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~~June 30, ~~2017~~ 2022

☐	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

~~1010 Atlantic Avenue~~

~~Alameda, California 94501~~Reno, Nevada 89511

(Address of principal executive offices, including zip code)

~~(510) 479-7635~~(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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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	☐
~~Non-accelerated filer ☐~~		~~Smaller reporting company ☐~~
~~(Do not check if a 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 6, 2017,~~July 15, 2022, there were ~~20,402,454~~76,949,582 outstanding shares of the common stock of Aqua Metals, Inc.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AQUA METALS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	*June 30, 2022*			*December 31, 2021*
	*(unaudited)*			*(Note 2)*
ASSETS
Current assets
Cash and cash equivalents	$	6,425		$	8,137
Accounts receivable		234			269
Lease receivable, current portion		16,037			920
Inventory		28			123
Assets held for sale		1,100			2,633
Prepaid expenses and other current assets		310			356
Total current assets		24,134			12,438

Non-current assets
Property and equipment, net		3,308			2,367
Intellectual property, net		550			640
Investment in LINICO		2,000			1,500
Lease receivable, non-current portion		0			15,528
Other assets		893			796
Total non-current assets		6,751			20,831

Total assets	$	30,885		$	33,269

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	898		$	685
Accrued expenses		2,331			3,005
Lease liability, current portion		288			388
Total current liabilities		3,517			4,078

Building purchase deposit		1,250			1,328
Lease liability, non-current portion		434			330
Total liabilities		5,201			5,736

Commitments and contingencies

Stockholders’ equity
Common stock; $0.001 par value; 200,000,000 shares authorized; 75,772,815 and 70,416,552 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		76			70
Additional paid-in capital		217,030			211,309
Accumulated deficit		(191,422	)		(183,846	)
Total stockholders’ equity		25,684			27,533

Total liabilities and stockholders’ equity	$	30,885		$	33,269

ASSETS

September 30, 2017 December 31, 2016
(unaudited) (Note 2)
Current assets
Cash and cash equivalents $ 17,523 $ 25,458
Restricted cash — 1,124
Accounts receivable 577 —
Inventory 1,218 59
Prepaid expenses and other current assets 856 729
Total current assets 20,174 27,370

Non-current assets
Property and equipment, net 45,485 41,392
Intellectual property, net 1,327 1,137
Other assets 1,219 1,630
Total non-current assets 48,031 44,159

Total assets $ 68,205 $ 71,529

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable $ 2,380 $ 1,572
Accrued expenses 2,045 1,975
Deferred rent, current portion 188 177
Notes payable, current portion 420 307
Total current liabilities 5,033 4,031

Deferred rent, non-current portion 821 963
Asset retirement obligation 691 —
Notes payable, non-current portion 8,917 9,238
Convertible note payable, non-current portion 1,005 307
Total liabilities 16,467 14,539

Commitments and contingencies — —

Stockholders’ equity
Common stock; $0.001 par value; 50,000,000 shares authorized; 20,400,794 and 17,878,725 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 20 18
Additional paid-in capital 99,529 85,234
Accumulated deficit (47,811 ) (28,262 )
Total stockholders’ equity 51,738 56,990

Total liabilities and stockholders’ equity $ 68,205 $ 71,529

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AQUA METALS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2022*			*2021*			*2022*			*2021*

Product sales	$	4		$	0		$	4		$	0

Operating cost and expense
Cost of product sales		1,048			2,138			2,043			3,749
Research and development cost		521			176			1,072			465
General and administrative expense		2,390			2,129			5,154			4,428
Total operating expense		3,959			4,443			8,269			8,642

Loss from operations		(3,955	)		(4,443	)		(8,265	)		(8,642	)

Other income and (expense)
Insurance proceeds net of related expenses		0			460			0			448
PPP loan forgiveness		0			201			0			332
Gain (loss) on disposal of property and equipment		739			(4,254	)		590			(4,254	)
Interest expense		(12	)		(4	)		(12	)		(9	)
Interest and other income		62			24			113			25

Total other income (expense), net		789			(3,573	)		691			(3,458	)

Loss before income tax expense		(3,166	)		(8,016	)		(7,574	)		(12,100	)

Income tax expense		0			0			(2	)		(2	)

Net loss	$	(3,166	)	$	(8,016	)	$	(7,576	)	$	(12,102	)

Weighted average shares outstanding, basic and diluted		75,215,009			68,152,296			73,584,761			67,518,650

Basic and diluted net loss per share	$	(0.04	)	$	(0.12	)	$	(0.10	)	$	(0.18	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AQUA METALS, INC.

Condensed Consolidated Statements of ~~Operations~~Stockholders’ Equity

(Unaudited)

(in thousands, except share ~~and per share~~ amounts)

~~(Unaudited)~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016

Product sales $ 589 $ — $ 1,192 $ —

Operating cost and expense
Cost of product sales 3,140 — 5,671 —
Research and development cost 1,367 1,887 6,538 4,080
General and administrative expense 1,925 1,434 4,897 4,245
Impairment charge — — 2,411 —
Total operating expense 6,432 3,321 19,517 8,325

Loss from operations (5,843 ) (3,321 ) (18,325 ) (8,325 )

Other income and expenses
Interest expense (454 ) (203 ) (1,250 ) (318 )
Interest and other income 7 7 28 22

Total other income (expense), net (447 ) (196 ) (1,222 ) (296 )

Loss before income tax expense (6,290 ) (3,517 ) (19,547 ) (8,621 )

Income tax expense — — (2 ) (1 )

Net loss $ (6,290 ) $ (3,517 ) $ (19,549 ) $ (8,622 )

Weighted average shares outstanding, basic and diluted 20,265,020 15,574,620 19,732,372 14,818,484

Basic and diluted net loss per share $ (0.31 ) $ (0.23 ) $ (0.99 ) $ (0.58 )

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

Balances, March 31, 2022		74,934,199	$	75	$	215,799	$	(188,256	)	$	27,618

Stock-based compensation		—		0		534		0			534
Common stock issued to employees and directors, includes RSUs vesting		19,481		0		0		0			0
Common stock issued for ATM share sales, net of $22 transaction costs		819,135		1		697		0			698
Net loss		—		0		0		(3,166	)		(3,166	)

Balances, June 30, 2022		75,772,815	$	76	$	217,030	$	(191,422	)	$	25,684

Balances, December 31, 2021		70,416,552	$	70	$	211,309	$	(183,846	)	$	27,533

Stock-based compensation		—		0		1,138		0			1,138
Common stock issued to employees and directors, includes RSUs vesting		1,139,129		1		0		0			1
Common stock issued for ATM share sales, net of $143 transaction costs		4,217,134		5		4,583		0			4,588
Net loss		—		0		0		(7,576	)		(7,576	)

Balances, June 30, 2022		75,772,815	$	76	$	217,030	$	(191,422	)	$	25,684

Balances, March 31, 2021		67,755,336	$	68	$	206,914	$	(169,739	)	$	37,243

Stock-based compensation		—		0		619		0			619
Common stock issued to employees and directors, includes RSUs vesting		300,162		0		0		0			0
Common stock issued upon exercise of employee stock options		2,083		0		3		0			3
Common stock issued for ATM share sales, net of $67 transaction costs		549,745		1		1,846		0			1,847
Net loss		—		0		0		(8,016	)		(8,016	)

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

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

Stock-based compensation		—		0		1,298		0			1,298
RSUs issued for consulting services		—		0		34		0			34
Common stock issued to employees and directors, includes RSUs vesting		884,411		1		0		0			1
Common stock issued upon exercise of employee stock options		347,901		0		727		0			727
Common stock issued upon warrant exercise		65,590		0		0		0			0
Common stock issued for ATM share sales, net of $311 transaction costs		2,473,359		3		9,328		0			9,331
Common stock issued related to LINICO investment		375,000		1		1,267		0			1,268
Net loss		—		0		0		(12,102	)		(12,102	)

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

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AQUA METALS, INC.

Condensed Consolidated ~~Statement~~Statements of ~~Stockholders’ Equity~~Cash Flows

(Unaudited)

(in ~~thousands, except share amounts)~~

~~(Unaudited)~~thousands)

Additional Total
Common Stock Paid-in Accumulated Stockholders’
Shares Amount Capital Deficit Equity

Balances, December 31, 2016 17,878,725 $ 18 $ 85,234 $ (28,262 ) $ 56,990

Stock based compensation - stock options — — 592 — 592
Cashless exercise of warrants 1,173,296 1 (1 ) — —
Exercise of warrants to purchase common stock 2,500 — 15 — 15
Exercise of options to purchase common stock 283,310 — 1,068 — 1,068
Common stock issued under Officers and Directors Purchase Plan 182 — 1 — 1
Common stock issued for cash in February 2017 from Johnson Controls, net of $167 transaction cost 939,005 1 10,471 — 10,472
Common stock issued for purchase of Ebonex IPR Limited 123,776 — 2,149 2,149
Net loss — — — (19,549 ) (19,549 )

Balances, September 30, 2017 20,400,794 $ 20 $ 99,529 $ (47,811 ) $ 51,738

	*Six Months Ended June 30,*
	*2022*			*2021*
Cash flows from operating activities:
Net loss	$	(7,576	)	$	(12,102	)
Reconciliation of net loss to net cash used in operating activities
Depreciation		548			724
Amortization of intellectual property		90			90
Fair value of RSUs issued for consulting services		0			34
Stock-based compensation		1,139			1,299
Inventory NRV adjustment		0			146
Loss (gain) on disposal of property and equipment		(590	)		4,254
PPP loan forgiveness		0			(332	)
Changes in operating assets and liabilities
Accounts receivable		273			(258	)
Inventory		95			283
Prepaid expenses and other current assets		45			320
Accounts payable		(5	)		222
Accrued expenses		(11	)		680
Other assets and liabilities		(357	)		(300	)
Net cash used in operating activities		(6,349	)		(4,940	)

Cash flows from investing activities:
Purchases of property and equipment		(973	)		(1,217	)
Proceeds from sale of equipment		1,145			275
Equipment deposits and other assets		(33	)		43
Investment in LINICO		(500	)		(232	)
Net cash used in investing activities		(361	)		(1,131	)

Cash flows from financing activities:
Lease of building		410			184
Proceeds from exercise of stock options		0			727
Proceeds from ATM, net		4,588			9,331
Net cash provided by financing activities		4,998			10,242

Net increase (decrease) in cash and cash equivalents		(1,712	)		4,171
Cash and cash equivalents at beginning of period		8,137			6,533
Cash and cash equivalents at end of period	$	6,425		$	10,704

	*Six Months Ended June 30,*
	*2022*			*2021*
Supplemental disclosure of cash flows information
Cash paid for income taxes	$	0		$	2
Cash paid for interest	$	5		$	0

Supplemental disclosure of non-cash transactions
Change in property and equipment resulting from change in accounts payable	$	(218	)	$	538
Change in investing activity resulting from issuance of equity	$	0		$	(1,268	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

AQUA METALS, INC.

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

~~(in thousands)~~

Nine months ended September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (19,549 ) $ (8,622 )
Reconciliation of net loss to net cash used in operating activities
Depreciation 2,149 403
Amortization of intellectual property 118 93
Accretion of asset retirement obligation 21 —
Fair value of warrants issued for consulting services — 138
Stock based compensation 592 898
Amortization of debt discount 206 26
Amortization of deferred financing costs 63 44
Non-cash convertible note interest expense 456 197
Impairment of acquired intellectual property 2,411 —
Changes in operating assets and liabilities
Accounts receivable (577 ) —
Inventory (1,159 ) —
Prepaid expenses and other current assets 150 (80 )
Accounts payable 1,152 500
Accrued expenses 773 530
Deferred rent (132 ) 71
Net cash used in operating activities (13,326 ) (5,802 )

Cash flows from investing activities:
Decrease in restricted cash 1,124 8,263
Purchases of property and equipment, net (6,618 ) (20,940 )
Other assets — (93 )
Intellectual property related expenditures (436 ) (165 )
Net cash used in investing activities (5,930 ) (12,935 )

Cash flows from financing activities:
Proceeds from issuance of common stock, net of transaction costs 11,556 9,167
Payments on notes payable (133 ) —
Payments on capital leases (102 ) (21 )
Proceeds from issuance of convertible notes payable, net of issuance costs — 4,858
Net cash provided by financing activities 11,321 14,004

Net decrease in cash and cash equivalents (7,935 ) (4,733 )
Cash and cash equivalents at beginning of period 25,458 20,141

Cash and cash equivalents at end of period $ 17,523 $ 15,408

Nine months ended September 30,
2017 2016
Non-cash investing activities
Tenant improvement allowances $ — $ 78

Non-cash financing activities
Capital lease $ — $ 143

Supplemental disclosure of non-cash transactions
Change in property and equipment resulting from change in accounts payable $ (344 ) $ 2,548
Change in property and equipment resulting from change in accrued expenses $ (702 ) $ 123
Decrease in restricted cash resulting from a decrease in accounts payable $ — $ 2,644
Recognition of convertible debt discount $ — $ 4,975
Asset retirement obligation offset with asset retirement cost (property and equipment) $ 670 $ —
Fair value of common stock issued for intellectual property $ 2,149 $ —

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

~~AQUA METALS, INC.~~

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Aqua Metals ~~Inc. (the “Company”~~(NASDAQ: AQMS) ~~was incorporated~~is engaged in ~~Delaware~~the business of equipment supply, technology licensing and ~~commenced operations on June 20, 2014 (inception). On January 27, 2015,~~related services to recyclers across the ~~Company formed two wholly-owned subsidiaries, Aqua Metals Reno, Inc. (“AMR”),~~globe. Our recycling process is a patented hydrometallurgical technology that is a novel, proprietary and ~~Aqua Metals Operations, Inc. (collectively, the “Subsidiaries”), both incorporated in Delaware. The Company is reinventing lead recycling with its proprietary AquaRefining~~^TM ~~technology. Unlike smelting,~~patented process we developed and named AquaRefining. AquaRefining is a room temperature, ~~water-based~~water and organic acid-based process that greatly reduces environmental footprint by reducing green house gases. The modular Aqualyzers cleanly generate ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy. Our process was originally designed for lead recycling. Lead is ~~fundamentally non-polluting. These modular systems~~a globally traded commodity with a worldwide market value in excess of $20 billion. We believe our suite of patented and patent pending AquaRefining technologies will allow the lead-acid battery industry to simultaneously improve the environmental impact of lead recycling and scale recycling production to meet demand. ~~The Company intends~~Furthermore, our AquaRefining technologies result in high purity lead. We are also applying our commercialized clean, water-based recycling technology principles to ~~manufacture~~develop the ~~equipment it~~cleanest and most cost-efficient recycling solution for lithium-ion batteries. We believe our process has ~~developed,~~the potential to produce higher quality products at a lower operating cost without the damaging effects of furnaces and ~~pursue~~greenhouse emissions. Aqua Metals estimates its total addressable market for lithium-ion battery recycling will be approximately $9 billion by 2025.

