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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-1169572
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification
Number)
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Securities registered pursuant to Section 12(b) of the Act:
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Name of Each Exchange on Which Registered:
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Common Stock
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The Nasdaq Capital Market
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
x
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Emerging Growth Company
x
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•
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our future financial and operating results;
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•
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our intentions, expectations and beliefs regarding anticipated growth, market penetration and trends in our business;
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•
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the timing and success of the roll-out of our first 16 Aqua refining modules;
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•
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the ability to maximize selling value from the broken lead-acid batteries, or LABs;
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•
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the timing and success of our plan of commercialization;
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•
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our ability to operate our AquaRefining process on a commercial scale;
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•
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our ability to realize the expected benefits of our strategic partnership with Johnson Controls;
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•
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our ability to procure LABs in sufficient quantities at competitive prices;
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•
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the success of our first LAB recycling facility near Reno, Nevada;
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•
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the availability of working capital to pursue the development of additional recycling centers;
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•
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the effects of the putative class action and shareholder derivative lawsuits filed against us;
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•
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the timing and success of our development of additional recycling facilities;
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•
|
the effects of market conditions on our stock price and operating results;
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•
|
our ability to maintain our competitive technological advantages against competitors in our industry;
|
•
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our ability to have our technology solutions gain market acceptance;
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•
|
our ability to maintain, protect and enhance our intellectual property;
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•
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the effects of increased competition in our market and our ability to compete effectively;
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•
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costs associated with defending intellectual property infringement and other claims;
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•
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our expectations concerning our relationships with suppliers, partners and other third parties; and
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•
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our ability to comply with evolving legal standards and regulations, particularly concerning requirements for being a public company and environmental regulations.
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Item 1.
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Business
|
•
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Lead and lead-based products, including high purity lead, lead alloys and lead compounds which are primarily intended for the LAB industry. We are also exploring higher value lead-based products which may offer performance and life-cycle benefits to the LAB industry; and
|
•
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Recovered plastic chips, intended for re-use in the manufacture of battery casings and other recycled plastic products.
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1)
|
the supply of AquaRefining and supporting equipment and services to third parties to use in their recycling operations on a licensing model. We are currently focused on exploring this business stream through our relationship with Johnson Controls;
|
2)
|
the expansion of our own AquaRefining capacity and facilities, subject to our receipt of additional capital.
|
•
|
AquaRefining technology and the related equipment, engineering and systems integration support sufficient to convert or retrofit existing smelter-based operations and/or the construction of new Johnson Controls and Johnson Controls’ strategic partners’ battery recycling facilities based on our AquaRefining technology;
|
•
|
Training, evaluation and certification of Johnson Controls’ operations personnel sufficient for such personnel to competently operate our AquaRefining technology and equipment; and
|
•
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Ongoing technical support, maintenance services and warranties.
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•
|
AQUA METALS (US and 15 foreign countries)
|
•
|
AQUAREFINING (US and 11 foreign countries)
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•
|
AQUAREFINE (US only)
|
Item 1A.
|
Risk Factors
|
•
|
the timing and success of our plan of commercialization and the fact that we continue to experience delays in ramping up our LAB recycling operations at TRIC;
|
•
|
our ability to bring modules online and ramp up production on a commercial scale.
|
•
|
our ability to profitably operate our AquaRefining process on a commercial scale;
|
•
|
our ability to realize the expected benefits of our strategic partnership with Johnson Controls;
|
•
|
our ability to procure LABs in sufficient quantities at competitive prices; and
|
•
|
our ability to receive proper certification from and meet the requirements of our customers regarding the purity of our AquaRefined lead.
|
•
|
limit our flexibility in developing our business operations and planning for, or reacting to, changes in our business;
|
•
|
increase our vulnerability to, and reduce our flexibility to respond to, general adverse economic and industry conditions; and
|
•
|
place us at a competitive disadvantage as compared to our competitors that are not as highly leveraged.
|
•
|
our ability to acquire sufficient quantities of used LABs at competitive prices;
|
•
|
our ability to produce AquaRefined lead that is priced competitively with lead produced by traditional smelting;
|
•
|
our ability to produce AquaRefined lead on a commercial scale and at an adequate gross profit; and
|
•
|
our ability to sell our AquaRefined lead at prices and in quantities that provide an adequate net profit from operations.
|
•
|
increased cost of enforcing our intellectual property rights;
|
•
|
heightened price sensitivities from customers in emerging markets;
|
•
|
our ability to establish or contract for local manufacturing, support and service functions;
|
•
|
localization of our LABs and components, including translation into foreign languages and the associated expenses;
|
•
|
compliance with multiple, conflicting and changing governmental laws and regulations;
|
•
|
foreign currency fluctuations;
|
•
|
laws favoring local competitors;
|
•
|
weaker legal protections of contract terms, enforcement on collection of receivables and intellectual property rights and mechanisms for enforcing those rights;
|
•
|
market disruptions created by public health crises in regions outside the United States;
|
•
|
difficulties in staffing and managing foreign operations, including challenges presented by relationships with workers’ councils and labor unions;
|
•
|
issues related to differences in cultures and practices; and
|
•
|
changing regional economic, political and regulatory conditions.
|
•
|
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
|
•
|
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;
|
•
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exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments; and
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•
|
extended transition periods available for complying with new or revised accounting standards.
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•
|
limit who may call stockholder meetings;
|
•
|
do not permit stockholders to act by written consent;
|
•
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do not provide for cumulative voting rights;
|
•
|
establish an advance notice procedure for stockholders' proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors, and
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•
|
provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities
|
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
|
|
High
|
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Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||||||
First Quarter
|
|
$
|
3.00
|
|
|
$
|
1.59
|
|
|
$
|
21.89
|
|
|
$
|
10.68
|
|
|
$
|
6.65
|
|
|
$
|
4.51
|
|
Second Quarter
|
|
$
|
4.14
|
|
|
$
|
2.26
|
|
|
$
|
18.56
|
|
|
$
|
10.44
|
|
|
$
|
12.92
|
|
|
$
|
7.15
|
|
Third Quarter
|
|
$
|
3.11
|
|
|
$
|
2.24
|
|
|
$
|
12.55
|
|
|
$
|
5.49
|
|
|
$
|
12.73
|
|
|
$
|
8.18
|
|
Fourth Quarter
|
|
$
|
2.92
|
|
|
$
|
1.55
|
|
|
$
|
6.91
|
|
|
$
|
1.88
|
|
|
$
|
13.66
|
|
|
$
|
8.62
|
|
Plan Category
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Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
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Weighted-Average Exercise Price of Outstanding Options and Warrants
|
|
Number of Securities Remaining Available for Future Issuance Under Equity compensation Plans
|
||||
Equity compensation plans approved by stockholders
|
|
950,691
|
|
(1)
|
|
$
|
4.18
|
|
|
805,749
|
|
Equity compensation plans not approved by stockholders
|
|
3,180,828
|
|
(2)
|
|
$
|
6.57
|
|
|
—
|
|
Item 6.
