릭텍(LIQT) 2026 회계연도 2분기 실적 발표 컨퍼런스 콜: 가이던스 하향

릭텍 인터내셔널(LiqTech International, LIQT)은 상업용 수영장 및 해양 부문의 성장에도 불구하고 에너지용 수처리 활동 둔화와 생산 제약으로 인해 2026 회계연도 2분기 매출 및 수익성이 감소했다고 발표했습니다. 경영진은 주요 에너지용 수처리 프로젝트가 연기됨에 따라 연간 매출 전망을 수정했습니다.

핵심 요약

• 2026 회계연도 2분기 매출은 전년 동기 대비 12% 감소한 440만 달러를 기록했으며, 매출총이익률은 9.8%에서 8.4%로 하락했습니다.
• 순손실은 220만 달러에서 310만 달러로 확대되었습니다. 조정 EBITDA는 전년 동기의 마이너스 130만 달러에서 마이너스 160만 달러를 기록했습니다.
• 상업용 수영장 매출은 2025 회계연도 2분기 및 2026 회계연도 1분기의 80만 달러에서 증가해 사상 최대인 150만 달러를 기록했습니다. 해양 부문 매출은 전년 동기의 40만 달러에서 70만 달러로 증가했습니다.
• 경영진은 주요 에너지용 수처리 고객사가 조직 개편 이후 내부 평가 및 승인 절차의 일부를 재개함에 따라 2026 회계연도 전체 매출 가이던스를 2,000만~2,300만 달러로 수정했습니다.
• 6월 공모를 통해 약 1,800만 달러의 순공모자금을 조달했습니다. 릭텍은 제한된 현금을 포함해 1,570만 달러의 현금성 자산으로 분기를 마감했으며, 잔여 선순위 약속어음 및 최초 발행 할인 어음을 상환했습니다.
• 릭텍은 미국 철강 제조업체로부터 4대의 산업용 폐수 여과 시스템에 대해 210만 달러 규모의 후속 주문을 수주했습니다. 주문 물량의 약 75%는 2026년 말까지 인도될 것으로 예상됩니다.

주요 재무 데이터

사업 및 영업 실적

상업용 수영장

상업용 수영장은 이번 분기 릭텍의 가장 강력한 사업 부문이었습니다. 매출은 전년 동기 및 전 분기의 80만 달러 대비 증가한 150만 달러로 사상 최대치를 기록했습니다.

회사는 호주의 플럼프턴 아쿠아틱 앤 레저 센터 프로젝트와 미국 와이오밍주 워랜드의 첫 상업용 수영장 프로젝트 조립을 완료했습니다. 네덜란드 덴헬더의 대형 시스템도 성공적으로 가동되고 있습니다. 경영진은 표준화된 모듈형 QlariFlow 플랫폼을 중심으로 유통 네트워크 관계를 지속적으로 확장하고 있습니다.

해양

해양 부문 매출은 전년 동기의 40만 달러에서 70만 달러로 증가했으나, 2026 회계연도 1분기의 80만 달러보다는 감소했습니다. 릭텍은 첫 두 대의 iCER 이중연료 수처리 장치에 대해 공장 수용 테스트 승인을 받았습니다.

경영진은 3분기에 추가 iCER 장치 1대와 해양 스크러버 수처리 시스템 2대를 인도할 것으로 예상하고 있습니다. 또한 중국에서 EGR 장착 선박용 수처리 시스템 4대를 수주했으며, 첫 인도는 12월로 예정되어 있습니다.

산업용 수처리

릭텍은 미국 철강 제조업체로부터 추가 폐수 여과 시스템 4대에 대해 210만 달러 규모의 후속 주문을 수주했습니다. 이번 주문은 고객사의 초기 시스템이 약 10개월간 안정적으로 가동된 이후 이루어졌습니다.

