GlobeNewswire Inc | Oct 22, 2020 04:01PM EDT

October 22, 2020

Recent Highlights:

-- Received additional insurance payment of $0.7 million on October 20, bringing total collected to $22.6 million; potential to collect up to $30.0 million for the replacement value of damaged assets, not including potential business interruption recovery proceeds -- Escrow balance has grown to $7.9 million, allocated for the retirement of the Veritex loan; the Company anticipates retiring the $8.5 million net balance on the Veritex loan, leaving it debt free by the end of 2020 -- Successful and regular operation of the second of three iterations of the V1.25 electrolyzer program, ahead of schedule -- Fabrication and continued testing of the V1.25b electrolyzer have validated anticipated improvements, including reduced build cost, higher throughput and lower maintenance costs -- Poised to begin operating the V.125L electrolyzer by the end of October, ahead of schedule -- Patent portfolio enhanced through the grant of a new patent; robust intellectual property assets now consist of 45 patents allowed or granted in 17 countries/regions -- $5.6 million of cash on hand at quarter end; made further progress regarding ongoing rate of cash spend -- Company has implemented its capital light, AquaRefining equipment supply and licensing business model -- Began the sale process of non-core assets and several parties have expressed interest in potential acquisition of the McCarran, Nevada facility -- Continued progress with potential licensing partners; ongoing discussions with several parties, inclusive of Clarios

MCCARRAN, Nev., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Aqua Metals, Inc. (NASDAQ:AQMS) (Aqua Metals or the Company), which is reinventing lead recycling with its AquaRefining technology, today announced financial and operational results for its thirdquarter ended September 30, 2020.

Steve Cotton, President and Chief Executive Officer, commented I continue to be pleased with Aqua Metals progress as we focus on our low capital, equipment supply and licensing business model. The V1.25L program is moving forward and remains ahead of schedule. The redesign of the frame and tank utilized for V1.25b validated our expectations regarding improved build and maintenance costs, among other enhancements. These improvements have simplified the overall electrolyzer design and improved the maintenance efficiency. In addition, development of further advancements that will be utilized for the final iteration of the program, are well underway. We remain very encouraged by the results of the V1.25 program and believe the results will continue to fortify Aqua Metals game changing technology that will be utilized by our future licensees. Additionally, I believe Aqua Metals is well positioned financially. We have significantly reduced our rate of cash spend and we have made substantial progress collecting insurance proceeds and anticipate more payments are on the way. At the end of the quarter we had a cash balance of $5.6 million, not including the escrow balance we have built up to $7.9 million that will be utilized to pay off the $8.5 million net balance on the Veritex loan which we anticipate happening prior to year-end, reducing our monthly debt service cash burn by ~$74,000 or nearly $0.9 million annually. We also have begun the process of monetizing non-core assets through the sale of plant equipment and have engaged with multiple interested parties after placing the McCarran facility for sale.

Third Quarter2020 Financial Results

The Company recognized minimal revenue during the third quarter ended September 30, 2020, because of the plant fire and the focus on its licensing strategy. The revenue earned during the quarter resulted from the sale of inventory consisting of lead compounds that were generated during pre-fire operations. By comparison, during the quarter ended September 30, 2019, the Company recognized revenue of $2.4 million. Product sales for the thirdquarter of 2019consisted of high-purity lead from the AquaRefining process, as well as lead bullion, lead compounds and plastics.

Cost of product sales decreased by approximately 80% for the thirdquarter of 2020to $1.6 million, compared to $8.2 million for the thirdquarter of 2019. Cost of product sales were lower in 2020due to the suspension of production resulting from the fire.

General and administrative expenses for the thirdquarter of 2020decreased approximately 68% to $1.7 million, from $5.1 million in the thirdquarter of 2019. The decrease is attributed to the suspension of operations and expenses under the Operations, Maintenance and Management Agreement with Veolia, reduced Company payroll and efficiencies in nearly all other expense categories.

For the quarter ended September 30, 2020, the Company had an operating loss of $3.4 million compared to an operating loss of $11.3 million for the thirdquarter of 2019, and a negative cash flow from operations of only $0.7 million for the thirdquarter of 2020compared to $8.3 million for the first half of 2020. The net loss for the thirdquarter of 2020was $1.8 million, or $0.03 per basic and diluted share, compared to a net loss of $11.3 million, or $0.20 per basic and diluted share, in the thirdquarter of 2019.

