REG - MyCelx Tech. Corp. MyCelx Tech. Cp-MYXR - Half Year Results Statement
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RNS Number : 5965Z MyCelx Technologies Corporation 17 September 2025
17 September 2025
MYCELX TECHNOLOGIES CORPORATION (AIM: MYX)
Half Year Results Statement
MYCELX Technologies Corporation ("MYCELX" or the "Company"), the clean water
and clean air technology company transforming the environmental impact of
industry, announces its unaudited interim results for the six months ended 30
June 2025.
Highlights
Financial
• Revenue of $1.7 million (2024 H1: $3.5 million). The decrease in 2025 is due
to the sale of Saudi Arabia branch assets in 2024.
• Gross profit of $0.7 million (2024 H1: $1 million) and a gross margin of 41%
(2024 H1: 28%), reflecting the H1 2025 revenues relating primarily to
recurring media sales, paid trials and a small equipment sale which were
higher margin than the Saudi Arabian revenue in H1 2024.
• EBITDA(1) of negative $1.8 million (2024 H1: negative $1.1 million). After
excluding the gain on the sale of the KSA branch assets, EBITDA would have
been negative $1.9 million in both H1 2025 and H1 2024.
• Loss before tax of $1.9 million (2024 H1: loss $1.3 million).
• Cash and cash equivalents $0.7 million (2024 H1: $2.1 million), with a further
$600,000 of payments received in early July 2025. The Company's $500,000 line
of credit remains undrawn.
Operational
PFAS
• Awarded a rental contract for a mobile PFAS treatment system to treat
groundwater contamination at a site in North Dakota for the U.S. Department of
Defense.
• Commenced participation in a multiple technology pilot trial treating PFAS
contamination at a municipal wastewater treatment facility.
• Continued landfill leachate trial with pre-treatment system installed for PFAS
remediation.
PRODUCED WATER
• Successfully completed an onshore trial in the U.S. Permian Basin with a large
oil producer which included both the MYCELX coalescer and REGEN equipment.
• Commenced offshore equipment lease in the Gulf of America with global
integrated oil producer managing overboard excursions.
Post Period Update
• Completed Factory Acceptance Testing of REGEN equipment for customer in
Nigeria and recognized revenue of $5.5 million, which also triggers invoicing
of the last two milestone payments representing in aggregate $1.1 million.
• Opened a $500,000 line of credit ('LOC') which will increase funds available
for sales and marketing, trial equipment, and bridging project accounts
receivable as the Company expands and accelerates its reach to meet the
growing demand for its technology in PFAS remediation and Produced Water
treatment. To date, the LOC remains undrawn.
Outlook
Looking ahead to the second half of 2025, MYCELX is poised for a step-change
in growth. Revenue is expected to materially increase, fueled by delivery of
major contracted projects - including the Nigeria REGEN system and the Middle
East EOR project - together with accelerating recurring media sales, PFAS
project revenue, and additional equipment sales. With approximately $11
million of revenue already secured through contracted or recurring sales, the
Company has good visibility in meeting the lower end of its guidance.
Operational momentum is also building. The successful Permian Basin trial has
become a powerful catalyst for broader engagement with U.S. onshore producers.
The volumes of water to be treated during production have become a critical
challenge for producers. Production reliability and breakeven cost economics
are being driven by water treatment costs, and this reality has created
multiple opportunities for MYCELX. The Company is advancing discussions and
Request for Quotations ('RFQs') with two major producers and one midstream
water services provider, positioning its technology as the next-generation
solution to achieve cost effective recycle and beneficial reuse in large-scale
produced water treatment. Near to mid-term opportunities are under active
development not only in the Permian Basin but also across international
markets, such as the Middle East and Nigeria, underscoring the global
relevance of the Company's advanced solutions.
In the PFAS sector, the launch of the U.S. Department of Defense rental
contract and the continuation of a landfill leachate trial provide strong
third-party validation of MYCELX's differentiated capabilities in two of the
largest and fastest-growing remediation verticals. These projects have the
potential to unlock follow-on opportunities across multiple defense
installations and landfill operators, further broadening the Company's
potential recurring revenue base.
The technology and solutions are gaining traction with large end users. As is
often the case with large capital sales, timelines to contract and delivery
can be difficult to predict. While the Company is actively engaged in bids for
multiple large projects, we remain cautious about providing timeline
expectations. MYCELX has a proven track record of execution, an expanding
opportunity pipeline, and reinforced support from industry-leading advisors.
MYCELX is well positioned to deliver on these opportunities and expand market
adoption with long-term value creation in the second half of 2025 and beyond.
(1)See Financial Review for definition of EBITDA.
Commenting on these results, Connie Mixon, CEO, said:
"In the first half of 2025, MYCELX laid the foundation for transformative
growth. We are actively engaged with leading oil producers and midstream
operators pursuing field upgrades and expansions - some of which we expect
will specify MYCELX solutions. With ongoing PFAS trials and a Department of
Defense ('DoD') project in hand, contracted projects in Nigeria and the Middle
East set for delivery, and recurring revenue streams, we remain on track to
achieve the lower end of our full-year guidance. Importantly, the Company is
gaining notable traction with high profile customers in its core markets with
active project bidding. While timelines are difficult to pin down, we believe
there is significant momentum for our technology driven by operational and
cost hurdles faced by end users that MYCELX can uniquely and effectively
address."
