Good afternoon, ladies and gentlemen, thank you for standing by. Welcome to the Aqua Metals Second Quarter 2017 Corporate Update Conference Call. [Operator Instructions] This conference is being recorded today, August 9, 2017. Before we get started I would like to turn the conference over to Greg Falesnik, Managing Director of MZ North America, the company's Investor Relations firm, who will read a disclaimer about forward-looking statements.

Thank you, Operator. This conference call may contain, in addition to historical information, forward-looking statements concerning Aqua Metals, Inc.; the lead acid battery recycling industry; the intended benefits of its agreements with Johnson Controls and Interstate Batteries; the future of lead acid battery recycling via traditional smelters; the Company's development of its commercial lead acid battery recycling facilities; and the quality, efficiency and profitability of Aqua Metals' proposed lead acid battery recycling operations. Those forward-looking statements involve known risks and uncertainties and other factors that could cause actual results to differ materially. Among those factors are the fact that the Company has not yet ramped up its initial commercial recycling facility to full-scale operation, thus subjecting the Company to all the risks inherent in a startup; the uncertainties involved in any new commercial relationship; and the risk that Aqua Metals will not receive the intended benefits of its agreements with Johnson Controls and Interstate Batteries; risks related to Aqua Metals' ability to raise sufficient capital as and when needed to expand its recycling facilities; changes in the federal state and foreign laws regulating the recycling of lead acid batteries; the Company's ability to protect its proprietary technology, trade secrets and know-how; and these and other risks disclosed in the section Risk Factors included in the quarterly report on Form 10-K filed with the SEC on March 1, 2017. Aqua Metals cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. At this time I'd like to turn the call over to Dr. Stephen Clarke, the Company's Chairman and CEO. Steve, the floor is yours.

Thank you, Greg, and welcome everybody to Aqua Metals Q2 earnings call for 2017. I'm going to really start off with a few highlights from this quarter and let me just give you an outline of how I proposed to go through the remainder - remaining of the call and then I get on with it. So we just finished quarter two and there is number of big successes that I'm going to talk about today. The first one is that we recognized our first revenue from our first AquaRefinery, in fact the world's first AquaRefinery this year. We now have full AquaRefining modules up and running and so we’re now producing AquaRefining like again a world's first. In this quarter we have secured our first two international patents. The first of those been in Korea and the second one following shortly after within Australia. We made our first acquisition, we acquired U.K. based Ebonex IPR limited. We've just appointed Mark Weinswig as the CFO effective tomorrow. We’ve hosted several analyst and investor visits to our first AquaRefinery and we received several accolades including our second Platts Global Metals Award and then award by the San Francisco Business Times Technology and Innovation Award which is really pleasing to win. So those are the highlights and I'm going to expand on some of those, and I put together the following agenda to structure the earnings call. So I'm going to start off with an operational update what we have done, where we were, where we are going to go next. Then I’m going to talk about business expansion, I’m going to talk about intellectual property, I’m going to talk about CFO succession. Tom Murphy our current CFO is going to go to the financial and then I’ll summarize but you’ll see…

Thank you, Steve. As Steve mentioned, we are pleased to announce that Aqua Metal's is now generating revenues from our TRIC facility. In the second quarter we recognized differed revenues of $603,000. The sales consisted of plastic and lead compounds. For the three months and six months ended June 30, 2017 we had an operating loss of $8.5 million and $13.1 million respectively. The loss was primarily driven by ramp-up of production at TRIC and in the ramp up only sales of low value lead compounds and plastics and the $2.4 million from the impairment of the Ebonex IPR purchase. Net loss was $8.4 million for the second quarter and $13.3 million for the year-to-date. That's $0.42 and $0.69 loss per share respectively. The company initially recorded the Ebonex IPR transaction as an increase of $2.5 million to intellectual property, net on the balance sheet. Subsequently 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, the company recorded a non-cash impairment charge of $2.4 million or $0.12 per share for the period ended June 30, 2017. We had $22.1 million in cash and cash equivalents as of June 30, 2017 compared to $26.6 million as of December 31, 2016. As Steve mentioned on July 31, we announced my retirement and the hiring of Mark Weinswig as my replacement effective tomorrow August 10. My decision to retire was based on multiple inputs as our most life-changing moments. I turned 65 this past April and have a health issue although not affecting my quality-of-life now, it will in the future. The company is at a point of going from start up stage to commercial operation and significant growth. Now is…

