Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Aqua Metals’ Fourth Quarter 2016 Corporate Update Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. [Operator Instructions] This conference is being recorded today, February 14, 2017. Before we get started, I’d like to turn the conference over to Greg Falesnik, Managing Director of MZ North America, the company's Investor Relations firm, who will read a disclaimer about forward-looking statements.

Thank you, operator. This conference call may contain, in addition to historical information, forward-looking statements concerning Aqua Metals; the lead-acid battery recycling industry; the intended benefits of its agreement with Johnson Controls and Interstate Batteries; the future of lead-acid battery recycling via traditional smelters; the company’s development of its commercial lead-acid battery recycling facilities; and the quality efficiency and profitability of Aqua Metals’ proposed lead-acid battery recycling operations. These forward-looking statements involve known risk and uncertainties and other factors that can cause actual results to differ materially. Among these factors are the fact that the company has not yet ramped its initial commercial recycling facility to full scale operation, thus subjecting the company to all the risk inherent in a startup; the uncertainties involved in any new commercial relationship and the risk that Aqua Metals will not receive the intended benefits of its agreements with Johnson Controls and Interstate Batteries, risks related to Aqua Metals ability to sufficiently raise capital as and when needed to expand its recycling facilities, changes in the federal, state and foreign laws regulating the recycling of lead-acid batteries, the company’s ability to protect its proprietary technology trade secrets and know-how and other risks disclosed in the section risk factors included in the quarterly report on Form 10-Q filed with the SEC on November 07, 2016. Aqua Metals’ cautions readers not to place undue reliance on any forward-looking statements. The company does not undertake, and specifically disclaims any obligation to update or revise such statements to reflect new circumstances or unanticipated events that may occur. At this time, I’d like to turn the call over Dr. Stephen Clarke, the company’s Chairman and CEO. Steve, the floor is yours.

Thank you, Greg and welcome everybody to the 2016 year-end conference call. One of the headlines today is that the first ever AquaRefinery located at Tahoe Reno Industrial Center, has moved from commissioning to operational. That means that we are breaking batteries and making lead from the batteries that we've broken, both from -- both metallic lead and Aqua-refined lead. It’s continuing to ramp-up. We are not at full scale yet and there is more work to be done. But this does mark a pretty incredible milestone. It’s just over 18 months since we’ve broke ground on that facility and we have the first ever AquaRefinery up and running. We have product ready to ship and it’s a pretty exciting milestone. I know that headline, that I’m going to talk about is obviously our agreement with Johnson Control. And that really has two key aspects for us that I want to talk about. The first one is that it provides the feed and off take for the additional facilities that we've been talking about for the past two years. It fills AquaRefinery long term capacity and it moves us forward in the additional AquaRefineries that we want to build on and upgrade ourselves. But more importantly it transitions us to the start of a really exciting new phase of the company, which is licensing. So I’m going to talk a little bit about both of those. I've laid out the following agenda. Let me give you a recap of our business strategy for those who are new to the story. I’m going to go into a little bit more detail on the status of the business. I’m going to talk a little bit more about the JCI agreement, and what that mean for us. I’m going to hand over to…