We completed the development of our first LAB recycling facility located in the Tahoe Reno Industrial Center in McCarran, Nevada (“TRIC”) and commenced production of battery breaking and limited operations during the first quarter of 2017. From April 2017 through April 2018, we commenced the shipment of products for sale, consisting of lead ~~acid~~compounds as well as plastics and limited production of lead bullion, including AquaRefined lead. During 2018, we commenced the sale of pure AquaRefined lead in the form of two tonne blocks and AquaRefined lead in the form of battery manufacturing ready ingots. In November 2018, we received official vendor certification from Clarios for our AquaRefined lead and commenced shipments directly to Clarios owned and partner battery manufacturing facilities. In 2019, we operated our demonstration AquaRefinery at commercial quantity production levels and produced over 35,000 AquaRefined ingots by operating the AquaRefinery twenty-four hours a day and seven days a week for sustained periods of time. The AquaRefining Aqualyzers in operation ran sustained endurance runs for over one month several times.

During the first half of 2020, we successfully performed test runs on the first and second iterations of our Aqualyzer as part of our V1.25L program. The program consists of three iterations that are classified as V1.25a,V1.25b and the final iteration, V1.25L. During the fourth quarter of 2020, we completed our V1.25L Aqualyzer program on time and under budget, achieving lead production that is 100% greater compared to the V1.0 Aqualyzer deployed at the AquaRefinery during commercial production in 2018 and 2019. In August 2021, we announced the completion of the V1.5 Aqualyzer. This latest Aqualyzer configuration has now achieved lead production that is over 300% greater than the V1.0 Aqualyzer deployed at the AquaRefinery during commercial production in 2018 and 2019. These results are expected to positively impact capital and operating expenses for the Company’s equipment supply and technology licensing customers. The increase in throughput results in a reduction of more than 60% in the number of Aqualyzers needed for equivalent lead production delivered by the V1.0 model, reducing capital and labor and footprint requirements. This latest iteration has also increased electrical efficiency to 97%, which further improves operating costs.

In February 2021, we announced a strategic investment in LINICO Corporation of up to $2 million to be paid in Aqua Metals shares and cash for an approximate 12% ownership in LINICO as part of our strategy to strengthen growth by potentially applying AquaRefining intellectual property to lithium-ion battery recycling ~~facilities,~~while meeting our lead recycling commercial guidance. In November 2021, Aqua Metals and LINICO signed a collaboration agreement which sets the parameters for future research and development cooperation, as both ~~directly~~companies expand into lithium-ion battery recycling and ~~through licensing or joint development arrangements.~~advance our technologies designed to recycle lithium-ion batteries cost-effectively and sustainably. Aqua Metals and LINICO plan to source the necessary lithium-ion feedstock from battery manufacturing scrap and end-of-life cells from various sources, including electric vehicle battery suppliers interested in participating in the eco-network the two companies announced in 2021. LINICO intends to process the feedstock into high-quality black mass utilizing its proprietary process. The resulting black mass will be used as input feedstock for Aqua Metals’ AquaRefining pilot cells intended to create high purity metals such as nickel, cobalt, and copper as well as other compounds.

In August 2021, we announced that we had established an Innovation Center focused on applying our proven technology to lithium-ion battery recycling research and development and prototype system activities. During the first half of 2022, we announced our ability to recover copper, lithium hydroxide, nickel, and cobalt from lithium-ion battery black mass at the Company's Innovation Center. Our strategic decision to apply our proven clean, closed-loop hydrometallurgical and electro-chemical recycling experience to lithium-ion battery recycling is designed to meet the growing demand for critical metals driven by the global transition to electric vehicles, growth in Internet data centers, and alternative energy applications including solar, wind, and grid-scale storage.

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, ~~2016,~~2021, and the notes thereto, which are included in the Company’s Annual Report on Form ~~10-K~~10-K for the year ended December 31, ~~2016,~~2021, as filed with the Securities and Exchange Commission, or the SEC, on ~~March 2, 2017.~~ February 24, 2022. There have been no material changes in the Company’s significant accounting policies during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 except for the addition of Revenue Recognition, Accounts Receivables and Asset Retirement Obligations, as described below.~~2022.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards ~~Update (“ASU”~~Updates ("ASU") of the Financial Accounting Standards Board (“FASB”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by such accounting principles for complete 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~~June 30, ~~2017,~~2022, the condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~September~~June 30, ~~2016,~~2021, the condensed consolidated ~~statement~~statements of ~~stockholders’~~stockholders' equity for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2022 and June 30, 2021 and the condensed consolidated statements of cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~September~~June 30, ~~2016,~~2021, as applicable, have been made. The condensed consolidated balance sheet as of December 31, ~~2016~~2021 has been derived from ~~our~~the Company’s audited financial statements as of such date, but it does not include all disclosures required by U.S. GAAP. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with ~~our~~the Company's audited consolidated financial statements for the period ended December 31, ~~2016,~~2021, which are included on Form ~~10-K~~10-K filed with the Securities and Exchange Commission on ~~March 2, 2017.~~February 24,2022.

The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 are not necessarily indicative of results that may be expected for the year ~~ended~~ ending December 31, ~~2017.~~2022.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its Subsidiaries, both of which are wholly-owned subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation.

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, ~~the valuation of conversion features of convertible debt,~~ valuation allowances for deferred tax assets, ~~the determination of fair value of estimated asset retirement obligations,~~ the determination of stock option expense and the determination of the fair value of stock warrants issued. Actual results could differ from those estimates.

Restricted cash was comprised of funds held in escrow at Green Bank for the purpose of paying for the construction of the lead recycling plant building in McCarran, Nevada. As of September 30, 2017, the building has been completed and the funds have been dispersed.

The Company sells its products to large well-established companies and extends credit without requiring collateral, based on an ongoing evaluation of the customer’s business prospects and financial condition. In the event that payment of a customer’s account receivable is doubtful, the Company would reserve the receivable under an allowance for doubtful accounts. As of September 30, 2017, the Company believes that all receivables will be collected and, therefore, has not created any reserve for doubtful accounts.

The Company records the fair value of estimated asset retirement obligations associated with tangible long-lived assets in the period incurred. Retirement obligations associated with long-lived assets are those for which there is an obligation for closures and/or site remediation at the end of the assets’ useful lives. These obligations are initially estimated based on discounted cash flow estimates and are accreted to full value over time through charges to operating expense. In addition, asset retirement costs are capitalized as part of the related asset’s carrying value and are depreciated on a straight-line basis over the assets’ respective useful lives.

~~The Company records revenue recognition in accordance with ASC 606,~~~~Revenue from Contracts with Customers~~.ASC 606 provides a single comprehensive model for the recognition of revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It requires an entity to recognize revenue when the entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) with the customer, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. ASC 606 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.

~~The Company recognizes compensation expense for stock-based compensation in accordance with ASC 718~~~~Compensation – Stock Compensation~~. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes-Merton method for stock options; the expense is recognized over the service period for awards to vest.

Basic net loss per share is computed by dividing net loss by the weighted average number of ~~vested~~common shares outstanding during the period. Diluted net loss per share is computed by ~~giving effect~~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 ~~all potential dilutive common securities, including convertible notes, options and warrants. Potential dilutive common shares include the dilutive effect of the~~purchase common stock underlying in-the-money stock options as is calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an option and the average amount of compensation cost, if any, for future services that the Company has not yet recognized when the option is exercised, are ~~assumed~~considered to be ~~used to repurchase shares in the current period.~~

~~For all periods presented in this report, convertible notes,~~common stock ~~options,~~equivalents and ~~warrants were not~~are only included in the ~~computation~~calculation of diluted net loss per share ~~because such inclusion would have had an~~when their effect is dilutive. The following shares underlying outstanding convertible notes, stock options, RSUs and warrants to purchase common stock were antidilutive ~~effect.~~due to a net loss in the periods presented and, therefore, were excluded from the dilutive securities computation for the six months ended June 30, as indicated below.

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 chief operating decision maker in deciding how to allocate resources and in assessing performance. The ~~Company~~chief operating decision maker views its operations and manages its business in one operating segment, and the Company operates in only one geographic segment.

~~Substantially all~~The Company did not generate revenue other than nominal revenue from the sale of ~~our revenue~~inventory during the three andsix months ended June 30, 2022 or the three and six months ended June 30, 2021. The accounts receivable balance on the Company's condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 consisted of amounts due from the return or sale of inventory and proceeds from assets held for ~~the three and nine-month period ended September 30, 2017 is attributable to Johnson Controls Battery Group, Inc.~~sale.

~~In February 2016, the FASB issued ASU 2016-02 -~~~~Leases~~ (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance.

There were no ~~other~~ recent accounting pronouncements or changes in accounting pronouncements during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 that are of significance or potential significance to the Company.

~~Revenues are recognized when control~~On November 29, 2019, there was a fire in the AquaRefining area of the ~~promised goods or services is transferred to customers, in an amount that reflects the consideration~~ TRIC facility. As of December 31, 2021, the Company ~~expects to be entitled to~~had received a total of $30.25 million in ~~exchange for those goods or services. Generally, this occurs with the delivery~~insurance payments as a result of the ~~Company’s products, primarily hard lead, lead compounds and plastics, to customers. Sales, value add, and other taxes, if~~fire damage. The Company does not expect any that are collected concurrent with revenue-producing activities are excluded from revenue as they are subsequently remitted to governmental authorities. Incidental items that are immaterial in the context of the contract are recognized as expense. Freight and shipping costsadditional insurance payments related to ~~the transfer of the Company’s products to customers are included in revenue and cost of product sales. Payment on invoices is generally due within 30 days of the invoice.~~this matter.

The Company ~~generates~~has historically generated revenues by recycling lead acid batteries (“LABs”) and selling the recovered lead to its customers. Primary components of the recycling process include sales of recycled lead consisting of lead compounds, ingoted hard lead and ingoted AquaRefined lead as well as plastics. The Company commenced the shipment of products for sale, consisting of lead compounds and plastics, in April 2017, and ~~to the date of this report~~ through March 31, 2018, all revenue ~~has been~~was derived from the sale of lead compounds and plastics. In April 2018, the Company began shipping lead bullion in addition to lead compounds and plastics. In June 2018, the Company began shipping high purity lead from its AquaRefining process.

Contracts with customers may include multiple performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company ~~expects that many of our contracts will have a single performance obligation as~~was not in commercial production during the ~~promise to transfer~~three and six months ended June 30, 2022 or during the ~~individual goods or services will not be separately identifiable from other promises in the contracts~~three and therefore, not distinct. For contracts with multiple performance obligations, revenue will be allocated to each performance obligation based on the Company’s best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling prices is based on prices charged separately to customers or expected cost-plus margin.

~~Revenue from~~six months ended June 30, 2021. Historically, Company products transferred to customers at a single point in time ~~as noted above with the delivery of the Company’s products to customers,~~ accounted for 100% of ~~our revenue during the three and nine months ended September 30, 2017.~~its revenue.

The Company ~~does not disclose~~has entered into an Industrial Lease Agreement with LINICO Corporation, a Nevada corporation, or ("LINICO"), dated February 15, 2021 pursuant to which the Company has leased to LINICO its 136,750 square foot recycling facility at TRIC. The lease commenced April 1, 2021 and expires on March 31, 2023. During the lease term, LINICO has the option to purchase the land and facilities at a purchase price of $14.25 million if the option is exercised and the sale is completed by October 1, 2022 and $15.25 million if the option is exercised and the sale is completed after October 1, 2022 and prior to March 31, 2023. The purchase option is subject to LINICO’s payment of a nonrefundable deposit of $1.25 million, which was paid on October 15, 2021, and a second nonrefundable deposit of $2.0 million by November 22, 2022, both of which will be applied towards the purchase price. The lease agreement is a triple-net lease pursuant to which LINICO is responsible for all fixed costs, including maintenance, utilities, insurance, and property taxes. The lease agreement provides for LINICO’s monthly lease payments starting at $68,000 per month and increasing to $100,640 in the last six months of the lease.

With respect to the portion of the facility that was damaged in the November 2019 fire, consisting of approximately 30,000 square feet, the Company was obligated to complete the clean-up of the damaged area, at the Company's expense and repair all damage to the damaged area, at the Company's expense. Both the clean-up and the repair of the building has been completed. With regard to the equipment on-site at TRIC, the Company has granted LINICO the right of first offer to purchase any equipment the Company offers for sale. The lease agreement contains customary representations, warranties and indemnities on the part of both parties.

The Company accounted for the Industrial Lease and Option to Purchase Agreement as a sales-type lease. As a component of the accounting for the agreement, the Company recognized the estimated fair market value of ~~unsatisfied performance obligations~~the land and plant of $17.0 million as a lease receivable, which is reflected on the Company's condensed consolidated balance sheets. The implied interest rate of 0.5% was utilized for ~~(i) contracts with an original expected length~~the amortization of ~~one year or less~~the scheduled building lease/purchase payments outlined in the agreement. The Company applies the monthly payments received as a reduction to lease receivable and ~~(ii) contracts for which we recognize revenue at~~interest income. The interest income recognized from the ~~amount~~agreement is included in "Interest and other income" on the Company's condensed consolidated statements of operations. For the six months ended June 30, 2022, the Company recognized a reduction in the lease receivable balance of approximately $410,000 and recorded $38,000 of interest income related to ~~which we have the right to invoice for services performed.~~this agreement.

5.Assets are classified as held for sale when, among other factors, they are identified and marketed for sale in their present condition, management is committed to their disposal, and the sale of the asset is probable within one year. Management believes these assets are no longer necessary for the Company's future operating plans. As of June 30, 2022, Aqua Metals had assets with a book value of $1.1 million classified as assets held for sale.

~~Depreciation~~Property and equipment depreciation expense was ~~$762,000~~$0.1 million and ~~$2,149,000~~$0.2 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017, respectively,~~2022 and ~~$205,000~~$0.3 million and ~~$403,000~~$0.5 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2021, respectively. ~~The building is a 136,750 square foot lead acid battery recycling plant located in McCarran, Nevada.~~ Equipment under construction is ~~primarily AquaRefining modules~~comprised of various components being manufactured or installed by the ~~Company to be used in the McCarran, Nevada recycling plant.~~Company.