As of September 30, 2020, the Company had $5.6 million in cash and cash equivalents. In addition, at the end of the thirdquarter, the Company had $7.6 million in escrow, to be used for the retirement of the Veritex loan. The increase in other assets during the thirdquarter of 2020to $10.6 million, from $7.9 million at the end of the second quarter, was driven by the growth of escrow balance. Subsequent to quarter end, as a result of an additional insurance payment, the escrow total grew to $7.9 million.

Aqua Metals received insurance proceeds of $6.8 million during the thirdquarter of 2020. The insurance proceeds receivable balance has now been reduced to zero as insurance payments have exceeded the total established insurance proceeds receivable amount. The $19.9 million of insurance proceeds receivable recorded during the fourth quarter of 2019, was limited by GAAP accounting standards to the net book value of assets written off as a result of the fire. Any amounts received in excess of that total are reported as other income. It is anticipated that additional insurance collections will be received, reflecting actual asset replacement cost and business interruption coverage.

Conference Call and Webcast

Aqua Metals will hold a conference call on Thursday, October 22, 2020 at 4:30 p.m. Eastern Daylight Time (1:30 p.m. Pacific Daylight Time) to discuss thirdquarter results and corporate developments. The call may be accessed by dialing: 1-855-327-6837 (toll free) or 1-631-891-4304 for international callers. A simultaneous webcast of the conference call will be available at: http://public.viavid.com/index.php?id=142036. In addition, the live webcast or a replay of the conference call will be available via the Company website at: https://ir.aquametals.com/ir-calendar. A telephone replay of the conference call will be available until November 22, 2020 by dialing 1-844-512-2921 (toll free) or 1-412-317-6671 and using pin number 10011537.

About Aqua Metals

Aqua Metals, Inc. (NASDAQ: AQMS) is reinventing lead recycling with its patented AquaRefining technology. Unlike smelting, AquaRefining is a room temperature, water-based process that emits less pollution. The modular systems are intended to allow the Company to vastly reduce environmental impact and scale lead acid battery recycling production capacity by licensing the AquaRefining technology to partners. This could help meet the growing demand for lead to power new applications including stop/start automobile batteries which complement the vehicles main battery, lead acid batteries which are in electric vehicles, Internet data centers, alternative energy applications including solar, wind, and grid scale storage. Aqua Metals is based in McCarran, Nevada. To learn more, please visit www.aquametals.com.

Aqua Metals has used, and intends to continue using, its investor relations website( https://ir.aquametals.com), in addition to its Twitter, LinkedIn and YouTube accounts at https://twitter.com/AquaMetalsInc(@aquamatalsinc), https://www.linkedin.com/company/aqua-metals-limitedand https://www.youtube.com/channel/UCvxKNWcB69K0t7e337uQ8nQrespectively, as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Safe Harbor

This press release contains forward-looking statements concerning Aqua Metals, Inc. Forward-looking statements include, but are not limited to, our plans, objectives, expectations and intentions and other statements that contain words such as "expects," "contemplates," "anticipates," "plans," "intends," "believes", "estimates, "potential and variations of such words or similar expressions that convey uncertainty of future events or outcomes, or that do not relate to historical matters. The forward-looking statements in this press release include our expectations for the sale of the land and building at our McCarran facility; the sufficiency of any sale proceeds coupled with any further insurance recovery to fund our operations and the development and completion of our V1.25 electrolyzer; the benefits of the V1.25 electrolyzer; and the future of lead acid battery recycling via traditional smelters. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially. Among those factors are: (1) the risk that we may not be able to sell the land, building and non-core equipment at our McCarran facility on a timely basis, (2) the risk that we may not realize the sale proceeds we hoped for from the sale of the land, building and non-core equipment, (3) the risk that the terms of any such sale may include indemnities or other provisions that pose potential contingent liability to Aqua Metals, (4) the risk that we may not be able to complete the development of our V1.25 electrolyzer; (5) the risk that we may not realize the expected benefits from our V1.25 electrolyzer; (6) the risk that our insurance recovery from our claims relating to the November 2019 fire at our TRIC facility and proceeds from the sale of legacy assets will not be sufficient to fund our accelerated licensing strategy; (7) the risk that we may not be able to satisfactorily demonstrate to potential licensees the technical and commercial viability of our V1.25 electrolyzer and AquaRefining process; (8) the risk that licensees may refuse or be slow to adopt our AquaRefining process as an alternative to smelting in spite of the perceived benefits of AquaRefining; (9) the risk that we may not realize the expected economic benefits from any licenses we may enter into; (10) the risk that we will have to engage in additional sales of our equity securities in order to fund our future operations; (11) the risk that further funding, by any means, may not be available at all; (12) the fact that we have not generated any significant revenue to date, thus subjecting us to all of the risks inherent in an early-stage company; (13) the risk that our patents and any other patents that may be issued to it may be challenged, invalidated, or circumvented; (14) the risk that we may not be able to successfully conclude our proposed joint development agreement with Clarios or, if we do, realize the expected benefits of such agreement; (15) changes in the federal, state and foreign laws regulating the recycling of lead acid batteries; (16) our ability to protect our proprietary technology, trade secrets and know-how and (17) those other risks disclosed in the section "Risk Factors" included in our Quarterly Report on Form 10-Q filed on October 22, 2020 and subsequent SEC filings. Aqua Metals cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law.

