Aqua Metals, Inc. (AQMS) on Q3 2023 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to the Aqua Metals' Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. It's now my pleasure to turn the conference over to your host, Bob Meyers of FNK Investor Relations. You may begin Bob.
Bob Meyers: Thank you, operator and thank you everybody for joining. Earlier today, Aqua Metals issued a press release providing an operational update and discussing financial results for the third quarter ended September 30th, 2023. This release is available on the Investor Relations section of the company's website at aquametals.com. Hosting the call today are Steve Cotton, President and Chief Executive Officer; and Judd Merrill, Chief Financial Officer. Before we begin, I would like to remind participants that during the call, management will be making forward-looking statements. Please refer to the company's report on Form 10-K filed March 9th or Form 10-Q filed today, November 8th, for a summary of the forward-looking statements and the risks, uncertainties, and other factors that could cause actual results to differ materially from those forward-looking statements. 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. As a reminder, after the formal remarks, we will be taking questions. [Operator Instructions] We will take as many questions as we can in our available time slot. And with that, I'd like to turn the call over to Steve Cotton, CEO of Aqua Metals. Steve, the call is yours.
Steve Cotton: Thank you, Bob and thank you to everyone who joined us today. Our strategy focus is paying off as we have made significant progress in commercializing our innovative technology. This strategy honed on lessons learned as the industry has matured is based on self-sustainability and measured growth. The rechargeable battery industry is still in its early stages and is susceptible to growth in the electrification of cars, the slow expansion of a charging infrastructure, and technological innovation and batteries themselves. The overall trajectory, however, remains steep. But short-term fluctuations in growth rates, investments and commercialization are to be expected. In contrast to others in the industry, Aqua Metals has built a strategy that can expand with multiple revenue streams, at a measured pace, and most importantly, does not involve a singular mass of capital expenditure. Unlike others, we do not plan to build first a massive and expansive plant requiring government grants or loans to succeed. Put another way, we do not need to spend $1 billion in CapEx to make $1 billion in revenue. With our unique technology and engineering design, our commercial plant is expected to require about half of the CapEx per ton of our closest competitor due to the inherent efficiency of our process and because our ability to scale at a metered pace requires half of the capital cost of other technologies, we have significantly greater flexibility in our funding mechanisms. We can certainly apply for government grants and loans, and we are doing so. If those avenues do not come to fruition, we can use traditional debt to finance our growth because we will be in a better position to service that debt due to our greater efficiency and the significantly smaller capital needs. Additionally, partnerships, joint ventures, and similar structures create a viable pathway to scaling. And finally, our industry involves valuable tax credits, which create additional monetization pathways that are available to us due to our lower CapEx requirements and not to others. Simply put, we have the strategy in place, supported by the right partners, based on the previously announced expansion of our campus recycling facility in Tahoe-Reno, Nevada and the projects we have announced with key partners to succeed. We are not overextending ourselves either financially or strategically, and we are developing multiple pathways to near-term success. As we watch the challenges of others in our industry amidst this environment where the cost of capital is high, we increasingly believe that our strategy is the right one. Let me speak to the expansion of our partner ecosystem. Expanding our relationships with partners is a critical part of our commercialization strategy and we have made significant progress in this area. As an IP company, our strategy involves Aqua Metals positioned as an owner/operator and also licensing our proven technology to partners. Licensing represents a highly capital-efficient way to grow revenue and profitability. During the third quarter, Dragonfly Energy announced it had successfully used high purity lithium hydroxide recovered by Aqua Metals from recycled lithium-ion batteries to manufacture a lithium-based battery cell using Dragonfly's patented Dry Battery Electrode Coating Technology. This is a major milestone for Aqua Metals and its partners, proving that we can deliver a closed lithium loop right here in Nevada sourcing, manufacturing, and recycling key lithium battery materials, all within the state. We also secured a strategic investment in partnership with South Korea-based Yulho and their Yulho