Certain costs necessary to make the recycling facility ready for its intended use have been capitalized, including interest expense on notes payable. Capitalized interest totaled $153,000 and $456,000 for the three and nine months ended September 30, 2016, respectively. Capitalization

The net proceeds of the loan were used for the construction of the Company’s lead acid recycling operation McCarran, Nevada. Collateral for this loan is AMR’s accounts receivable, goods, equipment, fixtures, inventory, accessions and a certificate of deposit in the amount of $1,000,000.

The loan is guaranteed by the United States Department of Agriculture Rural Development (“USDA”), in the amount of 90% of the principal amount of the loan. The Company paid a guarantee fee to the USDA in the amount of $270,000 at the time of closing and will be required to pay to the USDA an annual fee in the amount of 0.50% of the guaranteed portion of the outstanding principal balance of the loan as of December 31 of each year.

The Thermo Fisher Financial Service obligations relate to capital leases. The costs associated with obtaining the Green Bank loan were recorded as a reduction to the carrying amount of the note and are being amortized as interest expense within the condensed consolidated statements of operations over the twenty-one year life of the loan.

On February ~~7, 2017,~~ 15, 2021, the Company entered into a Series A Preferred Stock Purchase Agreement with ~~Johnson Controls pursuant to which~~LINICO Corporation, a Nevada Corporation, or ("LINICO"), that provided for the ~~Company issued and sold to a wholly-owned subsidiary~~Company's issuance of ~~Johnson Controls International plc,~~375,000 shares (“~~Johnson Controls”~~Aqua Shares”)~~, 939,005~~ of the Company's common stock in consideration of LINICO’s issuance of 1,500 shares of its Series A Preferred Stock, at a stated aggregate value of $1.5 million, along with a three-year warrant (“Series A Warrant”) to purchase an additional 500 shares of LINICO Series A Preferred Stock at an exercise price of $1,000 per share. During the three months ended March 31, 2022, the Company exercised the warrant for all 500 LINICO Series A Preferred shares. Following the exercise, the Company held a total of 2,000 shares of the Series A Preferred Stock representing approximately 12% of LINICO common stock on a fully diluted basis.

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.

The LINICO Series A Preferred Stock is senior to all other capital stock of LINICO with regard to dividends and distributions upon liquidation, dissolution and sale of the company. Each share of LINICO Series A Preferred Stock is entitled to one vote per share and votes with the common stock on all matters, subject to certain protective provisions that require the approval of the holders of the Series A Preferred Stock voting as a class. The Series A Preferred Stock accrues a cumulative dividend of 8% per annum on the original stated value of $1,000 per share, and all accrued and unpaid dividends on the Series A Preferred Stock must be paid in full prior to the payment of any dividends on any other shares of LINICO capital stock. In the event of any liquidation or dissolution of LINICO, which would include a sale of LINICO, the holders of the Series A Preferred Stock shall receive the return of their stated value of $1,000 per share plus all accrued and unpaid dividends prior to any distribution to the holders of any other capital stock of LINICO, following which the holders of the Series A Preferred Stock shall participate in the distribution of any remaining assets with the holders of the junior stock on an as-converted basis. The Series A Preferred Stock is convertible into shares of LINICO common stock at ~~$11.33 per~~the Company's option and is automatically converted into LINICO common stock upon the election of the holders of a majority of the LINICO Series A Preferred Stock or upon a qualifying IPO of LINICO common stock. The Series A Preferred Stockholders are also provided with preemptive rights allowing them the right to purchase their proportional share ~~for the gross proceeds~~ of ~~approximately $10.6 million. Costs incurred in connection with the transaction, primarily legal fees, totaled approximately $167,000.~~ certain future LINICO equity issuances.

The Series A Preferred Stock Purchase Agreement includes customary representations, warranties, and covenants by ~~Johnson Controls~~LINICO and the ~~Company, and an indemnity from~~Company.

As LINICO’s sale of the 375,000 of Aqua Shares resulted in net proceeds to LINICO that were less than $1,500,000, the Company was required to pay LINICO the difference of $232,000 in ~~favor of Johnson Controls.~~cash.

In connection with the investment transactions, the Company also entered into an Investors Rights Agreement and a Voting Agreement, each dated February ~~7, 2017 with Johnson Controls~~ 15, 2021, pursuant to which LINICO granted the Company ~~granted Johnson Controls~~ customary demand and piggyback registration rights, ~~limited board observation~~information rights and ~~limited preemptive rights allowing Johnson Controls~~ the right to ~~purchase its proportional share~~nominate one person to the LINICO board of ~~certain future equity issuances by~~directors as long as the ~~Company. The board observation and preemptive rights shall expire on~~Company is the ~~earlier~~owner of ~~(i) such time as Johnson Controls no longer owns 50%~~at least 10% of the ~~acquired shares or (ii) the termination of both the Tolling/Lead Purchase Agreement and Equipment Supply Agreement.~~LINICO common stock on a fully-diluted basis.

~~There were no sales commissions paid by~~Comstock Mining Inc., a Nevada corporation (NYSE-MKT: LODE), is the ~~Company in connection with~~beneficial owner of approximately 88% of the ~~sale of its~~ common shares ~~to Johnson Controls.~~of LINICO. The Company's Chief Financial Officer, Judd Merrill, is a member of the board of directors of Comstock Mining.

~~Warrants exercised~~As of June 30, 2022, 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. The Company recognized sublease income of approximately $0 and $85,000 for the three and six months ended June 30, 2022, respectively. The sublease agreement ended during the first quarter of 2022. The Company recognized sublease income of approximately $127,000 and $255,000 for the three and six months ended June 30, 2021, respectively.

~~During~~Based on the ~~nine months ended September 30, 2017, 1,175,796 shares were issued pursuant to cash and cashless warrant exercises as detailed below. Generally,~~present value of the ~~warrants specify using the preceding five-day average of closing prices~~lease payments for the ~~Company’s common stock in~~remaining lease term of the ~~calculation~~Company's existing leases, as of ~~common stock to be issued pursuant to a cashless exercise.~~June 30, 2022, total right-of-use assets were approximately $0.58 million and operating lease liabilities were approximately $0.59 million. As of June 30, 2021, the Company's total right-of-use assets were approximately $0.46 million and operating lease liabilities were approximately $0.54 million.

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 of 2024. The second finance lease is for warehouse equipment that expires in September of 2023.

Information related to the Company's right-of-use assets and related lease liabilities were as follows (in thousands):

Future maturities of lease liabilities as of June 30, 2022 are as follows (in thousands):

~~Warrants outstanding~~As of June 30, 2022, the Company does not have a notes payable balance. During the year ended December 31, 2021, both of the Company's two PPP loans totaling $332,000 were forgiven.

During the six months ended June 30, 2022, the Company issued 1,105,011 shares of ~~the Company’s~~ common stock ~~at a weighted average exercise price~~upon vesting of ~~$8.45 per share are as follows.~~Restricted Stock Units ("RSUs") granted by the Company to management and employees.

During the six months ended June 30, 2022, the Company issued 34,118 shares of common stock upon vesting of RSUs granted to Board members.

~~Stock based~~During the six months ended June 30, 2022, the Company issued 4,217,134 shares of common stock pursuant to the At The Market Issuance Sales Agreement for net proceeds of $4.6 million.

The stock-based compensation expense ~~attributable to option grants~~ was allocated as follows:

There were 0 options issued during the three and six months ended June 30, 2022 or the three and six months ended June 30, 2021.

In January 2022, the Company granted 44,780 RSUs, all of which were subject to vesting, with a grant fair value of $50,000 to employees. The shares vest in three equal installments over a three-year period.

In February 2022, the Company granted 47,933 RSUs, all of which were subject to vesting, with a grant fair value of $50,000 to employees. The shares vest in three equal installments over a three-year period.

In April 2022, the Company granted 9,615 RSUs, all of which were subject to vesting, with a grant fair value of $10,000 to employees. The shares vest in three equal installments over a three-year period.

In May 2022, the Company granted 182,293 RSUs, all of which were subject to vesting, with a grant fair value of $175,000 to Board Members. The shares vest in four equal installments over a twelve-month period.

In June 2022, the Company granted 12,121 RSUs, all of which were subject to vesting, with a grant fair value of $10,000 to employees. The shares vest in three equal installments over a three-year period.

~~The following assumptions were used in the Black-Scholes-Merton pricing model to estimate the fair value of options granted during the periods presented.~~Legal proceedings

~~The Company issued 247,976 and 283,310 shares of common stock for the three and nine months ended September 30, 2017, respectively, upon stock option exercises.~~

In July 2017, the Company granted 49,751 restricted stock units (RSUs) with a grant date fair value of $581,000 to its Chief Financial Officer as part of his employment agreement. 16,584 RSUs will vest on each July 31, 2018 and July 31, 2019 and the remaining 16,583 RSU’s will vest on July 31, 2020.

Pursuant to the Interstate Battery Investor Rights Agreement, the Company has agreed to compensate Interstate Battery should either Stephen Clarke, the Company’s current chief executive officer, or Selwyn Mould, the Company’s current chief operating officer, no longer hold such positions or no longer devote substantially all of their business time and attention to the Company, whether as a result of resignation, death, disability or otherwise (such an event referred to as a “key-man event”). The Company has agreed to pay Interstate Battery $2.0 million, per occurrence, if either officer is subject to a key-man event during the two years following May 18, 2016. The Company also agreed to pay Interstate Battery $2.0 million if either or both officers are subject to a key-man event during the third year following May18, 2016.

As of the date of this report, Interstate Battery has raised a claim that the Company is in technical breach of a negative covenant under the Interstate Battery convertible loan. The claimed breach relates to the Company’s failure to obtain Interstate Battery’s prior written consent to its acquisition of Ebonex IPR, Ltd. The Company is in negotiations with Interstate Battery to resolve the claim and the Company believes it will be able to resolve that matter. However, in the event the Company is unable to resolve the claim, Interstate Battery may declare a default under the loan and attempt to accelerate the payment of all amounts thereunder. There can be no assurance we will be able to resolve this matter or that Interstate Battery will not declare a default under the loan and attempt to accelerate the payment of all amounts thereunder. The Company estimates that resolving the claim of breach will result in a charge of $0.6 million. The Company has recorded $0.6 million in general and administrative expense for the three and nine months ended September 30, 2017 with the offset in accrued liabilities.

Pursuant to the Johnson Controls Investor Rights Agreement, the Company has agreed to compensate Johnson Controls should either Stephen Clarke, the Company’s current chief executive officer, or Selwyn Mould, the Company’s current chief operating officer, no longer hold such positions or no longer devote substantially all of their business time and attention to the Company, whether as a result of resignation, death, disability or otherwise (such an event referred to as a “key-man event”). The Company has agreed to pay Johnson Controls $1.0 million per occurrence, if either officer is subject to a key-man event during the 18 months following February 7, 2017. The Company also agreed to pay Johnson Controls $1.0 million if either or both key-man events occur after 18 months and prior to 30 months following February 7, 2017.

The Company has evaluated subsequent events through the date which the condensed consolidated financial statements were available to be issued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto contained elsewhere in this report. The information contained in this quarterly report on Form 10-Q is not a complete description of our business or the risks associated with an investment in our common stock. We urge you to carefully review and consider the various disclosures made by us in this report and in our other filings with the Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed with the SEC on ~~March 2, 2017,~~February 24, 2022, or our Annual Report.

In this report we make, and from time to time we otherwise make written and oral statements regarding our business and prospects, such as projections of future performance, statements of management’s plans and objectives, forecasts of market trends, and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements containing the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimates,” “projects,” “believes,” “expects,” “anticipates,” “intends,” “target,” “goal,” “plans,” “objective,” “should” or similar expressions identify forward-looking statements, which may appear in our documents, reports, filings with the SEC, and news releases, and in written or oral presentations made by officers or other representatives to analysts, stockholders, investors, news organizations and others, and in discussions with management and other of our representatives.

Our future results, including results related to forward-looking statements, involve a number of risks and uncertainties, including those risks included below in Part II, Item 1 “Risk Factors”. No assurance can be given that the results reflected in any forward-looking statements will be achieved. Any forward-looking statement speaks only as of the date on which such statement is made. Our forward-looking statements are based upon assumptions that are sometimes based upon estimates, data, communications and other information from suppliers, government agencies and other sources that may be subject to revision. Except as required by law, we do not undertake any obligation to update or keep current either (i) any forward-looking statement to reflect events or circumstances arising after the date of such statement or (ii) the important factors that could cause our future results to differ materially from historical results or trends, results anticipated or planned by us, or which are reflected from time to time in any forward-looking statement.

Aqua Metals (NASDAQ:AQMS) is ~~reinventing lead~~engaged in the business of equipment supply, technology licensing and related services to recyclers across the globe. Our recycling ~~with its~~process is a patented hydrometallurgical technology that is a novel, proprietary ~~AquaRefining~~^™ ~~technology.~~and patented process we developed and named AquaRefining. AquaRefining is a room temperature, ~~water-based~~water and organic acid-based process that greatly reduces environmental emissions. The modular Aqualyzers cleanly generate ultra-pure metal one atom at a time, closing the sustainability loop for the rapidly growing energy storage economy. Our process was originally designed for lead recycling. Lead is ~~fundamentally non-polluting. Our~~a globally traded commodity with a worldwide market value in excess of $20 billion. We believe our suite of patented and patent pending AquaRefining ~~modular systems~~technologies will allow the lead-acid battery industry to simultaneously improve the environmental impact of lead recycling and scale recycling production to meet demand. Furthermore, our AquaRefining technologies result in high purity lead. We are also applying our commercialized clean, water-based recycling technology principles with the goal of developing the cleanest and most cost-efficient recycling solution for lithium-ion batteries. We believe our process has the potential to produce higher quality products at a lower operating cost without the damaging effects of furnaces and greenhouse emissions. Aqua Metals ~~is based in Alameda, California, and has built~~estimates its ~~first~~total addressable market for lithium-ion battery recycling ~~facility in Nevada’s Tahoe Reno Industrial Complex.~~ will be approximately $9 billion by 2025.

We were formed as a Delaware corporation on June 20, 2014 for the purpose of engaging in the business of recycling metals through a novel, proprietary and ~~since~~patent-pending process that we developed and named “AquaRefining”. Since our formation, we have focused our efforts initially on the development and testing of our AquaRefining process ~~the construction of our initial~~for lead acid ~~battery,~~batteries, or LAB, ~~recycling facility~~and advanced that process by building a demonstration plant located in the Tahoe ~~Regional~~Reno Industrial Center in McCarran, Nevada (“TRIC”),. We have also developed a business plan which focuses equipment supply services and licensing of the ~~continuing~~AquaRefining technology to recyclers and began research and development ofon using the AquaRefining process on lithium-ion batteries at our ~~LAB recycling operations~~Innovation Center also located at ~~TRIC as we bring those LAB recycling operations online.~~TRIC.

