LiqTech International, Inc.

be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Robert Bloom of Lithen Partners. Please go ahead.

All right. Thank you very much, Jason. And good morning, everyone. Thank you all for joining us today for the LickTech International first quarter 2024 financial results conference call. for the period ending March 31, 2024. Joining us on today's call from the company are Fei Chen, Chief Executive Officer, and Philip Price, the company's Interim Chief Financial Officer. Before I turn the call over to management, let me remind listeners that there will be an open Q&A session at the end of today's call. If you dialed in through the traditional teleconference line, you can press star then one to ask a question. If you are listening through the webcast portal and would like to ask a question, You can submit your question through the Ask a Question feature in the webcast player. We'll do our best to get to as many questions as possible. Before we begin with prepared remarks, we submit for the record the following statement. This conference call may contain forward-looking statements. Although the forward-looking statements reflect the good faith and judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed during the conference call. The company therefore urges all listeners to carefully review and consider the various disclosures made and the reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, operations, and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, the company's actual results may vary materially from those expected or projected. The company therefore encourages all listeners not to place undue reliance on these forward-looking statements, which pertain only as of this date and the date of the release and conference call. The company assumes no obligation to update any forward-looking statements to reflect any events or circumstances that may arise after the date of this release and conference call. That said, I'd like to turn the call over to Fei Chen, CEO of LickTech International. Fei, please proceed.

