aqms20210930

aqms20210930_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 September 30, 2021

☐	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 October 29, 2021, there were 69,830,488 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	14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	20
Item 6.	Exhibits	28

	*September 30, 2021*			*December 31, 2020*
	*(unaudited)*			*(Note 2)*
ASSETS
Current assets
Cash and cash equivalents	$	11,700		$	6,533
Accounts receivable		250			32
Lease receivable, current portion		821			—
Inventory		333			1,091
Assets held for sale		3,179			—
Prepaid expenses and other current assets		309			702
Total current assets		16,592			8,358

Non-current assets
Property and equipment, net		1,822			24,883
Intellectual property, net		685			819
Investment in LINICO		1,500			—
Lease receivable, non-current portion		15,811			—
Other assets		917			1,078
Total non-current assets		20,735			26,780

Total assets	$	37,327		$	35,138

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	1,063		$	1,552
Accrued expenses		4,705			1,253
Lease liability, current portion		501			620
Notes payable, current portion		—			29
Total current liabilities		6,269			3,454

Lease liability, non-current portion		269			242
Notes payable, non-current portion		—			303
Total liabilities		6,538			3,999

Commitments and contingencies

Stockholders’ equity
Common stock; $0.001 par value; 100,000,000 shares authorized; 69,823,664 and 64,461,065 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		70			64
Additional paid-in capital		209,860			196,728
Accumulated deficit		(179,141	)		(165,653	)
Total stockholders’ equity		30,789			31,139

Total liabilities and stockholders’ equity	$	37,327		$	35,138

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2021*			*2020*			*2021*			*2020*

Product sales	$	—		$	90		$	—		$	108

Operating cost and expense
Cost of product sales		1,670			1,635			5,417			4,395
Research and development cost		273			210			738			669
General and administrative expense		2,681			1,656			7,109			6,286
Total operating expense		4,624			3,501			13,264			11,350

Loss from operations		(4,624	)		(3,411	)		(13,264	)		(11,242	)

Other income and (expense)
Insurance proceeds net of related expenses		4,344			1,722			4,792			1,467
PPP loan forgiveness		—			—			332			—
Loss on disposal of property and equipment		(1,411	)		—			(5,665	)		—
Interest expense		(5	)		(166	)		(15	)		(513	)
Interest and other income		310			18			334			43

Total other income (expense), net		3,238			1,574			(222	)		997

Loss before income tax expense		(1,386	)		(1,837	)		(13,486	)		(10,245	)

Income tax expense		—			—			(2	)		(2	)

Net loss	$	(1,386	)	$	(1,837	)	$	(13,488	)	$	(10,247	)

Weighted average shares outstanding, basic and diluted		69,609,070			60,998,971			68,223,115			60,242,093

Basic and diluted net loss per share	$	(0.02	)	$	(0.03	)	$	(0.20	)	$	(0.17	)

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

Balances, June 30, 2021		68,607,326	$	69	$	209,382	$	(177,755	)	$	31,696

Stock-based compensation		—		—		399		—			399
RSUs issued for consulting services		—		—		79		—			79
Common stock issued to employees and directors, includes RSUs vesting		1,216,338		1		—		—			1
Net loss		—		—		—		(1,386	)		(1,386	)

Balances, September 30, 2021		69,823,664	$	70	$	209,860	$	(179,141	)	$	30,789

Balances, December 31, 2020		64,461,065	$	64	$	196,728	$	(165,653	)	$	31,139

Stock-based compensation		—		—		1,696		—			1,696
RSUs issued for consulting services		—		—		114		—			114
Common stock issued to employees and directors, includes RSUs vesting		2,100,749		2		—		—			2
Common stock issued upon exercise of employee stock options		347,901		—		727		—			727
Common stock issued upon warrant exercise		65,590		—		—		—			—
Common stock issued for ATM share sales, net of $311 transaction costs		2,473,359		3		9,328		—			9,331
Common stock issued related to LINICO investment		375,000		1		1,267		—			1,268
Net loss		—		—		—		(13,488	)		(13,488	)