We ~~have~~ completed the development of our first LAB recycling facility at TRIC and commenced production of battery breaking and limited operations during the first quarter of 2017. ~~The TRIC facility will produce recycled lead, consisting of lead compounds, ingoted hard lead and ingoted AquaRefined lead as well as plastic. We~~From April 2017 through April 2018, we commenced the shipment of products for sale, consisting of lead compounds as well as plastics and ~~plastics in April 2017 and to the date~~limited production of ~~this report all revenue has been derived from~~lead bullion, including AquaRefined lead. During 2018, we commenced the sale of ~~lead compounds and plastics.~~

As of the date of this report, all 16 AquaRefining modules planned for TRIC have been delivered. Eight are in-place and fully assembled of which four are being used to produce small quantities of lead and to complete the evaluation of operating parameters. The final eight modules are in-place and undergoing final assembly. We expect to have all 16 modules assembled and operational by the end of 2017. We expect to continue to produce limited quantities ofpure AquaRefined lead in the form of two tonne blocks and AquaRefined lead in the form of battery manufacturing ready ingots. In November 2018, we received official vendor certification from Clarios for our AquaRefined lead and commenced shipments directly to Clarios owned and partner battery manufacturing facilities. In 2019, we operated our demonstration AquaRefinery at commercial quantity production levels and produced over 35,000 AquaRefined ingots by operating the AquaRefinery twenty-four hours a day and seven days a week for sustained periods of time. The AquaRefining Aqualyzers in operation ran sustained endurance runs for over one month several times.

In order to expand the demonstration AquaRefinery to its full capacity, we chose to idle the AquaRefinery beginning in September 2019 to facilitate contracting work required to increase the plant capacity planned for late 2019 or early 2020. On the evening of November 29, 2019, a fire occurred in the AquaRefining area of the recycling facility at TRIC. The cause of the fire was not due to the technology or process of AquaRefining but rather to contracting activities. The Company and the insurance carriers agreed on a total claim of $30.25 million which was paid in full by the carriers.

During the first half of 2020, we successfully performed test runs on the first and second iterations of our Aqualyzer as part of our V1.25L program. The program consists of three iterations that are classified as V1.25a, V1.25b and the final iteration, V1.25L. During the fourth quarter of ~~2017~~2020, we completed our V1.25L Aqualyzer program on time and we ~~expect~~under budget, achieving lead production that is 100% greater compared to ~~commence~~ the V1.0 Aqualyzer deployed at the AquaRefinery during commercial production ~~of AquaRefined lead by December 31, 2017, however due to the delays~~in 2018 and ~~unforeseen issues in~~2019. In August 2021, we announced the completion of the ~~AquaRefining production line we have experienced to date, there can be no assurance that we will not encounter additional delays and issues. Weexpect a ramp-up of AquaRefined~~V1.5 Aqualyzer. This latest Aqualyzer configuration has now achieved lead production that is over 300% greater than the V1.0 Aqualyzer deployed at the AquaRefinery during ~~2018.~~

~~Since January 1, 2016, we have engaged~~commercial production in 2018 and 2019. These results are expected to positively impact capital and operating expenses for the Company’s equipment supply and technology licensing customers. The increase in throughput results in a reduction of more than 60% in the ~~following financing transactions:~~

~~Interstate Battery Investment~~~~. On May 18, 2016, we entered into definitive agreements with Interstate Battery System International, Inc. (“Interstate Battery”)~~number of Aqualyzers needed for equivalent lead production delivered by the V1.0 model, reducing capital and ~~other investors for the sale of approximately $15.1 million of our equity~~labor and ~~debt securities, including a $10.0 million investment by Interstate Battery, the largest independent battery distributor in North America. At the same time, we~~footprint requirements. This latest iteration has also ~~entered into a supply agreement with Interstate Battery pursuant~~increased electrical efficiency to 97%, which ~~Interstate Battery will supply us with used LABs as feedstock for our AquaRefineries. The investment transactions closed on May 24, 2016.~~further improves operating costs.

~~Pursuant to the investment agreements with Interstate Battery, Interstate Battery:~~

In ~~connection with~~February 2021, we announced a strategic investment in LINICO Corporation of up to $2 million to be paid in Aqua Metals shares and cash for an approximate 12% ownership in LINICO as part of our strategy to strengthen growth by potentially applying AquaRefining intellectual property to lithium-ion battery recycling while meeting our lead recycling commercial guidance. In November 2021, Aqua Metals and LINICO signed a collaboration agreement which sets the ~~agreements, we granted Interstate Battery warrants~~parameters for future research and development cooperation, as both companies expand into lithium-ion battery recycling and advance our technologies designed to recycle lithium-ion batteries cost-effectively and sustainably. Aqua Metals and LINICO plan to source the necessary lithium-ion feedstock from battery manufacturing scrap and end-of-life cells from various sources, including electric vehicle battery suppliers interested in participating in the eco-network the two companies announced in 2021. LINICO intends to process the feedstock into high-quality black mass utilizing its proprietary process. The resulting black mass will be used as input feedstock for Aqua Metals’ AquaRefining pilot cells intended to create high purity metals such as nickel, cobalt, and copper as well as other compounds. The Company held a warrant (“Series A Warrant”) to purchase ~~our common stock, including:~~

We granted Interstate Battery customary demand and piggyback registration rights, limited board observation rights over the next three years and limited preemptive rights allowing it to purchase its proportional share of certain future equity issuances by us over the next three years. We included all of the Interstate Battery shares in our Form S-3 Registration Statement filed with the Securities and Exchange Commission on August 1, 2016.

Concurrent with the Interstate Battery investments, we also entered into a definitive agreement with certain accredited investors to sell approximately $5.1 million of our common stock through National Securities Corporation as placement agent. Pursuant to this agreement, we sold 719,333 ofan additional 500 shares of ~~our common stock, at the price of $7.12 per share, for gross proceeds of approximately $5.1 million.~~

~~Public Offering~~. On November 21, 2016, we completed a public offering of 2.3 million shares of our common stock, at the public offering price of $10.00 per share, for gross proceeds of $23.0 million. The completed offering includes shares issued by the exercise in full of the underwriter’s overallotment option. After the payment of underwriter discounts and offering expenses we received net proceeds of approximately $21.5 million. In connection with the underwriting agreement, we issued a warrant for 33,450 shares of our common stock,LINICO Series A Preferred Stock at an exercise price of ~~$10.00~~$1,000 per ~~share, exercisable commencing on May 20, 2017 and expiring on November 21, 2019.~~share. During the six months ended June 30, 2022, the Company exercised the warrant for all 500 LINICO Series A Preferred shares.

~~Johnson Controls Investment~~. In ~~connection with~~August 2021, we announced that we had established an Innovation Center focused on applying our ~~entry into~~proven technology to lithium-ion battery recycling research and development and prototype system activities. During the first half of 2022, we announced our ability to recover copper, lithium hydroxide, nickel, and cobalt from lithium-ion battery black mass at the Company's Innovation Center. Our strategic decision to apply our proven clean, closed-loop hydrometallurgical and electro-chemical recycling experience to lithium-ion battery recycling is designed to meet the growing demand for critical metals driven by the global transition to electric vehicles, growth in Internet data centers, and alternative energy applications including solar, wind, and grid-scale storage.

Our business strategy is based on the pursuit of licensing opportunities within the lead acid battery recycling marketplace without maintaining and operating a capital-intensive lead recycling facility. Our lead recycling business strategy is designed to optimize shareholder value by focusing on equipment supply ~~agreement~~ and ~~tolling/lead purchase agreement~~licensing opportunities, which have always been a core part of our business plans. On July 29, 2021, the Company signed a Definitive Agreement with ~~Johnson Controls, on February 7, 2017, we entered into a stock purchase agreement~~ACME Metal Enterprise Co., Ltd. (ACME) to deploy AquaRefining equipment at its facility in Keelung, Taiwan.

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 ~~Johnson Controls pursuant~~the lowest waste streams and lower costs than existing alternatives. We have already demonstrated our ability to ~~which we~~recover key valuable minerals in Li-ion batteries, such as lithium hydroxide, copper, nickel, cobalt, and other compounds in 2022. We plan to build our first full system for the recovery of these minerals in our pilot plant later this year. Our goal is to process results with nickel, cobalt, and copper in pure metal form, that can be sold to ~~Johnson Controls 939,005 shares of~~the general metals and superalloy markets and can be made into battery precursor compound materials with known processes already used in the mining industry.

Our focus is providing equipment and licensing our ~~common stock at $11.33 per share for~~lead acid battery recycling technologies in an enabler model which allows us to work with anyone in the ~~gross proceeds of approximately $10.6 million.~~industry globally and address the entire marketplace. We ~~granted Johnson Controls customary demand~~are also exploring joint ventures and ~~piggyback registration rights, limited board observation rights~~potentially operating a recycling facility again in the future, particularly as our Li AquaRefining matures through 2022 and ~~limited preemptive rights allowing it~~into 2023. This flexibility in our business model allows us to ~~purchase its proportional share of certain future equity issuances by us.~~preserve cash in the shorter term and maximize profit potential in the longer term. We ~~included all~~believe that Aqua Metals is in a position to become one of the ~~Johnson Controls shares in~~few critical minerals recovery players for which our ~~Form S-3 Registration Statement filed with the Securities~~environmental and ~~Exchange Commission on February 27, 2017.~~economic value proposition should generate both great commercial wins and potentially government grants to accelerate our credibility and progress.

~~Plan~~We have not engaged in commercial operations since the 2019 fire at our TRIC facility other than the sale of ~~Operations~~

~~Our~~inventory, and since that time our operations have been devoted to improvements to our AquaRefining processes and developing our Li AquaRefining battery recycling technology. We currently have budgeted to spend $3 million on research and development for 2022, which includes the plan ~~of operations for~~to build out the ~~12-month period following~~initial Li battery recycling pilot at the date of this report is to complete by year end the assembly and commissioning of all 16 AquaRefining modules planned for TRIC and to ramp up the production of AquaRefined lead during 2018. Our 12-month plan of operations also includes our proposal to provide planning, engineering, technical assistance, equipment and other services in supportInnovation Center. We have spend $1.1 million of the addition of an AquaRefining facility to a battery recycling facility owned by Johnson Controls. This proposed work is expected to produce a blueprint for further additions of AquaRefining facilities under a proposed definitiveresearch and development agreement with Johnson Controls pursuant to which we will collaborate with Johnson Controls for the conversion of Johnson Controls’ and certain strategic partners’ of Johnson Controls existing lead smelters to a lead recycling process utilizing our proprietary AquaRefining technology and equipment, know-how and services. Our 12-month plan of operations includes our continued pursuit of the licensing of our recycling technology and equipment to third parties and the expansion of our own production capacity. Finally, our 12-month plan of operations includes the pursuit and evaluation of additional strategic relationships to support the expansion of our own facilities and/or the provision of equipment and services to third parties. Additional funding will be required to expand our own production of AquaRefined lead beyond that provided bybudget during the first ~~16 modules at TRIC~~half of 2022. We did not incur revenue during the three and ~~to expand into the business of supplying equipment~~six months ended June 30, 2022 and services to third parties. There can be no assurance that we will be able to acquire the necessary funding on commercially reasonable terms or at all. There can also be no assurance we will be able to conclude the proposed development agreement with Johnson Controls.

~~During~~2021 other than nominal revenue generated during the second quarter of ~~2017, we began shipments~~2022 from the sale of ~~lead compounds and plastics to customers.~~inventory. The following table summarizes our results of operations with respect to the items set forth below for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 together with the dollar and percentage ~~change~~changes in those items (in thousands).

As mentioned ~~above,~~previously, historical product sales ~~consisting~~prior to the reported periods have consisted of high-purity lead from our AquaRefining process as well as lead bullion, lead compounds and ~~plastics began in April 2017.~~ plastics. Other than sales from inventory, we do not expect to generate revenue from operations until such time as we enter into a commercial license for our lead acid AquaRefining technology or revenue from Li battery recycling.

Cost of product sales ~~consists of all operating costs incurred at our~~McCarran facility following the commencement of product sales. Costs incurred at the McCarran facility prior to commencement of sales are included in research and development costs. Cost of product sales for the three and nine months ended September 30, 2017 includes raw materials, supplies and related costs, salaries and benefits, consulting and outside services costs, inventory adjustments, depreciation and amortization costs and insurance, travel and overhead costs. ~~There are no comparatives~~Cost of product sales decreased approximately 51% and 46% for the ~~previous periods.~~three and six months ended June 30, 2022, as compared to the three and six months ended June 30, 2021. The decrease in cost of product sales was primarily due to the decrease in plant clean-up costs, in preparation for the lease of the facility that occurred in 2021. Such expenditures were reduced during the six months ended June 30, 2022.

Research and development cost ~~included TRIC operating cost prior~~includes expenditures related to the ~~commencement~~improvement of ~~product sales, including cost incurred~~the AquaRefining technology related to ~~prepare~~ our ~~TRIC plant for operations.~~lead recycling process and initial development of our lithium-ion battery recycling process. During the three months ended ~~September~~June 30, ~~2017,~~2022, research and development ~~costs decreased by 28%~~cost increased $345,000, or 196%, over the comparable period in ~~2016 and increased by 60% for~~2021. For the ~~nine~~six months ended ~~September~~June 30, ~~2017 over the comparable period in 2016. At September 30, 2016, we had 16 employees in the TRIC facility and we focused on building the plant (cost included in~~2022, research and development expense). At the end of September 2017, we had 35 employees at the TRIC and are focused on recycling lead operations as well as continuing to commission various processes within the plant (cost included in research and development expense until product sales began, at which point forward they were included in cost of product sales). The decline in research and development expense in the three-month period ended September 30, 2017 asdevelopments costs increased $607,000, or 131% compared to the ~~prior year period is primarily associated with~~six months ended June 30, 2021. These increases were driven by efforts to advance our proprietary AquaRefining technology and the ~~cost of~~Li battery recycling pilot at the TRIC facility being included in cost of product sales rather than research and development subsequent to the commencement of product sales during the second quarter of 2017. The increase in research and development cost during the nine-month period ended September 30, 2017 versus the prior period is due to increased level of operations and commissioning of our plant in TRIC. We expect that research and development expenses will decrease from the current level going forward as all the costs related to TRIC will be included in cost of product sales.Innovation Center.

General and administrative expense ~~has~~ increased approximately 12% and 16% for the three and ~~nine-month periods~~six months ended ~~September~~June 30, 2017 versus September 30, 2016, primarily due to our $0.6 million accrual for estimated cost to resolve a claim of breach of a negative covenant in our convertible loan agreement with Interstate Battery.

