Good morning and welcome to the LickTech International Report's third quarter fiscal year 2026 financial results conference call. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may type it into the Ask a Question box on the webcast screen. Please note, this event is being recorded. I would now like to turn the conference over to Robert Bloom with some partners. Please go ahead.

All right. Thanks so much, and good morning, everyone, and thank you all for joining us today. on today's conference call to discuss LickTech International's third quarter 2026 financial results. Joining us today on the call from the company is 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, I'll remind listeners that there will be a Q&A session at the end of the call, as the operator indicated, 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 Exchange Commission, including the risk factors that attempt to advise interested parties 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 to 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, Chief Executive Officer of Electric International. Fei, please proceed.

Thank you, Robert. And good day to everyone on the call. At Leetech, our strategy is clear. Translate the strength of our filtration technology into sustained commercial growth and better profitability. We are prioritizing applications where we solve a compelling customer problem. Successful installations can generate repeat orders and standardize the systems allow us to scale efficiently. This is shaping our investment and execution priority across industry wastewater treatment, marine water treatment, and the commercial aquatics, alongside a renewed commercial focus on DPF. We are seeing tangible indications that this strategy is working. A successful wastewater installation at a U.S. steel manufacturer has led to an order for four additional systems. An established marine customer is expanding its use of our technology from scrubber application into ISO application. Our first commercial aquatics order in Finland expands the geographic footprint of Clary Flow and renewed attention to DPF is generating significant orders. Each is an example of building on proven technology and existing customer relationships to create further growth opportunities. Our immediate priority is to turn this momentum into a strong fourth quarter. We are maintaining full-year revenue guidance of 20 to 23 million Revenue recognized to date, combined with existing orders and the backlog, gives us meaningful visibility, especially in industry wastewater, marine, and DPF. The key now is execution, completing production, meeting customer acceptance milestones, and delivering systems on schedule before year end. We are managing those activities closely with continued cost discipline. With that context, let me review our third quarter performance and the developments across our businesses. Third quarter revenue was 4.4 million, up 15.5% year-over-year. Marine water treatment and the DPF drove growth, where our industry wastewater project continued to progress Commercial aquatics and plastics were softer during the quarter and the timing of customer acceptance shifted two marine scrubber deliveries into the fourth quarter. We also made sequential progress on profitability. Growth margin improved to 12.3% from 8.4% in second quarter. Our net loss narrowed to 1.8 million from 3.1 million. and adjusted EBITDA improved to negative 1.1 million from negative 1.6 million. There is more work ahead, but these are encouraging steps. David will discuss the financial performance, including the year-over-year comparisons, in more detail. Starting with the waterfall industry, we are advancing projects that demonstrate the value of our CureFlow platform in demanding industry wastewater applications. Our 2.1 million follow-on order from a U.S. steel manufacturer covers four additional CureFlow systems. We expect systems to be substantially completed by year-end, with revenue recognized on a percentage of completion basis. This is an important contributor to our fourth quarter outlook and a strong example of an initial installation leading to repeat business. We are also progressing the QF6 system for waterworks industry services at its new facility in Freeport, Texas. Delivery is expected in the fourth quarter. The system is designed to treat wastewater from industry equipment cleaning operations and recover more than 95% of incoming wastewater for reuse as wash water. This can reduce both fresh water consumption and the volume of wastewater disposal. For LICTEC, it opens another industry application for our filtration platform. In Water for Energy, we remain selective in pursuing opportunities and evaluating strategic commercial partnerships that could accelerate market penetration. We see meaningful long-term potential where recognizing the customer decisions and the project schedules can be difficult to predict. Potential new orders could provide upside within our guidance range Existing orders and the backlog in our other businesses provide substantial visibility towards the low end of our guidance range. Turning to marine water treatment, third quarter revenue was approximately 0.9 million