Aqua Metals Accused of Misleading Investors About its Technology

On May 19, 2016, Aqua announced a partnership with Interstate Battery System International, Inc., which would supply more than a million lead-acid batteries as feedstock for Aqua. Aqua was to use its breakthrough technology to yield nearly 100% lead recovery through a non-polluting process. On August 2, 2016, Aqua announced the opening of its first AquaRefinery, which it coined as the "world's first environmentally friendly process to recycle lead-acid batteries." Throughout the latter half of 2016 and early 2017, Aqua continued to tout the positive impact of its AquaRefinery, its budding relationships with other battery suppliers, and the possibility of expansion. However, Aqua officials ignored unresolved deficiencies in the company's AquaRefine technology, which it began to reveal in May 2017, and hid from investors that the company was unprofitable because it was unable to generate revenue from its core business. On October 23, 2017, Aqua revealed that it was only producing "small quantities" of lead. Then, on November 9, 2017, Aqua reported a net loss of $6.3 million, compared to a net loss of $3.5 million for the previous year's comparable quarter, disclosing that it was still overcoming "significant challenges." As news of Aqua's troubles became public, the company's stock fell nearly 82%, eventually closing at $3.00 per share on November 14, 2017. Aqua's stock has since fallen even further, closing at $2.10 per share on December 28, 2017.