~~As described above in Note 6~~2022, respectively, compared to the ~~Condensed Consolidated Financial Statements,~~three and six months ended June 30, 2021. Increases in ~~April 2017, we acquired all of the capital shares of Ebonex IPR Limited for consideration of $2.5 million, consisting of cash, transaction costs~~general and ~~123,776 shares of our common stock. The principal asset of Ebonex IPR Limited consisted of a patent portfolio with an independent fair value of $112,000. Included~~administrative expenses include changes in ~~the purchase were certain fixed assets that have been determined by management~~payroll and payroll related expenses, in addition to ~~have no immediate value and were not considered~~increases in ~~the valuation of Ebonex IPR.~~

Due to the fair value of the patent portfolio being significantly less than total consideration, the early development stage of the technology acquired and the uncertainties inherent in research and development, we recorded a non-cash impairment charge of $2.4 million for the period ended September 30, 2017.professional fees.

The following table summarizes our other income and interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 together with the dollar and percentage ~~change~~changes in those items (in thousands).

Insurance proceeds net of related expenses resulted from collection and payment activity that began in 2020 following the November 2019 fire. The change from period to period is due to the timing of insurance payments and associated fire clean-up expenses. The Company does not expect any additional insurance payments related to this matter. Both of the Company's two PPP loans totaling $332,000 received in May 2020 have been forgiven. One of the PPP loans for $131,000 was forgiven in January 2021 and the second PPP loan for $201,000 was forgiven in May 2021.

~~Interest~~We recognized a gain on property plant and equipment of approximately $739,000 and $590,000 during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 relates primarily~~2022. The gain on property plant and equipment resulted from the write-off of plant commitment accrued expenses. Plant clean-up and repair of fire damaged areas began in 2021 and were completed by the end of June 30, 2022.

The increase in interest expense for the three and six months ended June 30, 2022 is due to the ~~$5.0 million Interstate Battery convertible note~~interest paid on finance leases.

We recognized approximately $62,000 and ~~the $10.0 million notes payable, amortization of debt issuance costs incurred~~$113,000 in ~~connection with both of these notes, as well as an accrual for the USDA guarantee fee on the $10.0 million note to Green Bank. Interest relating to the $10.0 million notes payable~~interest and other income, during the three and ~~nine-month period~~six months ended ~~September~~June 30, ~~2016 was capitalized as part of~~2022, an increase from $24,000 and $25,000, during the ~~building cost of~~three and six months ended June 30, 2021. The increase in interest and other income is primarily due to the ~~TRIC facility in~~payments received for scrap material salvaged during the ~~amount of $153,000 and $456,000, respectively. Interest capitalization ceased upon completion of the building in November 2016.~~plant clean-up process.

The ~~note discount associated with the Interstate Battery convertible note is being amortized using the effective interest method over the three-year term~~primary driver of the ~~note, maturing~~increase in other income for the three and six months ended June 30, 2022 was due to a current year gain on ~~May 24, 2019. Using~~property and equipment resulting from the ~~effective interest method results in higher expense in later periods. Thus, non-cash interest expense associated with the note discount amortization will be $360,000 in 2017, $2.0 million in 2018~~write-off of plant commitment accrued expenses and ~~$2.6 million in 2019.~~driven by a prior year write down of fixed assets.

As of ~~September~~June 30, ~~2017,~~2022, we had ~~cash~~total assets of $30.9 million and ~~cash equivalents~~working capital of ~~$17.5 million as compared to $25.5 million of cash and cash equivalents as of December 31, 2016.~~$20.6 million.

The following table summarizes our cash ~~used in~~provided by (used in) operating, investing and financing activities (in thousands):

Net cash used in operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 and ~~2016~~2021 was ~~$13.3~~$6.3 million and ~~$5.8~~$4.9 million, respectively. Net cash used in operating activities during each of these periods consisted primarily of our net loss adjusted for ~~noncash~~non-cash items such as depreciation, amortization and stock-based compensation charges, loss on the disposal of property and ~~the impairment charge~~equipment, as well as net changes in working capital. The primary reason for the increase in net cash used in operating activities is due to our larger net loss, reflecting our increased operating expenses. As noted above, our operations during the first nine months of 2016 were focused on building the plant at TRIC, whereas during 2017 our focus has been on commissioning and commencing recycling operations at TRIC. The building at TRIC was completed in November 2016.

Net cash used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016~~2022 was ~~$5.9~~$0.4 million and ~~$12.9~~consisted mainly of $1.0 million ~~respectively.~~utilized towards the purchase of property and equipment, $1.1 million proceeds from the sale of equipment and $0.5 million utilized towards the warrant exercise. Net cash used in investing activities ~~during each~~for the six months ended June 30, 2021 was $1.1 million and consisted mainly of ~~these periods consists primarily~~$1.2 million for the purchase of ~~purchases of fixed assets related to~~property and equipment and $0.2 million utilized toward the ~~build out of our TRIC recycling facility~~investment in ~~Nevada and, to a lesser extent, our corporate headquarters during 2016.~~LINICO.

Net cash provided by financing activities of $5.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017 consists~~2022 consisted of ~~$10.5~~$4.6 million in net proceeds from the ~~issuance~~sale of ~~common stock~~Aqua Metals shares pursuant to ~~Johnson Controls~~the ATM and ~~$1.1~~$0.4 million of proceeds from ~~the exercise~~lease of ~~stock options partially offset by lease and debt payments.~~building. Net cash provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016 consisted~~2021 was approximately $10.2 million, consisting of ~~$9.1~~$9.3 million in net proceeds from the ~~issuance~~sale of ~~common stock~~Aqua Metals shares pursuant to ~~Interstate Battery~~the ATM and ~~other investors through our placement agent, National Securities Corporation; and $4.9~~$0.7 million ~~net~~of proceeds from ~~the Interstate Battery convertible note.~~stock option exercises.

As of June 30, 2022, we had total cash of $6.4 million and working capital of $20.6 million. As of the date of this report, we believe that ~~our working capital is sufficient to fund the commissioning and commencement of commercial operations of at least 16 AquaRefining modules and our commercial operations at TRIC. However,~~ we ~~will~~may require additional capital ~~within~~in order to fund our current level of ongoing costs and our proposed business plan over the next 12 months in order to increase production of AquaRefined lead at TRIC beyond that planned for 16 modules, to work with Johnson Controls on equipment integration and licensing to third parties and to fund our continued losses from operations until such time as we are able to achieve positive cash flow from operations.months. We intend to acquire the necessary capital though the possible sale of certain equipment and assets at TRIC and the collection of funds from the lease and potential sale of our plant. However, there can be no assurance that such funds will be available. If needed, we may seek ~~additional funds~~funding through ~~various~~the sale of equity or debt financing, ~~sources,~~ including the sale of our ~~equity and debt securities, licensing fees for~~common shares through our ~~technology, joint ventures with capital partners and/or project financing~~current at-the-market offering. Funding that includes the sale of our ~~recycling facilities. However, there can~~equity may be ~~no guarantees that such funds will be available on commercially reasonable terms, if at all.~~dilutive. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations. ~~Additionally, Aqua Metals Reno, or AMR,~~

No material changes from what was not in compliance with its minimum debt service coverage ratio covenant as of and for the three month periods ended March 31, June 30, and September 30, 2017 on its loan from Green Bank. AMR received a waiver for the minimum debt service coverage ratio covenant for the periods ended March 31, June 30, and September 30, 2017. While we expect to continue to receive waivers from Green Bank for non-compliance with such covenant, there is no guarantee that we will receive such waivers. If Green Bank determines not to grant us a waiver for non-compliancereported in the future, we would be in default of the loan and Green Bank would be able to accelerate the payment of all amounts under the loan. In addition, a failure by Green Bank to provide us with the required waiver could also constitute a default under our $5 million loan with Interstate Battery and allow it to accelerate the payment of all amounts thereunder.2021 Form 10-K.

As of the date of this report, Interstate Battery has raised a claim that we are in technical breach of a negative covenant under our $5 million loan from Interstate Battery. The claimed breach relates to our failure to obtain Interstate Battery’s prior written consent to our acquisition of Ebonex IPR, Ltd. We are in negotiations with Interstate Battery to resolve the claim and we believe we will be able to resolve the claim. However, in the event we are unable to resolve the matter, Interstate Battery may declare a default under the loan and attempt to accelerate the payment of all amounts thereunder. There can be no assurance we will be able to resolve the claim of breach or that Interstate Battery will not declare a default under the loan and attempt to accelerate the payment of all amounts thereunder.

Our management, with the participation of our chief executive officer and chief financial officer, ~~has~~ evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based on ~~this~~that evaluation, management, including our chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017.~~2022.

There were no changes in our internal control over financial reporting that occurred during the ~~three-month~~three month period ended ~~September~~June 30, ~~2017~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of any future matters could materially affect our future financial position, results of operations or cash flows.

Investing in our common stock involves a high degree of risk. Before purchasing our common stock, you should read and consider carefully the following risk factors as well as all other information contained in this report, including our consolidated financial statements and the related notes. Each of these risk factors, either alone or taken together, could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common stock. There may be additional risks that we do not presently know of or that we currently believe are ~~numerous~~immaterial, which could also impair our business and ~~varied risks, known and unknown, that may prevent us from achieving our goals.~~financial position. If any of ~~these risks actually~~the events described below were to occur, our ~~business,~~ financial condition, orour ability to access capital resources, our results of ~~operation may~~operations and/or our future growth prospects could be materially and adversely ~~affected. In such case,~~affected and the ~~trading~~market price of our common stock could ~~decline and investors~~decline. As a result, you could lose some or all ~~or part~~ of ~~their investment.~~any investment you may make in our common stock.

We have experienced a fire at our TRIC facility which has caused significant damage and, as a result of the fire, we revised our plans for the commercialization of our AquaRefining technologies. However, there can be no assurance that such plans will be successful. On the evening of November 29, 2019, a fire occurred at our lead acid battery, or LAB, recycling facility at TRIC. The cause of ignition is likely related to on-site contractor work that was being performed on the day of the fire. The fire was substantially contained to the AquaRefining area of the plant, however the fire destroyed or impaired beyond recovery substantially all of the AquaRefining equipment, including all 16 AquaRefining modules, control wiring and other supporting infrastructure.

When we designed and developed TRIC, we did so at a time when our business model assumed that TRIC would be the first of many LAB recycling facilities owned and operated by us. Commencing in 2017, we began to shift our focus away from the development of additional Company-owned LAB recycling facilities and towards the licensing of our AquaRefining technology to partners engaged in LAB recycling. We continued to develop TRIC as a LAB recycling facility for purposes of demonstrating AquaRefining on a commercial scale. However, as a result of the fire and our high costs of capital, we decided that the cost of restoring TRIC to its pre-fire state would not be the best use of our available cash and that we may be able to achieve the benefits of operating 16 AquaRefining modules, namely the demonstration of the scalability of our AquaRefining technologies, through a less costly commercialization program. Commencing in early 2020, we began to focus on licensing opportunities within the $20+ billion lead battery recycling marketplace and in February 2021 we entered into a triple-net lease-to-buy agreement with respect to TRIC. We believe this path is far less capital intensive than a rebuild of TRIC to its pre-fire state and we believe this plan could be funded in part from cash on hand and asset disposition of the AquaRefinery. However, there can be no assurance that our revised business model will be successful or that we will acquire the additional capital sufficient to fund our revised business plan.

We have initiated the research and development of the application of our AquaRefining technology to the recycling and recovery of lithium-ion batteries, however there can be no assurance that our efforts will be successful. In September 2021, we announced the establishment of our Innovation Center, in McCarran, Nevada, focused on applying our AquaRefining technology to lithium-ion battery recycling research and development and prototype system activities. Earlier in 2021, we filed a provisional patent for recovering high-value metals from recycled lithium-ion batteries to complement the patents for AquaRefining. Based on early phase testing, we believe we may be able to apply our AquaRefining methodology, used for plating ultra-high purity lead, to plating the metals found in lithium-ion batteries such as cobalt, nickel, and copper. Lithium and manganese will be recovered in other forms. However, we have only recently begun to conduct research and development in the recycling of lithium-ion batteries, and there can be no assurance that our efforts will be successful or that we will be able to conduct the recycling and recovery of the high value metals from lithium-ion batteries on a commercial scale.

Since we have a limited operating history and have only recently commenced revenue producing operations, it is difficult for potential investors to evaluate our ~~business~~business. .We formed our corporation in June ~~2014 and only commenced revenue producing operations in the first quarter of 2017.~~2014. From inception through ~~September~~June 30, ~~2017,~~2022, we ~~have~~ generated a total of ~~$1.2~~$11.5 million of revenue, all of which was derived primarily from the sale of lead compounds and plastics ~~during~~and, to a lesser extent, the ~~nine-month period ended September 30, 2017.~~sale of lead bullion and AquaRefined lead. To date, our operations have primarily consisted of the development and testing and limited operations of our AquaRefining process, the construction of our initial LAB recycling facility ~~in Tahoe Regional Industrial Center, McCarran, Nevada (“TRIC”),~~at TRIC, the continuing development of our LAB recycling operations at TRIC and limited revenue producing operations as we ~~bring~~brought those LAB recycling operations online. As a result of the November 2019 fire at TRIC, we have suspended all plant-based revenue producing operations, entered into a lease-to-buy agreement with respect to TRIC and have shifted our business model to focus exclusively on the licensing of our AquaRefining technology to partners engaged in LAB recycling and, subject to our successful research and development, lithium-ion batteries. As of the date of this report, we are unable to estimate when we expect to commence any meaningful commercial or revenue producing operations from our licensing model. Our limited operating history makes it difficult for potential investors to evaluate our technology or prospective operations. As an ~~early stage~~early-stage company, we are subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business, including, without limitation:

Investors should evaluate an investment in us in light of the uncertainties encountered by developing companies in a competitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability.

Our business is dependent upon our successful implementation of novel technologies and processes and there can be no assurance that we will be able to implement such technologies and processes in a manner that supports the successful commercial roll-out of our business model. While much of the technology and processes involved in lead recycling operations are widely used and proven, our AquaRefining process is largely novel and, to date, has been demonstrated on a modest scale of operations. While we have shown that our proprietary technology can produce AquaRefined lead on a small scale, we had just begun to demonstrate that we can produce AquaRefined lead on a commercial scale prior to the November 2019 fire at TRIC. Further, as we endeavored to complete our AquaRefining production line, we continuously encountered unforeseen complications that delayed the ramping up of our AquaRefining modules and the integration of our AquaRefining process with the traditional lead recycling operations. There can be no assurance that we will not encounter similar unforeseen complications as we pursue our revised business model.