AQUA METALS, INC.Condensed Consolidated Balance Sheets(in thousands, except share and per share amounts)

September December 30, 2020 31, 2019 (unaudited) ASSETS Current assets Cash and cash equivalents $ 5,635 $ 7,575 Accounts receivable ? 244 Insurance proceeds receivable ? 17,446 Inventory 1,135 1,257 Prepaid expenses and other current assets 489 981 Total current assets 7,259 27,503 Non-current assets Property and equipment, net 37,266 37,643 Intellectual property, net 864 999 Other assets 10,554 3,309 Total non-current assets 48,684 41,951 Total assets $ 55,943 $ 69,454 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities Accounts payable $ 1,714 $ 4,829 Accrued expenses 2,179 4,133 Lease liability, current portion 602 552 Notes payable, current portion 364 296 Total current liabilities 4,859 9,810 Lease liability, non-current portion 403 861 Asset retirement obligation 827 790 Notes payable, non-current portion 8,456 8,404 Total liabilities 14,545 19,865 Commitments and contingencies Stockholders? equity Common stock; $0.001 par value; 100,000,000 sharesauthorized; 61,117,926 and 57,997,780 shares 61 58 issued and outstanding as of September 30, 2020and December 31, 2019, respectivelyAdditional paid-in capital 191,475 189,422 Accumulated deficit (150,138 ) (139,891 )Total stockholders? equity 41,398 49,589 Total liabilities and stockholders? equity $ 55,943 $ 69,454

AQUA METALS, INC.Condensed Consolidated Statements of Operations(in thousands, except share and per share amounts)(Unaudited)

Three Months Ended September Nine Months Ended September 30, 30, 2020 2019 2020 2019 Product sales $ 90 $ 2,361 $ 108 $ 4,281 Operating cost and expenseCost of 1,635 8,231 4,395 20,097 product salesResearch anddevelopment 210 282 669 1,240 costGeneral andadministrative 1,656 5,107 6,286 13,458 expenseTotaloperating 3,501 13,620 11,350 34,795 expense Loss from (3,411 ) (11,259 ) (11,242 ) (30,514 )operations Other income and (expense)Insuranceproceeds net 1,722 ? 1,467 ? of relatedexpensesInterest (166 ) (142 ) (513 ) (3,234 )expenseInterest and 18 85 43 225 other income Total income 1,574 (57 ) 997 (3,009 )(expense), net Loss beforeincome tax (1,837 ) (11,316 ) (10,245 ) (33,523 )expense Income tax ? ? (2 ) (2 )expense Net loss $ (1,837 ) $ (11,316 ) $ (10,247 ) $ (33,525 ) Weightedaverage sharesoutstanding, 60,998,971 57,053,982 60,242,093 50,491,786 basic anddiluted Basic anddiluted net $ (0.03 ) $ (0.20 ) $ (0.17 ) $ (0.66 )loss per share

Contact:

Glen Akselrod, Bristol Capital(905) 326-1888, Ext. 1glen@bristolir.com