|
Selected Financial Data
|
|
|
|
|
|
|
|
|
|
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Period from
Inception
|
||||||||||
|
|
Year Ended December 31,
|
|
(June 20, 2014) to
|
||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
December 31, 2014
|
||||||||||
|
|
|
|
(in thousands, except share and per share data)
|
||||||||||||||||
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
4,449
|
|
|
$
|
2,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
Operating cost and expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
22,761
|
|
|
9,541
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Research and development cost
|
|
4,502
|
|
|
8,103
|
|
|
6,348
|
|
|
2,280
|
|
|
231
|
|
|||||
General and administrative expense
|
|
14,214
|
|
|
6,891
|
|
|
6,610
|
|
|
3,171
|
|
|
1,176
|
|
|||||
Impairment charge
|
|
—
|
|
|
2,411
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expense
|
|
41,477
|
|
|
26,946
|
|
|
12,958
|
|
|
5,451
|
|
|
1,407
|
|
|||||
Loss from operations
|
|
(37,028
|
)
|
|
(24,858
|
)
|
|
(12,958
|
)
|
|
(5,451
|
)
|
|
(1,407
|
)
|
|||||
Other income and expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Increase in fair value of derivative liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,776
|
)
|
|
(1,172
|
)
|
|||||
Interest expense
|
|
(3,447
|
)
|
|
(1,761
|
)
|
|
(639
|
)
|
|
(1,128
|
)
|
|
(217
|
)
|
|||||
Interest and other income
|
|
223
|
|
|
41
|
|
|
41
|
|
|
26
|
|
|
1
|
|
|||||
Total other income (expense), net
|
|
(3,224
|
)
|
|
(1,720
|
)
|
|
(598
|
)
|
|
(6,878
|
)
|
|
(1,388
|
)
|
|||||
Loss before income tax expense
|
|
(40,252
|
)
|
|
(26,578
|
)
|
|
(13,556
|
)
|
|
(12,329
|
)
|
|
(2,795
|
)
|
|||||
Income tax expense
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
421
|
|
|||||
Net loss
|
|
$
|
(40,254
|
)
|
|
$
|
(26,580
|
)
|
|
$
|
(13,557
|
)
|
|
$
|
(12,332
|
)
|
|
$
|
(2,374
|
)
|
Weighted average shares outstanding, basic and diluted
|
|
34,154,826
|
|
|
20,293,100
|
|
|
15,267,233
|
|
|
8,404,311
|
|
|
4,363,641
|
|
|||||
Basic and diluted net loss per share
|
|
$
|
(1.18
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(1.47
|
)
|
|
$
|
(0.54
|
)
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Selected Consolidated Balance Sheet Data:
|
|
|
|
|
||||
Cash, cash equivalents
|
|
$
|
20,892
|
|
|
$
|
22,793
|
|
Total assets
|
|
71,371
|
|
|
74,442
|
|
||
Working capital
|
|
10,953
|
|
|
21,850
|
|
||
Current liabilities
|
|
11,799
|
|
|
3,834
|
|
||
Long-term obligations, less current portion
|
|
9,482
|
|
|
11,643
|
|
||
Common stock and additional paid-in capital
|
|
145,186
|
|
|
113,807
|
|
||
Accumulated deficit
|
|
(95,096
|
)
|
|
(54,842
|
)
|
||
Total stockholders’ equity
|
|
$
|
50,090
|
|
|
$
|
58,965
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
With respect to a Credit Agreement dated May 18, 2016 between us and Interstate Battery, Interstate Battery waived the alleged breach of the Credit Agreement based on our acquisition of Ebonex IPR, Ltd.;
|
•
|
We adjusted the terms of a warrant to purchase 702,247 shares of its common stock issued to Interstate Battery in May 2016, pursuant to which the exercise price of the warrant was decreased from $7.12 per share to $3.33 per share and the expiration date of the warrant was extended to June 23, 2020; and
|
•
|
Interstate Battery agreed to provide us with more favorable pricing and payment terms under the Supply Agreement dated May 18, 2016 pursuant to which we buy used lead acid batteries from Interstate Battery.
|
|
|
Year ended December 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Favorable
(Unfavorable)
|
|
%
Change
|
|||||||
Product sales
|
|
$
|
4,449
|
|
|
$
|
2,088
|
|
|
$
|
2,361
|
|
|
113
|
%
|
Cost of product sales
|
|
22,761
|
|
|
9,541
|
|
|
(13,220
|
)
|
|
(139
|
)%
|
|||
Research and development cost
|
|
4,502
|
|
|
8,103
|
|
|
3,601
|
|
|
44
|
%
|
|||
General and administrative expense
|
|
14,214
|
|
|
6,891
|
|
|
(7,323
|
)
|
|
(106
|
)%
|
|||
Impairment charge
|
|
—
|
|
|
2,411
|
|
|
2,411
|
|
|
100
|
%
|
|||
Total operating expense
|
|
$
|
41,477
|
|
|
$
|
26,946
|
|
|
$
|
(14,531
|
)
|
|
(54
|
)%
|
|
|
Year ended December 31,
|
|||||||||||||
|
|
2018
|
|
2017
|
|
Favorable
(Unfavorable)
|
|
%
Change
|
|||||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
(3,447
|
)
|
|
$
|
(1,761
|
)
|
|
$
|
(1,686
|
)
|
|
96
|
%
|
Interest and other income
|
|
$
|
223
|
|
|
$
|
41
|
|
|
$
|
182
|
|
|
444
|
%
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Favorable
(Unfavorable)
|
|
%
Change
|
|||||||
Product sales
|
|
$
|
2,088
|
|
|
$
|
—
|
|
|
$
|
2,088
|
|
|
—
|
%
|
Cost of product sales
|
|
9,541
|
|
|
—
|
|
|
(9,541
|
)
|
|
—
|
%
|
|||
Research and development cost
|
|
8,103
|
|
|
6,348
|
|
|
(1,755
|
)
|
|
(28
|
)%
|
|||
General and administrative expense
|
|
6,891
|
|
|
6,610
|
|
|
(281
|
)
|
|
(4
|
)%
|
|||
Impairment charge
|
|
2,411
|
|
|
—
|
|
|
(2,411
|
)
|
|
—
|
%
|
|||
Total operating expense
|
|
$
|
26,946
|
|
|
$
|
12,958
|
|
|
$
|
(13,988
|
)
|
|
(108
|
)%
|
|
|
Year Ended December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
Favorable
(Unfavorable)
|
|
%
Change
|
|||||||
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
(1,761
|
)
|
|
$
|
(639
|
)
|
|
$
|
1,122
|
|
|
(175.59
|
)%
|
Interest income
|
|
$
|
41
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
—
|
%
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash used in operating activities
|
|
$
|
(26,318
|
)
|
|
$
|
(19,002
|
)
|
|
$
|
(11,121
|
)
|
Net cash used in investing activities
|
|
$
|
(3,929
|
)
|
|
$
|
(9,775
|
)
|
|
$
|
(29,606
|
)
|
Net cash provided by financing activities
|
|
$
|
28,346
|
|
|
$
|
24,988
|
|
|
$
|
35,501
|
|
|
|
Total
|
|
Less than
1 year
|
|
1 to 3
years
|
|
3 to 5
years
|
|
More than
5 years
|
||||||||||
Operating lease obligations
|
|
$
|
2,156
|
|
|
$
|
624
|
|
|
$
|
1,305
|
|
|
$
|
227
|
|
|
—
|
|
|
Capital lease obligations
|
|
39
|
|
|
16
|
|
|
12
|
|
|
11
|
|
|
—
|
|
|||||
Convertible debt
|
|
6,651
|
|
|
6,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Notes payable
|
|
9,506
|
|
|
295
|
|
|
648
|
|
|
737
|
|
|
7,826
|
|
|||||
|
|
$
|
18,352
|
|
|
$
|
7,586
|
|
|
$
|
1,965
|
|
|
$
|
975
|
|
|
$
|
7,826