회사는 또한 텍사스주 프리포트 시설에 설치될 QureFlow QF-6 세라믹 분리막 여과 시스템을 신규 미국 고객사로부터 수주했습니다. 이 시스템은 산업 장비 세척에서 발생하는 폐수를 처리하여 사업장의 세척수 공급용으로 재활용하게 됩니다.

경영진은 고객의 니즈, 기술 적합성 및 단기 매출 가시성이 더 뛰어난 선별된 산업용 응용 분야에 더 많은 자원을 투입할 계획입니다.

에너지용 수처리

주요 고객사의 조직 개편으로 인해 중요한 에너지용 수처리 프로젝트에 새로운 의사결정권자들이 참여하게 되었습니다. 이에 따라 고객사의 평가 및 승인 절차 중 상당 부분이 재개되어야 했습니다.

경영진은 프로젝트가 여전히 진행 중이며 고객사와의 관계가 유지되고 있고 기술적 결과 역시 여전히 우수하다고 밝혔습니다. 그러나 승인 지연과 주요 장비의 납기 시간으로 인해 2026년 전망에 반영된 관련 매출 금액이 줄어들었습니다. 릭텍은 이 시장을 더욱 선별적으로, 그리고 전략적 상업 파트너십을 통해 적극적으로 공략할 계획입니다.

DPF, 분리막 및 플라스틱

DPF 및 분리막 매출은 전년 동기 및 2026 회계연도 1분기의 130만 달러에서 약 100만 달러로 감소했습니다. 경영진은 핵심 원자재 수급 제약으로 인한 일시적인 생산 지연을 주요 원인으로 꼽았습니다.

플라스틱 매출은 2025 회계연도 2분기의 120만 달러, 전 분기의 약 100만 달러에 비해 감소한 약 90만 달러를 기록했습니다. 고객 구매 둔화와 원자재 시장의 불확실성이 사업에 부담으로 작용했습니다.

경영진 가이던스

릭텍은 2026 회계연도 전체 매출 가이던스를 2,000만~2,300만 달러로 수정했습니다. 이러한 조정은 주로 2026년 중 기여할 것으로 예상되었던 에너지용 수처리 사업 일정의 지연을 반영한 것입니다.

이 전망은 상업용 수영장 및 해양 부문의 지속적인 견조함, 선별된 산업용 수처리 기회, 그리고 DPF, 분리막 및 플라스틱의 지속적인 기여를 전제로 합니다. 신규 210만 달러 철강 주문의 약 75%는 연말까지 인도될 예정입니다.

경영진은 대형 시스템 주문 시점을 주요 변수로 꼽았습니다. 수정된 매출 반영 일정으로 인해 영업 레버리지 효과도 지연될 것으로 예상됩니다. 릭텍이 밝힌 우선 과제는 매출총이익률 개선, 엄격한 지출 관리, 운전자본 관리 및 가능한 한 빠른 수익성 달성입니다.

리스크 및 관전 포인트

• 에너지용 수처리 판매 주기는 테스트, 기술 검증, 고객 승인 및 자본 예산 수립이 필요하여 프로젝트 시점을 예측하기 어렵습니다.
• 고객사의 조직 개편 및 장기간의 승인 절차로 인해 주요 시스템 매출 발생 시점이 다른 회계 기간으로 이월될 수 있습니다.
• 매출이 고정 생산비용을 완전히 흡수하는 데 필요한 수준에 미치지 못해 매출총이익률 실적이 제한되고 있습니다.
• 이번 분기 중 핵심 원자재 제약으로 인해 DPF 및 분리막 생산에 차질이 생겼습니다.
• 릭텍 비용 기반의 상당 부분이 덴마크 크로네와 유로화로 표시되어 있어 환율 변동으로 인해 공시 영업비용이 증가했습니다.
• 플라스틱 수요는 고객의 구매 결정 지연과 원자재 가격 관련 불확실성의 영향을 받았습니다.

