10-K: Aqua Metals Reports 2024 Results, Focuses on Lithium-Ion Battery Recycling

Aqua Metals' 2024 report highlights a strategic shift towards lithium-ion battery recycling and ongoing efforts to secure funding for its commercial-scale Li AquaRefinery.

Summary

• Aqua Metals is focused on developing clean and cost-efficient recycling solutions for lithium-ion batteries using its patented AquaRefining technology.
• The company is building a commercial-scale Li AquaRefining recycling campus at TRIC, with Phase One designed to process up to 7,000 tonnes of lithium-ion battery material annually.
• Aqua Metals is seeking additional funding to complete Phase One, exploring debt, project finance, joint ventures, and strategic investment options.
• A multi-week continuous operation campaign at the pilot facility demonstrated exceptional recovery rates and production of battery-grade critical minerals.
• The company announced an expanded vision to more than double the output of lithium carbonate by deferring the plating of nickel and cobalt to metal form until the next phase.
• Aqua Metals effected a one-for-20 reverse stock split on November 5, 2024.
• The company had total cash of $4.0 million and a working capital deficit of $(3.9) million as of December 31, 2024.
• There is substantial doubt about the company's ability to continue as a going concern within one year after the date that the financial statements are issued.
• The company is subject to risks related to geopolitical and macroeconomic factors, labor issues, and government regulations.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there's progress in technology and strategic direction, the financial situation and going concern warning weigh heavily, resulting in a cautious sentiment.

Positives

• Aqua Metals' AquaRefining process is a cleaner alternative to smelting and chemical-based recycling methods.
• The company has demonstrated the ability to recover valuable metals from lithium-ion batteries at its pilot facility.
• Aqua Metals is expanding its vision to more than double the output of lithium carbonate.
• The company is exploring partnership and/or joint venture agreements.
• The company has secured 3 US patents, 38 international patents, and 4 international allowances related to its AquaRefining process.

Negatives

• Aqua Metals has a limited operating history and limited revenue producing operations.
• The company will need additional financing to execute its business plan and fund operations.
• The report of the independent registered public accounting firm states that there is substantial doubt about the company's ability to continue as a going concern.
• The company has in excess of $4.0 million of secured indebtedness, the majority of which is held by related parties and all of which becomes due within the next nine months.
• The company recently commenced the development of a lithium-ion recycling facility, however it is in the early stages of developing the facility and there can be no assurance that we will be able to successfully develop the facility or, if we do, realize the expected benefits of the facility.

Risks

• The company's ability to have its Aqua Refining solutions gain market acceptance is uncertain.
• The company's ability to acquire additional working capital on reasonable terms, as needed and on a timely basis is uncertain.
• The timing and success of the company's plan of commercialization is uncertain.
• The company's ability to demonstrate the operation of its AquaRefining process on a commercial scale is uncertain.
• The company's ability to successfully apply its AquaRefining technology to the recycling of lithium-ion batteries is uncertain.
• The effects of market conditions on the company's stock price and operating results are uncertain.
• The company's ability to maintain its competitive technological advantages against competitors in its industry is uncertain.
• The company's ability to maintain, protect and enhance its intellectual property is uncertain.
• The effects of increased competition in the company's market and the company's ability to compete effectively are uncertain.
• Costs associated with defending intellectual property infringement and other claims are uncertain.
• The company's expectations concerning its relationships with suppliers, partners and other third parties are uncertain.
• The company's ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and environmental regulations is uncertain.

Future Outlook

Aqua Metals expects to complete development of phase one of its Li AquaRefining recycling campus within 3-4 quarters of securing additional capital and to complete the commissioning and scaling of this operation at the new campus within 2 quarters of completion of the development.

Management Comments

• The Company continues to seek the funding to complete the Phase One.

Industry Context

The global demand for Li-ion batteries is expected to increase significantly, creating a $400 billion market by 2030. Recycling is expected to play a larger role in sourcing battery materials, but the deployed lithium-ion battery recycling infrastructure to serve market growth does not exist today.

Comparison to Industry Standards

• Currently, smelting is the only commercially proven process for recycling lithium-ion batteries, but it has high emissions and low yields.
• Other technologies under development utilize a predominately hydrometallurgical approach that consumes significant amounts of chemicals to extract the metals resulting in high cost and excessive waste streams.
• Aqua Metals' approach, Li AquaRefining, requires fewer chemicals, generates less waste, and produces higher-purity products at a lower cost compared to both smelting and standard hydrometallurgy.

Management Changes

Legal Proceedings

• In October 2021, the company filed an action against Johnson Controls Fire Protections, LP relating to its involvement in the November 2019 fire at its TRIC facility; the Court dismissed the complaint without leave to amend on March 25, 2025.

Related Party Transactions

• The company has two debt arrangements with related parties.
• Certain officers and directors of the company purchased Notes in the aggregate amount of $1,200,000.

Stakeholder Impact

• The company's financial condition and ability to continue as a going concern could impact shareholders, employees, and other stakeholders.
• The company's strategic shift towards lithium-ion battery recycling could impact suppliers and customers in the battery industry.

Next Steps

• The company continues to seek the funding to complete the Phase One operation.
• The company is exploring partnership and/or joint venture agreements, particularly as its Li AquaRefining matures.

Key Dates

Keywords

lithium-ion battery recycling, AquaRefining, critical minerals, recycling, batteries, metals, funding, TRIC, capital, debt