Materials division. This partnership is intended to expand our geographic footprint through licensing of our lithium AquaRefining technology in Yulho's plant in South Korea. This is a large project, and we are working closely with Yulho, giving them sufficient time to complete their build-out of their first black mass processing facility and ramp operations. We are targeting to complete a licensing agreement with Yulho in the first part of 2024. Recently, we advanced our previously advanced plans with 6K Energy and subsequently signed a multipart memorandum of understanding that enhanced the scope of our collaboration. The agreement outlines the future joint venture to co-locate a lithium battery recycling facility with 6K in the Eastern United States to be engineered and operated by Aqua Metals. The plant will support 6K Energy's proprietary UniMelt sustainable can manufacturing process that significantly reduces carbon pollution and waste stemming from the battery supply chain. This is another prime example of the value proposition that Aqua Metals provides to our potential partners and customers. We expect to finalize the formal supply agreement with 6K by the end of this year. We believe that these partnerships, strategic investments, and achievements serve as powerful validation for our technology, our strategy, and our position in the marketplace. And as a result of our partner ecosystem, we have agreements in place to receive black mass as we expand capacity at our own commercial campus. We have multiple partners to purchase our recycled components. So, buyers for our output is not likely to be a challenge. Effectively, we have created a closed loop significantly derisking our business model. We are squarely focused on building a circular supply chain that is sustainable with everything we produce, aligning with battery manufactured qualifications for steadily increasing our IRA incentives. These incentives, as I mentioned earlier, can serve as another tailwind for our core strategy. In the third quarter, we generated modest revenue from the sale of some inventory. We also generated modest revenues from our NRE or non-recurring engineering fees associated with our lithium AquaRefining program. However, our primary focus is on scaling our lithium-ion battery recycling business, enabling us to reach saleable truckload quantities and materials, while retaining samples to provide to partners like 6K and Dragonfly, so they can develop and execute their own testing programs. A truck load of materials is approximately 20 tons. We expect to begin producing salable quantities and materials from our Sierra ARC in the second half of 2024 and expect significant and consistent growth in revenues from recycled materials beginning in 2025. The build-out of our Sierra ARC in Tahoe-Reno is progressing as planned. We have Black Mass input material and funding to begin the commissioning for this expansion, and we are pursuing non-dilutive financing options for the remaining amounts. Our primary strategy for this is in the form of our already submitted USDA loan guarantee application that includes strong third-party validation in the form of a feasibility study of our overall business and strong third-party validation by a global engineering firm, ICF, in the form of a detailed technical life cycle analysis and validation of our novel processes. This package also includes detailed line-by-line hard quotes for the entire Phase 1 build out already underway of the Sierra ARC, which gives us great confidence in the overall costs. In the event the USDA loan guarantee does not work out for us, we have solid alternative debt-based backup plans in the works. I'd add that the government grants we are pursuing are for new lines of business, not for the core business with the ARC, and we are not dependent on securing those particular grants to move forward with the ARC. If successful, those grants will accelerate our overall expansion efforts. We raised capital in the third quarter and successfully strengthened our balance sheet to carry us through market fluctuations that can be expected with our flexible business model and funding options that are not solely reliant on government entities, we believe we are well-positioned to execute. In summary, we said that 2023 was the year that we said we would transition from pilot phase to commercialization, and that initiative is well underway and accelerating. We have successfully proven our technology at pilot scale and have leveraged that success to numerous announces and developing partnerships. We have secured input and offtake partners with more coming. We are scaling operations in a measured and phased way to minimize capital expenditures and limit risk. We have a healthy balance sheet and a growing number of options to secure the remaining growth capital. Our strategy is rapidly coming together and we believe that 2024 will be a watershed year for Aqua Metals. I look forward to sharing further updates with you all soon. And now I'm going to turn it over to Judd Merrill, our Chief Financial Officer, to discuss the results for the third quarter.