compared with 0.5 million a year ago. We delivered our third ISO water treatment system during the quarter following factory acceptance test approvers for our first two units in the second quarter. This marks continued progress in bringing our technology into next-generation marine engine applications. Two completed scrubber systems are now scheduled for fourth quarter delivery after customer factory acceptance testing shifted in timing. The first of four previously announced EGR water treatment systems also remains scheduled for fourth quarter delivery. In October, we have announced two new ISO orders with an existing customer. This expands a customer relationship that had previously centered on squabble water treatment. It illustrates how we can bring additional applications to customers already familiar with our technology. Across ICER, EGR, and the squabble systems, our solutions remove contaminants from circulating water, support, reuse, and help maintain reliable operation. Our China joint venture is central to this effort. Local engineering, sourcing, assembly and service bring us closer to customers and shipyards, where cold silicon carbon membrane continue to be manufactured in Denmark. With the border application portfolio, scheduled deliveries and aftermarket service activity, we expect Marine to finish the year strongly. In commercial aquatics, third quarter revenue was 0.8 million compared with 1.1 million a year ago. The soft quarter revenue largely reflects project timing. We expect stronger sales in the fourth quarter and remain focused on expanding our standardized Clariflow platform. In October, we announced our first commercial aquatics order in Finland. for the original Socos Hotel Presidenti in Helsinki through our local partner Pool4U. This expands our geographic reach and builds on our partnership in the Finnish market. Our silicon-carbon filtration technology combined with the compact system design gives pool operators a practical way to improve water quality and resource efficiency. We expect The Helsinki installation to become a local reference, supported by pool-for-use market knowledge and customer relationships. In the United States, installation and initial operation of our first commercial pool system in Woodlands, Wyoming are scheduled for November. This is an important step towards establishing a U.S. reference installation. Standardization allows us to deploy the same core technology across different facilities, with local partners supporting sales and project delivery, as our installed base expense shows us opportunity for service and aftermarket support. We see commercial aquatics as an important part of building a more scalable business, Existing orders and expected project activities support our expectation of a strong fourth quarter revenue contribution from this segment. Turning to DPF, Shared Quarter Revenue was $1.1 million compared with $0.8 million in the prior year quarter. As we announced earlier this week, we have secured significant new orders reflecting the impact of our renewed commercial focus. BPF sales exceeded expectations in each of the first three quarters of 2026, and that momentum continued into the fourth quarter. Sales orders from January 1st through November 1st increased 30% compared with the same period in 2025. This order activity reflects the strength of long-standing customer relationships as well as opportunities to bring our DPF technology into additional applications and in the market. DPF draws on our established technology and manufacturing capabilities. Our goal is to convert renewed demand into consistent revenue through disciplined The role material availability issue that affected production in the second quarter has been resolved. We entered the fourth quarter with a strong DPF order backlog. Our focus is now on production, execution, and timely delivery. And we expect fourth quarter DPF revenue to exceed the third quarter level. Plastics revenue was approximately $0.7 million compared with $1.0 million in the third quarter of last year. Following the softer third quarter, We expect this improvement to contribute to our year-end revenue plan. To conclude, our commercial progress and secured orders position us for a solid first quarter. We remain our full-year revenue guidance and our near-term focus is straightforward. production meets customer acceptance requirements and convert backlog into recognized revenue. Throughout 2026, we have invested in developing a more robust opportunity pipeline to strengthen commercial execution and improve revenue visibility. Based on the opportunities currently identified, we believe the pipeline supports The potential for 30 to 40% revenue growth in 2027 relative to full year 2026. This preliminary outlook is not formal guidance converting opportunities into orders and revenue will depend on customer decisions and execution. Our priority remains building a scalable business and the progressing towards sustainable profitability. Let me now turn the call over to David to review our financial results and explain the fourth quarter revenue plan in more detail. I will then make a few closing comments before we open the call for questions. David?

