal of property, plant and equipment | | | — | | | | (23 | ) | | | (23 | ) |
| Total operating expense | | $ | 14,345 | | | $ | (23 | ) | | $ | 14,322 | |
| Income (loss) from operations | | $ | (14,320 | ) | | $ | 23 | | | $ | (14,297 | ) |
| | | | | | | | | | | | | |
| Other income and expense | | | | | | | | | | | | |
| Gain on disposal of property, plant and equipment | | | 23 | | | | (23 | ) | | | — | |
| Total other income (expense), net | | $ | 408 | | | $ | (23 | ) | | $ | 385 | |
Notes to Condensed Consolidated Financial Statements
2. Summary of significant accounting policies
The significant accounting policies and estimates used in preparation of the condensed consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission, or the SEC, on March 28, 2024. There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2024.
Basis of presentation
The accompanying unaudited condensed consolidated financial statements of Aqua Metals, Inc. and subsidiaries (collectively, the “Company” or “Aqua Metals”) have been prepared in accordance with the interim reporting requirements of Form 10-Q, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the Company's audited consolidated financial statements for the period ended December 31, 2023, which are included on Form 10-K filed with the Securities and Exchange Commission on March 28, 2024. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for annual consolidated financial statements. In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary to present fairly each of the condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and September 30, 2023, the condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2024 and September 30, 2023 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and September 30, 2023, as applicable, have been made. The condensed consolidated balance sheet as of December 31, 2023 has been derived from the Company’s audited consolidated financial statements as of such date, but it does not include all disclosures required by U.S. GAAP for annual presentation.
The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for the year ending December 31, 2024.
Principles of consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned subsidiaries. Inter-company accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of the condensed consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of expenses during the period. Significant items subject to such estimates and assumptions include the carrying amount and valuation of long-lived assets, valuation allowances for deferred tax assets, and the determination of stock-based compensation expense. Actual results could differ from those estimates.
Notes to Condensed Consolidated Financial Statements
Net loss per share
Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method or the if-converted method, as applicable. For purposes of this calculation, stock options, restricted stock units (RSUs) and warrants to purchase common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following shares underlying outstanding convertible notes, stock options, RSUs and warrants to purchase common stock were anti-dilutive due to a net loss in the periods presented and, therefore, were excluded from the dilutive weighted average securities computation for the three and nine months ended September 30, as indicated below:
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| Excluded potentially dilutive weighted average securities (1): | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| | | | | | | | | | | | | | | | | |
| Unvested restricted stock units | | | 282,016 | | | | 251,736 | | | | 340,302 | | | | 276,271 | |
| Options to purchase common stock | | | — | | | | 5,790 | | | | — | | | | 25,299 | |
| Financing warrants to purchase common stock | | | 1,073,856 | | | | 21,833 | | | | 562,639 | | | | 7,569 | |
| Total potential dilutive weighted average securities | | | 1,355,872 | | | | 279,359 | | | | 902,941 | | | | 309,139 | |
| | (1) Securities are presented on a weighted average outstanding calculation as required if the securities were dilutive and adjusted to give effect to the November 4, 2024 reverse stock split. |
Segment and geographic information
Our chief operating decision maker (“CODM”) is the Chief Executive Officer. Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the CODM in deciding how to allocate resources and in assessing performance. The CODM views its operations and manages its business in one operating segment.
Concentration of credit risk
The Company did not generate revenue during the three and nine months ended September 30, 2024 and 2023, respectively. The Company had no trade receivables as of September 30, 2024 and December 31, 2023. The accounts receivable balance on the Company's consolidated balance sheet as of September 30, 2024 consisted of proceeds from sale of raw materials and proceeds from a non-recurring engineering (NRE) arrangement with 6K Energy. The balance as of December 31, 2023 consisted of proceeds from a NRE arrangement with 6K Energy.
Notes to Condensed Consolidated Financial Statements
Recent accounting pronouncements
Recently issued accounting pronouncements not yet adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. We are currently evaluating the impact that this guidance will have on the disclosures within our consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will require additional disclosures in our consolidated financial statements, once adopted.