We ~~will~~may need additional financing to execute our business plan and fund operations, which additional financing may not be available on reasonable terms or at all.As of ~~September~~June 30, ~~2017,~~2022, we had total ~~assets~~cash of ~~$68.2~~$6.4 million and working capital of ~~$15.1~~$20.6 million. As of the date of this report, we believe that ~~our working capital is sufficient to fund the commissioning and commencement of commercial operations of at least 16 AquaRefining modules and our commercial operations. However,~~ we ~~believe that we will~~may require additional capital ~~within~~in order to fund our current level of ongoing costs and our proposed business plan over the next 12 months in order to increase production of AquaRefined lead at TRIC beyond that planned for 16 modules, to work with Johnson Controls on equipment integration and licensing to third parties and to fund our continued losses from operations until such time as we are able to achieve positive cash flow from operations.months. We intend to ~~seek additional funds through various financing sources,~~acquire the necessary capital though the possible sale of certain equipment and assets at TRIC, including the proposed sale of ~~our equity and debt securities, licensing fees for our technology, joint ventures with capital partners and/or project financing of our recycling facilities.~~the plant. However, there can be no assurance that ~~such funds~~we will be ~~available on commercially reasonable terms,~~able to acquire proceeds from these sources in amounts sufficient to fund the capital requirements or, if ~~at all.~~we are successful, that we will not require additional capital. If needed, we may seek funding through the sale of equity or debt financing, including the sale of our common shares through our current at-the-market offering. Funding that includes the sale of our equity may be dilutive. If such funding is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations, in which case you may lose your entire investment.

Our business may be adversely affected by the recent coronavirus outbreak. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, this coronavirus spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. The outbreak and any preventative or protective actions that we or our partners and suppliers may take in respect of this coronavirus may result in a period of disruption to work in progress. Our partners’ and suppliers’ businesses could be disrupted, and our ongoing V1.5 operations and license negotiations could be negatively affected. Any resulting financial impact cannot be reasonably estimated at this time but may materially affect our business and financial condition. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

Our business model is new and has not been proven by us or anyone else.We are engaged in the business of producing recycled lead and, subject to our successful research and development, lithium-ion batteries through a novel, and ~~unproven~~proven on a modest scale, technology. While the production of recycled lead is an established business, to date all recycled lead has been produced by way of traditional smelting processes. To our knowledge, no one has successfully produced recycled lead or lithium-ion batteries in commercial quantities other than by way of smelting. In addition, ~~our lead recycling production line at TRIC is the first-of-its-kind and~~ neither we nor anyone else has ever successfully built a production line that commercially recycles LABs without smelting. While we have commenced limited lead recycling operations at our TRIC facility, to date all revenues have been derived from the sale of lead compounds and plastics and we have not commenced the commercial production of AquaRefined lead. Further, there can be no assurance that either we or our licensees will be able to produce AquaRefined lead lithium-ion batteries in commercial quantities at a cost of production that will provide us and our proposed licensees with an adequate profit margin. The uniqueness of our AquaRefining process ~~and our production line at TRIC~~ presents potential risks associated with the development of a business model that is untried and unproven.

~~Certain industry participants may have the ability to restrict our access to used LABs and otherwise focus significant competitive pressure on us~~. We believe that our primary competition will come from operators of existing smelters and other parties invested in the existing supply chain for smelting, both of which may resist the change presented by our AquaRefining process. Competition from such incumbents may come in the form of restricted access to used LABs. We believe that LAB manufacturers who also maintain their own smelting operations control a significant part of the market for used LABs. We will require access to used LABs at market prices in order to carry out our business plan. If those LAB manufacturers and others involved in the reverse supply chain for used LABs attempt to restrict our access to used LABs, that may adversely affect our prospects and future growth. There can be no assurance that we will be able to effectively withstand the pressures applied by our competition.

Even if weour licensees are successful in recycling lead orlithium-ion batteriesusing our processes, there can be no assurance that the AquaRefined lead or other recycled metals will meet the certification and purity requirements of our potential customers.A key component of our business plan is ~~to produce~~the production of recycled lead through our AquaRefining process of the highest purity (at least 99.99% pure lead), which we refer to as AquaRefined lead. We believe that our AquaRefined lead will provide usour licensees with a revenue premium over the ~~highest gross profit margin~~market price of lead on the London Metal Exchange, or LME, and, more importantly, ~~our~~the ability to produce AquaRefined lead will be vital to confirming the efficacy and relevancy of our proprietary technology. Our licensees and their customers will require that our AquaRefined lead meet certain minimum purity standards and, in all likelihood, require independent assays to confirm the lead’s purity. As of the date of this report, we have produced limited quantities of AquaRefined ~~lead.~~lead and in November 2018, Clarios confirmed its approval of the purity of our AquaRefined lead by providing to us official vendor approval to receive finished lead at its manufacturing facilities. However, we have not produced AquaRefined lead in significant commercial quantities and there can be no assurance that weour licensees will be able to do so or, if weour licensees are able to produce AquaRefined lead in significant commercial quantities, that such lead will continue to meet the required purity standards of ~~our~~their customers. IfFurther, while we ~~are unable to commercially produce AquaRefined lead that meets the purity stands established by our customers, our entire business plan~~believe we may be ~~invalidated~~able to apply our AquaRefining methodology to plating the metals found in lithium-ion batteries, such as cobalt, nickel, and ~~you may suffer~~copper, we have only recently begun to conduct research and development in the ~~loss~~recycling of ~~your entre investment.~~lithium-ion batteries, and there can be no assurance that our efforts will be successful or that we will be able to conduct the recycling and recovery of the high value metals from lithium-ion batteries on a commercial scale.

While we have been successful in producing AquaRefined lead in small volumes, there can be no assurance that either we or our licensees will be able to replicate the process, along with all of the expected economic advantages, on a large commercial scale either for us or our prospective licensees. While we have been successful in producing AquaRefined lead in small volumes, there can be no assurance that we will be able to replicate the process, along with all of the expected economic advantages, on a commercial scale. As of the date of this report, ourOur commercial operations have primarily involved the production of lead compounds and plastics from recycled LABs, and more recently, the sale of lead bullion and AquaRefined lead. In April 2018, we ~~have not~~ commenced the ~~commercial~~limited production of cast lead bullion (mixture of lead purchased to prime the kettles and AquaRefined ~~lead.~~lead from our AquaRefining process), and in June 2018, we commenced the sale of pure AquaRefined lead in the form of two tonne blocks. While we believe that our development, testing and limited production to date has validated the concept of our AquaRefining process, the limited nature of our operations to date are not sufficient to confirm the economic returns on our production of recycled lead. Further, we have not engaged in any commercial operations in the area of recycling of lithium-ion batteries. There can be no assurance that ~~the commencement of commercial production of AquaRefined lead at~~ our ~~TRIC facility will not incur unexpected costs or setbacks that might restrict the desired scale of our intended operations or that we~~licensees will be able to produce AquaRefined lead or high value metals from lithium-ion batteries in commercial quantities at a cost of production that will provide us and our proposed licensees with an adequate profit margin.

~~We have completed the construction of~~Our business may be negatively affected by labor issues and higher labor costs. Our ability to maintain our ~~initial LAB recycling facility at TRIC, however we have been delayed in the completion of~~workforce depends on our ~~lead recycling operations at TRIC~~ability to attract and ~~we may encounter further delays.~~ ~~We completed the construction of our initial LAB recycling facility at TRIC in August 2016~~retain new and commenced the limited production of recycled lead in January 2017. However, as of the date of this report, our commercial operations have involved the production of lead compounds and plastics from recycled LABs and we have not commenced the commercial production of AquaRefined lead.existing employees. As of the date of this report, all 16 AquaRefining modules planned for TRIC have been delivered. Eight are in-place and fully assembled of which four are commissioned. The final eight modules are in-place and undergoing final assembly. We have been delayed in the installation and commissioningnone of our ~~AquaRefining modules and the completion of our lead recycling operations at TRIC~~employees are covered by collective bargaining agreements and we ~~continue~~consider our labor relations to ~~conduct refinements to the production line~~be acceptable. However, we could experience workforce dissatisfaction which could trigger bargaining issues, employment discrimination liability issues as well as wage and benefit consequences, especially during critical operation periods. We could also experience a work stoppage or other disputes which could disrupt our operations and could harm our operating results. In addition, legislation or changes in ~~order to accommodate commercial production of AquaRefined lead. We expect to commence the commercial production of AquaRefined lead by December 31, 2017, however, due to the delays~~regulations could result in labor shortages and ~~unforeseen issues in the completion of the AquaRefining production line we have experienced to date, there~~higher labor costs. There can be no assurance that we will not encounter additional delays and issues. In addition, since our lead recycling production line at TRIC is the first-of-its-kind, neither we nor anyone else has ever built a facility of this nature and there can be no assurance that we willmay not experience ~~continuing operational delays and~~labor issues ~~including significant downtime from time to time, as we progress into the commercial production of AquaRefined lead. There can be no assurance~~ that ~~the commencement of commercial AquaRefining operations at our TRIC facility will not incur unexpected costs or hurdles that might restrict the desired scale of our intended operations or~~ negatively impact our ~~projected gross profit margin.~~

~~Our outstanding debt may make it difficult for us obtain additional financing using our future operating cash flow.~~We currently have a substantial amount of indebtedness, including approximately $9.9 million owed to Green Bank and approximately $5.8 million owed to Interstate Battery as of the date of this report. Such indebtedness could limit our ability to borrow additional funds to fund operations or ~~expansion or increase the cost~~results of ~~any such borrowing, or both. Our inability to conduct additional debt financing could:~~

~~Any of these or other consequences or events could have a material adverse effect on our ability to finance our business and our~~ operations.

~~We are subject to restrictive debt covenants that may limit our ability to run our business, finance our capital needs and pursue business opportunities and activities~~.As of the date of this report, we are indebted to Green Bank for approximately $9.9 million and Interstate Battery for approximately $5.8 million, all of which is secured by liens or substantially all of our assets. The credit agreements governing such indebtedness contain covenants that limit our ability to take certain actions. These covenants could limit our ability to finance our future operations and capital needs and our ability to pursue business opportunities and activities that may be in our interest. If we breach any of these covenants, the debt holder could declare a default under the credit agreement, in which case all of the indebtedness may then become immediately due and payable. In addition, any default under one credit agreement could lead to an acceleration of debt under the other credit agreement pursuant to cross-acceleration or cross-default provisions. If the debt under either credit agreement is accelerated, we may not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, since all of the indebtedness to Green Bank and Interstate Battery is secured by substantially all of our assets, a default under either credit facility could enable the debtholder to foreclose on its security interest and attempt to seize our assets. The affirmative and negative debt covenants could materially adversely impact our ability to operate and finance our business. In addition, our default under any of these covenants could subject us to accelerated debt payments or foreclosure proceedings that could threaten our ability to continue as a going concern.

~~Interstate Battery currently claims that we are in breach of a negative covenant with Interstate Battery and we have not been able to comply with our debt service covenant with Green Bank~~. As of the date of this report, Interstate Battery has raised a claim that we are in technical breach of a negative covenant under our loan with Interstate Battery. The claimed breach relates to our failure to obtain Interstate Battery’s prior written consent to our acquisition of Ebonex IPR, Ltd. We are in negotiations with Interstate Battery to resolve the claim and we believe we will be able to resolve the matter. However, in the event we are unable to resolve the matter, Interstate Battery may declare a default under the loan and attempt to accelerate the payment of all amounts thereunder. There can be no assurance we will be able to resolve the claimed breach or that Interstate Battery will not declare a default under the loan and attempt to accelerate the payment of all amounts thereunder. In addition, our credit agreement with Green Bank requires, among other affirmative and negative covenants, that we maintain a minimum debt service coverage ratio of 1.25 to 1.0 beginning with the twelve-month period ending March 31, 2017. We failed to meet the minimum debt service coverage ratio covenant as of March 31, June 30 and September 30, 2017, and we were required to obtain a waiver of the minimum debt service coverage ratio covenant from Green Bank for such periods. There can be no assurance that Green Bank will provide waivers of this covenant, or any other covenant that we may fail to satisfy, going forward. Our default under either the Interstate Battery or Green Bank loan covenants could subject us to accelerated debt payments or foreclosure proceedings that could threaten our ability to continue as a going concern.

Our intellectual property rights may not be adequate to protect our business.As of the date of this report, we have secured ~~international~~granted/allowed patents in the following countries/regions: U.S. (9837689, 10665907, 11028460, 10793957, 10689769, 10340561, 10316420, 11072864, and 11239507), Canada (2930945, 2968064, 3007101, and allowed 2986022), China (201480071929, 107849634, ZL201680041600.X, ZL201680041571.7, ZL 201580062811.7, 108603242, and 109183069), Europe (3072180, 3294916, 3221918, 3483305, and 3294929), Eurasia (32371, 35532, and 36722), South Africa (2016/04083, 2017/08454, 2017/08455, 2017/04123, and 2018/04384), South Korea ~~(Korea Patent No. 10-1739414)~~(101739414, 101882932, 101926033, 102096976, 102274210, 102242697, and 102310653), Honduras (80-2019), India (318321, 369304, and 364173), Indonesia (IDP000061176, IDP000066550, IDP000074882, and IDP000077702), Japan ~~(Japan Patent No. 6173595)~~(6173595, 6805240, 6775006, 6592088, 6861773, and 6944453), Malaysia (MY-181071-A, MY-185652-A, and MY-188863-A), Mexico (357027, 387016, and 392072), OAPI (17808, 19078, and 18736), Ukraine (118037, 124142, 119580, 124145, and 124523), Vietnam (22588 and allowed 1-2017-05043), Australia ~~(Australia Patent No. AU2014353227)~~(2014353227, 2017213449, 2016260407, 2016260408, 2015350562, and 2016362502), ARIPO (4995, 5559, and 5946), Peru (649-2016), Chile (62.308 and 61.519), and ~~secured allowances in South Africa~~Brazil (11 2018 011217-8, 11 2016 011396-9, and ~~the United States for “Devices and Method for Smelterless Recycling of Lead Acid Batteries.”~~ 11 2017 024433-0).

We also have ~~six~~further patent applications pending in the United States and 47numerous corresponding patent applications pending in ~~20 other~~22 additional jurisdictions relating to certain elements of the technology underlying our AquaRefining process and related apparatus and chemical formulations. However, no assurances can be given that any patent issued, or any patents issued on our current and any future patent applications, will be sufficiently broad to adequately protect our technology. In addition, we cannot assure you that any patents issued now or in the future will not be challenged, invalidated, or circumvented.