Thank you, Tom. In no way was Tom’s part a small part. Any of you who’ve met Tom will recognize there’s a slight joke in that as well. He's always a tallest guy in the room. Okay, so just going to round up now with some key takeaways some of which Tom has alluded to already and we’ve mentioned before. We recognized our first revenue in quarter 2, 2017. Our primary focus is to have 16 AquaRefining modules running by year-end, and to be prepared for the licensing activities which will become the main focus of this business. The experience that we’ve gained supports licensing roll out with our current partners and we’ve got strong interest from other potential licensees. We’ve achieved important I.P. precedents with our first two patents. We’ve got opportunities for additional strategic relationships to accelerate business development. And we can see on the horizon, the move to 48 volt and a new standard of lead acid battery could bring outside opportunities to AquaRefining lead and for our development stage materials and methods. So basically we've worked hard to, and I think we have positioned the company to leverage existing and future strategic partners. And with that point, I’m going to hand back to Kathy to handle questions. Thank you.

[Operator Instructions] We’ll go first to Colin Rusch of Oppenheimer and Company.

Kind of a housekeeping question. In terms of the cash consumption, can you just break out what was the operating loss, and then what was actual incremental CapEx in the business.

For the year-to-date through the first six months of the year, the net cash used in operating activities has been $9 million. And purchase of property and equipment for that six-month period is $5.6 million, little over $5.5 million.

And then it sounds like you’ve got a lot of customers, potential new customers looking at the process. Can you talk a little bit about how many folks are actually testing material at this point and are fairly far down the road in terms of discussions? And where we might think about in terms of incremental customer win over the balance the year?

I’ll take that. In terms of providing material for people to test, that’s a little bit low priority for us at the moment. And in the context of the arrangement we have with JCI, the primary focus is to supply the gains of level of interest that we have there. The additional licensees coming from battery companies and lead companies, we see it as - the level of interest on multiple site visits and observing processes in operation and thinking around how they would integrate into their existing facilities where they have their own in-house recycling, or whether they are - if they are lead company or how would they go about building a facility if they are currently outsourcing to a third-party for battery recycling, and discussions around do they want to start off with a standalone AquaRefining facility or do they we want to go a hybrid route. And so I really can't get into the specifics around it. Our process, our focus is to begin the rollout with JCI. We are obligated and happy to be obligated to JCI to agree a rollout schedule with them before we start formalizing any additional licensing arrangements. And so the priority for us is to begin the rollout within JCI, and then move on to working with the licensees in addition.

We’ll go next to the Bhakti Pavani of Euro Pacific Capital.

Just quickly on the operation side, like you mentioned in your prepared remarks, the battery baking equipment and system, everything is running as you guys want to. Just kind of curious to know how many shift are you currently running.

We’re currently running two shifts of 10 hours each.

For four days.

For four days a week. And that’s deliberately. We reorganized our original shift patent. What we want to do is have all operations working at a time when we have got technical expertise on site both to help with the recent issue, but more importantly, to learn from the operations. We've mentioned in our last earnings call that we're moving the basis of continuous improvement from Alameda to Reno, and that’s now happened. Many of our technical staff are on site three or four days a week now in Reno taking the opportunity to work with the full-scale equipment, working to look at where we would go next for our own facilities and for licensees.

Just one quick one on the housekeeping side. What is the expected CapEx spend for the remaining two quarters of this year?

It’s approximately in the $5 million to $6 million range.

We'll go next to Ilya Grozovsky of National Securities.

First of Tom, congratulations and best of luck in whatever it is you do in the future.

Thanks there. I appreciate that Ilya.

And then I just wanted to understand a little bit more about the sort of time table of the other 5 through 16 modules coming online. I think, Steve, you had said that you expect them to be in by October. Did I hear that correctly?

Yes. And this is the plan, I mean, guidance. But we expect to have the balance of the 16 modules on-site during October, and then to have all of them in operation by the end of the year.

And is that 5 through 16, are you going to install them in fours, or you’re going to kind of one at a time? I just want to get a little bit of the sense of kind of how this scales up from I think now with December.

I think we’re likely to be running the one at the time as we install them. We install them and commission them. We've not actually formalized that plan yet. So I can’t give you clear guidance on whether we’ll commission them in batches or commission individually. But what I can tell you is that module 5 is half built and module 6, 7, 8 are on site 6 and 7 that are quarter built and the balance of the equipment is in Alameda being assembled.

And then from what you've seen in one through four, you said you're running at two shifts 10 hours per shift and four days a week. In one of those shifts what kind of volume are you able to do coming out?