3. Revenue recognition
The Company has historically generated revenues by recycling lead acid batteries (“LABs”) and selling the recovered lead to its customers.
The Company was not in commercial production during the three and nine months ended September 30, 2024 and 2023, respectively. Historically, Company products transferred to customers at a single point in time accounted for 100% of its revenue.
4. Note receivable
During the year ended December 31, 2023, the Company sold its $2,000,000 stock investment in LINICO and recorded an impairment of $1,400,000 and a note receivable of $600,000. The proceeds will be received over a 12-month installment which began in January 2024. The balance of the note receivable is $250,000 and $600,000 as of September 30, 2024 and December 31, 2023, respectively.
The Company accounted for the LINICO investment under ASC 321, Investments-Equity Securities, using the measurement alternative of recording at cost as the investment in LINICO doesn’t have a readily determinable fair value.
5. Inventory
Inventory consisted of the following (in thousands):
| |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
| |
|
|
|
|
|
|
|
|
| Work in process |
|
$ |
— |
|
|
$ |
135 |
|
| Raw materials |
|
|
330 |
|
|
|
794 |
|
| Total inventory |
|
$ |
330 |
|
|
$ |
929 |
|
We write-down inventory when evidence exists that the net realizable value of inventory is less than the cost. During the nine months ended September 30, 2024, we recorded write-downs of $268,000 which were included in plant operations in the condensed consolidated statement of operations.
Notes to Condensed Consolidated Financial Statements
6. Property, plant and equipment, net
Property, plant and equipment, net, consisted of the following (in thousands):
| | | Useful Life | | | | | | | | | |
| Asset Class | | (Years) | | | September 30, 2024 | | | December 31, 2023 | |
| | | | | | | | | | | | | |
| Operational equipment | | | 3 - 10 | | | $ | 3,551 | | | $ | 3,581 | |
| Lab equipment | | | 5 | | | | 1,128 | | | | 817 | |
| Computer equipment | | | 3 | | | | 107 | | | | 89 | |
| Office furniture and equipment | | | 3 | | | | 87 | | | | 90 | |
| Leasehold improvements | | | 2.5 | | | | 80 | | | | 80 | |
| Land | | | - | | | | 1,141 | | | | 1,141 | |
| Building | | | 39 | | | | 3,131 | | | | 3,131 | |
| Equipment under construction | | | | | | | 9,643 | | | | 3,047 | |
| | | | | | | | 18,868 | | | | 11,976 | |
| Less: accumulated depreciation | | | | | | | (2,253 | ) | | | (1,629 | ) |
| | | | | | | | | | | | | |
| Total property, plant and equipment, net | | | | | | $ | 16,615 | | | $ | 10,347 | |
Property, plant and equipment depreciation expense was $229,000 and $682,000 for the three and nine months ended September 30, 2024 and $254,000 and $591,000 for the three and nine months ended September 30, 2023, respectively. Equipment under construction is comprised of our lithium-ion battery recycling commercial equipment along with various components being manufactured or installed by the Company.
7. Other assets
Other assets consist of the following (in thousands):
| | | September 30, 2024 | | | December 31, 2023 | |
| | | | | | | | | |
| Equipment deposits (1) | | $ | 6,920 | | | $ | 4,291 | |
| Nevada facilities Right of Use Assets (2) | | | 600 | | | | 222 | |
| Other assets | | | 20 | | | | 160 | |
| Total other assets, non-current | | $ | 7,540 | | | $ | 4,673 | |
(1) Deposits for equipment to be acquired and utilized at the Company's Phase One build-out of our recycling campus at Tahoe-Reno Industrial Center (TRIC).
(2) See Footnote 9.
