Greetings and welcome to the Aqua Metals 2019 Year End Results and Business Update Conference Call. [Operator Instructions] It is now my pleasure to introduce our host, Glen Akselrod, Spokesperson. Thank you. You may begin.

Thank you, Diego and thank you everybody for joining the Aqua Metals 2019 year end results and corporate update conference call. The purpose of today’s call is to report on 2019 financial results, provide a corporate update and summary of the business and to provide investors a better understanding of Aqua Metals post-fire recovery plan and go-forward business strategy. This will be done through an Investor PowerPoint presentation by management. The discussion will be led by Steve Cotton, President and CEO who is also joined by Judd Merrill, company’s CFO; and Ben Taecker, Vice President of Engineering and Operations. At the end of management’s formal presentation, we will break for question and answers. As a reminder, for the purpose of today’s call, we are only taking questions via the web portal. We have not yet logged in online. The web link access to that portal is available in today’s earnings press release as well as this morning’s insurance recovery press release. If you are currently only listening via the telephone and wish to ask a question after the presentation, please access the web link to do so. The presentation today will be using slides. You will be able to advance the slides in your own using the arrow keys in the top right hand corner of the presentation. You can also expand the PowerPoint using the expansion feature in the top right corner of the PowerPoint. If these arrow keys should disappear simply hover your mouse over the top right portion of your screen. Please remember, you can submit a question any time using the question textbox within the web at our portal. I will ask the questions on the air for everyone to hear and management will then answer. I will not reference any names that simply read the questions asked. If I can’t get to your question online, I will come back to via e-mail. If for some reason, you are experiencing any issues once we start, please remember you could e-mail me at glen@bristolir.com and I will be happy to assist. During today’s call, management will be making forward-looking statements. Please refer to the company’s annual report on the Form 10-K filed today, March 11 for a summary of the forward-looking statements and in the risks, uncertainties and other factors that could cause actual results to differ materially from those forward-looking statements. They are also listed on Page 2 of today’s PowerPoint. Aqua Metals cautions investors not to place undue reliance on any forward-looking statements, the company does not undertake and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur, except as required by law. With that said, once again, thank you for joining us. We do encourage Q&A following the formal remarks to help you better understand the business and its future growth path. And at this time, I will turn the call over to Steve to start his part of discussion and presentation.

Great. Well, thank you, Glen. So for starters, I just wanted to point out that the purpose of today’s call, as Glenn had alluded to is dual pronged. One is to provide an update to our existing shareholders who already follow the Aqua Metals story and the second is to continue what we embarked upon pre-fire in Q4 with Bristol, which is to introduce the company to potential shareholders who have also joined us today. I hope everybody saw our press release this morning regarding doubling our insurance collections this week to a total of $10 million from the $5 million point we were at prior to this press release. And we are really pleased with that progress and our cash position, which Judd will elaborate further during his portion of our presentation. So moving on to Slide 2 of the deck, you will see the Safe Harbor. I won’t read all to you, but it’s there for anybody who would like to read it. And we will start with Slide 3. This is Aqua Metals for the glance. So what you see in the right side for any of you who haven’t seen it before that is our novel proprietary environmentally friendly led acid battery recycling technology, which we call, AquaRefining at work. It makes this fungi lead and it’s a high purity lead at a room temperature, water base organic acid process rather than heat furnaces to create that ultra-pure lead in a very environmentally clean methodology and we believe that the AquaRefining technology is a great fuel for the $20 billion plus lead recycling industry, which then feeds into the $65 billion lead acid battery industry with that reduced environmental impact as compared to the traditional smelting process. There is vitals in the company down below, I…

Thanks Steve. Like Steve said on slide 10 we talked about the new design for electrolyzer of V1.25L specifically designed for licensing the Aqua Metals engineering team has recently completed this new design with minor improvements so around operation costs and capital build cost with absolutely no changes to the letter lining process that was developed in 2019 the main areas of improvement are around the overall efficiency of the unit the automation of the unit and the processes as well as the assembly complexity and remote access capability for our field deployment the team is in a process of building the first electrolyzer V1.25L and expect to be producing lead within the Q2 of this year. Turn it back over to you Steve.