For further information, please contact:
MYCELX Technologies Corporation
Connie Mixon, CEO Tel: +1 888 306 6843
Kim Slayton, CFO
Cavendish Capital Markets Limited (Nomad and Sole Broker)
Giles Balleny / Callum Davidson (Corporate Finance) Tel: +44 20 7220 0500
Jamie Anderson (Corporate Broking)
Jasper Berry / Michael Johnson (Sales)
Celicourt Communications (Financial PR)
Mark Antelme Tel: +44 20 7770 6424
Jimmy Lea
Charlie Denley-Myerson
Chairman's and Chief Executive Officer's Statement
MYCELX publishes its H1 2025 results today, alongside a wider business update
on the corporate activity worked on year to date.
Operational Review
During the first half of 2025, MYCELX advanced its strategy across both the
PFAS remediation and Produced Water markets, delivering meaningful operational
milestones and positioning the Company for a stronger second half of the year.
In PFAS, the Company was awarded a contract with the U.S. Department of
Defense in May 2025 to provide a mobile treatment system addressing Aqueous
film-forming foam ('AFFF') contamination. The unit was delivered in early July
2025 and is currently in operation, with the scope of work expanded beyond the
original award due to additional treatment volumes. In parallel, a
pre-treatment system was commissioned to restart a landfill leachate trial in
July 2025. The successful execution of this project could open opportunities
across other similarly operated landfills where PFAS contamination remains a
pressing issue.
In Produced Water, MYCELX successfully completed an onshore trial in the
Permian Basin with a major oil producer. The trial, which utilized both the
Company's coalescer and REGEN equipment, delivered higher-quality recycled
water and improved oil recover volumes, demonstrating material economic
benefits that could equate to millions of dollars in incremental annual
revenue for the producer. This outcome represents a key validation of MYCELX's
technology as a next-generation solution for large-scale produced water
management in the Permian Basin, one of the most water-intensive production
regions globally. In addition, MYCELX remains on track to deliver its second
enhanced oil recovery project in the Middle East in the fourth quarter of
2025.
To further strengthen its position in U.S. onshore markets, the Company
engaged Jim Summers as an Advisor in March 2025. Mr. Summers, a highly
regarded industry veteran, brings deep expertise in water infrastructure and
Permian Basin operations. His experience and industry network are expected to
play a role in expanding MYCELX's produced water treatment business in the
U.S. and beyond.
Financial Review
MYCELX generated approximately $1.7 million in revenue in the first half of
2025, a decrease of 51% from $3.5 million in the first half of 2024. The
decrease was due to the sale of the KSA branch assets in early 2024. Revenue
from equipment sales and leases was unchanged at $0.4 million in the first
half of 2025 (2024 H1: $0.4 million). Revenue from consumable filtration media
and service decreased 58% to $1.3 million (2024 H1: $3.1 million). Revenue
recognition from the Nigeria project was delayed due to on-site timing,
shifting approximately $5.5 million of project revenue into the second half of
the year. As a result, the second half is expected to be substantially
stronger, driven by revenue from the Nigeria REGEN and Middle East EOR
projects, increased recurring media sales, PFAS project revenue, and another
equipment sale.
Gross profit decreased by 30% to $0.7 million in the first half of 2025,
compared to $1.0 million in the first half of 2024, but gross profit margin
increased to 41% in the first half of 2025 (2024 H1: 28%) due to a higher
portion of total revenue coming from higher margin media sales.
Total operating expenses for the first half of 2025, including depreciation
and amortisation, decreased by 10% to $2.8 million (2024 H1: $3.1 million).
The largest component of operating expenses was selling, general and
administrative expenses, which decreased by approximately 10% to $2.6 million
in the first half of 2025 (2024 H1: $2.9 million) due to the elimination of
overhead expenses associated with the branch office in Saudi Arabia.
Depreciation and amortisation within operating expenses increased by 2% to
$109,000 (2024 H1: $107,000).
EBITDA was negative $1.8 million for the first half of 2025, compared to
negative $1.1 million for the first half of 2024. EBITDA is a non-U.S. GAAP
measure that the Company uses to measure and monitor performance and liquidity
and is calculated as net profit before interest expense, provision for income
taxes, and depreciation and amortisation of fixed and intangible assets,
including depreciation of leased equipment which is included in cost of goods
sold, and includes gains on sale of fixed assets (which includes gains from
the sale of Saudi Arabia business operations - see Note 13). This non-U.S.
GAAP measure may not be directly comparable to other similarly titled measures
used by other companies and may have limited use as an analytical tool.
The Company recorded a loss before tax of $1.9 million for the first half of
2025, compared to a loss before tax of $1.3 million for the first half of
2024. Basic loss per share was 8 cents for the first half of 2025, compared to
basic loss per share of 6 cents for the first half of 2024.
As of 30 June 2025, total assets were $10.2 million with the largest assets
being inventory of $5.5 million, $1.3 million of accounts receivable, $0.9
million of property and equipment, and $0.7 million of cash and cash
equivalents including restricted cash.
Total liabilities as of 30 June 2025 were $6.8 million and stockholders'
equity was $3.4 million. Total liabilities include $4.3 million of deferred
revenue related to milestone payments on large projects expected to be
delivered in H2 2025.