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
20,892
|
|
|
$
|
22,793
|
|
Accounts receivable
|
|
725
|
|
|
882
|
|
||
Inventory
|
|
765
|
|
|
1,239
|
|
||
Prepaid expenses and other current assets
|
|
370
|
|
|
770
|
|
||
Total current assets
|
|
22,752
|
|
|
25,684
|
|
||
|
|
|
|
|
||||
Non-current assets
|
|
|
|
|
||||
Property and equipment, net
|
|
45,548
|
|
|
45,733
|
|
||
Intellectual property, net
|
|
1,271
|
|
|
1,461
|
|
||
Other assets
|
|
1,800
|
|
|
1,564
|
|
||
Total non-current assets
|
|
48,619
|
|
|
48,758
|
|
||
|
|
|
|
|
||||
Total assets
|
|
$
|
71,371
|
|
|
$
|
74,442
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
2,088
|
|
|
$
|
1,436
|
|
Accrued expenses
|
|
5,196
|
|
|
1,801
|
|
||
Deferred rent, current portion
|
|
8
|
|
|
192
|
|
||
Lease liability, current portion
|
|
121
|
|
|
—
|
|
||
Notes payable, current portion
|
|
311
|
|
|
405
|
|
||
Convertible note payable, current portion
|
|
4,075
|
|
|
—
|
|
||
Total current liabilities
|
|
11,799
|
|
|
3,834
|
|
||
|
|
|
|
|
||||
Deferred rent, non-current portion
|
|
27
|
|
|
771
|
|
||
Lease liability, non-current portion
|
|
110
|
|
|
—
|
|
||
Asset retirement obligation
|
|
745
|
|
|
701
|
|
||
Notes payable, non-current portion
|
|
8,600
|
|
|
8,839
|
|
||
Convertible note payable, non-current portion
|
|
—
|
|
|
1,332
|
|
||
Total liabilities
|
|
21,281
|
|
|
15,477
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
||||
Common stock; $0.001 par value; 50,000,000 shares authorized; 38,932,437 and 27,554,076 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively
|
|
39
|
|
|
27
|
|
||
Additional paid-in capital
|
|
145,147
|
|
|
113,780
|
|
||
Accumulated deficit
|
|
(95,096
|
)
|
|
(54,842
|
)
|
||
Total stockholders’ equity
|
|
50,090
|
|
|
58,965
|
|
||
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
|
$
|
71,371
|
|
|
$
|
74,442
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Product sales
|
|
$
|
4,449
|
|
|
$
|
2,088
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Operating cost and expense
|
|
|
|
|
|
|
||||||
Cost of product sales
|
|
22,761
|
|
|
9,541
|
|
|
—
|
|
|||
Research and development cost
|
|
4,502
|
|
|
8,103
|
|
|
6,348
|
|
|||
General and administrative expense
|
|
14,214
|
|
|
6,891
|
|
|
6,610
|
|
|||
Impairment charge
|
|
—
|
|
|
2,411
|
|
|
—
|
|
|||
Total operating expense
|
|
41,477
|
|
|
26,946
|
|
|
12,958
|
|
|||
|
|
|
|
|
|
|
||||||
Loss from operations
|
|
(37,028
|
)
|
|
(24,858
|
)
|
|
(12,958
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other income and expense
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(3,447
|
)
|
|
(1,761
|
)
|
|
(639
|
)
|
|||
Interest and other income
|
|
223
|
|
|
41
|
|
|
41
|
|
|||
|
|
|
|
|
|
|
||||||
Total other expense, net
|
|
(3,224
|
)
|
|
(1,720
|
)
|
|
(598
|
)
|
|||
|
|
|
|
|
|
|
||||||
Loss before income tax expense
|
|
(40,252
|
)
|
|
(26,578
|
)
|
|
(13,556
|
)
|
|||
|
|
|
|
|
|
|
||||||
Income tax expense
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(40,254
|
)
|
|
$
|
(26,580
|
)
|
|
$
|
(13,557
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding, basic and diluted
|
|
34,154,826
|
|
|
20,293,100
|
|
|
15,267,233
|
|
|||
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
|
$
|
(1.18
|
)
|
|
$
|
(1.31
|
)
|
|
$
|
(0.89
|
)
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity (Deficit)
|
|||||||||
|
|
Common Stock
|
|
|
|
||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2015
|
|
14,137,442
|
|
|
$
|
14
|
|
|
$
|
48,356
|
|
|
$
|
(14,705
|
)
|
|
$
|
33,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation - stock options
|
|
—
|
|
|
—
|
|
|
1,060
|
|
|
—
|
|
|
1,060
|
|
||||
Warrants issued for consulting services
|
|
—
|
|
|
—
|
|
|
138
|
|
|
—
|
|
|
138
|
|
||||
Cashless exercise of warrant
|
|
15,203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Exercise of options to purchase common stock
|
|
4,500
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Common stock issued in May 2016 Private Placement, net of $345 offering costs
|
|
719,333
|
|
|
1
|
|
|
4,777
|
|
|
—
|
|
|
4,778
|
|
||||
Common stock issued for cash in May 2016 from Interstate Battery, net of $629 allocated transaction cost
|
|
702,247
|
|
|
1
|
|
|
4,369
|
|
|
—
|
|
|
4,370
|
|
||||
Common stock issued in November 2016 public offering, net of $1,688 offering costs
|
|
2,300,000
|
|
|
2
|
|
|
21,540
|
|
|
—
|
|
|
21,542
|
|
||||
Proceeds allocated to warrants issued and beneficial conversion feature in connection with Interstate Batteries Agreement
|
|
—
|
|
|
—
|
|
|
4,975
|
|
|
—
|
|
|
4,975
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,557
|
)
|
|
(13,557
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2016
|
|
17,878,725
|
|
|
$
|
18
|
|
|
$
|
85,234
|
|
|
$
|
(28,262
|
)
|
|
$
|
56,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
1,081
|
|
||||
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
|
|
284,370
|
|
|
—
|
|
|
1,071
|
|
|
—
|
|
|
1,071
|
|
||||
Common stock issued under Officers and Directors Purchase Plan
|
|
2,404
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
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
|
|
||||
Common stock issued in December 2017 public offering, net of $1,256 transaction cost
|
|
7,150,000
|
|
|
7
|
|
|
13,752
|
|
|
—
|
|
|
13,759
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,580
|
)
|
|
(26,580
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 31, 2017
|
|
27,554,076
|
|
|
$
|
27
|
|
|
$
|
113,780
|
|
|
$
|
(54,842
|
)
|
|
$
|
58,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
1,201
|
|
|
—
|
|
|
1,201
|
|
||||
Common stock issued under Officers and Directors Purchase Plan
|
|
2,034
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Common stock issued upon RSU vesting
|
|
65,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Common stock issued for consulting services
|
|
152,727
|
|
|
—
|
|
|
423
|
|
|
—
|
|
|
423
|
|
||||
Common stock issued in overallotment related to December 2017 Public Offering, net of $10 transaction cost
|
|
1,072,500
|
|
|
2
|
|
|
2,101
|
|
|
—
|
|
|
2,103
|
|
||||
Common stock issued for cash in June 2018 Public Offering, net of $2,096 transaction cost
|
|
10,085,500
|
|
|
10
|
|
|
26,636
|
|
|
—
|
|
|
26,646
|