Great, thanks Ben. Moving on to Slide 11 that all plugs into our 2020 first half key initiatives and you will see there is a list of six items there and I will try to get through these as quickly as possible first is to continue to collect those insurance process that we have been successfully collecting effected by our retention of a public adjuster which allows us to interface with the insurance company adjusters that has been very successful thus far as well as specialized council to facilitate those payments, both for the casualty and for the business interruption losses and put cash on the balance sheet as we have already been doing second point is to sell unneeded assets as appropriate our balance sheet shows about $37 million of book value for the all the equipment in the plant and some of that could be sold or redeployed as well to our license side so we have opportunities to unlock some value added assets that we have here in the facility while we use it to run the V1.25L that Ben was referring to in the near future point three is restructuring our debt for the year 2020 and retiring that debt in 2020. As I mentioned earlier, the next point is to build and run those electrolyzers with those design improvement and really the primary reasons that we are doing that is to improve the costs and operating model for a better value proposition to the licenses while we are talking with them while increasing utilization rate to get more through potentially through those machines which further increases that value proposition and again we expect to begin running one or two of those units very soon we also seek to contract the license site number 1 we…

Alright. Thanks, Steve. I will spend a few comments on each slide. We are going to start on Slide 26 capitalization. You will see as of December 31, 2019, we had total cash of $7.6 million, working capital of $17.7 million, which gives no effect to the payment of the $7.5 million insurance proceeds that we receive at the end of the year, subsequent to the end of the year. We do have the debt with Green Bank for approximately $9.2 million, but a $8.6 million net of insurance cost, which is secured by liens on substantially of all of our assets, including insurance proceeds. However, we are in current negotiations with Green Bank on a loan modification that may takeaway some of those covenants related to the leads and such. Moving right on to the next slide on the balance sheet, as we have stated as of December 31, 2019, the company did receive $2.5 million in insurance payments as a result of the fire damage. And subsequent to year end as I mentioned we received an additional $7.5 million. The company as of year end determined that it was probable that we will receive at least an additional $17.4 million insurance proceeds during the 2020 fiscal year of which we have already seen $7.5 million. The expected $17.4 million of insurance receivable is segregated on our balance sheet. As a result of fire, the company did write-off approximately $22.4 million of fixed assets that were damaged. These assets consisted of operational equipment, building and equipment that was under construction at the time of the fire. The disposal of the fire damaged assets included a decrease of accumulated depreciation of $2.5 million so the total net write-off of fixed assets totaled $19.9 million. Moving to the statement of operations,…

Yes. So thanks, Judd and that’s a wrap for our presentational materials. So Glen, I will turn it over to you and you can facilitate the Q&A portion for today.

Okay, super. Thank you very much, Steve. And to our audience, remember, please use the question-and-answer textbox in the presentation portal. We do have quite a number of questions in the queue. We will try to do our best to get to everybody. We will stay past 5:30 to answer questions. And if we don’t get to you questions today, I will be sure to respond via e-mail or phone call as a follow-up. So our first question to you Steve is can you talk about what the OpEx run-rate is to reach licensing revenue?

So the OpEx run-rate as Judd was talking about is going to be significantly lower, because we reduced our cash burn rate. And Judd maybe you can actually answer that question better than me.

So the OpEx burn rate is composed of G&A and plant operations. It’s about a 65:35 split at this point, so about 65% G&A and 35%. As I mentioned, we are about $800,000 a month and we will probably see there is something that you transitioned in this environment, there is few commitments that are kind of still out there related to certain smelting type contracting, but as we may see that actually come down a little bit as we move through the year.

Okay. And can you comment on how much CapEx is required?

How much CapEx is required in our current?

I guess, as – in a new business model?

So the CapEx is actually is a fairly low amount. Some of the work that’s being done right now, it’s towards the enhanced electrolyzers that we would talk – that Ben talked about. And so for 2020, we are probably $0.5 million to $1 million of CapEx for the year.

Okay, thank you. What are the hurdles that you see in signing a licensing agreement?

So, the licensing agreement depending upon who we sign it with and for what type of facility obviously people want to learn more about the approved points that what we have already done which we can very easily communicated and people are going to want to see the electrolyzer V1.25L is one and that we expect it will accomplish and begin to accomplish certainly in Q2 and then it comes down to the hurdle of the value proposition and we are confident that we can model multiple applications of Aquarefining with the folks that we are talking to provide compelling solution for at least one site from the get go and that’s the key is to get the first site and it is a numbers game in any sales process that you have to be talking to multiple players about multiple types of opportunities and find the best fit and so it is commercial hurdle that in any product that you are going to have to overcome and we have had many conversations and feel good about the progress that we have made with our conversations today.