질의응답 하이라이트

경영진은 단기 수익성 개선 추진 과제로 해양, 상업용 수영장, 산업용 수처리 전반의 제품 표준화, 조달 개선, 중국 합작투자를 통한 일부 부품 조달, 재고 최적화, 생산 효율성 및 품질 관리 향상을 꼽았습니다.

QureFlow와 관련해 경영진은 릭텍의 탄화규소 분리막에 적용된 특허 코팅 기술과 시스템의 연속 십자류 여과 방식을 강조했습니다. 철강 고객사는 첫 시스템을 10개월간 가동한 후 추가로 4대를 주문했습니다.

상업용 수영장 사업과 관련해 경영진은 판매량 증가와 시스템 대형화 모두에서 성장이 이루어지고 있다고 밝혔습니다. 미국의 첫 수영장 시스템은 2026 회계연도 3분기 말까지 설치될 예정입니다.

해양 사업의 경우 릭텍은 중국 내 위탁 조립 파트너십을 통해 유연한 생산 능력을 확보할 것으로 기대하고 있습니다. 회사는 수주 증가에 따른 신속한 생산을 지원하기 위해 iCER, EGR 및 스크러버 시스템 표준화에 집중하고 있습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning, and welcome to the LiqTech International Reports Second Quarter Fiscal Year 2026 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

Robert Blum

Great. Thank you very much, [ Chloe ]. Good morning, everyone, and thank you for joining us on today's call to discuss LiqTech's second quarter 2026 financial results. 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. As the operator mentioned, before I turn the call over to management, I'll remind everyone that there will be a Q&A session at the end of the call today. [Operator Instructions].

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 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. Now I'd like to turn the call over to Fei Chen, CEO of LiqTech International. Fei, please proceed.

Fei Chen

Thank you, Robert, and good day to everyone on the call. Before discussing the quarter, I want to acknowledge an important development for LiqTech and our shareholder base. In June, we completed an underwritten public offering that generated approximately $18 million in net proceeds. The offering brought a number of new shareholders into LiqTech. And I want to thank those investors along with our existing shareholders for the confidence you have placed in our company and our technology.

We recognize the rising equity capital comes with significant responsibility to our shareholders. We expect to be judged by how effectively we deploy that capital, how consistently we execute and ultimately, whether we can translate our technology and market opportunities into sustainable financial performance. A portion of the proceeds was used to repay our outstanding senior promissory notes and original issue discount notes, significantly strengthening our balance sheet. The remaining capital provides us with the working capital and financial flexibility to execute our growth priorities.

Importantly, having a stronger balance sheet does not change the need for financial discipline. We remain focused on careful capital allocation, disciplined spending and converting our commercial opportunities into revenue and improved profitability. Our priority now is execution and demonstrating measurable progress in our financial results. For shareholders who are newer to LiqTech, I would like to provide just a very brief high-level review of the strategy we have been implementing over the past several years.

Our objective is to build a more balanced, repeatable and profitable company around applications where our silicon carbide membrane technology provides a clear performance advantage and where customer adoption can scale. To begin with, commercial pool has become a much more important part of that strategy. We have invested in a standardized and modular QlariFlow platform, expanded our distribution network and built references across multiple geographies.

Next, Marine has also reengaged through our joint venture in China, which gives us local sales, sourcing, assembly, development and service capabilities in a market where local execution is essential. Our DPF and membrane business and our plastics business provide a steady base of activity and important manufacturing capabilities. The largest variable in our outlook remains Water for Energy and Water for Industry. These markets represent meaningful revenue opportunities for LiqTech, but sales cycles are typically longer and more complex.

Projects often require pilot testing, technical validation, customer approvals, capital budgeting and multiple layers of internal decision-making. As a result, project timing can be difficult to predict and is often influenced by customer processes that are outside our direct control. This means Water for Energy and Water for Industry can be significant drivers of our future growth, but it can also create variability in our quarterly and annual revenue. Our focus is, therefore, on building a broader pipeline, advancing multiple opportunities in parallel and converting more of these projects into firm orders.