8. Accrued expenses
Accrued expenses consist of the following (in thousands):
| | | September 30, 2024 | | | December 31, 2023 | |
| | | | | | | | | |
| Property, plant and equipment related | | $ | 674 | | | $ | 1,857 | |
| Payroll related | | | 1,359 | | | | 506 | |
| Professional services | | | 90 | | | | 26 | |
| Other | | | 191 | | | | 78 | |
| Total accrued expenses | | $ | 2,314 | | | $ | 2,467 | |
Notes to Condensed Consolidated Financial Statements
9. Leases
As of September 30, 2024, the Company maintained two finance leases for equipment and two operating leases for real estate. The operating leases have current terms of 36 and 37 months and include one or more options to extend the duration of the agreements. These operating leases are included in "Other assets" on the Company's condensed consolidated balance sheets and represent the Company's right to use the underlying assets for the term of the leases. The Company's obligation to make lease payments are included in "Lease liability, current portion" and "Lease liability, non-current portion" on the Company's condensed consolidated balance sheets.
On March 14, 2024, the Company extended its operating lease for its headquarters located at 5370 Kietzke Lane, Reno, NV. The lease extension was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the Right-of-Use (“ROU”) assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.61%, which resulted in an increase of the ROU asset of $170,000 and an increase in the operating lease liabilities of $166,000.
On June 9, 2024, the Company extended its operating lease for its Innovation Center located at 160 Denmark Dr, McCarran, NV. The lease extension was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the Right-of-Use (“ROU”) assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.52%, which resulted in an increase of the ROU asset of $347,000 and an increase in the operating lease liabilities of $324,000.
The Company currently maintains two finance leases for equipment. In November 2021, the Company entered into a finance lease for a modular laboratory which expires in October 2024. On April 1, 2024 the Company entered into a finance lease for laboratory equipment which expires in 2029.
Information related to the Company's right-of-use assets and related lease liabilities were as follows (in thousands):
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| Cash paid for operating lease liabilities | | $ | 68 | | | $ | 66 | | | $ | 204 | | | $ | 199 | |
| Operating lease cost | | $ | 72 | | | $ | 65 | | | $ | 210 | | | $ | 196 | |
| | | | | | | | | | | | | | | | | |
| Cash paid for finance lease liabilities | | $ | 25 | | | $ | 15 | | | $ | 64 | | | $ | 46 | |
| Interest expense | | $ | 2 | | | $ | 2 | | | $ | 6 | | | $ | 5 | |
| | | September 30, 2024 | | | September 30, 2023 | |
| Weighted-average remaining lease term (years) - operating leases | | | 2.4 | | | | 1.1 | |
| Weighted-average discount rate - operating leases | | | 10.48 | % | | | 6.17 | % |
| | | | | | | | | |
| Weighted-average remaining lease term (years) - finance leases | | | 2.3 | | | | 1.1 | |
| Weighted-average discount rate - finance leases | | | 4.59 | % | | | 8.17 | % |
| | | | | | | | | |
| Right-of-use assets obtained in exchange for lease obligations: | | | | | | | | |
| Operating leases | | $ | 600 | | | $ | — | |
Future maturities of lease liabilities as of September 30, 2024 are as follows (in thousands):
| Due in 12-month period ended September 30, | | | | | | | | |
| | | Operating Leases | | | Finance Leases | |
| 2024 | | $ | 71 | | | $ | 16 | |
| 2025 | | | 291 | | | | 47 | |
| 2026 | | | 182 | | | | 47 | |
| 2027 | | | 149 | | | | 48 | |
| Thereafter | | | — | | | | 60 | |
| Less imputed interest | | | (84 | ) | | | (21 | ) |
| Total lease liabilities | | $ | 609 | | | $ | 197 | |
| | | | | | | | | |
| Current lease liabilities | | $ | 242 | | | $ | 44 | |
| Non-current lease liabilities | | | 367 | | | | 153 | |
| Total lease liabilities | | $ | 609 | | | $ | 197 | |
Notes to Condensed Consolidated Financial Statements
10. Note payable
On February 1, 2023, Aqua Metals Reno, Inc., our wholly-owned subsidiary, entered into a Loan Agreement with Summit Investment Services, LLC, a Nevada limited liability company (the “Lender”), pursuant to which the Lender provided us with a loan in the amount of $3 million. The loan proceeds were used to purchase a building located at 2999 Waltham Way McCarran, NV 89434 (the “Building”). The loan accrues interest at a fixed annual rate of 9.50%. Interest-only payments are due monthly for the first twenty-four months and the principal and all unpaid interest is due on February 1, 2025. We have the right to prepay the loan at any time, provided that we must pay guaranteed minimum interest of $213,750 (9-months of interest). The Loan Agreement includes representations, warranties, and affirmative and negative covenants that are customary of institutional loan agreements. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all of the covenants. The loan is collateralized by a first priority lien on the building and site improvements, and is guaranteed by Aqua Metals, Inc.