Okay thank you. Can you comment on the number of potential licenses you are currently speaking with about agreements?

So we have been talking to potential licensees that are involved with Greenfield build as well as involved with retrofit of existing facilities and even a couple of that have interest in particular applications for AquaRefining that would be significant volumes for our AquaRefining in a facility but are processing something different than just a battery paste in that facility but other things that come out of the process in those facilities so there is multiple that we have been talking to but not going to give you the exact number.

Okay, thank you. Has the agreement with Veolia changed or do you expect it to change as part of the adjusting strategy?

So the agreement with Veolia is in force so we still have an agreement with Veolia and the means to the end was to operate the plant here at the AquaRefinery with O&M, which we did suspend that portion of agreement because there is no need to operate a full 24/7 plant but the partnerships foundation is that Veolia wants to be a part of our AquaRefining propagation and deployment and operating those types of facilities throughout the world and that part of our partnership is strong and remains in force and we have a very common interest in seeing that happen so we suspend the O&M portion of it but the overall relationship is geared towards finding the best path forward to get AquaRefining deployed elsewhere.

Okay, thank you. Next question can you provide color on the asset sales mentioned in the press release and how much money you think can be generated from the sale?

So in the debt we talked about $10 million plus opportunity there for the assets sales and we are going to be very opportunistic and consider what makes the most sense at the right time as we utilized the facility in the meantime to operate our one to two electrolyzers so in operating that one or two electrolyzers there is this certain piece of assets within the facility that we may not need like for example we have three operating kettle provisions for 650 ton kettles if we don’t intend to run the full facility here and march towards the licensing opportunity and focus towards that, there may be an opportunity to sell some of the kettle materials if we don’t operate all 16 modules to outside of the building and not affected by the fire bunch of cooling systems that may be able to sell the ones that we are not using and get some dollars in house for that We preserved all optionality that if a strategic partner has an interest. in outfitting the facility in a capital heavy mode and is willing to provide either as a financial partner or as a strategic partner the dollars to build out this facility to its full capacity that is something that we will continue to entertain and keep that option open but ultimately if we do the licensing path down the line there is an opportunity to consider exiting the entire building and filling the plants but that’s not on our agenda at the moment is to use the plant sell the assets that we don’t need and keep that optionality open depending upon how the licensing and conversations with strategics and financials would go.

Okay, thank you. Can you comment on how you can run a licensed electrolyzer without a plant in place?

So we have a plant in place that part did not survive the fire so well. It was on the AquaRefining side of the wall. So people maybe wondering justifiably well, how you can run AquaRefining if the AquaRefining areas has been burnt. And the way that we intend to do that is more than three quarters of the square footage of the plant is still usable and accessible. And we have already moved some of those chilling systems that I was mentioning in place to feed into running the electrolyzer or electrolyzer or is right there in the front end area of the plant. And that’s our plan and w don’t need the AquaRefining area to do that.

Okay, thank you. Insurance related question, what are the insurance dollars and limits covering the November fire and are those first-party or third-party insurance coverages?

So, our total insurance coverage is $50 million. And that is first-party, so that’s our insurance carrier. Now, it’s layered insurance is four different insurance companies involved, but they are all directly with us. And so the first initial payment came from that first layer and second payment came from the second layer, but these are all first-party insurance carriers that they are working directly to act up to that $50 million limit.

Thank you. You have commented on your relationship with Veolia, can you also expand on that on the current relationship with Clarius and Interstate Batteries and how have they changed post fire?

Sure. So I will start with Interstate Batteries. We are not buying much feedstock right now. So there is not any transactional relationship with Interstate Batteries at the moment. On the Clarius side of the equation, we are regularly being with Clarius though there is no AquaRefining lead, sales to them at this time. They do remember – remain as a key board observer and obviously, as an interested licensee of AquaRefining and an overall partner as we continue in our journey forward. So Clarius has been in this with us for quite a few years. And ultimately, we will find the right way to work together with them we believe. And in the meantime they are on our board as a board observer and we regularly meet and talk to them about different types of opportunities.