Over time, we believe this should make the business less dependent on the timing of any single large project. Based on what we have learned from the market, we have refined our go-to-market approach for both Water for Energy and Water for Industry. In Water for Energy, going forward, we will focus on building strategic commercial partnerships that help us accelerate market penetration and convert our technology capabilities into commercial opportunities. In Water for Industry, we will take a more targeted approach, focusing our resources on selected applications where we see clear customer needs and a strong technology fit.

The steel industry is a good example, where our recent follow-on order demonstrates the potential to move from initial installation to broader multisystem deployments. Our objective is to build a more visible, repeatable and scalable opportunity pipeline while maintaining disciplined resource allocation. The second quarter illustrates both sides of our strategy. Commercial pool achieved record revenue and the Marine continues to execute against its order book.

Since quarter end, the U.S. industry wastewater reuse order and the $2.3 (sic) [ 2.1 ] million follow-on order from a U.S.-based steel manufacturer have further reinforced the progress we are making in selected Water for Industry applications. At the same time, delay in a larger Water for Energy project has reduced our revenue visibility for the remainder of 2026. As a result, we are revising our full year revenue guidance to a range of $20 million to $23 million. Importantly, even at the revised guidance range, we expect to deliver meaningful year-over-year revenue growth, reflecting the underlying process across our business. We are disappointed by this delay, particularly because we had expected this project to contribute revenue this year, but our response is not weak. We are putting greater emphasis and resources behind the markets where we see more repeatable demand, shorter sales cycles and a better revenue visibility.

At the same time, we will continue to pursue significant opportunities in Water of Energy, but in a more selective and increasingly partnership-driven manner. This is not a sudden change in direction. Rather, it's a continuation and acceleration of the strategy shift we have discussed it over the past several quarters, informed by what we have learned from the market. We now have a stronger balance sheet, growing commercial platform and significant market opportunities. But ultimately, we need to demonstrate that these strengths translate into improved financial performance. Our priorities are clear: execute on the opportunities in front of us, maintain financial discipline, improve profitability and build a more predictable and sustainable business. And let me be clear, achieving profitability as quickly as possible remains one of our highest priorities.

Let us talk about each area in more detail. Commercial Pool was the strongest area of business in the second quarter. Revenue reached a record $1.5 million compared with $0.8 million in both the second quarter of '25 and the first quarter of '26. The performance reflects the work we have done to standardize the QlariFlow platform, strengthen our distribution partnerships and establish a broader base of reference installations. During the quarter, we completed assembly of the systems for the Plumpton Aquatic and Leisure Centre project in Australia and our first U.S. commercial pool project in Worland, Wyoming.

The large pool system in Den Helder, Netherlands, which we announced in April is now operating successfully. These projects demonstrate that QlariFlow can serve different facility sizes, project designs and geographics. We are maintaining the advantage of a modular platform. We continue to have our focus in establishing new distribution relationships in the prioritized geographic regions. Expanding the partner network is an important part of the pool strategy because local partners are critical for identifying projects earlier, supporting system design and installation and providing the customer relationships needed to scale efficiently. Pools are attractive to LiqTech because the systems can be more standardized than our many large industry projects. The value proposition is straightforward and each successful installation can help create additional opportunities in the surrounding market and add aftermarket service business.

Transitioning to Marine. Marine revenue totaled $0.7 million in the second quarter compared with $0.4 million in the second quarter of '25 and $0.8 million in the first quarter of '26. During the quarter, we received factory acceptance test approval for the first 2 iCER dual-fuel water treatment units. This represents an important execution milestone and reflects the significant progress made by our team and our joint venture in China. We expect to deliver 1 additional iCER dual-fuel water treatment unit and 2 marine scrubber water treatment systems in the third quarter. We also secured a commercial order of 4 water treatment systems for EGR-equipped vessels in China with the first system currently expected to be delivered in December.