Thank you, Robert. And good day to everyone on the call. I am excited to have this opportunity to speak with you and share an update on the solid progress we have made as we maintain our focus on delivering against the strategic plan we instituted over the past year to successfully stabilize and grow our business initially through our established markets and then position ourselves for incremental growth through our target markets. As a quick reminder, our established markets are markets where we have extensive customer bases and typically have reduced sales cycle times. This includes commercial pool systems, diesel particulate filters, marine scrubbers, and other areas where we have recurring revenue opportunities such as general aftermarket sales and plastics. This established business market provides a strong and stable base of revenue for lead tech and allow us to gain manufacturing efficiencies by leveraging our existing production capacity. Our target markets include key markets where our high performance ceramic Silicon carbon ceramic membrane can provide customers with a strong return on their investments. This includes specific industry filtration applications to remove solids, oil, pathogens, and heavy metals from water as well as compounds from emissions and industrial off-gases. These areas tend to have longer sales cycles, but it is our belief that if we align ourselves with great partners and establish key reference customers, the sales cycles will decrease and the large market opportunity will open up for DITSEC. I am pleased to report that the strategy is working. As I assume most of you saw, we are expecting a significant step up sequentially in revenue for the second quarter. with revenue to be between $5 and $5.5 million. This would represent an approximate 20% to 30% sequential revenue growth. But before we talk about a few of the forward-looking expectations and the drivers to the strong second quarter we expect, let's first look back at the progress made during the first quarter. Revenue during quarter one increased 6% compared to Q1 of 2023, driven by delivery of our first US-based oil and gas-produced water order as part of our new distribution agreement with Resovec Direct as we're at strength in our DPF and the ceramic membrane business. The US-based oil and gas order was a critical development for us in many ways. First, it expands our presence in North America by showcasing the benefits of our produced water treatment solutions to the oil and the gas industry. And second, the order comes rapidly on the heels of us signing our country's distribution agreement with the Resolvac Direct in March 2024, highlighting what we believe will be straining interest for our solutions in North America. The containerized pilot system that Razorpack Direct ordered arrived in Houston on April 30th and will be used as a customer site to test, demonstrate, and document the efficiency of this type of filtration technology in trading produced water to facilitate beneficial industry reuse and meet current and future regulatory requirements. Longer term, The intention is to use the results from this pilot operation as the basis to design and implement full-scale commercial systems for the onshore oil and gas application in the US. Let me be clear that our expectation is that this will not be a multi-year trial process. It is our belief that the initial results received in the next few months will help to validate our solutions and provides the data necessary for other customers to move forward. As we stated during our year-end call, the North American oil and gas market is going to be a key focus for DTIC moving forward, and we couldn't be more pleased to be partnered with the great team at the J.S.U.P.E.C. Directorate, who has a strong presence in key oil and gas geographies in the U.S. Building on the success of North American oil and gas order, we received another significant oil and gas produced water commercial pilot order in the first quarter from National Energy Services Reunited, or NISA, in the Middle East. This unit will be used in Gulf Cooperation Council countries by one of the largest integrated energy and chemicals companies in the world, and is scheduled to deliver in June. This will be a key component of the strong second quarter that we are expecting. Similar to the US order, we believe that this commercial test unit for produced water has the ability to open the doors for additional orders with this customer and many other operators in the region. Admittedly, the Middle East tends to move a bit slower than in the US. But this one of our systems installed two years ago operating to expectations We believe there is an opportunity to move Rhapsody forward with other customers in this geography as well. Overall, I am pleased with the progress made against our oil and gas target market initiatives and look forward to incremental progress in 2024. Let's transition to a few key developments since our last call in our established markets, starting with marine scrubbers. Last week, we announced entry into a partnership with the Dan Marine Group, or DMZ, to expand our presence in the Chinese shipbuilding and repair market for marine scrubber water treatment solutions, as well as new exhaust gas recirculation water treatment systems for dual-fuel marine vessels. The agreement also includes the servicing by DMZ of existing LICSEC marine installations, including fast delivery of spare parts and on-site repair work. Danmarine Group has close customer relationships in the marine industry and a strong sales and service organization in China with locations close to customers for shipbuilding and repair. A key component to this partnership is our ability to leverage DMZ's highly skilled sales and service capabilities to sell, install, and service our marine water treatment systems. The other highlight here is the market for new exhaust gas recirculation water treatment systems for dual-fuel marine vessels. Marine time industry is undergoing a significant transition towards cleaner, fuel and reduce environmental emissions. In the coming five years, more than half of the new vessels will be built with dual fuel engines, which make them be able to operate with LNG or methanol. For this new type of vessels, there is a need for highly sufficient and reliable water treatment systems. This type of solution is the perfect fit to this application. We look forward to the opportunities that this new partnership can bring for us in Chinese marine squabbles and exhaust gas recirculation market. The second key partnership we entered was with Freiman, where we established maritime representative to the shipping industry to market our marine squabble water treatment solution within Greece. For those not aware, Greece is the largest ship-owning market in the world. Bremen has close customer relationships with major shipping companies in Greece and have deep technical insights to ensure effective customer collaboration for design and installation of new water treatment systems. With the combination of our unique silicon carbon ceramic filtration technology and years of successful commercial demonstration in the marine industry. We look forward to our two companies come together effectively to expand our marine squabble footprint and reduce environmental impact from shipping. As we look to the second quarter, beyond the key oil and gas order to the Middle East set for delivery in June, another key driver to our growth expectation is the commercial swimming pool market. During the second quarter, we expect to deliver eight systems in total with contributions coming from each of our key geographies and distribution partners. As a reminder and for context, we delivered 20 swimming pool systems in all of 2023. The agreements we signed last year with Waterco, Binary, Total Pool, and Oxygen are all contributors with each delivering at least one system in Q2. I am pleased with the progress we have achieved on this key established market and look forward to continued market adoption in the years to come. Transition to our DPF business and the membrane business, another of our established markets. During the first quarter, DPF sales increased 31% compared to the year-ago first quarter. with sales of nearly 1.6 million. We are seeing increased interest for our DPF solutions within the European Inland Transportation Market as renewed focus on black carbon emission reduction occurs. We are also seeing strong sales for our features for emergency electricity generator. Similar to pool systems, we are pleased with the growth coming from our DPF solutions, which in many ways was an afterthought for Dick Tech previously, but has become a solid contributor for us today. On the ceramic membrane side, we are making inroads to a couple of key potential markets with pilot testing going on at customer sites. These markets include petrochemicals, water treatment, paper and puff, and battery material concentration. We are also looking to scale up through OEM partners in China, Europe, and the US. We believe this can be a driver for this component of our operations going ahead. I hope to have more to share with you in the coming quarters on this pilot test. To wrap things up before I turn the hour to Philip, to review the financiers in more detail. As our outlook suggests, we expect to see good growth in the second quarter. We have eight pool systems scheduled for delivery with contributions coming from each of the distribution partners we have crossed the board. These orders, coupled with our Middle East-oriented gas system set for delivery in June and an uptick Nearly each of our key established markets' recurring product offerings, such as DTF filters and membrane, provide us with optimism for both the second quarter and the rest of the year. I look forward to our continued successful execution against the strategic plan we set forth. With that said, let me turn the call over to Philip to review the financial results in more detail.