Thank you, Steve. I’m going to start with the recap of the unaudited fourth quarter and year-end results for 2016. The 10-K will be filed in first week of March. For the three months and year-end December 31, 2016 we had an operating loss of $4.7 million and $13 million respectively. The net loss for the fourth quarter was $5.3 million and $13.6 million for the year-ended December 31, 2016. That’s $0.30 and $0.89 per share loss respectively. Of note, share-based compensation for the year of 2016 was $1.1 million. We had $26.6 million in cash and cash equivalent as of December 31, 2016 compared to $31.8 million as of December 31, 2015. Cash balance as of today is $34.2 million. I’d now like to point out the key financial highlights for 2016. On May 18th, we signed a strategic partnership with Interstate Batteries and highlights of that transaction are the Interstate Battery purchased 702,000 shares of the company at $7.12 per share for gross proceeds of $5 million. Interstate Battery loaned the company $5 million pursuing to a secured convertible promissory note. The note bears interest at 11% and the loan will mature on May 25, 2019. We also granted Interstate Battery two warrants to purchase common stock. A warrant to purchase 702,247 shares expiring on May 18, 2018 and the second a warrant to purchase 1,605,000 shares and expiring on May 18, 2019. Average exercise price is $8.43 per share. The company at the same with certain accredited investors sold 719,000 shares for gross proceeds of $5.1 million. Liquid venture Partners through National Securities Corporation acted as placement agents. In September the State of Nevada granted the company property tax in centers which combined with tax incentives granted in May are worth an estimated $3.6 million. On November 21, 2016, we completed a public offering of 2.3 million shares of our common stock that the public offering price of $10 per share or gross proceeds of $23 million. After the payment of underwriter discounts and operating expenses we received net proceeds of approximately $21.5 million. In connection with the underwriter's agreement, we issued a warrant for 33,450 shares of common stock at an exercise price of $10 per share vesting on May 20, 2017 and expiring on November 21, 2019. Liquid venture partners through National Securities Corporation again acted as placement agents for us. As of December 31, 2016 we have spent $39.8 million on the Nevada plant, that's inclusive of land, building and all the equipment. Staff including full time consultants, increased from 22 at the beginning of 2016 to 67 currently, of which 38 are in our Nevada plant. Outstanding common shares as of December 31 was 17.9 million shares. Outstanding common shares as of February 10th is 19,210,335. This includes 939,005 shares issued to Johnson Controls and 392,605 shares issued for warrant exercise. With that I'd like to turn the call back over to Steve.

Thanks, Tom. So, basically just rounding up the summary headline really is that we're executing on our mission and it's a simple thing to say but it reflects a huge amount of hard work and no small amount of self-sacrifice that's going on to, get this company to where it is in the short-term time that's been around. And the key to that has been we've been incredibly fortunate in being able to build an outstanding and committed team. And I don't want to jinx myself but I'll dare to say that we've had no problem recruiting some of the -- some of the most incredible talented people to join us. We've watched and have been thrilled as people have relocated from one coast to the other and bring themselves, their family, their children and everything to join, what we're building in Reno, Nevada and I think that is incredibly humbling. And then to see them turnaround a work and deliver what they've done is just incredible. We've built permitted and commissioned AquaRefining number one in just a little over 18 months. I had a conversation with a senior executive in battery company, in which I said, I was frustrated that we are a few months late I mean. He pretty much laughed, I mean he said no, you are not a few months late, you're three months early. When you guys announced, what you going do in building this, we kind of took a bet amongst ourselves and we assumed that it's going to take five years to build the first AquaRefinery and it will take three years to get license. But you didn't -- it's been incredible to watch how fast you built it. And I think in building what we've done is established the body of knowledge, the expertise, the know-how and not least the precedent, I mean in permitting allows us to continue rolling out the additional AquaRefineries at a similar space. We've secured strategic relationships, the last one with Johnson Controls, which is the largest manufacturer of automotive batteries, mentioning these are pre-requisites that supply for AquaRefineries 2 through five it launched this equipment licensing in North America, China and Europe and it gives us an incredible launch pad for the Chinese market. And we're beginning early stage work on higher value products. What's surprising there is the level of market pool and the strength of the market partners in both the high value and high performing lead, but also the other materials and other methods. And finally we are by no means done in building strategic relationships and we’ve got a lot more to work on and this been thrilling the quality and level of people that are approaching us. Anyway, with that said, this is concluding the presentation part of the earnings call and I’ll hand back now to the operator, Evan, having to handle questions. Thank you.

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] We will take our first question from Colin Rusch of Oppenheimer and Company. Please go ahead.

Thanks, good morning. This is North K [ph] on forColin. Hello Steve and Tom and congratulations on all the progress to-date. Maybe if we can just start with the current operations at the Nevada plant. You know you discussed it during the call, but can we just understand where the operations are actually at now in terms of the number of shifts that are currently running and then how to think about kind of cadence as you see of adding additional shifts towards that for, and maybe any thinking about little bit kind of understanding the output per shift, I am guessing that not every shift will have kind of the same output number? Thanks. So understanding that would be helpful.