The Company ended the period with $0.7 million of cash and cash equivalents,
including restricted cash, supplemented by $0.6 million in payments received
in early July 2025. The Company used approximately $0.6 million of cash in
operations in the first half of 2025, which matched the $0.6 million used in
operations in the first half of 2024. The Company used $0.01 million for
investing activities in the first half of 2025, compared to $2.2 million
generated in the first half of 2024 from proceeds from the sale of the Saudi
branch assets. There were no financing activities in the first half of 2025 or
2024. The Company continues to manage its working capital carefully to align
with growth ambitions.
Post the period end, the Company opened a line of credit ('LOC') which allows
the Company to access up to $0.5 million, as and when required. The proceeds
will enable MYCELX to increase funds available for sales and marketing, trial
equipment and bridging project accounts receivable as the Company expands and
accelerates its reach to meet the growing demand for its technology in PFAS
remediation and Produced Water treatment. The LOC has a floating rate based on
the Adjusted One Month Term of the Secured Overnight Financing Rate plus 1.5%
margin and is personally guaranteed by MYCELX's Chief Executive Officer. To
date, the LOC remains undrawn.
Outlook
MYCELX expects a significant increase in revenue in the second half of 2025,
driven by the delivery of contracted projects in Nigeria and the Middle East,
alongside growth in recurring media sales, PFAS revenue, and equipment sales.
The Company remains on track to achieve the lower end of its full-year revenue
expectations, with the majority of revenue already contracted or recurring in
nature. Operational momentum, highlighted by the successful Permian Basin
trial and commencement of PFAS projects, positions MYCELX to expand its market
presence in both Produced Water and PFAS remediation. Supported by careful
cash management and the flexibility to pursue financing options for capital
equipment opportunities, MYCELX remains well positioned to deliver growth in
the second half of 2025 and beyond.
Tom
Lamb
Connie Mixon
Chairman
Chief Executive Officer
17 September 2025
MYCELX TECHNOLOGIES CORPORATION
Statements of Operations
(USD, in thousands, except share data)
Six Months Six Months Year
Ended Ended Ended
30 June 30 June 31 December
2025 2024 2024
(unaudited) (unaudited)
Revenue 1,670 3,500 4,903
Cost of goods sold 974 2,514 3,559
Gross profit 696 986 1,344
Operating expenses:
Research and development 105 113 219
Selling, general and administrative 2,550 2,892 5,466
Depreciation and amortisation 109 107 212
Total operating expenses 2,764 3,112 5,897
Operating loss (2,068) (2,126) (4,553)
Other income (expense)
Gain on sale of property and equipment 159 838 1,928
Interest expense (5) (7) (13)
Loss before income taxes (1,914) (1,295) (2,638)
Provision for income taxes (1) (66) (85)
Net loss (1,915) (1,361) (2,723)
Loss per share-basic (0.08) (0.06) (0.12)
Loss per share-diluted (0.08) (0.06) (0.12)
Shares used to compute basic loss per share 24,363,814 22,983,023 23,429,416
Shares used to compute diluted loss per share 24,363,814 22,983,023 23,429,416
The accompanying notes are an integral part of the financial statements.
MYCELX TECHNOLOGIES CORPORATION
Balance Sheets
(USD, in thousands, except share data) As of As of As of
30 June 30 June 31 December
2025 2024 2024
(unaudited) (unaudited)
ASSETS
Current Assets
Cash and cash equivalents 643 2,073 1,260
Restricted cash 50 50 50
Accounts receivable - net 1,324 443 558
Unbilled accounts receivable - 99 1,206
Inventory 5,462 2,690 4,002
Prepaid expenses 113 155 35
Other assets 71 88 71
Total Current Assets 7,663 5,598 7,182
Property and equipment - net 869 1,083 955
Intangible assets - net 669 734 704
Operating lease asset - net 1,022 1,300 1,208
Total Assets 10,223 8,715 10,049
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 1,340 413 274
Payroll and accrued expenses 102 54 178
Contract liability 4,319 1,040 2,913
Customer deposits 16 53 164
Operating lease obligations - current 398 348 380
Total Current Liabilities 6,175 1,908 3,909
Operating lease obligations - long-term 673 997 877
Total Liabilities 6,848 2,905 4,786
Stockholders' Equity
Common stock, $0.025 par value, 100,000,000 shares authorised, 24,363,814
shares issued and outstanding 30 June 2025 and 31 December 2024 and 22,983,023
shares issued and outstanding at 30 June 2024
609 574 609
Additional paid-in capital 45,620 44,813 45,593
Accumulated deficit (42,854) (39,577) (40,939)
Total Stockholders' Equity 3,375 5,810 5,263
Total Liabilities and Stockholders' Equity 10,223 8,715 10,049
As of
As of
As of
30 June
30 June
31 December
2025
2024
2024
(unaudited)
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents
643
2,073
1,260
Restricted cash
50
50
50
Accounts receivable - net
1,324
443
558
Unbilled accounts receivable
-
99
1,206
Inventory
5,462
2,690
4,002
Prepaid expenses
113
155
35
Other assets
71
88
71
Total Current Assets
7,663
5,598
7,182
Property and equipment - net
869
1,083
955
Intangible assets - net
669
734
704
Operating lease asset - net
1,022
1,300
1,208
Total Assets
10,223
8,715
10,049
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
1,340
413
274
Payroll and accrued expenses
102
54
178
Contract liability
4,319
1,040
2,913
Customer deposits
16
53
164
Operating lease obligations - current
398
348
380
Total Current Liabilities
6,175
1,908
3,909
Operating lease obligations - long-term
673
997
877
Total Liabilities
6,848
2,905
4,786
Stockholders' Equity
Common stock, $0.025 par value, 100,000,000 shares authorised, 24,363,814
shares issued and outstanding 30 June 2025 and 31 December 2024 and 22,983,023
shares issued and outstanding at 30 June 2024
609
574
609
Additional paid-in capital
45,620
44,813
45,593
Accumulated deficit
(42,854)
(39,577)
(40,939)
Total Stockholders' Equity
3,375
5,810
5,263
Total Liabilities and Stockholders' Equity
10,223
8,715
10,049
The accompanying notes are an integral part of the financial statements.
