US lead-acid battery recycling start-up Aqua Metals is facing a probe into “possible securities fraud violations” as it launches a “retrofit” of equipment to tackle new production problems.
The blows come just weeks after the firm, which is seeking to commercialise a water-based recycling process, posted further losses and said it was “significantly behind schedule” with production plans.
New York-based law firm Levi & Korsinsky said on 1 December it had launched an investigation into Aqua Metals “concerning possible violations of federal securities laws”.
The law firm did not specify the reasons for the investigation and did not respond to BBB’s request for details.
Meanwhile, Aqua Metals confirmed it had begun modifying its AquaRefining modules that “have experienced a condition in which recovered lead hangs up on the modules’ exit chutes”.
The company said the issue requires “periodic manual intervention to remove the AquaRefined lead”— but “believes it has a solution to this problem”. The company said a “retro-fit package has been developed consisting of modifications to the exit chute and improvements to the electrolyte feed system”.
Testing of the retro-fit package is under way, “with the expectation that, if successful, modifications to the 16 AquaRefining modules should begin by the end of December and the company then expects to commission and place into commercial operation modules on a rolling basis, with the initial modules placed into continuous operation during January 2018”.
Chairman and CEO Dr Stephen Clarke (pictured) said: “Given our focus and progress in developing a retrofit package, we have taken the decision not to operate the AquaRefining modules in manual mode during December, but rather transition them to continuous operation as we add the modified chutes and electrolyte distribution.”
Clarke said last month all 16 modules were expected to be assembled and operational by the end of 2017. As of 9 November, he said eight of the modules were “fully assembled and the final eight modules are in place and undergoing final assembly”.
As a result of the retrofit, Aqua Metals said it expects to report revenue for the fourth quarter of 2017 “at or slightly below the prior revenue guidance range of $1.2 million to $1.8m.
An Aqua Metals spokesperson told BBB on 5 December the company would not be commenting on the investigation “at this time”. The spokesperson also declined to comment when asked if the retrofit would result in limited or no further production of AquaRefined lead for the remainder of this year.