Judd Merrill: Thanks Steve. Let me start my comments with our balance sheet. As of September 30th, 2023, we had total assets of $42 million and working capital of $23.1 million. We ended the quarter with total cash of approximately $25.6 million. During the quarter, we completed a public offering of approximately 18 million shares, resulting in $20 million of gross proceeds. In addition, we entered into an agreement to execute a license agreement with Yulho, which included Yulho investing $5 million into Aqua Metals. This capital supports our planned for Phase 1 of our 10,000 ton per year campus facility. There were no other significant changes on the balance sheet since our last quarterly report. So, I'll move to the income statement. In Q3, we were focused on advancing and executing our operations at our pilot facility. The costs related to operating this facility were approximately $1.8 million for the quarter. We generated a small amount of revenue, as Steve mentioned, primarily related to the sale of lead inventory. We also recorded modest service fees from our development agreement with 6K. Those fees are recorded in other income. Research and development costs decreased approximately 21% compared to the quarter ended September 30th, 2022. Included in R&D expenses are cost related to our agreement with 6K. General and administrative expenses increased approximately 7.8% for the quarter ended September 30th, 2023, compared to the quarter ended September 30th, 2022, in line with expectations and guidance. For the third quarter of 2023, we had an operating loss of $4.9 million compared to an operating loss of $3.9 million for the same period in 2022. Our net loss for the quarter was $4.5 million or a negative $0.04 per basic and diluted share compared to a net loss of $3.9 million or a negative $0.05 per basic and diluted share for the same period in 2022. Moving to the cash flow statement. Cash provided by operating activities for the quarter ended September 30th, 2023 was $2.2 million and consisted primarily of cash received from the sale of our old lead recycling facility. Net cash used in investing activities for the quarter was $6.3 million. This consisted mainly of $4.3 million utilized towards the purchase of our campus property and $1.8 million of equipment, primarily related to the build-out of our first commercial demonstration facility. Net cash provided from financing activities was $22.6 million for the quarter. This consisted of $3.8 million in net proceeds from the sale of Aqua Metals' shares pursuant to that, the market offering, $2.9 million of proceeds from the loan agreement secured with Summit Investment and $18.3 million in net proceeds from our July 2023 public offering and $4.6 million in net proceeds from the Yulho transaction. These inflows were offset mainly by the $6 million used to pay off the note payable as reported in Note 11 of our 10-Q report. We have bolstered our balance sheet and are managing our cash wisely by actively reviewing and considering every dollar spent. One of the positives of higher interest rates is that we are earning a nice return on the cash balance we currently have in the bank. We believe that 2024 is an important year as we finished construction and began production at our first commercial demonstration plant. It is an important milestone as we believe that the plant will generate positive cash flows for the company. As we noted in our 10-Q report, we believe that we will need additional capital to fund our proposed business plan beyond the next 12 months, including the completion of the Phase 1 buildout of our recycling campus metric and the start of our full-scale commercial operations. We are actively pursuing non-dilutive options such as the USDA government guaranteed loan for $25 million. However, we are not reliant on the USDA loan as we have been working on securing funds from other sources, such as from conventional lenders, the DOE, strategic partners, and possible dilutive options. Our access to cash is key to ensure our funding success and bridge us to positive cash generation as we expect from our first commercial demonstration plant. We are confident in our financial strength and our ability to execute on our business strategy. And with that, that concludes my remarks on the financials. I will now turn it back over to the moderator for Q&A.
Sameer Joshi: Yes. thanks for taking my questions. The Sierra ARC facility, can you remind us what CapEx has already been spent on it? And what is the remaining amount to be spent on this?
Judd Merrill: Yes, Sameer, this is Judd. The total CapEx for this project is just about $30 million. And so in this quarter, we spent about $1.8 million towards that. And the -- that's the third quarter. In the fourth quarter, we'll see that spend tick up quite a bit. And with the goal of getting that thing built by early Q2 of next year.
Sameer Joshi: And that will be the Phase 1 with around 3,000 tons per year capacity, is that correct?
Judd Merrill: 3,000 tons of black mass process per year, that's the capacity.
Sameer Joshi: That's not process. Okay. Got it. So, just looking at the next 18 -- 12 to 18 months, what are the milestones that we should be looking at? And also within the next six months between now and this facility coming online, what can investors expect to see? Should we see more relationships like 6K or Dragonfly or some other milestones?
Steve Cotton: Yes. So, lots of milestones to come. For 6K and Dragonfly, we'll, of course, see progressing those relationships. And we believe that we'll be announcing new relationships and partnerships, both from the feedstock and offtake part of the ecosystem. So, there'll be those commercial developments that are continuing to work through the cycle of engaging with these other parties and really the tool that we're using to do that, of course, is not only our own organizational capability, but leveraging that people can come and witness our pilot operating and producing these materials, see it for themselves, and those commercial partnerships will continue to progress. But of course, we'll also see the pilot progress into the Sierra ARC facility, which is just about 1.8 miles down the road from the pilot operation. As Judd was mentioning earlier, that is expected to start coming online, black mass material into it in Q2 of next year, which really isn't that far away. It's only a matter of a few months until we begin to start commissioning and then ultimately producing tonnage of materials from that facility. So, we'll see that type of progress. And then further with our existing relationships, I mentioned 6K and Dragonfly, but also our licensing partner and investor Yulho Materials in South Korea, we anticipate that we'll be able to work out the details of the licensing agreement tied to some due diligence that both parties are completing inclusive of our business and technical trip we'll be making to South Korea soon and we'll be able to announce some news there. On the financial development side, we're continuing to keep that balance sheet strong. Judd mentioned where we are with the USDA loan application, which we're very confident in, but we also have alternatives to that don't have quite as nice terms as the USDA has for the loan guarantee program. But we will see continued strength of the balance sheet as we progress through the year as our planned set of milestones.