MYCELX TECHNOLOGIES CORPORATION
Statements of Stockholders' Equity
(USD, in thousands)
Additional
Common Stock Paid-in Accumulated
Capital Deficit Total
Shares $ $ $ $
Balances at 31 December 2023 22,983,023 574 44,799 (38,216) 7,157
Stock-based compensation expense - - 14 - 14
Net loss for the period - - - (1,361) (1,361)
Balances at 30 June 2024 (unaudited) 22,983,023 574 44,813 (39,577) 5,810
Issuance of common stock, net of offering costs 1,380,791 35 757 - 792
Stock-based compensation expense - - 23 - 23
Net loss for the period - - - (1,362) (1,362)
Balances at 31 December 2024 24,363,814 609 45,593 (40,939) 5,263
Stock-based compensation expense - - 27 - 27
Net loss for the period - - - (1,915) (1,915)
Balances at 30 June 2025 (unaudited) 24,363,814 609 45,620 (42,854) 3,375
The accompanying notes are an integral part of the financial statements.
MYCELX TECHNOLOGIES CORPORATION
Statements of Cash Flows
(USD, in thousands)
Six Months Six Months Year
Ended Ended Ended
30 June 30 June 31 December
2025 2024 2024
(unaudited) (unaudited)
Cash flows from operating activities
Net loss (1,915) (1,361) (2,723)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortisation 156 235 398
Gain on sale of property and equipment (159) (838) (1,928)
Inventory reserve adjustment - (101) (525)
Stock compensation 27 14 37
Change in operating assets and liabilities:
Accounts receivable - net (607) 1,369 1,254
Unbilled accounts receivable 1,206 156 139
Inventory (1,485) 727 (163)
Prepaid expenses (78) (32) 88
Prepaid operating leases - - 5
Other assets - 65 82
Accounts payable 1,066 (1,128) (1,267)
Payroll and accrued expenses (76) (739) (615)
Contract liability 1,406 1,040 2,913
Customer deposits (148) 43 154
Net cash used in operating activities (607) (550) (2,151)
Cash flows from investing activities
Proceeds from sale of property and equipment - 2,281 2,281
Payments for purchases of property and equipment (10) (32) (32)
Payments for internally developed patents - (9) (13)
Net cash (used in) provided by investing activities (10) 2,240 2,236
Cash flows from financing activities
Net proceeds from stock issuance - - 792
Net cash provided by financing activities - - 792
Net (decrease) increase in cash, cash equivalents and restricted cash (617) 877
1,690
Cash, cash equivalents and restricted cash, beginning of period 1,310 433
433
Cash, cash equivalents and restricted cash, end of period 693 1,310
2,123
Supplemental disclosures of cash flow information:
Cash payments for interest 5 7 13
Cash payments for income taxes 1 133 156
Non-cash movements of inventory and fixed assets 25 - 103
Non-cash operating ROU assets 1,022 1,300 1,257
Non-cash operating lease obligations 1,071 1,345 1,257
The accompanying notes are an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Nature of business and basis of presentation
Basis of presentation - These interim financial statements have been prepared
using recognition and measurement principles of Generally Accepted Accounting
Principles in the United States of America ('U.S. GAAP').
The interim financial statements for the six months ended 30 June 2025 and
2024 have not been audited.
Nature of business - MYCELX Technologies Corporation ('MYCELX' or the 'Company') was incorporated in the State of Georgia on 24 March 1994. The Company is headquartered in Norcross, Georgia with operations in Houston, Texas and the United Kingdom. The Company provides clean water technology equipment and related services to the oil and gas, power, marine and heavy manufacturing sectors and the majority of its revenue is derived from the United States.
Liquidity - The Company believes that is has sufficient liquidity from
available cash balances, cash generated from ongoing operations, and general
ability to access the capital and debt markets to satisfy the operating
requirements of the business through the next twelve months. In February 2024,
the Company sold its Saudi Arabia branch assets for $7.125 million which
included payment of $3.125 million at closing and up to $4 million deferred on
a 24 month earn-out structure. Within the Statement of Cash Flows, of the
$3.125 million of proceeds from the sale, $2.281 million is reflected as
proceeds from sale of property and equipment, within cash flows from investing
activities, and $844,000 is included in net loss within cash flows from
operating activities. Additionally, the Company raised gross proceeds of $0.9
million before expenses in a Placing of Common Shares in September 2024. The
proceeds of these transactions will enable the Company to focus on
accelerating its marketing and sales plan for its unique technologies in the
PFAS remediation and Produced Water markets while also supporting other
working capital needs. The Company actively manages its financial risk by
operating Board-approved financial policies that are designed to ensure that
the Company maintains an adequate level of liquidity and effectively mitigates
financial risks.