|
||||
Modification of Interstate Batteries warrant #1
|
|
—
|
|
|
—
|
|
|
1,002
|
|
|
—
|
|
|
1,002
|
|
||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,254
|
)
|
|
(40,254
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances, December 31, 2018
|
|
38,932,437
|
|
|
$
|
39
|
|
|
$
|
145,147
|
|
|
$
|
(95,096
|
)
|
|
$
|
50,090
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(40,254
|
)
|
|
$
|
(26,580
|
)
|
|
$
|
(13,557
|
)
|
Reconciliation of net loss to net cash used in operating activities
|
|
|
|
|
|
|
||||||
Depreciation
|
|
3,213
|
|
|
2,908
|
|
|
687
|
|
|||
Amortization of intellectual property
|
|
190
|
|
|
163
|
|
|
128
|
|
|||
Accretion of asset retirement obligation
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Fair value of warrant modification, net
|
|
402
|
|
|
—
|
|
|
—
|
|
|||
Fair value of warrants issued for consulting services
|
|
—
|
|
|
—
|
|
|
138
|
|
|||
Fair value of common stock issued for consulting services
|
|
423
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
|
1,201
|
|
|
1,081
|
|
|
1,060
|
|
|||
Amortization of debt discount
|
|
2,006
|
|
|
360
|
|
|
54
|
|
|||
Amortization of deferred financing costs
|
|
83
|
|
|
83
|
|
|
62
|
|
|||
Non-cash convertible note interest expense
|
|
690
|
|
|
618
|
|
|
343
|
|
|||
Lease liability, net of deferred rent write-off
|
|
(493
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of lease liability
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of acquired intellectual property
|
|
—
|
|
|
2,411
|
|
|
—
|
|
|||
Loss on sale of equipment
|
|
869
|
|
|
76
|
|
|
—
|
|
|||
Inventory write down
|
|
179
|
|
|
456
|
|
|
—
|
|
|||
Changes in operating assets and liabilities
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
157
|
|
|
(882
|
)
|
|
—
|
|
|||
Inventory
|
|
295
|
|
|
(1,636
|
)
|
|
(59
|
)
|
|||
Prepaid expenses and other current assets
|
|
400
|
|
|
236
|
|
|
(394
|
)
|
|||
Accounts payable
|
|
472
|
|
|
926
|
|
|
(176
|
)
|
|||
Accrued expenses
|
|
4,009
|
|
|
924
|
|
|
564
|
|
|||
Deferred rent
|
|
(124
|
)
|
|
(177
|
)
|
|
—
|
|
|||
Net cash used in operating activities
|
|
(26,318
|
)
|
|
(19,002
|
)
|
|
(11,121
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(3,693
|
)
|
|
(8,819
|
)
|
|
(29,156
|
)
|
|||
Proceeds from sale of equipment
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Other assets
|
|
(236
|
)
|
|
(345
|
)
|
|
(250
|
)
|
|||
Intellectual property related expenditures
|
|
—
|
|
|
(615
|
)
|
|
(200
|
)
|
|||
Net cash used in investing activities
|
|
(3,929
|
)
|
|
(9,775
|
)
|
|
(29,606
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net of transaction costs
|
|
28,753
|
|
|
25,325
|
|
|
30,709
|
|
|||
Payments on notes payable
|
|
(277
|
)
|
|
(201
|
)
|
|
(14
|
)
|
|||
Payments on capital leases
|
|
(130
|
)
|
|
(136
|
)
|
|
(52
|
)
|
|||
Proceeds from issuance of convertible notes payable, net of issuance costs
|
|
—
|
|
|
—
|
|
|
4,858
|
|
|||
Net cash provided by financing activities
|
|
28,346
|
|
|
24,988
|
|
|
35,501
|
|
|||
|
|
|
|
|
|
|
||||||
Net decrease in cash, cash equivalents and restricted cash
|
|
(1,901
|
)
|
|
(3,789
|
)
|
|
(5,226
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
|
22,793
|
|
|
26,582
|
|
|
31,808
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
20,892
|
|
|
$
|
22,793
|
|
|
$
|
26,582
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest, net of amounts capitalized
|
|
$
|
668
|
|
|
$
|
699
|
|
|
$
|
330
|
|
Cash paid for income taxes
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Non-cash investing activities
|
|
|
|
|
|
|
||||||
Tenant improvement allowances
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78
|
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities
|
|
|
|
|
|
|
||||||
Capital lease
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
310
|
|
Fair value of consulting warrants
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
138
|
|
Fair value of financing warrants
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
229
|
|
Fair value of common stock issued to consultants
|
|
$
|
423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total non-cash financing activities
|
|
$
|
461
|
|
|
$
|
—
|
|
|
$
|
677
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash transactions
|
|
|
|
|
|
|
||||||
Change in property and equipment resulting from change in accounts payable
|
|
$
|
180
|
|
|
$
|
(1,062
|
)
|
|
$
|
1,200
|
|
Change in property and equipment resulting from change in accrued expenses
|
|
$
|
(14
|
)
|
|
$
|
(1,098
|
)
|
|
$
|
1,330
|
|
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
|
|
|
$
|
—
|
|
Reduction in accrued liabilities upon modification of Interstate Battery warrant #1
|
|
$
|
600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
1.
|
Organization and Operations
|
2.
|
Summary of Significant Accounting Policies
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
25,458
|
|
|
$
|
20,141
|
|
Restricted cash
|
|
1,124
|
|
|
11,667
|
|
||
|
|
|
|
|
||||
Total cash, cash equivalents and restricted
|
|
|
|
|
||||
cash shown in the statement of cash flows
|
|
$
|
26,582
|
|
|
$
|
31,808
|
|
|
|
Year Ended December 31,
|
|||||||
Excluded potentially dilutive securities (1):
|
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|
|||
Convertible note - principal
|
|
702,247
|
|
|
702,247
|
|
|
702,247
|
|
Consulting warrants to purchase common stock
|
|
—
|
|
|
—
|
|
|
486,364
|
|
Options to purchase common stock
|
|
1,694,068
|
|
|
578,813
|
|
|
915,572
|
|
Unvested restricted stock
|
|
96,623
|
|
|
180,951
|
|
|
—
|
|
Financing warrants to purchase common stock
|
|
2,340,828
|
|
|
2,340,828
|
|
|
3,316,208
|
|
Total potential dilutive securities
|
|
4,833,766
|
|
|
3,802,839
|
|
|
5,420,391
|
|
(1)
|
The number of shares is based on the maximum number of shares issuable on exercise or conversion of the related securities as of the period end. Such amounts have not been adjusted for the treasury stock method or weighted average outstanding calculations as required if the securities were dilutive.
|
|
|
|
|
Accounts Receivable
|
|||||||||||
|
|
Revenue
|
|
As of December 31,
|
|||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Johnson Controls Battery Group, Inc.