Thank you, Fei, and good day, everyone. I will review our third quarter financial results and key comparisons with both last year and second quarter. and the revenue contributions supporting our maintained full-year guidance. The revenue for the third quarter of 2026 was 4.4 million, compared with 3.8 million in the third quarter of last year, an increase of 15.5%. Revenue was essentially unchanged from the second quarter of this year. The year-over-year increase reflects higher system and aftermarket and filters and membrane revenue, including growth in marine and water for industry. We also recognize revenue from externally funded research and development activities. These contributions were partially offset by lower component revenue. As Fei discussed, marine revenue was approximately 0.9 million, commercial pool was approximately 0.8 million, DPF was approximately 1.1 million, and plastic was approximately 0.7 million. The quarter benefited from marine and DPF growth, while commercial pool and plastic remained below their prior year levels. Gross profit for the third quarter was approximately $540,000, representing a gross margin of 12.3%. This compares with approximately $748,000 and a gross margin of 19.6% in the third quarter of 2025. Sequentially, gross profit increased. David Nørby Foss Kowalczyk, Fei Chen David Nørby Foss Kowalczyk, Fei Chen David Nørby Foss Kowalczyk, Fei Chen David Nørby Foss Kowalczyk, Fei Chen David Nørby Foss Kowalczyk Revenue scale and product mix both affect our ability to absorb fixed manufacturing costs. A higher fourth quarter activity provides an opportunity to improve that absorption, while utilization and disciplined procurement remain important to the longer term margin profile. Total operating expenses were 2.3 million. compared with 2.1 million in the prior year quarter, an increase of 12.2%. Foreign exchange rates were broadly comparable to the year-over-year period. Sequentially, operating expenses declined by approximately 363,000, or 13.4%, from the second quarter of this year. Selling expenses were approximately 1 million, compared with 0.5 million in the third quarter of 2025. The increase primarily reflected new hires and a much higher activity level within sales and marketing, costs associated with our US service center, and the reversal of a bonus and other accruals in the prior year period. General administrative expenses were approximately 1 million, compared to 1.3 million in the prior year quarter, a decrease of 21.5%. The comparison benefited from the timing of the annual general meeting, which moved to fourth quarter this year. Research and development expenses were approximately 289,000, compared with 268,000 in the prior year quarter. The increase primarily reflected membrane development and development work on marine and commercial pool systems. We continue to manage spending carefully while supporting our commercial priorities. The timing of expenses, including annual general meetings, will continue to affect quarterly comparisons. Total other expenses was approximately 55,000, compared with 127,000 in the third quarter of 2025 and 720,000 in the second quarter of 2026. The reduction primarily reflects the repayment of the debt in June and July this year. Net loss for the third quarter was 1.8 million compared with 1.5 million in the prior year period and 3.1 million in the second quarter. Net loss attributed for Zolitech was approximately 1.84 million or 0.05 per basic and dilute share compared with 1.43 million or 0.1 million per share a year ago. Adjusted EBITDA was a negative 1.1 million compared with the negative 0.5 million in the prior year quarter and negative 1.6 million in the second quarter. The sequential improvement of approximately 0.5 million reflected higher gross profit and lower operating expenses. The year-over-year decline reflects lower gross profit and higher operating expenses. Turning to guidance. We are maintaining our full year 2026 revenue range of 20 to 23 million. This represents growth of approximately 21 to 39% over 2025. With 12.9 million of revenue reported through September, approximately 7.1 million is needed in the fourth quarter to reach the low end of that range. Existing orders and backlog within Especialty Water for Industry, Marine and DPF support a substantial portion of the lower end of the guidance and provide meaningful visibility into fourth quarter activity. Achieving the planned increase from the third quarter will depend on timely production, customer acceptance, shipment and revenue recognition. Our focus is on managing those milestones closely. The 23 million upper end would require additional 10.1 million in fourth quarter revenue. Revenue above the current plan depends on additional material orders for the timing of project execution, including potential water for energy opportunities. We are pursuing those opportunities while keeping production and delivery of the existing orders as our immediate priority. We ended September with cash and restricted cash of 13.9 million, compared with 15.7 million at the end of June and 5.1 million at the end of 2025. Cash and restricted cash declined by approximately 1.8 million during the quarter. The financing, completed in June, continues to provide financial flexibility to support working capital and our growth priorities. Our responsibility is to use that flexibility carefully as we complete the projects in front of us. We remain focused on managing collections, inventory and project working capital alongside operating spending. The objective is to convert increased activity into stronger financial performance while maintaining the resources needed to serve our customers. And with that, let me turn the call back to Fei.