On the basis of current financial projections, including a downside scenario
sensitivity analysis considering only revenues that are contracted or that the
Company considers probable and adjusting for direct cost of goods sold within
the analysis, the Company believes that it has adequate resources to continue
in operational existence for the foreseeable future of at least 12 months from
the date of the issuance of these interim financial statements and,
accordingly, consider it appropriate to adopt the going concern basis in
preparing these interim Financial Statements. Should the projected cash flow
not materialise under certain scenarios, alternative actions to increase
liquidity may need to be considered.
2. Summary of significant accounting policies
Use of estimates - The preparation of financial statements in conformity with
U.S. GAAP requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the amounts reported in
the financial statements and accompanying notes. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised. The
primary estimates and assumptions made by management relate to the inventory
valuation, accounts receivable valuation, useful lives of property and
equipment, volatility used in the valuation of the Company's share-based
compensation and the valuation allowance on deferred tax assets. Although
these estimates are based on management's best knowledge of current events and
actions the Company may undertake in the future, actual results ultimately may
differ from the estimates and the differences may be material to the financial
statements.
Revenue recognition - The Company's revenue consists of filtration media
product, equipment leases, professional services to operate the leased assets,
turnkey operations and equipment sales. These sales are based on mutually
agreed upon pricing with the customer prior to the delivery of the media
product and equipment. The Company recognises revenue when it satisfies a
performance obligation by transferring control over a product or service to a
customer.
Revenue from filtration media sales and spare parts (part of equipment sales)
is billed and recognised when products are shipped to the customer. Revenue
from equipment leases is recognised over time as the equipment is available
for customer use and is typically billed monthly. Revenue from professional
services provided to monitor and operate the equipment is recognised over time
when the service is provided and is typically billed monthly. Revenue from
turnkey projects whereby the Company is asked to manage the water filtration
process end to end is recognised on a straight-line basis over time as the
performance obligation, in the context of the contract, is a stand-ready
obligation to filter all water provided. Revenue from contracts related to
construction of equipment is recognised upon either factory acceptance testing
or shipment of the equipment to the customer because the control transfers at
acceptance or the point of shipment and there is no enforceable right to
payments made as customer deposits prior to that date. Customer deposits for
equipment sales represent payments made prior to transferring control at the
point of shipment that can be refunded at any time when requested by the
customer. Contract liabilities represent milestone payments on large equipment
sales.
Sales tax charged to customers is presented on a net basis within the
Statements of Operations and therefore recorded as a reduction of net
revenues. Shipping and handling costs associated with outbound freight after
control over a product has transferred to a customer are accounted for as a
fulfilment cost and are included in cost of goods sold.
The Company's contracts with the customers state the final terms of the sales,
including the description, quantity, and price of media product, equipment
(sale or lease) and the associated services to be provided. The Company's
contracts are generally short-term in nature and, in most situations, the
Company provides products and services ahead of payment and has fulfilled the
performance obligation prior to billing.
The Company believes the output method is a reasonable measure of progress for
the satisfaction of its performance obligations that are satisfied over time,
as it provides a faithful depiction of (1) performance toward complete
satisfaction of the performance obligation under the contract and (2) the
value transferred to the customer of the services performed under the
contract. All other performance obligations are satisfied at a point in time
upon transfer of control to the customer.
The Company's contracts with customers often include promises to transfer
multiple products and services. Determining whether products and services are
considered distinct performance obligations that should be accounted for
separately versus together may require significant judgment. Judgment is
required to determine stand-alone selling price ('SSP') for each distinct
performance obligation. The Company develops observable SSP by reference to
stand-alone sales for identical or similar items to similarly situated clients
at prices within a sufficiently narrow range.
All equipment sold by the Company is covered by the original manufacturer's
warranty. The Company does not offer an additional warranty and has no related
obligations.
Unbilled accounts receivable represents revenue recognised in excess of
amounts billed. Contract liability represents billings in excess of revenue
recognised. Unbilled accounts receivable at 30 June 2025 and 2024, 31 December
2024 and 1 January 2024 was $nil, $99,000, $1.2 million and $255,000,
respectively. The increase in unbilled accounts receivable during 2024 was due
to the gain on the Saudi Arabia earn-out that was unbilled at year end.
Contract liability at 30 June 2025 and 2024, 31 December 2024 and 1 January
2024 was $4.3 million, $1 million, $2.9 million and $nil, respectively.
Timing of revenue recognition for each of the periods and geographic regions
presented is shown below:
Equipment Leases, Turnkey Arrangements, and Services Recognised Over Time Consumable Filtration Media, Equipment Sales and Service Recognised at a Point
in Time
30 June 2025 30 June 2024 31 December 2024 30 June 2025 30 June 2024 31 December 2024
(USD, in thousands)
Middle East - 752 871 74 860 954
United States - - 141 1,044 1,032 1,664
Australia - - - 150 513 772
Other - - - 316 272 430
Total revenue recognised under ASC 606 - 752 1,012 1,584 2,677 3,820
Total revenue recognised under ASC 842 86 71 71 - - -
Total revenue 86 823 1,083 1,584 2,677 3,820
Contract costs - The Company capitalises certain contract costs such as costs
to obtain contracts (direct sales commissions) and costs to fulfil contracts
(upfront costs where the Company does not identify the set-up fees as a
performance obligation). These contract assets are amortised over the period
of benefit, which the Company has determined is customer life and averages one
year.