Note payable is comprised of the following (in thousands):
| | | September 30, 2024 | | | December 31, 2023 | |
| | | | | | | | | |
| Note payable, current portion | | | | | | | | |
| Summit Investment Services, LLC | | $ | 3,000 | | | $ | 35 | |
| Less issuance costs | | | (12 | ) | | | — | |
| Total note payable, current portion | | $ | 2,988 | | | $ | 35 | |
| | | | | | | | | |
| Note payable, non-current portion | | | | | | | | |
| Summit Investment Services, LLC | | $ | — | | | $ | 3,000 | |
| Less issuance costs | | | — | | | | (77 | ) |
| Total note payable, non-current portion | | $ | — | | | $ | 2,923 | |
11. Stockholders’ equity
Shares issued
During the nine months ended September 30, 2024, the Company issued 129,857 shares of common stock upon vesting of Restricted Stock Units ("RSUs") granted by the Company to management and employees, including 44,261 of reissued treasury stock. We withheld 52,252 shares to satisfy approximately $552,000 of employees’ tax obligations during the nine months ended September 30, 2024. We treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs in a similar manner as common stock repurchases and reported as treasury stock.
During the nine months ended September 30, 2024, the Company issued 20,111 shares of common stock for consulting services.
During the nine months ended September 30, 2024, the Company issued 7,330 shares of common stock upon vesting of RSUs granted to Board members.
During the nine months ended September 30, 2024, the Company issued 5,171 shares of common stock to Board members related to director fees.
During the nine months ended September 30, 2024, the Company issued 6,607 shares of common stock to a former employee related to a severance agreement.
During the nine months ended September 30, 2024, the Company issued 3,444 shares of common stock pursuant to the employee stock purchase plan.
During the nine months ended September 30, 2024, the Company issued 306,049 shares of common stock pursuant to the at the market issuance sales agreement for net proceeds of $2.8 million.
In May 2024, the Company completed a public offering of 1,006,250 shares of its common stock at the public offering price of $7.80 per share. In connection with the sale of common stock, the Company issued warrants to purchase shares of common stock at the rate of one warrant for every share of purchased common stock, at the offering price of $0.20 per warrant. After the deduction of the underwriter’s discount and expenses payable by us, we received net proceeds of $7.3 million. The Company used the relative fair value method to allocate the net proceeds of approximately $7.3 million between the common stock and the warrants. As presented below, the Company recorded the fair value of the warrants of $3.1 million and common stock of $4.2 million.
Notes to Condensed Consolidated Financial Statements
During the nine months ended September 30, 2023, the Company issued 70,694 shares of common stock upon vesting of Restricted Stock Units ("RSUs") granted by the Company to management and employees, including 25,532 of reissued treasury stock. We withheld 46,960 shares to satisfy approximately $1,091,000 of employees’ tax obligations during the nine months ended September 30, 2023. We treat shares of common stock withheld for tax purposes on behalf of our employees in connection with the vesting of RSUs in a similar manner as common stock repurchases and reported as treasury stock.
During the nine months ended September 30, 2023, the Company issued 6,546 shares of common stock upon vesting of RSUs granted to Board members.
During the nine months ended September 30, 2023, the Company issued 789 shares of common stock to a former Board member to fulfill obligations related to consulting services.
During the nine months ended September 30, 2023, the Company issued 4,231 shares of common stock to a Board member related to director fees.
During the nine months ended September 30, 2023, the Company issued 23,468 shares of common stock upon the settlement of the securities class action lawsuit.
During the nine months ended September 30, 2023, the Company issued 9,635 shares of common stock pursuant to the employee stock purchase plan.
In July 2023, the Company completed a public offering of 909,650 shares of its common stock, for net proceeds of $18.3 million.