Okay, thank you. Can you comment on what the current headcount is today and what your expected G&A costs will be in 2020?

Yes. So our current headcount is 23 employees made up of engineers and plants of operations, individuals, who are helping us, get the electrolyzers up and running and general corporate staff as well. So that should stay fairly consistent throughout the year and add resources as needed. Our G&A as I said, our current monthly burn rate is about $800,000 a month and G&A makes up about 65%.

Yes, thank you. Could you comment on what type of assets would be for sale as part of this new strategy?

So earlier I gave an example of the kettles that we use to melt the lead and if we are not going to need to melt 80 tons a day of lead, we need to melt a few tons a day of lead we wouldn’t necessarily meet all those kettles. And then those chiller systems for 16 modules if we are running just a few electrolyzers, we are not going to need some of that infrastructure, some of which survived the fire. And there is other potential pieces of equipment, not only that would be for sale, but could be moved to our first licensee that gives us a great value proposition for the first licensee. One example of that, that I will provide is we do have that kiln that we put in. We ran the demonstrate kiln, but we have a full size brand new kiln here that cost several million dollars to put in which is part of our process for the full loan facility, what’s to say that we wouldn’t take that kiln and send that to a licensee for first mover’s advantage great deal on the kiln.

Okay, thank you. Just for clarity purposes, are you planning on selling the plant itself or just equipment within the plant and then further clarity, I think you may have commented on it, but just again, what is the current burn per month down to?

So, I will answer the first question and then Judd can answer the second. So, the assets that we are talking about doing asset disposition opportunistically, now is not inclusive of the full plant, because we need the plants to operate and run the electrolyzers. It’s more that those equipment examples I gave just a moment ago and then ultimately as we progressed in our strategic conversations there might be opportunities to either go back and outfit the plants with sourcing someone else large and heavy capital so it does not dilute our shareholders or once we complete our admission to get to the first life in site it may make sense to sell the plant and the building in the land at that point in time for keeping that optionality fully open.

Okay thank you. Next question is related to insurance again is there a reason to get only booking insurance proceeds receivables 17.4 million when the total name thing would be an additional $47.5 billion can you just walk the investors through that?

Yes. So this is actually by GAAP accounting rules that we can book only upon to the amount of the right off although we internally believe it is going to be much, much higher and we have got a lot of evidence to support that and we are putting that we are giving that information to the insurance carriers on long run basis so if you remember I said the net right off with $19.9 million of which we have already collected 2.5 as of the end of the year which leaves us with a 17.4 million as a receivable and so there is GAAP accounting rules and then there is what we actually expect to receive as we go throughout the year and we collect more then we will be able to recognize that on our financial statements.

Okay thank you. Again back to the licensing model in your discussions with licensees have any said or indicated that they we would sign an agreement without the current plants operating? And then as a second follow-up why do you think it will take until the end of 2020 to get a deal done?

So, the answer to question one is yes there are potential licenses that do not need to see the entire plant operating for them to proceed with the licensed option. And so the answer to the second question is if we believe it is prudent for us to get the V1.25L electrolyzers running because it is our interest to make sure that we can see them operating when they are remote. And that we make those improvements and we improve our value proposition and get the best of win-win for the licensing enough and that should not take years it should take months and so we should be through that as I said commencing in Q2 And while we work out the commercial discussions with the licensees, we have an opportunity to move on that by 2021.

Okay thank you. If the Green Bank loan is retired or modified would you be able to sell and lease back your building and if so how much additional cash might just generate?

Yes. So the Green Bank loan that we are working on that right now and it would first be a modification and then a retirement over the course of several months once we do that yes it frees up what we could do at the plants and there is certain governance whenever you enter into an agreement with the vendor that we have to follow and we followed those and we had a great relationship with Green Bank but once those are out of the place when we have significant abilities to do what we like to So I think if those opportunities came up, there would be – we would be able to take advantage of it.

Okay thank you. And I know we have reached top of the hour we got about six or seven questions left in the queue we will try to get through those and then end the call at that time. Can you comment on the current delisting situation and the plan that you would have in place to address that?

