LiqTech International, Inc.

Good day and welcome to the LIGTECH Second Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. 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 Mr. Robert Bloom with Liston Partners. Please go ahead.

All right. Thank you very much. Good morning, everyone, and thank you for joining us today to discuss LICTEC's second quarter 2025 financial results for the period ended June 30, 2025. Joining us on today's call from the company are Fei Chen, Chief Executive Officer of and David Kowalczyk, the company's Chief Financial and Chief Operating Officer. Before I turn the call over to management, I do want to remind listeners that there will be a Q&A session at the end. To ask a question through the webcast portal, simply type in your question through the Ask a Question feature in the webcast player there. 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 in the reports filed with the Securities and Exchange Commission, including 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 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. 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, we achieved improved financial performance across the board during the second quarter, including revenue growth, growth margin improvement, and decreased operating expenses, as we continued to execute on our key strategic priorities. In the second quarter, we achieved strong performance in our swimming pool segment, delivering six systems and generating nearly 800,000 in revenue. Further, the order flow for swimming pools looks strong as we enter the back half of the year. We also received an order for an advanced membrane-based filtration system to treat oily wastewater, and they delivered a new pilot system to our partner and ResurBank Direct to address a new end-market opportunity. These water system orders, coupled with 31% sequential growth in our ceramic and plastics business combined, helped drive the overall revenue improvement during the quarter. Beyond the strength of the second quarter results, for the Year-over-Revenue outlook, anticipants continued Year-over-Year improvements in the third and fourth quarters with full-year revenue expected to be at company's highest level in four years dating back to the pandemic. I am certainly pleased with the progress made to date and expected over the rest of the year. In brief, this quarter is a little different than some of the previous quarters, in that we really had solid operational performance across the board. Unlike the first quarter, where we had the record oil and gas system order, the second quarter was much more balanced, with contributions from water system deliveries, ceramics, DPFs, and plastics We obviously like this balance as something to build on for the rest of the year. One item I would like to mention is the order we received from North Star Blue Scope Steel, a major US-based steel producer. The system is designed to resolve recurring filtration process upsets caused by the high oil content and the variability in wastewater quality. is scheduled to be commissioned and begin operation in the second half of the calendar year 2025. That said, based on consultation with our accounting firm, we have mutually agreed moving forward that when orders exceed a certain threshold, we will record revenue on a percentage of completion basis. For the second quarter, we recognized about $200,000 for this project, with another $300,000 or so to be recognized during the second half of the year. This practice should help to avoid wide swings and better align the balance sheet and income statement. This order is key for a couple of reasons. where cross-flow filtration is the most sustainable wastewater treatment process. It comes with a major volume-in to volume-out challenge. LICTEC's ceramics-based system addresses this challenge where adapting to ever-changing oil and to beat water quality. The addition of LICTEC Advanced Wastewater Pretreatment Filtration supports North Star's broader water recognition initiatives and reflects a growing trend in the steel industry towards more sustainable water management practices. This project demonstrates our growing traction in industry water treatment and our ability to contribute meaningfully to our customers operational efficiency and sustainability goals. Another key order during the quarter was a pilot unit which was sold to Razorback Direct. As most of you are aware, Razorback Direct has been a great partner for us in North America. In November 2024, based on the success of an earlier pilot unit at the customer side, we received a record-breaking commercial order from the oil gas customer. That order has subsequently been installed this quarter at the customer side and is now in stable operation. This new pilot order, also sourced through Resolvac Direct, is for a completely new customer in a different industry from oil and gas. I will withhold the industry's focus until further customer feedback occurs. But we are excited by the opportunity that it may present to us in the long term. Overall, we continue to make progress with multiple pilot projects underway that leverage our preparatory technology to address some of the most demanding environments. As the history of progress with Resurrect Direct, we've seen 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. Recently, our pilot unit at one of the world's leading integrated energy companies has successfully completed. The positive results have resulted in that our ultrafiltration solution has been approved for the commercial application at this influential company. Beyond the various water for energy and industry applications discussed, we made very good progress during the second quarter within our swimming pool segment. As I mentioned a moment ago, during the quarter, we delivered six systems generating nearly $800,000 in revenue. This is a significant step up from the past couple of quarters. our team effectively leveraged our board distribution agreements to source multiple new opportunities in the swimming pool market. As we look at the back half of the year, we believe the momentum within swimming pools will continue. Notably, we have recently received our first inquiry for a US refurbishment pool project through our partner at NAF Aquatics. If we are able to formally secure this project, it would serve as a good reference for other US-based opportunities in the future. Transitioning to other parts of our established markets, starting with DPFs and ceramic membranes where sales during Q2 were about 1.3 million, which was down from the year-ago second quarter but up nicely from 1.0 million during the most recent sequential first quarter. Order intake remains strong. We anticipate sustained positive performance for the remainder of the year. Within plastics, we saw a nice uptick during quarter two with a revenue of $1.2 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 expectations. Again, these two areas combined, ceramics and the plastic, were up 31% sequentially. One final area that showed nice progress was our aftermarket sales within the marine industry, driven by several membrane housing replacements. This growth was boosted by the China after sales framework agreement we discussed in detail last quarter. In addition to aftermarket sales, we are advancing opportunities within our water treatment unit, dual fuel marine segment. We expect to participate in the upcoming Q3 bidding process for water treatment units for dual-fuel vessels, presenting a promising opportunity for Leeds Tech. Further updates will follow in the coming months. So, to recap, we really had a nice quarter across the board. Six swimming pool systems delivered a new order from a U.S. steel producer, a new pilot system sought to address a new end-market opportunity with Razorback Direct, good performance from our ceramics and plastic groups, incremental progress being made out of our Chinese JIAWEI, numerous pilot and commercial progress underway, which we believe can drive broad large-scale orders across our segments in the future. As I mentioned at the beginning, for the year, our revenue outlook anticipates continued year-over-year improvements in the third and fourth quarters, with full-year revenue expected to be at the company's highest level in four years dating back to the pandemic. I believe we are well-positioned to build up the success of recent pilot and commercial projects that handle the most challenging liquids across a variety of large-scale applications. We are strengthening our commercial position in established markets such as swimming pools, DPFs, ceramics, and plastics. 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 the look to open the call for your questions. David, please.