Sameer Joshi: And just -- I know you mentioned this, but I just wanted to clarify. The additional funding that you're seeking is not required for the completion of the Phase 1 of the Sierra ARC, is that correct?
Judd Merrill: So, Sameer, if I got the question right, you're talking about the funding for Phase 1 CapEx. Is that right?
Sameer Joshi: Yes. Yes.
Judd Merrill: Yes. So, we do need -- we do require either the USDA or some type of debt instruments to complete that project. We ended the quarter with just almost $26 million in cash, but the bigger cash outlays for the CapEx are coming in the next few months. And so that's what we've been working towards to make sure that we ensure that we have the funding to do that. And the intent is to do that with the debt finance.
Sameer Joshi: Okay. So, are there any long-lead items that need to be purchased now so that you can have the facility up and running mid-next year?
Steve Cotton: We already did purchase some really long lead-items last year, which is the switchgear and there's a global supply chain challenge with getting a switchgear. That's the equipment that takes the main power from a power drop to a facility and distributes the power throughout the facility. So, we've secured delivery dates of that for early next year. So, that long lead-time has already been taken care of as well as the electrical supply itself. Other long lead-time parts and materials have been ordered already and that's what Judd was talking about in terms of our CapEx expenditures ramping as we go through the quarter. And Judd may have something to add.
Judd Merrill: Yes. I mean a lot of the -- what we've spent so far is putting deposits down on the long lead-time equipment once we've gone through the process of selecting the vendor and meeting with them. We spent quite a bit of time ensuring that we understand the sources embedding them out and making sure that they fit our needs and then putting deposits down. So, now we're moving into bringing things on site and start the installation process. So, it's a lot of foundational work has been done. Now, we're going to be very rapid on installation and construction.
Sameer Joshi: Understood. And just one more clarification. The revenues, roughly $25,000, these are from lead metal held over from previous or maybe I did not hear it right?
Judd Merrill: Yes, there was a few sources of some cash coming in other than the raise that we did, but there's about $25,000 of lead in inventory that we sold in the quarter and there were some other income, mainly related to our partnership with 6K and the work we're doing with them. And so those are kind of the big pieces of those amounts that came in during the quarter.
Sameer Joshi: Okay. Thanks for taking my questions. Good luck.
Steve Cotton: Thanks Sameer.
Judd Merrill: Thank you.
Operator: Thank you. I'd like to turn the floor back over to Bob for further questions.
Bob Meyers: Thank you, operator. The first question, in your sector there are companies announcing delays, cost over-runs and lay-offs. Can you tell us how Aqua Metals is able to navigate some of the recent market fluctuations and the ones we can probably anticipate?
Steve Cotton: Sure Bob. And thanks for whoever asked the question. So, yes, as we've seen, the EV sector and even energy transition is showing like any other nascent and rapidly growing industry not to have a linear growth. But if you look at the year-over-year shipments of EV models announced and energy storage systems are now being deployed, it is still growing and it's growing at a very rapid pace. But there is going to be some undulation to that market. Others in the EV battery recycling space specifically do continue to pursue what we view as very capital-intensive boom shot types of approaches and we believe could potentially run into some continued challenges as you relate that to the undulation of the market. And so that's why we set our strategy and that really is a phased expansion plan and having a flexible business model. So, we're not building gigantic initial facility, but one facility that will carry the company and be able to grow into the 3,000 tonnes to do that and get to the 10,000 tonnes with our first facility. The flexible business model allows us to have an opportunity to license our technology because we have the IP, the underlying IP that we've prosecuted to make sure that we could be in the business of even partnering and licensing our technology as evidenced by our relationship with Yulho and expected other licensees. We have lower capital requirements, we think about half of what some of the others have because we don't have to have sodium sulphate crystallization equipment that cost millions of dollars per facility and many other things that handle those waste streams are just not part of our process. And so we can build for less and less capital we can scale rationally, particularly with our approach of modular building blocks. And we're also -- we've designed the business to be not reliant on government grants or loans, but have that as being an upside to our core business plan by design. And so I think that really separates Aqua Metals from many of the other parties that are out there in the market is that we view all those types of programs as upside to our business, but not core to our business. And then the high-purity products that we produced can beget many buyers because we go to metals before we go to the salts and pre-cathode active materials that we will be working of course with 6K Energy to produce the cathode active materials. We can also sell those metals into the global metals markets and there's plenty of people that are quite interested in buying high purity cobalt and nickel as well. So, that hopefully provides a general answer to the overall sector question.