The China joint venture has allowed us to reestablish a stronger position in Marine by combining LiqTech's membrane technology with localized engineering, sourcing, assembly and service. We continue to manufacture our co-silicon carbon membranes in Denmark. We're using the joint venture to improve competitiveness and responsiveness in the Chinese shipbuilding market. The growing mix of iCER, EGR scrubber systems and related aftermarket opportunities gives us confidence that Marine can become a more consistent contributor over time.

Turning to Water for Energy. The most significant change occurred recently. A major customer went through an organizational change that affected the decision-making process for an important Water for Energy project that we had expected to contribute revenue in 2026. New decision-makers became involved and significant part of the customers' internal evaluation and approval process effectively had to restart. As the impact of this delay become clear, we reassessed what we could realistically deliver and recognized as revenue during the remainder of 2026.

Given the slower customer decision-making process, combined with the lead time required for certain critical equipment, we concluded that it was no longer prudent to maintain our previous full year revenue guidance. I want to be clear that we are disappointed by this delay. Our team has invested significant time and resources in technical validation, field engagement and commercial development. Importantly, we have not seen any change in the underlying need for our technology and the technical results remain compelling. The project has not been terminated and remains an active opportunity. Our relationship with the customer remains intact, and we continue to engage closely with the new decision makers as they work through their internal evaluation and approval process.

Within Water for Industry, the near-term opportunity set is becoming increasingly tangible, particularly in steel and other industry wastewater applications. Yesterday, we announced a $2.1 million follow-on order from a U.S.-based steel manufacturer for 4 additional industry wastewater filtration systems with approximately 75% of the order currently expected to be delivered by the end of 2026. This order builds directly on the successful deployment of customers' initial system, which uses our silicon carbide membrane technology to treat challenging wastewater with high oil content and significant variability as part of the customers' broader water reclamation process.

What is particularly important to us is the progressing of this customer relationship. We started with one system, allowing the customer to validate our technology under real operating conditions. Based on successful performance of that system, the customer has now moved forward with 4 additional systems. This demonstrates the potential of our strategy proven the technology in a demanding application, established strong customer reference and then scale from initial installation to a broader deployment. This transition from initial installation to a larger multisystem deployment is exactly the type of development we want to see in Water for Industry. It demonstrates the potential to convert successful technology validation into repeat business and larger commercial opportunities.

This week, we also announced an order from a new U.S. customer for a QureFlow QF-6 ceramic membrane filtration system to be installed at its new facility in Freeport, Texas. The system will treat wastewater generated from industry equipment cleaning operation and recycle the treated water back into the facility's wash water supply. This is an important proof point for several reasons. It brings a new U.S. customer to LiqTech, demonstrates the applicability of our standardized QureFlow platform beyond traditional produced water treatment and addresses a challenging and highly variable wastewater stream where consistent remove of suspended solids and oil is critical.

Most importantly, it delivers a clear economic and environmental benefit to the customer by reducing both wastewater disposal volumes and freshwater consumption. Together with the new steel industry order, this industry wastewater order reinforces our belief that selected water for industry applications can develop into a more repeatable and scalable business. Our standardized system provide customers with clear economic and sustainability benefits. We are allowing us to deploy proven solutions across similar applications. This is why we are allocating greater resource towards selected industry segments where we see strong technology fit, increasing customer engagement and a better near-term revenue visibility.

Finally, our DPF and membrane business remain important foundational part of LiqTech. DPF and membrane revenue was approximately $1 million in the second quarter compared with $1.3 million in both the previous year quarter and the first quarter of '26. The decrease primarily reflected temporary production delays caused by constrained availability of critical raw material. Plastics revenue was $0.9 million compared to $1.2 million in the second quarter of '25 and approximately $1 million in the first quarter of '26. Customer purchasing decisions slowed during the quarter and availability of raw material prices and the broader market uncertainty where both DPF and plastics experienced some pressure during the quarter, they continue to provide an important base of recurring customer activity and continue to the balance of our overall business portfolio.