Yes. So as we announced back in January we received a notice from the NASDAQ on the listing rules we were still under a dollar per share the company has a period of 180 calendar days from that date of notifications so until July 13 2020 to cure it so at any point in time between now and then that our share price goes above a dollar 10 to 15 business day we will cure it if we do not regain that dollar per share for ten days by July 13 then we the company may be eligible for additional time to regain compliance And sometimes that's another additional six months. So that would take us into the January of 21 so we believe that the actions we are taking and the go forward plan will be very positive and hopefully drive that up we intend to monitor very closely between now and then and we are considering all the options in order to make sure we regained clients with this requirement.

Okay, super. Thank you. I have got a couple of obviously headline type questions related to coronavirus, so we will ask them now. Number one is has this affected your operations and have you built plans around it?

So with any businesses considering right now is how you operate if you have to quarantine or put employees out of farms away. And we do have a plan in place in the event that we need to so, we have sat down with our IT department and make sure everybody has the proper VPN and connectivity in the event that we need to pull the trigger on that. So, it’s a interesting time for all of us with the coronavirus and obviously the people that we are trying to protect are typically in the older ages and so we want to make sure that nobody is bringing home something to somebody else. So, the plans are in place. We are thinking about how we would approach it and there is certain accentual activities that would be taking place at the plants in the event that things got worse. And fortunately in the environment that we work in, people wear respirators anyway with N95 masks. And so that’s kind of a natural thing that would take place with proper PPE and you are wearing latex gloves and all those things anyway. So, I think we are prepared and we will see what the world brings us in the next several days.

Okay, super. Thank you. And I guess is a related question, how could critical component lead times impact the operation of the Version 1.25 and are you expecting any delays due to China supply issues?

So, right now, we have just about all the parts that we need to build Version 1.25L. And we are in the process of procuring those last parts and have line of sight to delivery for each and every one of them. So we expect no delay due to lead times.

Okay, super. Thank you. Can you just comment and you may have done this earlier, whether Clarius still has first mover status in their agreement and I guess what other factors within the agreement still need to be met or perhaps were not met?

So, Clarius as part of our agreement with them, does have a first mover advantage that was extended to June of 2021 and we continue to dialogue with Clarius about the most appropriate facility in application for AquaRefining while we talk to other potential licensees, but the contract is in place with Clarius between now and June of 2021 for them to have that first mover’s advantage. Now if they choose not to be the first mover for some reason that would likely with our – the strength of our partnership we would have the opportunity to work with another licensee and still maintain obviously a relationship with Clarius in the event that, that scenario were to develop.

Okay, super. Thank you very much. I believe all but one question in the queue have now been answered in one way, shape or form, if not please for the person asking retype a specific question? And the last question that I will ask at this point unless other questions come in is could a potential licensee takeover your existing plant?

The answer is yes. So, there is an opportunity for us as I mentioned earlier for strategics, whether they are financial strategics or for industry specific strategics to look at the opportunity to operate the plant. The plant is setup to for the most part of work with lead acid batteries, but there is even potential other types of applications that use battery breakers and kettles for refining business, for example, an aluminum plant just down the street that has kettles running by the day melting aluminum. And so there is other uses as well. So when we think of strategics, we think of strategics on multiple layers, but the most strategic for us would be someone in the lead industry that would have an interest in doing that. And we are open to the conversations with any and all and are having some of those conversations.

Okay. Super. Thank you, gentlemen. There are no further questions in the queue. Steve, I will turn the call over to you back for closing remarks.

Yes, yes. Thank you, Glen and thanks to everyone for attending today and for those of you that are familiar with the story being patient with those that we are getting more familiar with the story and vice-versa frankly and in these challenging times what the market is doing, what they are doing, it even questions about coronavirus etcetera. We are comfortable that we have the cash runway as mentioned earlier to proceed with our path forward. And as we have discussed today, Aqua Metals has accomplished a great deal in 2019 and post fire even on the last 100 days into early 2020, we believe we have set our vision and path forward. We have a strong footing of the building in maximizing cash model to fuel what we believe is a non-dilutive push forward with short-term technical improvement that we can prepare AquaRefining for licensing and the goal of seeing through our vision of propagating AquaRefining in a large industry as we have talked about that we and our partners think need AquaRefining and we look forward to continuing to provide further updates to everybody in the near future.

Super. Thank you very much. Thank to our audience and this concludes this presentation.

Thank you. All parties may disconnect. Have a great evening.