Bob Meyers: Great. Thank you. The next question. During the call, you mentioned your CapEx could be about half of that of other companies in the industry. Are you able to expand on that?
Judd Merrill: Yes. Thanks for the question. If we look at kind of the public estimates out there for the competing hydro technologies, we've said that our initial plant takes about $30 million in CapEx, but the build out full campus is about $100 million in total, including that $30 million CapEx. And that's processing 10,000 tonnes of black mass per year. And based on what we're seeing, that's about half of what the other hydro processes are quoting in the public. And that's part of -- Steve was talking about, we don't use the same amount of chemicals. So, we save on all the storage space. We have less equipments. We have minimal waste. We don't have big footing furnaces. And we're not using one-time use chemicals. So, that's what drives that significant reduction in CapEx that we're seeing on our end.
Bob Meyers: Great. Thank you. The next question has several parts. So, I'll try and address them one at a time. Many of the partnerships you have announced to date have been seemingly overlooked by the market. Can you perhaps provide some more granularity on economics? Do license agreements require CapEx? What kind of royalty rate should we expect? And congratulations on the success so far.
Steve Cotton: Yes. Good questions. So, in terms of the partnerships that we've announced to date, I could kind of take everybody through them one by one of what that means for the economics ultimately or what that means for Aqua Metals. So, let's start with 6K Energy as an example. We've already announced an MOU to develop a co-located facility to supply 6K Energy enough material to have a significant debt in their supply chain for their 13,000 tonnes per year facility that is called PlusCAM that starts in Jackson, Tennessee. We'll begin supplying that out of our facility right here in Tahoe-Reno when the Sierra ARC is beginning to produce tonnages of materials. We're already supplying 6K Energy with quite a bit of the materials that we produce for samples that they're putting in the hands of EV manufacturers and cell manufacturers by taking the samples that we provide, the connector technology that we did the non-recurring engineering deal with them to ultimately be able to do that. And then the supply of that facility should generate initially tens of millions and then ultimately hundreds of millions of dollars of revenue for Aqua Metals. And so that's a very exciting supply agreement not only in the sense that we can work with them to supply the materials that come off of our own facility here in Sierra ARC, but also off of the facility that we jointly build and then we'll operate for them in the East Coast for their PlusCAM facility. So, lots of opportunity on that to shed some light on that relationship. And we've already received revenue effectively from 6K with the non-recurring engineering fees that we've been charging to develop the connecting technology to get the metals into the material form that they can make their cathode active material. I'll move on now to Dragonfly Energy, who is local, right here within the Tahoe-Reno area and is obviously quite interested in getting lithium from Aqua Metals. And as previously announced, has already taken lithium from Aqua Metals and built and cycled lithium cell and proves that the lithium sustainably that we provided to them is a great material for them to use, to produce new battery cells. So, as they begin to scale their pilot line, which is a significant pilot. I always joke with them -- last time I checked a 100 megawatt hour facility, battery facility is not really as much of a pilot, it's more of like a commercial demonstration plant. And that is going to be revenue generating for them and for Aqua Metals through supply of lithium for them to a significant degree. Then if we move on to Yulho Materials in South Korea, they're working on completion of their initial 8,000 tonnes per year facility in South Korea that will take feedstock from the major battery makers in Korea's production scrap feedstock and then build basically the twin of initially phased of our Phase 1 facility in Sierra ARC and ultimately scaling that to their 8,000 tonnes. And that can generate a lot of -- tens of millions of dollars of revenue for them plus a significant percentage of that revenue coming back to Aqua Metals in the form of licensing and running royalty fees. They plan to expand that to a size of 24,000 tonnes per year of black mass production. And if we scale the equivalent of the Sierra ARC ultimately with them to that size facility, that's about $0.25 billion, give or take, depending again on metals prices and things like that, that we could collect a significant percentage in the form of very high margin licensing and running royalty fees. And that's just really the beginning. There's many other parties that we're working with out there that are also considering licensing our technology. And we're taking all the right steps to mutually get through those due diligence process discussions to make sure that those are good fits as well as other opportunities for us to potentially deploy additional Aqua Metals owned and run facilities like we're doing with 6K Energy. So, I hope that sheds some light on what the economics for these deals look like. And I'll just conclude that answer with, that's a testament to the diversity of our business model to build, own and operate and to license the technology. And anything kind of in between is also known as a joint venture co-location.