|
|
88
|
%
|
|
96
|
%
|
|
—
|
%
|
|
95
|
%
|
|
95
|
%
|
|
|
2018
|
|
2017
|
||
|
|
|
|
|
||
Supplier A
|
|
32
|
%
|
|
56
|
%
|
Supplier B
|
|
64
|
%
|
|
44
|
%
|
3.
|
Revenue recognition
|
4.
|
Inventory, net
|
5.
|
Property and equipment, net
|
|
|
Useful Life (Years)
|
|
December 31,
|
||||||
Asset Class
|
|
|
2018
|
|
2017
|
|||||
|
|
|
|
|
|
|
||||
Operational equipment
|
|
3-10
|
|
$
|
15,926
|
|
|
$
|
15,457
|
|
Lab equipment
|
|
5
|
|
698
|
|
|
685
|
|
||
Computer equipment
|
|
3
|
|
201
|
|
|
174
|
|
||
Office furniture and equipment
|
|
3
|
|
336
|
|
|
326
|
|
||
Leasehold improvements
|
|
5-7
|
|
—
|
|
|
1,408
|
|
||
Land
|
|
—
|
|
1,047
|
|
|
1,047
|
|
||
Building
|
|
39
|
|
24,820
|
|
|
24,847
|
|
||
Asset retirement cost
|
|
20
|
|
670
|
|
|
670
|
|
||
Equipment under construction
|
|
|
|
7,892
|
|
|
4,552
|
|
||
|
|
|
|
51,590
|
|
|
49,166
|
|
||
Less: accumulated depreciation
|
|
|
|
(6,042
|
)
|
|
(3,433
|
)
|
||
|
|
|
|
|
|
|
||||
|
|
|
|
$
|
45,548
|
|
|
$
|
45,733
|
|
6.
|
Intellectual Property
|
|
|
2018
|
|
2017
|
||||
Intellectual property
|
|
$
|
1,906
|
|
|
$
|
1,906
|
|
Accumulated amortization
|
|
(635
|
)
|
|
(445
|
)
|
||
Intellectual property, net
|
|
$
|
1,271
|
|
|
$
|
1,461
|
|
2019
|
$
|
191
|
|
2020
|
191
|
|
|
2021
|
191
|
|
|
2022
|
191
|
|
|
2023
|
191
|
|
|
Thereafter
|
316
|
|
|
Total estimated future amortization
|
$
|
1,271
|
|
7.
|
Other Assets
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Alameda security deposit (1)
|
|
$
|
55
|
|
|
$
|
321
|
|
CD for Green Bank collateral security (2)
|
|
1,026
|
|
|
1,019
|
|
||
Nevada sales and use tax deposit
|
|
49
|
|
|
49
|
|
||
Facility Closure Trust deposit (3)
|
|
670
|
|
|
450
|
|
||
|
|
1,800
|
|
|
1,839
|
|
||
Less: current portion (1)
|
|
—
|
|
|
(275
|
)
|
||
|
|
|
|
|
||||
Other assets, non-current
|
|
$
|
1,800
|
|
|
$
|
1,564
|
|
(1)
|
The lease deposit related to the Alameda headquarters was released over time:
$275,000
was released in June 2018; the remainder will be released at the end of the lease term. The current portion in 2017 was included in prepaid expenses and other current assets in the consolidated balance sheet.
|
(2)
|
The
$1.0
million certificate of deposit is held by Green Bank as collateral for the Green Bank note payable balance. The deposit with Green Bank will be released after TRIC has three consecutive months of positive cash flow from operations.
|
(3)
|
The Company has entered into a Facility Closure Trust Agreement for the benefit of the Nevada Division of Conservation and Natural Resources (NDEP). Funds deposited in the Trust are to be available when and if needed, for closure and/or post-closure care of the facility related to potential decontamination and hazardous material cleanup. The Trustee will reimburse the Company or other persons as specified by the NDEP from the fund for closure and post-closure expenditures in such amounts as the NDEP shall direct in writing. In addition, the Trustee shall refund to the Company such amounts as the NDEP specifies in writing.
$100,000
was deposited upon establishment of the Trust Fund, on October 31, 2016;
$350,000
was deposited on October 31, 2017; and
$220,000
was deposited on October 31, 2018.
|
8.
|
Accrued liabilities
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Fixed asset related
|
|
$
|
218
|
|
|
$
|
232
|
|
Payroll related
|
|
2,115
|
|
|
470
|
|
||
Use tax accrual
|
|
2
|
|
|
75
|
|
||
Professional services
|
|
159
|
|
|
88
|
|
||
Key man penalty accrual
|
|
2,500
|
|
|
—
|
|
||
Estimated Interstate Battery settlement
|
|
—
|
|
|
600
|
|
||
Other
|
|
202
|
|
|
336
|
|
||
|
|
$
|
5,196
|
|
|
$
|
1,801
|
|
9.
|
Asset Retirement Obligation
|
10.
|
Convertible Notes
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Convertible note payable
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Accrued interest
|
|
1,651
|
|
|
961
|
|
||
Deferred financing costs, net
|
|
(20
|
)
|
|
(67
|
)
|
||
Note discount
|
|
(2,556
|
)
|
|
(4,562
|
)
|
||
|
|
|
|
|
||||
Less current portion
|
|
$
|
4,075
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Convertible note payable, non-current portion
|
|
$
|
—
|
|
|
$
|
1,332
|
|
11.
|
Deferred Rent
|
12.
|
Notes Payable
|
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Notes payable, current portion
|
|
|
|
|
||||
Capital equipment leases, current portion
|
|
$
|
16
|
|
|
$
|
128
|
|
Green Bank, net of issuance costs
|
|
295
|
|
|
277
|
|
||
|
|
$
|
311
|
|
|
$
|
405
|
|
|
|
|
|
|
||||
Notes payable, non-current portion
|
|
|
|
|
||||
Capital equipment leases, non-current portion
|
|
$
|
31
|
|
|
$
|
11
|
|
Green Bank, net of issuance costs
|
|
8,569
|
|
|
8,828
|
|
||
|
|
$
|
8,600
|
|
|
$
|
8,839
|
|
13.
|
Stockholders’ Equity
|
•
|
a warrant to purchase
702,247
shares of the Company’s common stock, at an exercise price of
$7.12
per share, that is exercisable upon grant and expires on
May 24, 2018
; and
|
•
|
a warrant to purchase
1,605,131
shares of the Company’s common stock, at an exercise price of
$9.00
per share, that is exercisable commencing November 24, 2016 and expires on
May 24, 2019
.
|
•
|
The fair value of the note was calculated using an average of the Merrill Lynch US High Yield CCC rate of
16.21%
on May 24, 2016 and the Merrill Lynch US High Yield B effective yield of
7.44%
on May 24, 2016.
|
•
|
The fair value of the common stock was based on the closing market price of the Company’s common stock on the NASDAQ stock market on May 24, 2016.