To summarize, the second quarter delivered record commercial pool revenue, continued execution in Marine and meaningful progress in industry wastewater. These achievements were offset by the delay in Water for Energy that has reduced our near-term revenue visibility and lead us to revise our 2026 revenue outlook. While we are disappointed by timing change, we remain optimistic about the direction of the business. We have a stronger balance sheet, a broader shareholder base, growing traction in markets where we can build standardized and repeatable solution and a greater clarity around where to allocate our resources. Our priority now is execution, converting these advantages into more predictable revenue growth, improved margins and ultimately, sustainable profitability. Let me now turn the call over to David to review the financial results in more detail. I will then make a few closing comments before we open the call for your questions. David?

David Kowalczyk

Yes. Thank you, Fei, and good day, everyone. I will walk through our second quarter financial results, the revised full year outlook and the impact on the June financing on our balance sheet. The revenue for the second quarter of 2026 was $4.4 million compared with $5 million in the second quarter of '25, representing a decrease of 12%. The quarter included strong year-over-year growth in Commercial Pools and Marine, offset by lower Water for Energy activity, temporary production constraints in DPF and membranes and softer customer purchasing in plastics.

Within Commercial Pool, revenue was a record $1.5 million compared with $0.8 million in the prior year quarter. Marine revenue was $0.7 million compared with $0.4 million last year. These increases demonstrate the progress in the strategic growth markets Fei just discussed. DPF and membrane revenue was approximately $1 million compared with $1.3 million in the second quarter of '25. Plastic revenue was approximately $0.9 million compared with $1.2 million in the prior year quarter. As Fei noted, the DPF and membrane comparison was affected by raw material availability, while plastics reflected slower customer purchasing decisions in a volatile raw material environment. Gross profit for the second quarter was $0.4 million, representing a gross margin of 8.4%. This compares with a gross profit of $0.5 million and a gross margin of 9.8% in the second quarter of '25.

The year-over-year decline primarily reflected product mix, including a lower contribution from higher-value system activity as well as a lower utilization of manufacturing capacity, while we continue to manage costs carefully. These factors were particularly offset by procurement benefits and lower depreciation expenses. As we have discussed in prior calls, our current revenue level remains below the point where fixed production costs are fully absorbed. Improving gross margins level depends on both revenue scale and mix. Standardized Commercial Pool, Marine and selected industrial systems are important to that effort because they provide opportunities to reuse engineering, improve procurement, simplify manufacturing and create better operating leverage as volume increases.

Total operating expenses for the second quarter were $2.7 million compared with $2.6 million in the second quarter of '25, an increase of 4%. Approximately 60% of the increase was related to foreign exchange rate movements, given that a significant portion of our cost base is denominated in Danish crowns and euros. Selling expenses were $0.8 million compared with $0.8 million in the prior year quarter. Excluding currency effects, the increase primarily reflected the annualized impact of hires within the Chinese joint venture, continued investments in sales coverage in the U.S. and Europe and annualized cost for the U.S. service center.

General and administrative expenses were $1.6 million compared with $1.5 million in the second quarter of '25. Adjusting for currency movements, G&A remained stable and below general inflation as the cost of filling open positions were offset by savings in other overhead areas. Research and development expenses were $0.3 million compared with $0.2 million in the prior year quarter. The increase primarily related to membrane development and development work for Marine and Commercial Pool systems.

We continue to manage operating expenses with discipline while directing investments towards the areas that support commercial growth and more repeatable system platforms. Other expenses for the second quarter were $0.7 million compared with approximately $0.1 million in the comparable period of '25. The increase was primarily attributable to amortization of debt discount accrued and paid interest on the senior promissory notes and losses on foreign currency translation.