During the six months ended 30 June 2025 and 2024, and the year ended 31
December 2024, the Company did not have any costs to obtain a contract and any
costs to fulfil a contract were inconsequential.
Cash, cash equivalents and restricted cash - Cash and cash equivalents consist
of short-term, highly liquid investments which are readily convertible into
cash within ninety days of purchase. At 30 June 2025, all of the Company's
cash, cash equivalent and restricted cash balances were held in checking and
money market accounts. The Company maintains its cash in bank deposit accounts
which, at times, may exceed federally insured limits. At 30 June 2025 and
2024, and 31 December 2024, cash in non-U.S. institutions was $nil, $1,000 and
$1,000, respectively. The Company has not experienced any losses in such
accounts. The Company classifies as restricted cash all cash whose use is
limited by contractual provisions. At 30 June 2025 and 2024, and 31 December
2024, restricted cash included $50,000 in a money market account to secure the
Company's corporate credit card.
Reconciliation of cash, cash equivalents and restricted cash at 30 June 2025
and 2024, and 31 December 2024:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Cash and cash equivalents 643 2,073 1,260
Restricted cash 50 50 50
Total cash, cash equivalents and restricted cash 693 2,123 1,310
Accounts receivable - Trade accounts receivable are stated at the amount
management expects to collect from outstanding balances. The Company provides
credit in the normal course of business to its customers and performs ongoing
credit evaluations of those customers and maintains allowances for doubtful
accounts, as necessary. Accounts are considered past due based on the
contractual terms of the transaction. Credit losses, when realised, have been
within the range of the Company's expectations and, historically, have not
been significant. The Company measures its credit losses using a current
expected credit loss model. The measurement of expected credit losses is based
on relevant information about past events, including historical experience,
current conditions and reasonable and supportable forecasts that affect the
collectability of the reported amounts. The allowance for credit losses
represents the Company's best estimate of probable future losses in the
accounts receivable balance, primarily based on known troubled accounts,
historical experience and other currently available evidence. Accounts
receivable are written off against the allowance when the Company believes
that the receivable will not be recovered. The allowance for doubtful accounts
at 30 June 2025 and 2024, and 31 December 2024 was $83,000, $58,000 and
$83,000, respectively.
Inventories - Inventories consist primarily of raw materials and filter media
finished goods as well as equipment to house the filter media and are stated
at the lower of cost or net realisable value. Equipment that is in the process
of being constructed for sale or lease to customers is also included in
inventory (work-in-progress). The Company applies the Average Cost method to
account for its inventory. Manufacturing work-in-progress and finished
products inventory include all direct costs, such as labour and materials, and
those indirect costs which are related to production, such as indirect labour,
rents, supplies, repairs and depreciation costs. A valuation reserve is
recorded for slow-moving or obsolete inventory items to reduce the cost of
inventory to its net realisable value. The Company determines the valuation by
evaluating expected future usage as compared to its past history of
utilisation and future expectations of usage. The inventory reserve at 30 June
2025 and 2024, and 31 December 2024 was $675,000, $675,000 and $675,000,
respectively. Changes to the inventory reserve are included in cost of goods
sold. At 30 June 2025 and 2024, and 31 December 2024, the Company had
REGEN-related inventory of 23 percent, 48 percent and 32 percent of the total
inventory balance, respectively, which is in excess of the Company's current
requirements based on the recent level of sales. The inventory is associated
with efforts to expand into the Enhanced Oil Recovery and Beneficial Reuse
markets that the Company has identified as large global markets. These efforts
should reduce this inventory to desired levels over the near term and
management believes no loss will be incurred on its disposition. However,
there is a risk that management will sustain a loss on the value of the
inventory before it is sold. No estimate can be made of a range of amounts of
loss that are reasonably possible should the efforts not be successful.
Prepaid expenses and other current assets - Prepaid expenses and other current
assets include non-trade receivables that are collectible in less than 12
months, security deposits on leased space and various prepaid amounts that
will be charged to expenses within 12 months. Non-trade receivables that are
collectible in 12 months or more are included in long-term assets.
Property and equipment - All property and equipment are valued at cost.
Depreciation is computed using the straight-line method for reporting over the
following useful lives:
Leasehold improvements Lease period or 1-5 years (whichever is shorter)
Office equipment 3-10 years
Manufacturing equipment 5-15 years
Research and development equipment 5-10 years
Purchased software Licensing period or 5 years (whichever is shorter)
Equipment leased to customers 5-10 years
Expenditures for major renewals and betterments that extend the useful lives
of property and equipment are capitalised. Expenditures for maintenance and
repairs are charged to expense as incurred. Depreciation expense includes
depreciation on equipment leased to customers and is included in cost of goods
sold.
Intangible assets - Intangible assets consist of the costs incurred to
purchase patent rights and legal and registration costs incurred to internally
develop patents. Intangible assets are reported net of accumulated
amortisation. Patents are amortised using the straight-line method over a
period based on their contractual lives which approximates their estimated
useful lives.