Bob Meyers: Great. Thank you. Next question. Have you seen any decrease from commercial interests from potential partners given the recent and likely near-term downdrift in prices for some of the battery metals?
Steve Cotton: No, in short. So, there might be a downturn, like I was mentioning earlier, undulation in the rapid growth of the space. But the EV penetration is not a fad, it's happened and it's happening and it's about the speed of the growth rate and all the cell manufacturers, leading manufacturers working very hard to make sure that they can secure the tax-benefited domestically-sourced mineral production for which we're one of the only companies in North America already that's producing lithium, as an example, as well as the other battery metals like the nickel and the cobalt and so on. So, we have seen no decline in activity. And in fact, probably, if anything, a little bit more interest because some of the earlier movers have run into some challenges. And so people are shopping around a little bit for who else they can work with to secure long-term supplies, because those EV manufacturers, the cell manufacturers, if anything else are committed to continue to grow and develop this industry.
Bob Meyers: Perfect. Thank you. A couple on commercialization, I'll try and combine them. When do you see enough revenue to breakeven? And then when do you see sustainable revenue streams?
Steve Cotton: Yes. So, in my comments at the beginning of the call, I mentioned that our first commercial demonstration plant that we're building now, the 3,000 tonnes is a milestone for us because that will generate positive cash flows. So, that breakeven concept that we're all looking forward to, that's where our models are predicting that at first plant. So, that's a positive milestone. That's what we're constructing. That's what we're working towards. So, that's good. And once that gets set-up and running, we believe that we'll have sustainable revenues from that. There's a lot of interest in our materials already, even though we just only produced some of the pilot operations. And so once that first phase gets going, we believe we'll have sustainable revenue just from that first phase and then we'll work to construct the second phases of that campus facility and be able to enjoy the revenues from that as well.
Bob Meyers: Great. Thank you. And then on the partnerships, just a little clarification. Are you able to offer a little bit more on the timeframes around 6K and Yulho?
Steve Cotton: So, timeframes in terms of agreements, we've said that we would be announcing -- we intend to announce by around the end of this year what the go-forward plan is with 6K based upon that already announced MOU and that will provide the details of what the future looks like, but it will be likely what I was saying before, which is the co-location and the opportunity for us to generate tens, if not hundreds of millions of dollars a year as we get into year two and beyond with 6K Energy and supply agreement with them alone. And that's not cumulative, that's per year. So, that hopefully gives you some insight on to the timing on that. And then on the Yulho side of the equation, we do have a business -- series of business meetings just in a matter of few weeks in South Korea for further discussions on the licensing agreement and due diligence on our part at a business level on their facility that they are just about ready to begin commissioning on their own. And then there's a further series of technical meetings that will be taking place in Q1 and we expect that we'll be able to announce together what the go-forward plan is on the licensing arrangements with Yulho on a more formal level at the conclusion of those due diligence and final meetings that we'll be having. And we're really excited to be out there with them and see the facility as they begin to really bring it online as we get into Q1 of next year. So, coming soon.
Operator: Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.
Steve Cotton: All right. Well, thank you. And I'll just conclude by thanking everybody for your interest and support and attention today. And I'll just add that we believe as a management team that we've got the right technology that is environmentally correct technology, a strong balance sheet that we've secured already and we have a very rational and methodical approach to our business plan and our growth plan and we feel that our multi-faceted business model can really differentiate us in the industry to be able to really work with anyone rather than compete. And we see that as a really strong asset for Aqua Metals that we can continue to leverage as evidenced by what we've already done with 6K Energy and Yulho and Dragonfly Energy. We really appreciate everyone's time and look forward to impending updates and see you all next time soon.
Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
