LiqTech International, Inc.

Good day, and welcome to the Lick Tech International Report's first quarter 2025 financial results call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will 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 with Litham Partners. Please go ahead.

All right. Thank you very much, Jason, and good morning, everyone. Thank you all for joining us today to discuss LickTech International's first quarter 2025 financial results for the period ended March 31, 2025. Joining us on today's call from the company are Fei Chen, Chief Executive Officer, and David Kowalczyk, the company's Chief Financial and Chief Operating 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 the call. If you dialed into the call through the traditional teleconference line, as the operator indicated, please press star, then 1 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. Before we begin with prepared remarks, you submit for the record the following statement. This conference call may contain forward-looking statements. Although the forward-looking statements reflect a good faith in judgment and management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause future results, actual results to be materially from those discussed during the conference call. The company therefore urges all listeners to carefully review and consider the various disclosures made in the reports filed with the Securities and Exchange Commission, including risk factors that attempt to advise interested parties of risks that may affect our business, financial condition, operations, and cash flows. If more 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 associated that may arise after the date of this release and conference call. Now, 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. At a high level, the results of the first quarter come in, come in line with expectations we provided the previous quarter, with revenue growing 36%. sequentially to 4.6 million, led primarily by the successful delivery of a record commercial order of our pure flow mobile units to the oil and the gas industry. This order was a key milestone for LICTIC that further validates how our highly specialized filtration solutions can benefit the global energy industry. Beyond oil and gas segment, we have also made progress on a number of other initiatives we have set forth these past few quarters, including our joint venture in China, which officially had its grand opening in April. Following the grand opening, we received our first new marine squabble orders in more than one and a half years and entered into a new framework agreement for after-sales support, which has already gained traction. It is great to see the immediate progress made in China. The other key high-level comment I will make is that we are seeing nice progress made with key pilot units currently deployed in a variety of addressable end markets, including one for lithium brine extraction free treatment in the U.S. and a unit with one of the world's leading integrated energy companies for oil and gas water treatment. Both rental-based agreements have recently been extended with expanded scopes. The progress I just mentioned, coupled with relative strength across a variety of our key products and the marked verticals, such as a ramp up in DPF order intake, increase in swimming pool systems order, and the growth in our plastic division are all expected to drive revenue growth. As you can see from our outlook, revenue for the second quarter is expected to show continued sequential growth from Q1 estimated to be within the range of 4.8 to 5.2 million. Beyond revenue growth, however, our focus is on bottom line profitability. With a better manufacturing utilization that should drive improved growth margins and the full effect of our recent cost saving initiatives implemented during the past few months, we are expected to further improve our profitability metrics in Q2 as well. So the high level summary. Sequential revenue growth in Q1 of 36%, led by the record commercial oil and gas delivery. Real progress made in China from our joint venture, which we think will continue to expand. Improved order flow from DPFs, swimming pools, and the plastics. Implementations of cost-saving initiatives aimed at lowering our break-even rate, and the Q2 guidance of $4.8 to $5.2 million. Transiting back to the record oil and gas order, this truly was a milestone order and delivery for us. It started about a year ago when we signed a distribution agreement in February 2024 with Resurrect Direct and sequentially secured an order for a containerized pilot system for produced water treatment. which was promptly delivered and performed successfully at the customer side throughout the second half of 2024. The success of this pilot program paved the way for a record-breaking commercial order. The order shifted during Q1, which is when we recognized ReRenew. The units are expected to be installed at the customer side in the US in June or July timeframe for produced water treatment. Once we got the commercial grade system up and running, it will help serve as an additional reference for prospective customers, where some customers might still choose to have their own pilot programs. These commercial scale operational units should help shorten the path to future orders. To that end, we continue to make progress with multiple pilot projects on the way that leverage our preparatory technology to address some of the most demanding environments. As the history of progress with Rieseberg directs within