At the moment we are running - the modules are designed to operate at about 2.4 tons a day each. We are spending the next month running a series of trials in which we are running them at higher outputs, lower outputs different concentrations of lead in the electrolyte different voltage and current regimes, different temperatures. Essentially we’re taking the next month to fully map the performance of the modules. We’ve done a huge amount of work here in Alameda to map the technology but there's always some level of shift in parameters as you go from large pilot scale to full scale and even when you install the modules in different locations. Ambient temperature has an impact, validation has an impact, weather has some measurable impact it’s not huge but it’s there. So the first thing you need to do with a large-scale hydro metal facility which essentially that is what it is, it’s fully mapped the process. And so the next one we’ll be doing that I’m really not going to give guidance to how many tons we’ll get join the balance of quarter three or even quarter four for that matter. The really important part was is that we gain as much experience as we can from operating AquaRefining modules under a broad range of operating conditions and other things to prepare for the supply of equipment to licensees and to prepare for the build-out of our own facilities. I know it’s not very precise answer but it’s the truth.

And then lastly just given that we’re halfway through the September quarter what can you tell us about sort of the revenues that you've had in the month of July and thus far in August in terms of - have you grown it from the June numbers?

Look our expectation - and this is an important point there is some kind of misconception in the market that ramping up the first of the kind facility is a linear process, it really isn’t it’s an exponential process. You've got equipment that is rate base, you’ve got hours in which you can run the equipment and you got percentage of time. So you’ve got to factor times, factor times, and factor. Our expectation is quite modest for quarter three that will be largely flat in revenue but we’re expecting to see a big growth in revenues until the backend of quarter four as we ramp of the final modules and we really start cranking on them.

We’ll go next to [indiscernible].

Just sharing congratulations and thanks Tom it's special to be part of a disruptive technology company and your role has been critical from the beginning, so thank you.

Thanks. I feel disruptive enough so I am ready….

As you guys know I and my family members and our family company is in a scrap metal processing and recycling business back in Michigan. And we view what you're doing as among the most exciting things that happened to the industry in generations. And at the same time we have this is more of a tactical stock related question. There is a very emboldened short interest short upwards of 4 million shares and the short guys are smart guys and I wonder if you could articulate really Steve why are these guys wrong?

Well, if all of the guys - the guys behind the Seeking Alpha article, is a bit like asking me that famous [indiscernible] when did I stop beating my wife, there is no logically possible answer to it. I’ll try to unpick the strands of that ridiculous article and for that short thesis to be correct, I'm a scurrilous, fraudster but nothing works, you chose to raise, a $100 million to build a theatrical set in the Nevada desert, so that I could run off with the proceeds. And we can see the strength of that unwind, I mean knowing some commentary about the acquisition of Ebonex being a third-party issue because quite rightly I did actually found the precursor to that company but was not a shareholder of the company we bought and had no dealings with it for 20 years. Though as the strand that we bought of giant distraction when we should have been focusing what we were doing and I would argue it really wasn't distraction at all because with almost no effort into it and I don’t mean that in a pejorative sense I just mean that we’re focusing entirely on doing what we’re doing. We are starting to explain as you saw today a little bit about where we see the industry going, and why an acquisition like that might payoff in the future. One of the other strands was that AquaRefining just doesn't work. Well we had - it was about 90 people through the facility watching it work now at some point, some of those 90 people will start communicating to the guys who are holding a short positions and explaining actually it does work. We've shown videos of it working and I don't know, maybe the shorts are so upside down and buried in their own bubble of misbelieve they just can't get out now, I don't know. It makes no sense to me at all. I would point out that there are probably one or two entities in this world who would be very upset if smelting was to go away and be replaced by something else.

Adding on to that Ben is, and just summarizing what Steve words said, the reason the search will eventually go away and it may not be overnight unfortunately as this works. And why I am comfort level and we never leave because this works.

And as Tom said earlier it worked the first time we turn it on. I mean you got to recognize that we actually - we put our second mortgages 401(k) and kids education for instance found in this business if this is a get rich quick scheme, please show me where I got rich. I haven’t monetized anything from this, I have not sold a single share. And the reason we were happy to look our spouses in the eye and say, I am going to write another $100,000 check tomorrow darling because when we turned AquaRefining modules on they worked and they still do.

Well thanks for that. I just appreciate the color and I just wanted to hear your thoughts and kind of an open forum because they’re certainly open with the way they do business and I always appreciate a CEO or a management team’s opportunity to respond.

Thank you.

Okay, I think with that we’ll bring the earnings call to an end. Thank you all for joining in and thank you for listening and thank you for being part of this incredible journey.

That does conclude our conference for today. We thank you for your participation. You may now disconnect.