Net loss for the second quarter of '26 was $3.1 million compared with a net loss of $2.2 million in the second quarter of '25. Adjusted EBITDA was a negative $1.6 million compared with a negative $1.3 million in the prior year quarter, slight decline was due to the lower revenue and gross profit and currency-driven increase on operating expenses. Turning to our outlook. We are revising our expectations for the full year of 2026, adjust to a range of $20 million to $23 million. The revision primarily reflects the movement of Water for Energy projects that were previously expected to contribute in '26, but are now anticipated to be completed beyond the current fiscal year.

The range continues to contemplate strong performance from Commercial Pool and Marine, selected Water for Industry opportunities, including the new U.S. steel manufacturing follow-on order and ongoing contributions from DPF membranes and plastics. Approximately 75% of the $2.1 million order is expected to be delivered by the end of '26. The principal variable remains the timing of larger system orders. We have reduced the amount of Water for Energy revenue assumed in the outlook, but we have not removed this opportunity from our commercial pipeline. The revised revenue cadence will affect the timing of operating leverage.

Our priorities remain gross margin improvement, disciplined operating spending and careful working capital management. We will continue to align investment with the markets where we see the strongest visibility and the best opportunity to create repeatable, profitable growth. Turning to the balance sheet. We ended the second quarter with cash on hand, including restricted cash of $15.7 million as of June 30. This compares with $2.7 million at the end of the first quarter. The change primarily reflects the June public offering. The offering closed on June 8 and generated approximately $18 million in net proceeds. In connection with the transaction, we eliminated the remaining senior promissory notes and original issued discount notes.

As a result, LiqTech ended the quarter with a substantially stronger liquidity position and greater financial flexibility. We intend to use that flexibility carefully. The capital is not a substitute for operating execution. It gives us the ability to support working capital, pursue business development in target markets and make focused investments that can help accelerate growth. We will evaluate those investments against clear commercial milestones and continue to manage cash with discipline. And with that, let me now turn the call back to Fei.

Fei Chen

Thank you, David. Before we open the call for questions, I want to return to the message I shared at the beginning. LiqTech is building around a differentiated silicon carbon filtration platform that can solve difficult water and emission challenges across multiple markets. The opportunity is significant, and our responsibility is to translate the opportunity into a business that is more predictable, scalable and profitable. The second quarter demonstrates clear progress in Commercial Pool and Marine.

Since quarter end, the new U.S. industry wastewater treatment order and $2.1 million follow-on order from a U.S.-based steel manufacturer have provided further commercial validation of our technology and strengthen our confidence in the opportunity within selected industrial wastewater applications. At the same time, the quarter reinforced the need to remain disciplined in Water for Energy where customer-controlled project timing can create meaningful revenue volatility. We are responding by allocating greater resource towards markets where we have better visibility and a clear path to scale. We are pursuing water for energy opportunities more selectively and increasingly through strategic partnerships.

Across the business, we are focused on building repeatable system platforms, expanding our market reach through partnerships and remaining disciplined use of financial flexibility created by the June offering. We appreciate the support of both our long-standing and the new shareholders. We recognize the responsibility that comes with that support, and we are committed to earning it through disciplined execution, more predictable growth and improved financial performance. With that, Robert, we would be happy to take any questions.

Robert Blum

Great. Thank you very much, Fei and David, for the prepared remarks. [Operator Instructions] First here, would you speak to where process improvements driving profitability may be realized in the near term. Examples may be sales, assembly, water system engineering or another area for LiqTech.

Fei Chen

Very good question. We actually have been working intensively in the past 1 and 2 years really to make the cost reduction for our processes in order to speed up the profitability. I can mention, first of all, we are doing the standardized product across all the applications, as we mentioned, the marine area, the commercial pool area and also the water for industry area, we are now having our product standardized and that reduce the cost and also provide the scales of economy when the sales goes up.

And we're also working much more close to our procurement process purchasing for the raw materials and the components, we really improve on that, and that will provide us the cost reduction. And we're also using our joint venture in China to see if there's any other component and materials in China can be much more cheaper and attractive for us than we're normally purchasing in Europe. So those are very much things we're doing. We're also working very much on the inventory optimization. We're also working on the production efficiency and the quality control, all this contributing to the improvement of our costs.