In August 2023, the Company issued 227,273 shares of its common stock pursuant to that certain Securities Purchase Agreement (the “Yulho SPA”), with Yulho Co, Ltd., for net proceeds of $4.6 million.
During the nine months ended September 30, 2023, the Company issued 162,215 shares of common stock pursuant to the At The Market Issuance Sales Agreement for net proceeds of $3.8 million.
Warrant issued
In connection with the above-described May 2024 public offering, the Company issued a warrant to purchase 39,125 shares of the Company's common stock to the underwriter of the Company's public offering, equal to 2% of the shares and the number of shares underlying the warrants sold in the offering, for relative fair value of $0.1 million. The warrants are exercisable at $9.75 per share on the closing date, May 14, 2024. The warrants have an expiration date of 5 years from the date of issuance and will expire on May 14, 2029. The relative fair value of the warrants was recorded in the condensed consolidated balance sheet in additional paid-in capital in stockholders' equity as the warrants are indexed to the Company’s common stock and meet the conditions for equity classification.
In May 2024, in conjunction with the Company's public offering, the Company issued a warrant to purchase up to 1,006,250 shares of the Company's common stock, for the relative fair value of $3 million. The warrants are exercisable at $7.80 per share. The warrants have an expiration date of 5 years from the date of issuance and will expire on May 14, 2029. The relative fair value of the warrants was recorded in the condensed consolidated balance sheet in additional paid-in capital in stockholders' equity as the warrants are indexed to the Company’s common stock and meet the conditions for equity classification.
In July 2023, the Company issued a warrant to purchase 18,193 shares of the Company's common stock to the underwriter of the Company's public offering, equal to 2% of the 909,650 shares sold. The warrants are exercisable at $27.50 per share, commencing six months after July 17, 2023. The warrants have an expiration date of 5 years from the date of issuance and will expire on July 17, 2028.
In August 2023, the Company issued a warrant to purchase 10,288 shares of the Company's common stock to the underwriter of the transaction in connection with the Yulho SPA. The warrants have an expiration date of 5 years from the date of issuance and are exercisable immediately at $25 per share. The warrant will expire on August 4, 2028.
Stock-based compensation
The stock-based compensation expense was allocated as follows:
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
| Plant operations | | $ | 28 | | | $ | 35 | | | $ | 213 | | | $ | 82 | |
| Research and development cost | | | 6 | | | | 8 | | | | 42 | | | | 48 | |
| General and administrative expense | | | 604 | | | | 551 | | | | 1,908 | | | | 1,750 | |
| Total | | $ | 638 | | | $ | 594 | | | $ | 2,163 | | | $ | 1,880 | |
Notes to Condensed Consolidated Financial Statements
2019 Stock Incentive Plan
In 2019, our board of directors adopted the Aqua Metals, Inc. 2019 Stock Incentive Plan (the “2019 Plan”). On May 23, 2024, 475,000 shares of common stock was authorized and added to the plan. A total of 1,400,000 shares of common stock was authorized for issuance pursuant to the 2019 Plan. The 2019 Plan provides for the following types of stock-based awards: incentive stock options; non-statutory stock options; restricted stock; and performance stock. The 2019 Plan, under which equity incentives may be granted to employees and directors under incentive and non-statutory agreements, requires that the option price may not be less than the fair value of the stock at the date the option is granted. Option awards are exercisable until their expiration, which may not exceed 10 years from the grant date. As of September 30, 2024, there were 570,743 remaining shares available for future grants.
| | | | | | | | | |
| | | Number of Shares | | | Number of | |
| | | Available for | | | RSUs | |
| | | Grant | | | Outstanding | |
| Balances, December 31, 2023 | | | 71,023 | | | | 432,725 | |
| Granted | | | (57,126 | ) | | | 57,126 | |
| Exercised/ Released | | | — | | | | (169,075 | ) |
| Forfeited | | | 61,081 | | | | (61,081 | ) |
| Returned to Plan | | | 52,251 | | | | — | |
| Addition to 2019 Plan | | | 475,000 | | | | — | |
| Expiration of 2014 Plan | | | (31,486 | ) | | | — | |
| Balances, September 30, 2024 | | | 570,743 | | | | |