Even patents issued to us may not stop a competitor from illegally using our patented processes and materials. In such event, we would incur substantial costs and expenses, including lost time of management in addressing and litigating, if necessary, such matters. Additionally, we rely upon a combination of trade secret laws and nondisclosure agreements with third parties and employees having access to confidential information or receiving unpatented proprietary know-how, trade secrets and technology to protect our proprietary rights and technology. These laws and agreements provide only limited protection. We can give no assurance that these measures will adequately protect us from misappropriation of proprietary information.

Our processes may infringe on the intellectual property rights of others, which could lead to costly disputes or disruptions.The applied science industry is characterized by frequent allegations of intellectual property infringement. Though we do not expect to be subject to any of these allegations, any allegation of infringement could be time consuming and expensive to defend or resolve, result in substantial diversion of management resources, cause suspension of operations or force us to enter into royalty, license, or other agreements rather than dispute the merits of such allegation. If patent holders or other holders of intellectual property initiate legal proceedings, we may be forced into protracted and costly litigation. We may not be successful in defending such litigation and may not be able to procure any required royalty or license agreements on acceptable terms or at all.

~~Our business strategy includes licensing arrangements and entering into joint ventures and strategic alliances, however as~~

~~There can be no assurance that we will be able to negotiate our key agreement with Johnson Controls on commercially reasonable terms, or at all~~. In February 2017, we entered into a series of agreements with Johnson Controls, including an equipment supply agreement pursuant to which, among other things, we agreed to work with Johnson Controls on the development of a program for the conversion of Johnson Controls and certain strategic partners of Johnson Controls’ existing lead smelters throughout North America, China and Europe to a lead recycling process utilizing our AquaRefining technology and equipment, know-how and services. The equipment supply agreement discusses the development of the conversion program in general terms and contemplates that the parties will enter into a definitive development program agreement that is based on the general terms set forth in the equipment supply agreement and provides more detailed terms and conditions, including the economic obligations and rights of each party. In September 2017, we commenced discussions with Johnson Controls concerning the development program agreement, however as of the date of this report our discussions with Johnson Controls concerning the development program agreement remain preliminary in nature. There can be no assurance that we will be able to negotiate and conclude a definitive development program agreement with Johnson Controls on commercially reasonable terms, or at all.

We are dependent on a limited number of suppliers of certain materials used in our AquaRefining process and our inability to obtain these materials as and when needed could cause a material disruption in our operations.Our AquaRefining process involves a significant number of elements, chemicals, solvents and other materials, in addition to used LABs. There are a limited number of suppliers of certain materials used in our AquaRefining process and we have no agreements in place for our supply of such materials. Our ability to conduct our AquaRefining process on a commercial scale will depend significantly on obtaining timely and adequate supply of these materials on competitive terms. Our inability to source these materials on a timely and cost-efficient manner could interrupt our operations, significantly limit our revenue sales and increase our costs. This factor could also impair our ability to meet our commitments to supply our customers. Our inability to obtain these materials as and when needed could cause a material disruption in our operations.

~~If we are unable to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in decreased productivity~~. If our AquaRefining process proves to be commercially viable, growth and expansion activities could place a significant strain on our managerial, administrative, technical, operational and financial resources. Our organization, procedures and management may not be adequate to fully support the expansion of our operations or the efficient execution of our business strategy. If we are unable to manage future expansion effectively, our business, operations and financial condition may suffer significantly, resulting in decreased productivity.

~~Certain industry participants may have the ability to restrict our access to used LABs and otherwise focus significant competitive pressure on us~~. We believe that our primary competition will come from operators of existing smelters and other parties invested in the existing supply chain for smelting, both of which may resist the change presented by our AquaRefining process. Competition from such incumbents may come in the form of restricted access to used LABs. We believe that LAB manufacturers who also maintain their own smelting operations control approximately 50% of the market for used LABs. We will require access to used LABs at market prices in order to carry out our business plan. If those LAB manufacturers and others involved in the reverse supply chain for used LABs attempt to restrict our access to used LABs that may adversely affect our prospects and future growth. There can be no assurance that we will be able to effectively withstand the pressures applied by our competition.

We may experience significant fluctuations in raw material prices and the price of our principal product, either of which could have a material adverse effect on our liquidity, growth prospects and results of operations. Used LABs are our primary raw material and we believe that in recent years the cost of used LABs has been volatile at times. In addition, we believe that the cost of used LABs can be seasonal, with prices trending lower in the winter months (as automobile owners increase their purchase of new LABs, thereby putting a greater number of used LABs on the market) and trend higher in the spring (as the purchase of new LABs, and supply of used LABs, decreases). Our principal product, recycled lead, has also experienced price volatility from time to time as well. For example, the market price of lead on the London Metal Exchange, or LME, during 2015 and 2016 ranged from $1,554 to $2,456 per tonne. While we intend to pursue supply and tolling arrangements as appropriate to offset any price volatility, the volatile nature of prices for used LABs and recycled lead could have an adverse impact on our liquidity, growth prospects and results of operations.

Global economic conditions could negatively affect our prospects for growth and operating results.Our prospects for growth and operating results will be directly affected by the general global economic conditions of the industries in which our suppliers, partners and customer groups operate. We believe that the market price of our principal product, recycled lead, is relatively volatile and reacts to general global economic conditions. Lead prices decreased from $2,139 per tonne on May 5, 2015 to a low of $1,554 per tonne on November 23, 2015 because of fluctuations in the market. ~~A month later, the price per tonne increased back up to $1,801 per tonne; the~~Lead price per tonne was ~~$1,983 on December 31, 2016.~~approximately $2,067 at the end of June 2022. Our ~~business~~business will be highly dependent on the economic and market conditions in each of the geographic areas in which we operate. These conditions affect our business by reducing the demand for LABs and decreasing the price of lead in times of economic ~~down turn~~downturn and increasing the price of used LABs in times of increasing demand of LABs and recycled lead. There can be no assurance that global economic conditions will not negatively impact our liquidity, growth prospects and results of operations.

We are subject to the risks of conducting business outside the United States.A part of our strategy involves our pursuit of growth opportunities in certain international market locations. We intend to pursue licensing or joint venture arrangements with local partners who will be primarily responsible for the day-to-day operations. Any expansion outside of the USU.S. will require significant management attention and financial resources to successfully develop and operate any such facilities, including the sales, supply and support channels, and we cannot assure you that we will be successful or that our expenditures in this effort will not exceed the amount of any resulting revenues. Our international operations expose us to risks and challenges that we would otherwise not face if we conducted our business only in the United States, such as:

U.S. ~~Government~~government regulation and environmental, health and safety concerns may adversely affect our business.Our operations and the operations of our licensees in the United States will be subject to the ~~Federal, State~~federal, state and local environmental, health and safety laws applicable to the reclamation of lead acid ~~batteries.~~batteries including the Occupational Safety and Health Act ("OSHA") of 1970 and comparable state statutes. Our facilities and the facilities of our licensees will have to obtain environmental permits or approvals to ~~operate,~~expand, including those associated with air emissions, water discharges, and waste management and storage. We and our licensees may face opposition from local residents or public interest groups to the installation and operation of our respective facilities. Failure to secure (or significant delays in securing) the necessary approvals could prevent us from pursuing some of our planned operations and adversely affect our business, financial results and growth prospects. In addition to permitting requirements, our operations and the operations of our licensees are subject to environmental health, safety and transportation laws and regulations that govern the management of and exposure to hazardous materials such as the lead and acids involved in battery reclamation. These include hazard communication and other occupational safety requirements for employees, which may mandate industrial hygiene monitoring of employees for potential exposure to lead.

We and our licensees are also subject to inspection from time to time by various federal, state and local environmental, health and safety regulatory agencies and, as a result of these inspections, we and our licensees may be cited for certain items of non-compliance. For example, in August 2018, the Nevada Occupational Safety and Health Administration, or Nevada OSHA, delivered to us a citation and notification of penalty. The citation listed a number of items related to our compliance with Nevada OSHA’s Lead Standard. We reached a settlement agreement with Nevada OSHA on the amount of penalties associated with the citation. We also agreed to engage a lead compliance expert to audit our facility at TRIC for compliance with all provision of the Lead Standard and to generate a written report with findings of any noncompliance, recommended corrective actions, and a time frame to correct the findings of noncompliance. We agreed with Nevada OSHA to correct all findings of noncompliance within the time frame proposed by the lead compliance expert in their report. The lead compliance expert has been engaged, has visited the facility at TRIC and has completed the written report. We have corrected all findings of noncompliance in a timely manner.

Failure to comply with ~~these~~the requirements of federal, state and local environmental, health and safety laws could subject our business and the businesses of our licensees to significant penalties (civil or criminal) and other sanctions that could adversely affect our business.

In addition, in the event we are unable to ~~present~~operate and ~~operate~~expand our AquaRefining process and operations as safe and environmentally responsible, we and our licensees may face opposition from local governments, residents or public interest groups to the installation and operation of our facilities.

The development of new AquaRefining technology by us or our partners or licensees, and the dissemination of our AquaRefining process will depend on our ability to acquire necessary permits and approvals, of which there can be no assurance. As noted above, our AquaRefining processes will have to obtain environmental permits or approvals to operate, including those associated with air emissions, water discharges, and waste management and storage. In addition, we expect that any use of AquaRefining operations at our partner's facilities will require additional permitting and approvals. Failure to secure (or significant delays in securing) the necessary permits and approvals could prevent us and our partners and licensees from pursuing additional AquaRefining expansion, and otherwise adversely affect our business, financial results and growth prospects. Further, the loss of any necessary permit or approval could result in the closure of an AquaRefining facility and the loss of our investment associated with such facility.

Our business involves the handling of hazardous materials and we may become subject to significant fines and other liabilities in the event we mishandle those materials. The nature of our operations involves risks, including the potential for exposure to hazardous materials such as lead, that could result in personal injury and property damage claims from third parties, including employees and neighbors, which claims could result in significant costs or other environmental liability. Our operations also pose a risk of releases of hazardous substances, such as lead or acids, into the environment, which can result in liabilities for the removal or remediation of such hazardous substances from the properties at which they have been released, liabilities which can be imposed regardless of fault, and our business could be held liable for the entire cost of cleanup even if we were only partially responsible. We are also subject to the possibility that we may receive notices of potential liability in connection with materials that were sent to third-party recycling, treatment, and/or disposal facilities under the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, ~~(“CERCLA”),~~or CERCLA, and comparable state statutes, which impose liability for investigation and remediation of contamination without regard to fault or the legality of the conduct that contributed to the contamination, and for damages to natural resources. Liability under CERCLA is retroactive, and, under certain circumstances, liability for the entire cost of a cleanup can be imposed on any responsible party. Any such liability could result in judgments or settlements that restrict our operations in a manner that materially adversely effects our operations and could result in fines, penalties or awards that could materially ~~impairs~~impair our financial condition and even threaten our continued operation as a going concern.

We will be subject to foreign government regulation and environmental, health and safety concerns that may adversely affect our business. As our business expands outside of the United States, our operations will be subject to the environmental, health and safety laws of the countries where we do business, including permitting and compliance requirements that address the similar risks as do the laws in the United States, as well as international legal requirements such as those applicable to the transportation of hazardous materials. Depending on the country or region, these laws could be as stringent as those in the ~~US,~~U.S., or they could be less stringent or not as strictly enforced. In some countries in which we are interested in expanding our business, such as Mexico and China, the relevant environmental regulatory and enforcement frameworks are in flux and subject to change. Compliance with these requirements will cause our business to incur costs, and failure to comply with these requirements could adversely affect our business.

In the event we are unable to present and operate our AquaRefining process and operations as safe and environmentally responsible, we may face opposition from local governments, residents or public interest groups to the installation and operation of our facilities.

~~Our common stock.~~The market price of our shares may be subject to fluctuation and volatility. You could lose all or part of your investment ~~Our common stock has traded on the Nasdaq Capital Market, under the symbol “AQMS”, since July 31, 2015. Since that date,~~. The market price of our common stock ~~has at times been relatively thinly traded and~~is subject to ~~price volatility. There can be no assurance that we will be able~~wide fluctuations in response to ~~successfully maintain a liquid market for~~various factors, some of which are beyond our ~~common shares. The stock market in general,~~control. Since April 1, 2020, the reported high and ~~early stage public companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance~~low sales prices of such companies. If we are unable to develop and maintain a liquid market for our common shares, you may not be able to sell your common shares at prices you consider to be fair or at times that are convenient for you, or at all.

~~Control by management and others may limit your ability to influence the outcome of director elections and other transactions requiring stockholder approval~~. As of the date of this report, our directors and executive officers beneficially own approximately 12.9% of our outstanding common stock. In addition, two other stockholders, Johnson Controls and Interstate Battery, together, beneficially own an additional 19.5%. As a result, such persons acting together will have significant influence over corporate actions requiring stockholder approval, including the following actions:

Such persons’ stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

~~We are an “emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make~~ our common stock ~~less attractive~~have ranged from $0.35 to ~~investors~~. We$8.06 through June 30, 2022. The market price of our shares on the NASDAQ Capital Market may fluctuate as a result of a number of factors, some of which are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”beyond our control, including, but not limited to:

WeThese factors and any corresponding price fluctuations may materially and adversely affect the market price of our shares and result in substantial losses being incurred by our investors. In the past, following periods of market volatility, public company stockholders have ~~chosen~~often instituted securities class action litigation. If we were involved in securities litigation, it could impose a substantial cost upon us and divert the resources and attention of our management from our business.

If securities or industry analysts do not continue to ~~“opt out” of the extended transition periods available for complying with new~~publish research or revised accounting standards, but we intend to take advantage of all of the other benefits available under the JOBS Act, including the exemptions discussed above. We cannot predict if investors will findpublish inaccurate or unfavorable research about our ~~common~~business, our stock ~~less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active~~price and trading volume could decline. The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If industry analysts cease coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline. In addition, independent industry analysts may provide reviews of our AquaRefining technology, as well as competitive technologies, and perception of our offerings in the marketplace may be significantly influenced by these reviews. We have no control over what these industry analysts report, and because industry analysts may influence current and potential customers, our brand could be harmed if they do not provide a positive review of our products and platform capabilities or view us as a market leader.

We may be at an increased risk of securities class action litigation. Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because early-stage companies have experienced significant stock price volatility in recent years. If we were to be sued, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. In 2017, a securities class action lawsuit and shareholder derivative lawsuit were filed against us. In 2021, we were able to settle both actions through our issuance of $500,000 of our common shares and our ~~stock price may be more volatile.~~adoption of limited corporate governance reforms, however we incurred significant legal costs in defending both actions and our management was required to devote significant time in managing the defense of the actions.

