Aqua Metals (AQMS) Q2 2024 earnings summary

Executive summary

• Q2 2024 was impacted by a 25%+ drop in lithium carbonate prices, high interest rates, and no commercial revenue, leading to significant macroeconomic headwinds and financing challenges.

• Construction of the Sierra ARC and the first commercial-scale lithium battery recycling facility progressed but was paused pending additional funding, with commissioning now expected in 2025.

• Staff reductions and asset dispositions were implemented to extend the cash runway by about one year and align expenses with operational needs.

• The company remains confident in its technology, maintaining strong industry partnerships and ongoing pilot operations to support technology validation.

• Substantial doubt exists regarding the ability to continue as a going concern due to ongoing losses and insufficient capital.

Financial highlights

• Ended Q2 2024 with $7.8 million in cash, down from $16.5 million at year-end 2023, supporting ongoing operations and financing efforts.

• Net loss for Q2 2024 was $5.6 million ($0.05 per share), compared to $4.8 million ($0.06 per share) in Q2 2023; H1 2024 net loss was $11.3 million vs. $9.4 million in H1 2023.

• No revenue recognized in Q2 or the first half of 2024 or 2023.

• Property, plant, and equipment increased by $6.5 million, and $3.5 million in equipment deposits were made, mainly for ARC equipment purchases.

• Operating expenses for Q2 2024 were $5.6 million, up from $4.9 million in Q2 2023, driven by higher payroll, G&A, and ARC phase one preparations.

Outlook and guidance

• Construction and installation at the commercial demonstration plant are paused and will resume once funding is secured; completion expected within six months of funding.

• Commissioning of Sierra ARC is now expected in 2025, delayed from late 2024.

• Alternative financing options, including project finance, joint ventures, and strategic investors, are being pursued to complete the ARC plant.

• Cash runway is projected to last approximately one year following cost reductions and asset dispositions.

• DOE grant decision expected by October; USDA discussions ongoing.