Balances, September 30, 2021		69,823,664	$	70	$	209,860	$	(179,141	)	$	30,789

Balances, June 30, 2020		60,274,096	$	60	$	190,956	$	(148,301	)	$	42,715

Stock-based compensation		—		—		519		—			519
Common stock issued to employees and directors, includes RSUs vesting		843,830		1		—		—			1
Net loss		—		—		—		(1,837	)		(1,837	)

Balances, September 30, 2020		61,117,926	$	61	$	191,475	$	(150,138	)	$	41,398

Balances, December 31, 2019		57,997,780	$	58	$	189,422	$	(139,891	)	$	49,589

Stock-based compensation		—		—		2,029		—			2,029
Common stock issued to employees and directors, includes RSUs vesting		3,097,068		3		—		—			3
Common stock issued for consulting services		23,078		—		24		—			24
Net loss		—		—		—		(10,247	)		(10,247	)

Balances, September 30, 2020		61,117,926	$	61	$	191,475	$	(150,138	)	$	41,398

	September 30,
Excluded potentially dilutive securities (1):	2021		2020

Options to purchase common stock		1,038,439		1,390,340
Unvested restricted stock units		3,652,686		3,947,819
Financing warrants to purchase common stock		6,372		103,500
Total potential dilutive securities		4,697,497		5,441,659

	September 30, 2021		December 31, 2020

Finished goods	$	219	$	2
Work in process		26		247
Raw materials		88		842
Total inventory	$	333	$	1,091

	Useful Life
Asset Class	(Years)		September 30, 2021			December 31, 2020

Operational equipment		3 - 10	$	867		$	12,126
Lab equipment		5		498			524
Computer equipment		3		59			222
Office furniture and equipment		3		164			221
Land		-		—			1,047
Building		39		—			19,508
Equipment under construction				1,681			3,597
				3,269			37,245
Less: accumulated depreciation				(1,447	)		(12,362	)

Total property and equipment, net			$	1,822		$	24,883

	*September 30, 2021*		*December 31, 2020*

Building repair	$	2,274	$	—
Payroll related		1,003		479
Property and equipment related		872		715
Class action settlement		500
Professional		21		—
Other		35		59
	$	4,705	$	1,253

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Cash paid for operating lease liabilities	$	167	$	162	$	494	$	480
Operating lease cost	$	155	$	144	$	444	$	433

	September 30, 2021
Weighted-average remaining lease term (in years)		2.0
Weighted-average discount rate		7.83	%

	*Nine Months Ended September 30,*
	*2021*			*2020*
Supplemental disclosure of cash flows information
Cash paid for income taxes	$	2		$	2
Cash paid for interest	$	—		$	448

Supplemental disclosure of non-cash transactions
Change in accounts receivable resulting from insurance funds held in escrow	$	—		$	7,600
Change in property and equipment resulting from change in accounts payable	$	793		$	(1,263	)
Change in property and equipment resulting from change in accrued expenses	$	—		$	(409	)
Change in equity resulting from change in accrued expenses	$	—		$	24
Change in investing activity resulting from issuance of equity	$	(1,268	)	$	—

Due in 12-month period ended September 30,
2022	$	524
2023	$	133
2024	$	135
Less imputed interest	$	(44	)
Total lease liabilities	$	748

Current operating lease liabilities	$	495
Non-current operating lease liabilities	$	253
	$	748

	Three Months Ended September 30,										Nine Months Ended September 30,
					Favorable			%							Favorable			%
	2021		2020		(Unfavorable)			Change			2021		2020		(Unfavorable)			Change

Product sales	$	—	$	90	$	(90	)		(100.0	)%	$	—	$	108	$	(108	)		(100.0	)%
Cost of product sales		1,670		1,635		(35	)		2.1	%		5,417		4,395

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of product sales	$	14	$	23	$	61	$	67
Research and development cost		11		24		64		124
General and administrative expense		375		473		1,573		1,841
Total	$	400	$	520	$	1,698	$	2,032

SEC Form 10-Q filed by Aqua Metals, Inc.