Yeah sure, sure and thanks North. We are really challenged in talking about the detail of this, for an interesting reason. Aqua Metals is the only publicly traded player in the global $22 billion lead industry. The majority, well everybody but us in supply of lead is a privately held company and there is a huge amount of secrecy around all the details of lead production, starting with name plate capacity of facilities through to individual products spects, product quantities, input costs and the rest of it. So we’re going to have to be from here on in quite circumspect with respect to the level of detail that we provide on individual operations. We don’t want to be providing information that's useful to a competitor or worse providing information that’s impact, say commercial partners. So basically what we are saying is that we are making lead from batteries that we've broken, we currently operate in a single shift. We have got a stock pile of raw materials ready to ship. We have got, not raw materials, product ready to ship, and as I said we are operating on a single shift, we’ve brought almost a second shift and beyond that we are really not going to provide too much more guidance.

Okay. Thank you. Second, maybe you can just to talk to the facility CapEx numbers, it looks like the $54 million per 160, might be a touch higher than some of the numbers that we have seen in the past. So maybe we could get some insight into and I think you talked about it during the prepared remarks. But, you know some of the challenges, understanding this was the first plant, that might inform how you think about CapEx for future plans. And on flip side now that you’ve kind of done this once, where you see kind of potential cost savings on future designs?

Sure. So the budgetary reasons we’re going with $54 million for a nominal 160 ton a day facility, that will vary by region and given what - depending on what we start with. We are confident in the $54 million number. One of the things that kind of moved up, up a little bit is we have seen opportunities and taken advantage of opportunities to add in additional process that to produce high yields and better water recycling, stronger product quality and that some level automation. I expect that by plant 3 or 4 we will see some CapEx reductions but I don’t think it safe to really project anything beyond $54 million now. And we think the number sort of $50 million -- $54 million plant is still very attractive.

And if you can see obviously the ROI and net incremental CapEx in terms of higher demand, better product and cost savings and obviously that would make sense.

And one of the things to add some color to that, is all smelters have to operate with high level of personnel protective equipment and bringing filtration for their operators, that's normal. And that creates a pretty tough working environment. We got actually got a plan which we're implementing and we're reasonably confident that we can become the first ever battery recycling facility that will not require its operators to have to wear breathing equipment and will have much lower level of PPE requirement which will just make for a much more pleasant and acceptable working environment. And we think it's worth making that investment to the benefit of our employees.

Okay, thank you very much for that color. And then just maybe one last one from me. On the cash burn rate. It looked perhaps the touch fire, so how should we think about kind of a normalized burn rate going forward.

We're transitioning from burning capital to making it.

So I mean -- as we delayed and delayed and getting into commercial operations we had certainly and the first shift on site in Reno a lot longer than we anticipated before we did get to the commercial level. So the burn rate was higher in that regard, but now that we're starting to beginning commercial operations that should go down. And with the investment we've received from not just Johnson Controls but the shelf takedown we did last November. We're actually sitting on pretty good pilot cash for our business plans. We don't see any a need in order to complete what we've talked about for foreseeable future. It's a unique position for us to be in.

Okay. Great, thank you so much again for the color. Take care.

Thank you.

And our next question comes from Bhakti Pavani [ph] of Euro-Pacific Capital. Please go ahead .

Good morning guys, and congratulations again on the progress.

Good morning.

Good morning and thank you.

Just a quick question, I know you mentioned that you would not like to diverse more details into the operations, just kind of wondering in the prepared remarks you mentioned that the facility is producing about 120 tons per day, is that correct? Is it currently producing 120 tons a day of lead, or you will get there eventually?

So what we're saying and we mentioned this in the last earnings call, the original four shift capacity at the plant was 80 tons a day, and we figured out how to expand that to 120 tons a day with the equipment we had on-site. A 120 tons a day is our four shift capacity, I wouldn't want anybody to believe if we're making 120 tons a day right now.

Currently we have -- we've just implemented within the last few weeks the second shift. And are presently recruiting for the third shift.

Got it. So in order to expand to 160 tons per day, what kind of timeline are we talking about? Is it going to be end of this year or probably next year?