|
|
|
Warrant #1
|
|
Warrant #2
|
||||
Warrant shares issued
|
|
702,247
|
|
|
1,605,131
|
|
||
Market price
|
|
11.39
|
|
|
11.39
|
|
||
Exercise price
|
|
7.12
|
|
|
$
|
9.00
|
|
|
Term (years)
|
|
2 years
|
|
|
3 years
|
|
||
Risk-free interest rate
|
|
0.91
|
%
|
|
1.05
|
%
|
||
Volatility
|
|
65.70
|
%
|
|
67.80
|
%
|
||
Dividend rate
|
|
—
|
%
|
|
—
|
%
|
||
Per share FV of warrant
|
|
5.89
|
|
|
5.89
|
|
||
FV of warrant
|
|
$
|
4,136
|
|
|
$
|
9,450
|
|
|
|
Fair value
|
|
Allocated value
|
||||
|
|
|
|
|
||||
Allocation of Proceeds
|
|
|
|
|
|
|
||
Convertible note
|
|
$
|
4,879
|
|
|
$
|
1,844
|
|
Warrants
|
|
13,586
|
|
|
5,134
|
|
||
Common stock
|
|
7,998
|
|
|
3,022
|
|
||
|
|
|
|
|
||||
|
|
$
|
26,463
|
|
|
$
|
10,000
|
|
|
|
1/31/2016
|
|
4/30/2016
|
|
7/31/2016
|
||||||
Warrant shares issued
|
|
12,500
|
|
|
12,500
|
|
|
12,500
|
|
|||
Market price
|
|
4.63
|
|
|
8.37
|
|
|
9.31
|
|
|||
Exercise price
|
|
$
|
6.00
|
|
|
$
|
6.00
|
|
|
$
|
6.00
|
|
Term (years)
|
|
1.25
|
|
|
2.25
|
|
|
2
|
|
|||
Risk-free interest rate
|
|
0.97
|
%
|
|
0.77
|
%
|
|
0.72
|
%
|
|||
Volatility
|
|
80.00
|
%
|
|
80.00
|
%
|
|
80.00
|
%
|
|||
Dividend rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Per share FV of warrant
|
|
1.24
|
|
|
4.58
|
|
|
5.19
|
|
|||
FV of warrant
|
|
$
|
16
|
|
|
$
|
57
|
|
|
$
|
65
|
|
Date of
Warrant
Exercise
|
|
Average Closing
Market Price
Per Share
|
|
Exercise Price
Per Share
|
|
Warrant
Shares
Exercised
|
|
Common
Shares
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
|
|
Exercise Price
per Share
|
|
Expiration
Date
|
|
Shares Subject to purchase
at December 31, 2018
|
|||
|
|
|
|
|
|||
$
|
3.33
|
|
|
6/23/2020
|
|
702,247
|
|
$
|
9.00
|
|
|
5/18/2019
|
|
1,605,131
|
|
$
|
10.00
|
|
|
11/21/2019
|
|
33,450
|
|
|
|
|
|
|
|||
|
|
|
|
2,340,828
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of product sales
|
|
$
|
154
|
|
|
$
|
143
|
|
|
—
|
|
|
Research and development cost
|
|
215
|
|
|
456
|
|
|
256
|
|
|||
General and administrative expense
|
|
832
|
|
|
482
|
|
|
804
|
|
|||
Total
|
|
$
|
1,201
|
|
|
$
|
1,081
|
|
|
$
|
1,060
|
|
|
|
Year ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|
|||
Expected stock volatility
|
|
76.9% - 86.3
|
|
|
70.5% - 73.2
|
|
|
71%-80
|
|
Risk free interest rate
|
|
2.1% - 3.0
|
|
|
1.4% - 2.0
|
|
|
0.9%-1.8
|
|
Expected years until exercise
|
|
2.5-3.5
|
|
|
2.5-3.5
|
|
|
2.5-4.0
|
|
Dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
Options Outstanding
|
|
RSU’s outstanding
|
|||||||||||
|
|
Number of
Shares
Available for
Grant
|
|
Number of Shares
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Number of
RSU’s
|
|
Weighted-
Average
Grant Date
Fair Value
Per Share
|
|||||||
Balance at December 31, 2016
|
|
443,565
|
|
|
915,572
|
|
|
$
|
4.96
|
|
|
—
|
|
|
$
|
—
|
|
Authorized
|
|
750,000
|
|
|
|
|
|
|
|
|
|
||||||
Granted
|
|
(330,884
|
)
|
|
134,933
|
|
|
11.19
|
|
|
195,951
|
|
|
7.28
|
|
||
Exercised
|
|
—
|
|
|
(284,370
|
)
|
|
3.77
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
202,322
|
|
|
(187,322
|
)
|
|
6.44
|
|
|
(15,000
|
)
|
|
5.78
|
|
||
Balance at December 31, 2017
|
|
1,065,003
|
|
|
578,813
|
|
|
6.51
|
|
|
180,951
|
|
|
7.40
|
|
||
Granted
|
|
(640,275
|
)
|
|
1,269,925
|
|
|
3.99
|
|
|
207,623
|
|
|
2.42
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65,600
|
)
|
|
5.78
|
|
||
Forfeited
|
|
381,021
|
|
|
(154,670
|
)
|
|
7
|
|
|
(226,351
|
)
|
|
4.74
|
|
||
Balance at December 31, 2018
|
|
805,749
|
|
|
1,694,068
|
|
|
$
|
4.57
|
|
|
96,623
|
|
|
$
|
4.01
|
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Weighted-
Average
Remaining
Contractural
Life (Years)
|
|
Aggregate
Intrinsic
Value (in
thousands)
|
||
Outstanding
|
|
1,694,068
|
|
|
4.57
|
|
3.77
|
|
6
|
|
Vested and exercisable
|
|
678,264
|
|
|
5.21
|
|
2.86
|
|
—
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||
Range of Exercise Prices
|
|
Quantity
|
|
Weighted-
Average
Remaining
Contractural
Life
(Years)
|
|
Quantity
|
|
Weighted-
Average
Remaining
Contractural
Life
(Years)
|
||
|
|
|
|
|
|
|
|
|
||
$1.60 -$2.93
|
|
212,750
|
|
|
4.77
|
|
—
|
|
|
0.00
|
$2.94 - $3.00
|
|
422,500
|
|
|
4.33
|
|
82,500
|
|
|
4.33
|
$3.01 - $3.95
|
|
395,220
|
|
|
2.98
|
|
305,458
|
|
|
2.58
|
$3.96 - $6.92
|
|
310,267
|
|
|
3.44
|
|
134,494
|
|
|
2.30
|
$6.93 - $19.20
|
|
353,331
|
|
|
3.70
|
|
155,812
|
|
|
3.13
|
|
|
|
|
|
|
|
|
|
||
|
|
1,694,068
|
|
|
3.78
|
|
678,264
|
|
|
2.86
|
14.
|
Commitments and Contingencies
|
2019
|
624
|
|
|
2020
|
643
|
|
|
2021
|
662
|
|
|
2022
|
227
|
|
|
Total minimum lease payments
|
$
|
2,156
|
|
•
|
With respect to a Credit Agreement dated May 18, 2016 between the Company and Interstate Battery, Interstate Battery waived the alleged breach of the Credit Agreement based on the Company’s acquisition of Ebonex IPR, Ltd.;
|
•
|
The Company adjusted the terms of a warrant to purchase
702,247
shares of its common stock issued to Interstate Battery in May 2016, pursuant to which the exercise price of the warrant was decreased from
$7.12
per share to
$3.33
per share and the expiration date of the warrant was extended to June 23, 2020; and
|
•
|
Interstate Battery agreed to provide the Company with more favorable pricing and payment terms under the Supply Agreement dated May 18, 2016 pursuant to which the Company buys used lead acid batteries from Interstate Battery.
|
15.