Impairment of long-lived assets - Long-lived assets to be held and used,
including property and equipment and intangible assets with definite useful
lives, are assessed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. If the
total of the expected undiscounted future cash flows is less than the carrying
amount of the asset, a loss, if any, is recognised for the difference between
the fair value and carrying value of the assets. Impairment analyses, when
performed, are based on the Company's business and technology strategy,
management's views of growth rates for the Company's business, anticipated
future economic and regulatory conditions, and expected technological
availability. For purposes of recognition and measurement, the Company groups
its long-lived assets at the lowest level for which there are identifiable
cash flows, which are largely independent of the cash flows of other assets
and liabilities. No impairment charges were recorded in the six months ended
30 June 2025 and 2024, and the year ended 31 December 2024.
Research and development costs - Research and development costs are expensed
as incurred. Research and development expense for the six months ended 30 June
2025 and 2024, and the year ended 31 December 2024 was approximately $105,000,
$113,000 and $219,000, respectively.
Advertising costs - The Company expenses advertising costs as incurred.
Advertising expense for the six months ended 30 June 2025 and 2024, and the
year ended 31 December 2024 was $25,000, $7,000 and $31,000, respectively, and
is recorded in selling, general and administrative expenses.
Income taxes - The provision for income taxes for interim and annual periods
is determined using the asset and liability method, under which deferred tax
assets and liabilities are calculated based on the temporary differences
between the financial statement carrying amounts and income tax bases of
assets and liabilities using currently enacted tax rates. The deferred tax
assets are recorded net of a valuation allowance when, based on the weight of
available evidence, it is more likely than not that some portion or all of the
recorded deferred tax assets will not be realised in future periods. Decreases
to the valuation allowance are recorded as reductions to the provision for
income taxes and increases to the valuation allowance result in additional
provision for income taxes. The realisation of the deferred tax assets, net of
a valuation allowance, is primarily dependent on the ability to generate
taxable income. A change in the Company's estimate of future taxable income
may require an addition or reduction to the valuation allowance.
The benefit from an uncertain income tax position is not recognised if it has
less than a 50 percent likelihood of being sustained upon audit by the
relevant authority. For positions that are more than 50 percent likely to be
sustained, the benefit is recognised at the largest amount that is
more-likely-than-not to be sustained. Where a net operating loss carried
forward, a similar tax loss or a tax credit carry forward exists, an
unrecognised tax benefit is presented as a reduction to a deferred tax asset.
Otherwise, the Company classifies its obligations for uncertain tax positions
as other non-current liabilities unless expected to be paid within one year.
Liabilities expected to be paid within one year are included in the accrued
expenses account.
The Company recognises interest accrued related to tax in interest expense and
penalties in selling, general and administrative expenses. During the six
months ending 30 June 2025 and 2024, and the year ended 31 December 2024 the
Company recognised no interest or penalties.
Earnings per share - Basic earnings per share is computed using the weighted
average number of common shares outstanding during the period. Diluted
earnings per share is computed using the weighted average number of common and
potentially dilutive shares outstanding during the period. Potentially
dilutive shares consist of the incremental common shares issuable upon
conversion of the exercise of common stock options. Potentially dilutive
shares are excluded from the computation if their effect is anti-dilutive.
Total common stock equivalents consisting of unexercised stock options that
were excluded from computing diluted net loss per share were approximately
1,400,046 for the six months ended 30 June 2025 and there were no adjustments
to net income available to stockholders as recorded on the Statement of
Operations.
The following table sets forth the components used in the computation of basic
and diluted net (loss) profit per share for the periods indicated:
30 June 30 June 31 December
2025 2024 2024
Basic weighted average outstanding shares of common stock
24,363,814 22,983,023 23,429,416
Effect of potentially dilutive stock options - - -
Diluted weighted average outstanding shares of common stock
24,363,814 22,983,023 23,429,416
Anti-dilutive shares of common stock excluded from diluted weighted average
shares of common stock
1,400,046 1,604,578 1,478,718
Fair value of financial instruments - The Company uses the framework in ASC
820, Fair Value Measurements, to determine the fair value of its financial
assets. ASC 820 establishes a fair value hierarchy that prioritises the inputs
to valuation techniques used to measure fair value and expands financial
statement disclosures about fair value measurements.
The hierarchy established by ASC 820 gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3
measurements).
The three levels of the fair value hierarchy under ASC 820 are described
below:
• Level 1: Unadjusted quoted prices in active markets for identical assets or
liabilities that the Company has the ability to access at the measurement
date.
• Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
• Level 3: Unobservable inputs for the asset or liability.
There were no transfers into or out of each level of the fair value hierarchy
for assets measured at the fair value for the six months ended 30 June 2025
and 2024, and the year ended 31 December 2024.
All transfers are recognised by the Company at the end of each reporting
period.
Transfers between Levels 1 and 2 generally relate to whether a market becomes
active or inactive. Transfers between Levels 2 and 3 generally relate to
whether significant relevant observable inputs are available for the fair
value measurement in their entirety.
The Company's financial instruments as of 30 June 2025 and 2024, and 31
December 2024 include cash and cash equivalents, restricted cash, accounts
receivable and accounts payable. The carrying values of cash and cash
equivalents, restricted cash, accounts receivable and accounts payable
approximate fair value due to the short-term nature of those assets and
liabilities.
Foreign currency transactions - From time to time the Company transacts
business in foreign currencies (currencies other than the United States
Dollar). These transactions are recorded at the rates of exchange prevailing
on the dates of the transactions. Foreign currency transaction gains or losses
are included in selling, general and administrative expenses.