Thank you, David. Before we conclude, I would like to thank David for his dedication and the contributions to Leetech ahead of his departure on November 30th. We appreciate his work across our finance and operations teams and wish him every success in his next chapter. We have appointed Michael Schurter as interim Chief Financial Officer, effective November 1st. Michael brings extensive financial leadership experience and we welcome him to LeadTech as we work through this transition and continue executing our priorities. As we move through the fourth quarter, our team is focused on the work required to meet our customer commitments, from production and testing Thank you to our customers, employees, and shareholders for your continued support. We look forward to demonstrating further progress through execution. With that, Robert, we would be happy to take questions.

All right, very good. Thank you, both Fei and David, for your prepared remarks there. As a reminder to everybody listening through the webcast portal, if you would like to ask a question, simply type it into the Ask a Question feature there on the webcast player. We have a few questions submitted already, so we'll begin. The first question here is, could you break down the medium-term targeted revenue split between your standardized platforms like commercial pools, marine, and DPF versus project-based water for energy and water for industry platforms?

It's a very good question. We have A very clear strategy, we would like to have a stable basis of revenue from repeatable recurring business such as DPF and now also commercial aquatics and also marine business. Give us a strong baseline for the revenue and then on top of that, we got projects from water for industry and water for energy. And for the medium term, I guess that's for 2027. That's why we had to look ahead. And we can see definitely the stable platforms from the DPS and marine and commercial aquatic is contributing very strongly there. So in this way, we have much more visibility for our revenue prediction in the medium term.

And as a follow on to that, the question is, how do you expect the margins to shift due to the change in business mix?

We definitely expect improvements, both through the shift in segments and also through much better capacity utilization. What we see is that with marine and aquatics, we definitely get a more standardized system to deliver, which makes it much easier for us to optimize margin on each system that is delivered. So definitely a positive for profitability.

We have been working very much on standardizing our systems, both for the marine and commercial aquatics, and also we are also looking to the water for industry area. So the whole thinking is by standardizing our system, we will have much better chance to improve the margin continuously.

Our next question here is, what are the key factors for reaching the 30% to 40% growth in 2027?

We have seen we're building up a very good pipeline opportunity. So we have a base to be optimistic about our future. As I said several times in my speech, the most important is consistent, efficient execution. From the beginning, the sales process to the delivery and service installation, the whole process We have to turn old opportunity into actual revenue, and that requires execution discipline. That's really the key fact.

And as a follow-on to that, are you able to discuss what the current backlog and sales pipeline size is?

We don't expose our backlog sizes.

You can say that the fourth quarter is covered by a substantial amount compared to the guidance, but not for 2027. We are building up, but we don't disclose the numbers.

Again, as a reminder, everyone on the webcast, if you'd like to ask a question, please type it into the webcast player there in the Ask a Question feature. The next question here is, what sort of operating leverage will the company see with sales approaching $8 to $10 million for quarter four?

So definitely a strong operating leverage. I think that's what we have said. You can say we see EBITDA break even at those levels. Could be happening in Q4, but depending on the final mix of the customers. But that level is what we are indicating to say here we are. We are in the area where we see EBITDA break even.

Very good. Another question here on the pipeline, if there's a way that you can talk about the quality of the sales pipeline currently.

This is something we're continuously working on improvement, the quality of our pipeline. So, give you a concrete example, when we're looking into 2027 prediction, we have really going very analytically looking to our pipeline analysis each of the opportunities and really to be kind of selective and critical and to evaluate them and in this way we got much better David Nørby Foss Kowalczyk, Fei Chen David Nørby Foss Kowalczyk, Fei Chen

Our next question here is, has there been any change in the sales cycle time to closing contracts?

There's been change in the commercial products, for example, because we have much better pipeline now, so we're able to combine the retrofit project with the new build project. Because new build project, it normally take one to one and a half years sales cycle. And retrofit is much faster. So in this way, we able to combine these two things to shorten the sales cycle of our project. And we also working very much on the marine areas. We try to standardize and also repeating to the same customer again and again in this way. We also working on to shorten the cycle. And the DPF area, you see we have really got very good orders. We have been very disciplined going to see who are our key customers. And those ones got extra attention. So we've got a faster in the order coming in from our key customers. And that also really suits very strongly. We also reduced our sales cycle in this way. So we're putting out our priorities. I would like to thank you all very much for joining us today. and for your continued interest in Leetech. We look very much forward to updating you on our fourth quarter and the full year results in 2027. Thank you very much.

Thank you. The conference has now concluded and we thank you for attending today's presentation. You may now disconnect your lines and have a wonderful day.