We're still evaluating now. One of things we're looking at is it might be -- so we could do it more than two ways. One is to add -- let me back up again. To be able to go from 120 to 160 we need to add additional AquaRefineries, to do that we'll need to stop arc refining for at least one of the shifts as we install equipment because that requires welding operations and you can't weld and operating in electrochemical environment because of risk. So one option is to do that and that's kind of the default option. The other option is to actually go and build the next AquaRefinery first bring that online as 160 ton a day facility right from the get go, then when we have that capacity on stream then look at adding the additional capacity to the Reno facility. Because then we'll have a bigger cushion in which to add in the additional AquaRefining. And so, that we still evaluate -- one of the moment and I don't think we've got a fixed view of it.

Got it. From the capital spending standpoint, what amount of capital do you expect to spend this year, assuming you went with the latter option and have a 150 ton per day facility from the get go?

So, we're looking for additional capital spend to be debt financed. Building the next facility is a somewhat circular exercising in getting acceptable terms from providers of debt with having the off take and supply agreements to support that and having a sufficient operational time of the first facility on the right risk.

We have identified improvements for the current plant that will be about $4 million in CapEx for the current plant for 2017.

Okay. And in order to add additional AquaRefining modules, how much more of CapEx are we looking at?

To go -- to add additional 16 modules and the infrastructure that goes with that, that is already in places, is about $12 million.

Got it. Okay. Thank you. Wanting to talk about the Johnson Control agreement, I know in the 8-K you did mention about there would be a mutually agreed blueprint date, especially with the equipment supply agreement. Have you guys -- could you maybe provide more color on what kind of timeline are we talking about?

Well we're on it already. I'm not going to get into two much more detail on that. We are -- both parties are working hard on this. We'll be making announcement on that in a few days.

Okay. Also a follow-up on that, the licensing agreement -- I am just kind of wondering, how it's going to work -- I mean is it like certain number of modules that you would be supplying to them and it would be counted on a per module basis. How is it going to be valued the agreement?

Again we're not going to be releasing details on that for the foreseeable future if ever. The idea is that we're going to concentrate on retrofitting on existing facility or possibly building a new facility. But most likely retrofitting an existing facility, learning from that and then follow that up with a fairly aggressive rollout across JCI's North American, Chinese and European facilities and that's something that JCI and we are working on but we're not going to be making those numbers public, it's commercial sensitive.

Got it, all right. That's from my side. Thank you very much, guys and congratulations again.

Thank very much.

Thank you.

[Operator Instructions] And we'll take our next question from Mike (inaudible) Capital. Please go ahead.

Steve, congratulations to you and the team for all the progress you've made in the couple of months. It's been pretty impressive.

Thank you.

Thanks.

I have two questions. First I know, first it was a really busy day for the company but the last Thursday, the CEO of EnerSys on their quarterly call spoke very highly of Aqua Metals. So obviously he is pretty familiar with you guys and they have a fair amount of data center exposure. So I was just wondering, if you could maybe elaborate on that and the data center opportunity? And then I have a follow-up. Thank you.

Sure. Well first of all it was surprise that we were mentioned in somebody else's earning call and we were thrilled and very honored that EnerSys referred us in their earnings call. You're absolutely right EnerSys is a power house in stationary and industrial applications and we see that -- we would like to talk to them, like to work with them we know some of those guys pretty well. We think there is a great opportunity there and I think there is real synergy between our relationship with JCI and a potential relationship with EnerSys. So, they would fit together quite well.

Any my follow-up would be, obviously JCI is a huge company. I am surprised that they just didn’t kind of come after all of Aqua Metals. I suppose they are just buying a small portion? And to the extent you can talk about that, that will be great.

So, you are not the first person to ask that. Our positioning with JCI as we came together that subject was discussed. We believe that we’re just at the start of the journey here, that we can built tremendous shareholder value as a separate company. And basically that’s what we plan to do I can’t speak for JCIs decision making process is to whether they would or wouldn’t want to buy us, we just think we’re able in a great position to build incredible ongoing shareholder value as an independent company.

Thanks Steve. Keep up the good work.

Thank you.

And that is the all the time we have for question-and-answers. I will turn it back to management for closing remarks.

Well, thank you. I just really not much more to add here. We had an incredible year on top of another incredible year and we’re pretty excited to be where we are, but not under no illusions that there is a lot of hard work to be done. So thank you all for your participation.

And this does conclude our conference for today. Thank you for your participation. You may disconnect.