We ~~will remain an “emerging growth company until 2020, although~~maintain director and officer insurance that we will lose that status sooner if our revenues exceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 millionregard as ~~of any June 30.~~

~~Our status as an “emerging growth company”~~reasonably adequate to protect us from potential claims. We are responsible for meeting certain deductibles under the ~~JOBS Act~~policies and, in any event, we cannot assure you that the insurance coverage will adequately protect us from claims made. Further, the costs of insurance may increase and the availability of coverage may decrease. As a result, we may not be able to maintain our current levels of insurance at a reasonable cost, or at all, which might make it more difficult to ~~raise capital~~attract qualified candidates to serve as executive officers or directors.

Future sales of substantial amounts of our common stock, or the possibility that such sales could occur, could adversely affect the market price of our common stock. We cannot predict the effect, if any, that future issuances or sales of our securities or the availability of our securities for future issuance or sale, will have on the market price of our common stock. Issuances or sales of substantial amounts of our securities, or the perception that such issuances or sales might occur, could negatively impact the market price of our common stock and ~~when we need it~~. ~~Because of~~ the ~~exemptions from various reporting requirements provided to us as an “emerging growth company,”~~terms upon which we may ~~be less attractive to investors and it may be difficult for us to raise~~obtain additional ~~capital as and when we need it. Investors may be unable to compare our business with other companies~~equity financing in our industry if they believe that our reporting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.the future.

We have not paid dividends in the past and have no plans to pay dividends.We plan to reinvest all of our earnings, to the extent we have earnings, in order to ~~develop~~pursue our ~~recycling centers~~business plan and cover operating costs and to otherwise become and remain competitive. We do not plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. Therefore, you should not expect to receive cash dividends on our common stock.

~~Shares eligible for future sale may adversely affect the market for our common stock~~. Of the 20,402,454 shares of our common stock outstanding as of the date of this report, approximately 17,411,694 shares are held by “non-affiliates” and are freely tradable without restriction pursuant to Rule 144. In addition, in August 2016, we filed with the SEC a Registration Statement on Form S-3 for purposes of registering the resale of 3,711,872 shares of restricted common stock sold to Interstate Battery in May 2016, including 3,009,625 shares of common stock issuable to Interstate Battery upon exercise of its warrants and conversion of its convertible note, and in February 2017, we filed with the SEC a Registration Statement on Form S-3 for purposes of registering the resale of the 939,005 shares of restricted common stock we sold to Johnson Controls in February 2017. Any substantial sale of our common stock pursuant to Rule 144 or pursuant to any resale prospectus may have a material adverse effect on the market price of our common stock.

Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.Provisions of our certificate of incorporation and bylaws and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. The provisions in our certificate of incorporation and bylaws:

In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. This restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of our common stock.

Our bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with the Company.Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us or any our directors, officers or other employees arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws, or (iv) any action asserting a claim against us or any our directors, officers or other employees governed by the internal affairs doctrine. This forum selection provision in our bylaws may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or any of our directors, officers or other employees.

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Page

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	~~Condensed Consolidated Balance Sheets~~	1

	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders' Equity	3
	~~Condensed Consolidated Statement 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	15 13

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19 17
Item 4.	Controls and Procedures	17

~~Item 4.~~	~~Controls and Procedures~~	19

	PART II - OTHER INFORMATION
Item 1A1.	~~Risk Factors~~Legal Proceedings	20 18
Item 1A.	Risk Factors	19
Item 6.	Exhibits	27 26

	Nine months ended
	September 30,				June 30,
Excluded potentially dilutive securities (1):	2017		2016		2022		2021

Convertible note - principal		702,247		702,247
Consulting warrants to purchase common stock		—		473,864
Options to purchase common stock		624,329		870,528		1,009,230		1,038,439
Unvested restricted stock units						4,307,768		4,840,763
Financing warrants to purchase common stock		2,340,828		3,295,258		6,372		6,372
Total potential dilutive securities		3,667,404		5,341,897		5,323,370		5,885,574

	Useful Life		September 30,			December 31,			Useful Life
Asset Class	(Years)		2017			2016			(Years)		June 30, 2022			December 31, 2021

Operational equipment		3-10	$	15,773		$	15,132			3 - 10	$	1,469		$	1,539
Lab equipment		5		646			547			5		730			530
Computer equipment		3		175			140			3		6			8
Office furniture and equipment		5		321			298			3		90			91
Leasehold improvements		5-7		1,408			1,408			2.5		80			0
Land		—		1,047			1,047
Building		39		24,687			21,962
Asset Retirement Cost		20		670			—
Equipment under construction				3,672			1,635					2,232			1,328
				48,399			42,169					4,607			3,496
Less: accumulated depreciation				(2,914	)		(777	)				(1,299	)		(1,129	)

			$	45,485		$	41,392
Total property and equipment, net											$	3,308		$	2,367

Date of		Average Closing				Warrant		Common
Warrant		Market Price		Exercise Price		Shares		Shares
Exercise		Per Share		Per Share		Exercised		Issued

	2/10/2017	$	11.016	$	0.0034375		392,728		392,605
	2/13/2017	$	13.062	$	3.00		25,119		19,349
	2/13/2017	$	13.062	$	6.00		72,420		39,154
	2/15/2017	$	16.768	$	6.00		65,177		41,856
	2/16/2017	$	16.768	$	6.00		35,000		22,470
	3/17/2017	$	20.262	$	6.00		2,500		2,500
	3/20/2017	$	20.304	$	3.00		226,068		192,666
	3/20/2017	$	20.304	$	6.00		586,596		413,253
	4/3/2017	$	19.148	$	0.0034375		43,636		43,628
	4/11/2017	$	17.920	$	6.00		12,500		8,315

							1,461,744		1,175,796

	June 30, 2022
Weighted-average remaining lease term (Years) - operating leases		2.4
Weighted-average discount rate - operating leases		6.15	%

Weighted-average remaining lease term (Years) - finance leases		1.8
Weighted-average discount rate - finance leases		7.51	%

ASSETS

	September 30, 2017			December 31, 2016
		(unaudited)			(Note 2)
Current assets
Cash and cash equivalents	$	17,523		$	25,458
Restricted cash		—			1,124
Accounts receivable		577			—
Inventory		1,218			59
Prepaid expenses and other current assets		856			729
Total current assets		20,174			27,370

Non-current assets
Property and equipment, net		45,485			41,392
Intellectual property, net		1,327			1,137
Other assets		1,219			1,630
Total non-current assets		48,031			44,159

Total assets	$	68,205		$	71,529

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	2,380		$	1,572
Accrued expenses		2,045			1,975
Deferred rent, current portion		188			177
Notes payable, current portion		420			307
Total current liabilities		5,033			4,031

Deferred rent, non-current portion		821			963
Asset retirement obligation		691			—
Notes payable, non-current portion		8,917			9,238
Convertible note payable, non-current portion		1,005			307
Total liabilities		16,467			14,539

Commitments and contingencies		—			—

Stockholders’ equity
Common stock; $0.001 par value; 50,000,000 shares authorized; 20,400,794 and 17,878,725 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		20			18
Additional paid-in capital		99,529			85,234
Accumulated deficit		(47,811	)		(28,262	)
Total stockholders’ equity		51,738			56,990

Total liabilities and stockholders’ equity	$	68,205		$	71,529

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016

Product sales	$	589		$	—		$	1,192		$	—

Operating cost and expense
Cost of product sales		3,140			—			5,671			—
Research and development cost		1,367			1,887			6,538			4,080
General and administrative expense		1,925			1,434			4,897			4,245
Impairment charge		—			—			2,411			—
Total operating expense		6,432			3,321			19,517			8,325

Loss from operations		(5,843	)		(3,321	)		(18,325	)		(8,325	)

Other income and expenses
Interest expense		(454	)		(203	)		(1,250	)		(318	)
Interest and other income		7			7			28			22

Total other income (expense), net		(447	)		(196	)		(1,222	)		(296	)

Loss before income tax expense		(6,290	)		(3,517	)		(19,547	)		(8,621	)

Income tax expense		—			—			(2	)		(1	)

Net loss	$	(6,290	)	$	(3,517	)	$	(19,549	)	$	(8,622	)

Weighted average shares outstanding, basic and diluted		20,265,020			15,574,620			19,732,372			14,818,484

Basic and diluted net loss per share	$	(0.31	)	$	(0.23	)	$	(0.99	)	$	(0.58	)

					Additional						Total
	Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity

Balances, December 31, 2016		17,878,725	$	18	$	85,234		$	(28,262	)	$	56,990

Stock based compensation - stock options		—		—		592			—			592
Cashless exercise of warrants		1,173,296		1		(1	)		—			—
Exercise of warrants to purchase common stock		2,500		—		15			—			15
Exercise of options to purchase common stock		283,310		—		1,068			—			1,068
Common stock issued under Officers and Directors Purchase Plan		182		—		1			—			1
Common stock issued for cash in February 2017 from Johnson Controls, net of $167 transaction cost		939,005		1		10,471			—			10,472
Common stock issued for purchase of Ebonex IPR Limited		123,776		—		2,149						2,149
Net loss		—		—		—			(19,549	)		(19,549	)

Balances, September 30, 2017		20,400,794	$	20	$	99,529		$	(47,811	)	$	51,738


	September 30, 2017		December 31, 2016

Finished goods	$	15	$	—
Work in process		70		—
Raw materials		1,133		59
	$	1,218	$	59

	*June 30, 2022*		*December 31, 2021*

Property and equipment related	$	715	$	2,242
Class action settlement		500		500
Payroll related		828		180
Professional		103		56
Other		185		27
	$	2,331	$	3,005

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Cash paid for operating lease liabilities	$	150	$	164	$	214	$	327
Operating lease cost	$	141	$	144	$	207	$	289

Cash paid for finance lease liabilities	$	15	$	2	$	29	$	3
Interest expense	$	2	$	0	$	5	$	0

Due in 12-month period ended June 30,
	Operating Leases			Finance Leases
2022	$	263		$	61
2023	$	280		$	64
2024	$	91		$	18
Less imputed interest	$	(44	)	$	(11	)
Total lease liabilities	$	590		$	132

Current lease liabilities	$	235		$	53
Non-current lease liabilities	$	355		$	79
	$	590		$	132

Exercise Price		Expiration		Shares Subject to purchase
per Share		Date		at September 30, 2017

$	7.12		5/18/2018		702,247
$	9.00		5/18/2019		1,605,131
$	10.00		11/21/2019		33,450
					2,340,828

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of product sales	$	23	$	16	$	48	$	47
Research and development cost		18		11		36		53
General and administrative expense		493		592		1,055		1,198
Total	$	534	$	619	$	1,139	$	1,298

	Three months ended September 30,										Nine months ended September 30,
					Favorable			%							Favorable			%
	2017		2016		(Unfavorable)			Change			2017		2016		(Unfavorable)			Change

Product sales	$	589	$	—	$	589			—		$	1,192	$	—	$	1,192			—
Cost of product sales		3,140		—		(3,140	)		—			5,671		—		(5,671	)		—
Research and development cost		1,367		1,887		520			27.56	%		6,538		4,080		(2,458	)		60.25	%
General and administrative expense		1,925		1,434		(491	)		34.24	%		4,897		4,245		(652	)		15.36	%
Impairment charge		—		—		—			—			2,411		—		(2,411	)		—
Total operating expense	$	6,432	$	3,321	$	(3,111	)		93.68	%	$	19,517	$	8,325	$	(11,192	)		134.44	%

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016

Expected stock volatility		70.7% - 71.4	%		72.9% - 73.9	%		70.7% - 72.7	%		72%-80	%
Risk free interest rate		1.50% - 1.65	%		0.92% - 1.02	%		1.38% - 1.79	%		0.92%-1.77	%
Expected years until exercise		3.5			3.5			2.5-3.5			2.5-3.5
Dividend yield		0	%		0	%		0	%		0	%

	Three Months Ended June 30,										Six Months Ended June 30,
					Favorable			%							Favorable			%
	2022		2021		(Unfavorable)			Change			2022		2021		(Unfavorable)			Change

Product sales	$	4	$	—	$	4			—		$	4	$	—	$	4			—
Cost of product sales	$	1,048	$	2,138	$	1,090			(51.0	)%		2,043		3,749		1,706			(45.5	)%
Research and development cost		521		176		(345	)		196.0	%		1072		465		(607	)		130.5	%
General and administrative expense		2,390		2,129		(261	)		12.3	%		5,154		4,428		(726	)		16.4	%
Total operating expense	$	3,959	$	4,443	$	484			(10.9	)%	$	8,269	$	8,642	$	373			(4.3	)%

Exhibit No.	Description	~~Description~~		Method of Filing

3.1		First Amended and Restated Certificate of Incorporation of the Registrant		Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on July 22, 2015.
3.2
~~3.2~~Third		Amended and Restated Bylaws of the Registrant	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on January 21. 2022.
3.3	Certificate of Amendment to First Amended and Restated Certificate of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
3.4
~~3.3~~		Certificate of Amendment to the First Amended and Restated Certificate of Incorporation ~~of the Registrant~~		~~Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.~~

10.1*		~~Executive Employment Agreement dated July 14, 2017 between Mark Weinswig and Registrant~~		Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on ~~August~~May 9, ~~2017.~~2019
3.5
10.2*		~~Aqua Metals, Inc. Officer~~Certificate of Amendment to the First Amended and ~~Director Share Purchase Plan~~Restated Certificate of Incorporation		Filed electronically herewith
31.1
~~31.1~~		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		Filed electronically herewith
31.2
~~31.2~~		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		Filed electronically herewith
32.1
~~32.1~~		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).		Filed electronically herewith

101.INS		Inline XBRL Instance Document		Filed electronically herewith
101.SCH
~~101.SCH~~		Inline XBRL Taxonomy Extension Schema Document		Filed electronically herewith
101.CAL
~~101.CAL~~		Inline XBRL Taxonomy Extension Calculation Linkbase Document		Filed electronically herewith
101.LAB
~~101.LAB~~		Inline XBRL Taxonomy Extension Label Linkbase Document		Filed electronically herewith
101.PRE
~~101.PRE~~		Inline XBRL Taxonomy Extension Presentation Linkbase Document		Filed electronically herewith
101.DEF
~~101.DEF~~		Inline XBRL Taxonomy Extension Definition Linkbase Document		Filed electronically herewith
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

		AQUA METALS, INC.

Date:	~~November 9, 2017~~July 21, 2022	By:	/s/ Stephen ~~R. Clarke~~Cotton
			Stephen ~~R. Clarke,~~Cotton,
			President, ~~and~~ Chief Executive Officer and Director (Principal Executive Officer)

Date:	July 21, 2022	By:	/s/ Judd Merrill
~~Date:~~	~~November 9, 2017~~	~~By:~~	~~/s/ Mark Weinswig~~ Judd Merrill,
			~~Mark Weinswig,~~
			Chief Financial Officer
			(Principal Financial Officer)