And from the sales perspective, we're also working very much on using our sales pipeline and CRM system really to control where we're going to use the sales resource and where we're really going to invest in the technology and also the whole process to get the commercial results and because that also brings a lot of cost to us. So we also -- so overall from the beginning to the end, we are looking at each of steps to really make the cost reduction. We're still a long way to go because they continuously have the possibility to improve, but we are very much aware to do that.

Robert Blum

All right. Very good. Thank you. Next question here. Could you talk about the competitive advantages that the QureFlow system has versus the other systems on the market? And how long did the steel customer have your unit operational before they chose to add 4 more units?

Fei Chen

Our crossflow system is based on our silicon carbon membrane. And this is very unique because our membrane has the patented coating, makes it very suitable for the waters with very, very dirty content, high oil content and high suspended particles and also different impurity in the water. And that's actually exactly the reason why our system is really function well in the steel manufacturing industry. On top of our membrane, our system, because we call crossflow, is really a continued operation system, and we're able to have the water recycled continuously in the system, and that makes the system continuously safe cleaning and really reduce the risk for being blocking by the impurity in the water.

And the company used our system for the steel manufacturing waters, have been running our system for 10 months. And it has been very stable, and they were so amazed because before they're using polymer membranes and those membranes very easily got blocked and they have to be changed very often. That really brings a lot of OpEx for them, the costing. And also very often, they have to stop the treatment and replace and that really also caused the break in their production process. So our system can run continuously and for all the 10-month period and without any troubles, and we are very stable and keep the promise we have given to them. And that's actually the basis why they have decided to extend another 4 systems because they're really happy for the performance of our system.

Robert Blum

Okay. Very good. The next question here is, are you seeing a larger number of pool system sales? Or are you seeing larger sales per system, sort of the size of the system versus the quantity of the systems?

Fei Chen

We see both. I mean we -- right now, majority of our sales still is in Europe, especially in North Europe. And -- but we're now coming to U.S. with a strong partner. And also, as you hear, we actually already finished the first pool system. It's going to be installed in U.S. in the quarter 3 -- by the end of quarter 3. So if we continue coming to the U.S., we will continue to come to U.S. In U.S., the systems are bigger. they are much bigger than Europe.

And as you also hear, we actually got a very big system in Australia and also in Holland. So we're working on both the bigger system and also the volume. But of course, we would rather go to the bigger system because you got the revenue faster and much more efficient sales, and we're seeing both.

Robert Blum

Okay. Very good. Next question here is how many iCER water treatment units do you forecast could be sold in an average year? And how many annual units do you have capacity for?

Fei Chen

That's a very good question. I mean the market is quite big, not only iCER, it's iCER combined with EGR because iCER is about 30% of market and EGR is 70% of market. So these 2 technology, they kind of parallel and share the market. And we are very happy. We already got EGR sales order, and we're going to deliver by end of this year. So we are also going to the EGR market. So right now, according to the Internet data, there's 600 boats and vessels to be delivered from now to 2028, '29 and the combination of iCER and EGR. So our goal definitely -- we would like to get a substantial amount of those vessels and really to get our installations.

So we are working in China to the assembly part. And what we're doing is we find some very good partners in China do the assembly for us. So in this way, our assembly capacity to be quite flexible. So we're able to increase quite fast in this way. So we don't see that as really a challenge. So what we now really focus on is to finalize the standardize of our system for the marine application, both for iCER, EGR and also for scrubber. So in this way, we're really able to speed up very fast when the sales coming. And we see a very good cadence, both for the sales and also delivery in this area.

Robert Blum

Very good. I am showing no further questions here. So with that, Fei, I will turn it back over to you for any closing remarks.

Fei Chen

Thank you, Robert. Thank you all very much for joining us today and for your continued interest in LiqTech. We look forward to updating you again next quarter.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.