|
Related Party Transactions
|
•
|
a series of transactions with Interstate Battery and its affiliate, a greater than five percent owner of our common shares described at “Management’s Discussion and Analysis of Financial Condition and Results of Operations – General - Interstate Battery Partnership” in this Form 10-K; and
|
•
|
the payment of
$116,000
of salary during the year ended December 31, 2017;
$156,000
of salary, bonus and consulting fees during the year ended December 31, 2016 to a former employee who is the brother of the Company’s former chief executive officer.
|
16.
|
Income Taxes
|
|
|
Year ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Current
|
|
|
|
|
|
|
|||
Federal
|
|
—
|
|
|
—
|
|
|
—
|
|
State
|
|
2
|
|
|
2
|
|
|
1
|
|
|
|
|
|
|
|
|
|||
Deferred
|
|
|
|
|
|
|
|||
Federal
|
|
—
|
|
|
—
|
|
|
—
|
|
State
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|||
Total provision for income taxes
|
|
2
|
|
|
2
|
|
|
1
|
|
|
|
Year ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Tax at federal statutory rate
|
|
21.00
|
%
|
|
34.00
|
%
|
|
34.00
|
%
|
State tax, net of federal benefit
|
|
0.22
|
%
|
|
—
|
%
|
|
(0.01
|
)%
|
Change in rate
|
|
(0.04
|
)%
|
|
(22.13
|
)%
|
|
(1.30
|
)%
|
Valuation allowance
|
|
(20.24
|
)%
|
|
(15.78
|
)%
|
|
(30.70
|
)%
|
Impairment charge of acquired IP
|
|
—
|
%
|
|
6.86
|
%
|
|
—
|
%
|
Excess benefits from equity compensation
|
|
—
|
%
|
|
(3.08
|
)%
|
|
—
|
%
|
Other
|
|
(0.93
|
)%
|
|
0.14
|
%
|
|
(2.00
|
)%
|
Provision for taxes
|
|
0.01
|
%
|
|
0.01
|
%
|
|
(0.01
|
)%
|
|
|
As of December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
|
||||
Capitalized start-up costs
|
|
$
|
4,103
|
|
|
$
|
4,312
|
|
Credits
|
|
465
|
|
|
484
|
|
||
Net operating losses
|
|
13,134
|
|
|
5,350
|
|
||
Others
|
|
1,153
|
|
|
818
|
|
||
Total gross deferred tax assets
|
|
18,855
|
|
|
10,964
|
|
||
Valuation allowance
|
|
(18,299
|
)
|
|
(10,370
|
)
|
||
Total gross deferred tax assets (net of valuation allowance)
|
|
556
|
|
|
594
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
|
||||
Patents
|
|
(250
|
)
|
|
(239
|
)
|
||
Fixed assets
|
|
(108
|
)
|
|
—
|
|
||
Beneficial conversion feature - debt discount
|
|
(198
|
)
|
|
(355
|
)
|
||
Total gross deferred tax liabilities
|
|
(556
|
)
|
|
(594
|
)
|
||
Net deferred tax assets
|
|
—
|
|
|
—
|
|
17.
|
401(k) Savings Plan
|
18.
|
Supplemental Financial Information
|
|
|
Three months ended
|
|
|
||||||||||||||||
|
|
March 31,
2018 |
|
June 30,
2018 |
|
September 30,
2018 |
|
December 31,
2018 |
|
Total for year
2018 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue - sales
|
|
$
|
1,726
|
|
|
$
|
483
|
|
|
$
|
1,169
|
|
|
$
|
1,071
|
|
|
$
|
4,449
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
5,436
|
|
|
4,600
|
|
|
6,453
|
|
|
6,272
|
|
|
22,761
|
|
|||||
Research and development cost
|
|
1,475
|
|
|
1,203
|
|
|
967
|
|
|
857
|
|
|
4,502
|
|
|||||
General and administrative expense
|
|
1,775
|
|
|
3,913
|
|
|
2,174
|
|
|
6,352
|
|
|
14,214
|
|
|||||
Total operating expenses
|
|
8,686
|
|
|
9,716
|
|
|
9,594
|
|
|
13,481
|
|
|
41,477
|
|
|||||
Loss from operations
|
|
(6,960
|
)
|
|
(9,233
|
)
|
|
(8,425
|
)
|
|
(12,410
|
)
|
|
(37,028
|
)
|
|||||
Other income and expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
(587
|
)
|
|
(719
|
)
|
|
(919
|
)
|
|
(1,222
|
)
|
|
(3,447
|
)
|
|||||
Interest and other income
|
|
17
|
|
|
25
|
|
|
81
|
|
|
100
|
|
|
223
|
|
|||||
Total other expense, net
|
|
(570
|
)
|
|
(694
|
)
|
|
(838
|
)
|
|
(1,122
|
)
|
|
(3,224
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss before income tax expense
|
|
(7,530
|
)
|
|
(9,927
|
)
|
|
(9,263
|
)
|
|
(13,532
|
)
|
|
(40,252
|
)
|
|||||
Income tax expense
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Net loss
|
|
(7,532
|
)
|
|
(9,927
|
)
|
|
(9,263
|
)
|
|
(13,532
|
)
|
|
(40,254
|
)
|
|||||
Weighted average shares outstanding, basic and diluted
|
|
27,768,008
|
|
|
30,134,995
|
|
|
38,779,710
|
|
|
38,905,282
|
|
|
34,154,826
|
|
|||||
Basic and diluted net loss per share
|
|
$
|
(0.27
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(1.18
|
)
|
|
|
Three months ended
|
|
|
|||||||||||
|
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
|
Total for year
2017 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue - sales
|
|
—
|
|
|
603
|
|
|
589
|
|
|
896
|
|
|
2,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of product sales
|
|
—
|
|
|
2,531
|
|
|
3,140
|
|
|
3,870
|
|
|
9,541
|
|
Research and development cost
|
|
2,987
|
|
|
2,184
|
|
|
1,367
|
|
|
1,565
|
|
|
8,103
|
|
General and administrative expense
|
|
1,528
|
|
|
1,444
|
|
|
1,925
|
|
|
1,994
|
|
|
6,891
|
|
Impairment charge
|
|
|
|
2,411
|
|
|
—
|
|
|
—
|
|
|
2,411
|
|
|
Total operating expenses
|
|
4,515
|
|
|
8,570
|
|
|
6,432
|
|
|
7,429
|
|
|
26,946
|
|
Loss from operations
|
|
(4,515
|
)
|
|
(7,967
|
)
|
|
(5,843
|
)
|
|
(6,533
|
)
|
|
(24,858
|
)
|
Other income and expense
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
|
(388
|
)
|
|
(408
|
)
|
|
(454
|
)
|
|
(511
|
)
|
|
(1,761
|
)
|
Interest and other income
|
|
11
|
|
|
10
|
|
|
7
|
|
|
13
|
|
|
41
|
|
Total other expense, net
|
|
(377
|
)
|
|
(398
|
)
|
|
(447
|
)
|
|
(498
|
)
|
|
(1,720
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss before income tax expense
|
|
(4,892
|
)
|
|
(8,365
|
)
|
|
(6,290
|
)
|
|
(7,031
|
)
|
|
(26,578
|
)
|
Income tax expense
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
Net loss
|
|
(4,894
|
)
|
|
(8,365
|
)
|
|
(6,290
|
)
|
|
(7,031
|
)
|
|
(26,580
|
)
|
Weighted average shares outstanding, basic and diluted
|
|
18,792,850
|
|
|
20,123,041
|
|
|
20,265,020
|
|
|
21,956,993
|
|
|
20,293,100
|
|
Basic and diluted net loss per share
|
|
(0.26
|
)
|
|
(0.42
|
)
|
|
(0.31
|
)
|
|
(0.32
|
)
|
|
(1.31
|
)
|
19.