the US oil and gas industry highlighted, the first steps to new application success with our filtration systems often starts with a pilot level program. Currently, we have multiple systems at the various phases of testing and the piloting, including a pilot unit from a leading technology company, the Lithium Brine Production in the US. We announced it in November. It has recently been extended once again with an expanded scope to get data for commercial level design. The customer is very satisfied with the performance to date. And we look forward to potential next steps with this customer. We also have a pilot unit with one of the world's leading integrated energy companies for produced water treatment in the US, which was shifted in Q3 of last year. Similar to the lithium brand system, the unit has demonstrated superior performance, and the customer has extended the rental period to collect additional performance data. Very recently, Resurrect Direct has rent a pilot unit to explore various applications for our UF filtration system, since they have experienced strong interest from customers. We look forward to the continued execution on our multiple pilots and the opportunities it could lead to for us in the future. Let's transition for a moment to our China GAV, where there is a number of activities happening, which included our official grand opening ceremony in Shanghai in April. Taking a step back, we initially established the GAV in November of last year. We are the majority owner of the GAV, contributing our pioneering marine water treatment solutions where GeoTree is the minority owner and is contributing facilities, local support, and with the initial operational and commercial funding. In February, we achieved an important operational step when we received supplier approval for our water treatment system for the WinGD ISO technology. For those not familiar, WinGD is one of the market leaders in marine engine manufacturing with a focus on advancing the decarbonization of marine transportation. This supplier approval allows us to seamlessly deliver systems to WinGD, its licenses, and authorized service partners. We commenced a pilot test for our marine water treatment solution for the WEN-GD ISO system, which was successfully carried out in China in March. We are now in close dialogue with the relevant stakeholders for commercial projects integrating into the WEN-GD ISO system. Separately in China, we received an order for two marine scrubber water treatment units at the Shanghai Xiyao Environmental Technology Company. are scheduled to be delivered in November 2025 and February 2026. It's a small initial step, but certainly nice to see the orders coming in after one and a half years MPT period for the marine scrubber market. In connection with the grand opening ceremony, we also entered into a new framework agreement for after sales support for the marine scrubber market which has already gained traction. Service of our existing units in the field and the maintenance revenue associated with it has always been a key initiative for us. And this is another step in further capturing this profit opportunity. In summary, we see a lot of positive progress in China, with 80% of the global shipping building market and the numerous retrofits application taking place to move towards cleaner fuel applications, China is expected to be a strong growth market for our marine water treatment solutions in the years to come. Before I turn it over to David, let me quickly touch on a few other key markets with a brief update. First, within the swimming pool market, We shipped two systems during Q1, and have another three systems set to ship here in Q2. Recently, we also signed a distribution agreement with NAF Aquatics in New Jersey for the sales and distribution of the liquid tour systems in the US. NAF Aquatics holds a strong market position in the US, particularly in the Northeast. with decades of experience and a broad network of local experts, which should lead to them being an ideal partner for us as we expand in the US. Certainly, swimming pools will remain a key contributor, and I look forward to more progress made here. Transiting to other parts of our established markets, starting with DPFs and ceramic membranes where sales during Q1 was about $1 million, which was similar to what they were in Q4 of 2024, but down quite a bit from the year-ago period when we had a few large orders. We are seeing a nice uptick in orders here in the second quarter. Within plastics, we saw a nice uptick during Q1 with revenue of almost $1 million, which was up year-over-year and sequentially. The plastic team continues to do a great job differentiating itself and is generally outperforming our expectation. As we look at the second quarter, our expectation is for revenue of $4.8 to $5.2 million. The revenue breakdown will be a little more diversified than it was during Q1, which benefited from the large commercial oil and gas order. We expect to see growth in revenue from the pilot unit rentals, growth in swimming pool, growth in DPFs and ceramic membranes, growth in plastics, and increased contribution from our aftermarket sales. We are less dependent in Q2 on any one or two large orders to achieve our stated objectives. With nice rebounds across our various product lines, It should serve as a nice potential springboard as new large systems come on board. Let me now turn the call over to David to review the financials in more details. I will then make a few closing comments and then look to open the call for your questions.