|
Subsequent Events
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
(a)
|
Evaluation of Disclosure Controls and Procedures
.
|
(b)
|
Changes in internal control over financial reporting.
|
(c)
|
Management’s report on internal controls over financial reporting.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
Financial statements
|
(b)
|
Financial statement schedules
|
(c)
|
Exhibits
|
Number
|
|
Exhibit Description
|
|
Method of Filing
|
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on December 11, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Current Report on Form 8-K filed January 17, 2019
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on September 27, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 25, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on July 20, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on July 20, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on March 2, 2017
|
||
|
|
|
|
|
|
|
Filed electronically herewith
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Proxy Statement on Form DEF 14A filed on April 24, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on August 27, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2015.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed November 10, 2015.
|
||
|
|
|
|
|
|
|
Filed as an exhibit to the Registrant’s Registration Statement on Form S-3 filed on August 1, 2016.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 10, 2016.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on May 10, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on May 10, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-3 filed on February 27, 2017
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 9, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 9, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on November 9, 2017.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Current Report on Form 8-K filed on April 19, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q filed on May 9, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Current Report on Form 8-K filed on April 25, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Current Report on Form 8-K filed on May 2, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Current Report on Form 8-K filed on May 2, 2018.
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant's Quarterly Report on Form 10-Q filed on August 8, 2018.
|
||
|
|
|
|
|
|
|
Filed electronically herewith
|
||
|
|
|
|
|
|
|
Filed electronically herewith
|
||
|
|
|
|
|
|
|
Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on June 9, 2015.
|
||
|
|
|
|
|
|
|
Filed electronically herewith.
|
||
|
|
|
|
|
|
AQUA METALS, INC.
|
|
|
|
|
Date: February 28, 2019
|
By:
|
/s/
Stephen Cotton
|
|
|
Stephen Cotton,
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Stephen Cotton
|
|
President, Chief Executive Officer and Director
|
|
February 28, 2019
|
Stephen Cotton
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/
Judd Merrill
|
|
Chief Financial Officer
|
|
February 28, 2019
|
Judd Merrill
|
|
(Principal Financial and
Accounting Officer
|
|
|
|
|
|
|
|
/s/ S. Shariq Yosufzai
|
|
Director, Chairman of the Board
|
|
February 28, 2019
|
S. Shariq Yosufzai
|
|
|
|
|
|
|
|
|
|
/s/
Vincent L. DiVito
|
|
Director
|
|
February 28, 2019
|
Vincent L. DiVito
|
|
|
|
|
|
|
|
|
|
/s/ Sushil Kapoor
|
|
Director
|
|
February 28, 2019
|
Sushil Kapoor
|
|
|
|
|
|
|
|
|
|
/s/ Gayle Gibson
|
|
Director
|
|
February 28, 2019
|
Gayle Gibson
|
|
|
|
|
|
|
|
|
|
/s/
Mark Stevenson
|
|
Director
|
|
February 28, 2019
|
Mark Stevenson
|
|
|
|
|
(i)
|
in the form of Common Stock owned by the Holder (based on the Fair Market Value (as defined below) of such Common Stock on the date of exercise);
|
(ii)
|
in the form of Warrant Shares withheld by the Company from the Warrant Shares otherwise to be received upon exercise of this Warrant having an aggregate Fair Market Value on the date of exercise equal to the aggregate Exercise Price of the Warrant Shares being purchased by the Holder; or
|
(iii)
|
by a combination of the foregoing, provided that the combined value of all cash and the Fair Market Value of any shares surrendered to the Company is at least equal to the aggregate Exercise Price for the number of Warrant Shares being purchased by the Holder.
|
X =
|
the number of Warrant Shares to be issued to the Holder (rounded to the nearest whole share).
|
1.
|
Cash
: A cash severance payment equal to One Hundred Thousand Dollars and No Cents ($100,000.00), less all relevant taxes and other withholdings. The payment will be made in six (6) installments in accordance with the Company’s regular payroll practices commencing with the first regularly scheduled pay date that occurs after the Effective Date.
|
2.
|
Issuance of Restricted Stock Units
: The Company hereby grants to Executive an award of Restricted Stock Units (RSUs)
for the number of shares of the Company’s Common Stock as follows:
|
a.
|
Starting on the first business day of March 2019, and occurring on the first business day of each month for the next twenty (20) months thereafter (21 months in total), and conditioned on Executive’s continued compliance with this Agreement, the Company will issue Executive, no later than the fourth business day of the respective month, a number of shares (“Shares”) of Common Stock of the Company equal to $33,333 divided by the volume-weighted average price (VWAP) of the Company’s Common Stock over the twenty (20) trading days preceding the first business day of the respective month.
|
b.
|
The Shares will be issued pursuant to the 2014 Plan and deposited in Executive’s trading account available for trading on or before the fourth business day of the respective month.
|
c.
|
In lieu of issuing the Shares for any month, the Company may, at its option, pay Executive $33,333.
|
3.
|
COBRA
: The Company shall reimburse Executive for the payments Executive makes for COBRA coverage for a period of twenty-four (24) months, or until Executive has obtained full replacement health insurance reimbursement elsewhere, whichever occurs first, provided Executive timely elects and pays for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA. If Executive’s other replacement health insurance ceases during the twenty-four (24) month period, Executive will be eligible to receive COBRA reimbursements from Company through the end of the 24-month period. COBRA reimbursements shall be made by the Company to Executive consistent with the Company’s normal expense reimbursement policy, provided that Executive submits documentation to the Company substantiating his/her payments for COBRA coverage.
|
4.
|
INDEMNIFICATION
: The Parties agree that the Indemnification Agreement dated May 5, 2015 (“Indemnification Agreement”) between Executive and the Company shall survive the execution of this Agreement and shall not be terminated, modified, waived, or otherwise effected by this Agreement of any of the terms set forth herein.
|
(b)
|
he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel;
|
(c)
|
he understands the terms and consequences of this Agreement and of the releases it contains; and
|
I, Stephen Cotton, certify that:
|
(1)
|
I have reviewed this annual report on Form 10-K of Aqua Metals, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
AQUA METALS, INC.
|
|
|
|
|
Date: February 28, 2019
|
By:
|
/s/
Stephen Cotton
|
|
|
Stephen Cotton, Chief Executive Officer
|
I, Judd Merrill, certify that:
|
(1)
|
I have reviewed this annual report on Form 10-K of Aqua Metals, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
AQUA METALS, INC.
|
|
|
|
|
Date: February 28, 2019
|
By:
|
/s/ Judd Merrill
|
|
|
Judd Merrill, Chief Financial Officer
(Principal Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/
Stephen Cotton
|
|
Dated: February 28, 2019
|
|
Stephen Cotton
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Judd Merrill
|
|
Dated: February 28, 2019
|
|
Judd Merrill
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|