Stock compensation - The Company issues equity-settled share-based awards to
certain employees, which are measured at fair value at the date of grant. The
fair value determined at the grant date is expensed, based on the Company's
estimate of shares that will eventually vest, on a straight-line basis over
the vesting period. Fair value for the share awards representing equity
interests identical to those associated with shares traded in the open market
is determined using the market price at the date of grant. Fair value is
measured by use of the Black Scholes valuation model (see Note 8).
Recently issued accounting standards - In November 2023, the Financial
Accounting Standards Board ('FASB') issued ASU 2023-07, Segment Reporting
(Topic 280) Improvements to Reportable Segment Disclosures, to enhance
disclosures about significant segment expenses. The guidance is effective for
fiscal years beginning after 15 December 2023. The Company adopted the new
accounting standard for the fiscal year 2024. The adoption of this ASU did not
have a material effect on the Company's financial statements, other than the
newly required disclosure for significant expense. Refer to Note 11, Segment
and Geographic Information.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):
Disaggregation of Income Statement Expenses, to improve the disclosures by
requiring more detailed information about the types of expenses (including
purchases of inventory, employee compensation, depreciation and amortisation)
in commonly presented expense captions (such as cost of sales, SG&A, and
research and development). In January 2025, the FASB issued 2025-01, Income
Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40), to modify the effective date previously stated
in ASU 2024-03 to clarify that all public business entities are required to
adopt the guidance in annual reporting periods beginning after 15 December
2026. Early adoption is permitted. We are currently evaluating the impact that
adopting ASU 2024-03 would have on our financial statements and will adhere to
the clarified effective date in ASU 2025-01 if implementation is necessary.
Recent accounting pronouncements pending adoption not discussed above are
either not applicable or are not expected to have a material impact on the
Company.
3. Accounts receivable
Accounts receivable and their respective allowance amounts at 30 June 2025 and
2024, and 31 December 2024:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Accounts receivable 1,407 501 641
Less: allowance for doubtful accounts (83) (58) (83)
Total receivable - net 1,324 443 558
4. Inventories
Inventories consist of the following at 30 June 2025 and 2024, and 31 December
2024:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Raw materials 1,020 1,130 1,048
Work-in-progress 3,180 177 1,691
Finished goods 1,262 1,383 1,263
Total inventory 5,462 2,690 4,002
5. Property and equipment
Property and equipment consist of the following at 30 June 2025 and 2024, and
31 December 2024:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Leasehold improvements 530 530 530
Office equipment 616 616 616
Manufacturing equipment 709 709 709
Research and development equipment 427 427 427
Purchased software 207 207 207
Equipment leased to customers 1,844 1,809 1,809
4,333 4,298 4,298
Less: accumulated depreciation (3,464) (3,215) (3,343)
Property and equipment - net 869 1,083 955
During the six months ended 30 June 2025 and 2024, and the year ended 31
December 2024, the Company removed property, plant and equipment and the
associated accumulated depreciation of approximately $nil, $7.5 million and
$7.5 million, respectively, to reflect the disposal of property, plant and
equipment.
Depreciation expense for the six months ended 30 June 2025 and 2024, and the
year ended 31 December 2024 was approximately $121,000, $201,000 and $330,000,
respectively, and includes depreciation on equipment leased to customers.
Depreciation expense on equipment leased to customers included in cost of
goods sold for the six months ended 30 June 2025 and 2024, and the year ended
31 December 2024 was $47,000, $128,000 and $186,000, respectively.
6. Intangible assets
During 2009, the Company entered into a patent rights purchase agreement. The
patent is amortised utilising the straight-line method over a useful life of
17 years which represents the legal life of the patent from inception.
Accumulated amortisation on the patent was approximately $92,000, $86,000 and
$89,000 as of 30 June 2025 and 2024, and 31 December 2024, respectively.
In January 2023, the Company entered into a patent rights purchase agreement.
The patents are amortised utilising the straight-line method over useful lives
of 13 and 14.75 years which represent the remaining legal life of the patents
on the date of purchase. Accumulated amortisation on the patents was
approximately $9,000, $5,000 and $7,000 as of 30 June 2025 and 2024, and 31
December 2024, respectively.
In addition to the purchased patents, the Company has internally developed
patents. Internally developed patents include legal and registration costs
incurred to obtain the respective patents. The Company currently holds various
patents and numerous pending patent applications in the United States, as well
as numerous foreign jurisdictions outside of the United States. In the six
months ended 30 June 2025, there was no new expense for internally developed
patents and fees on patents in progress.
Intangible assets as of 30 June 2025 and 2024, and 31 December 2024 consist of
the following:
Weighted Average 30 June 30 June 31 December
Useful lives 2025 2024 2024
US$000 US$000 US$000
Internally developed patents 15 years 1,529 1,525 1,529
Purchased patents 17 years 150 150 150
1,679 1,675 1,679
Less accumulated amortisation - internally developed patents (909) (850) (879)
Less accumulated amortisation - purchased patents (101) (91) (96)
Intangible assets - net 669 734 704
At 30 June 2025, internally developed patents include approximately $174,000
for costs accumulated for patents that have not yet been issued and are not
depreciating.
Approximate aggregate future amortisation expense is as follows:
Year ending 31 December (USD, in thousands)
2025 35
2026 68
2027 63
2028 56
2029 51
Thereafter 222
Amortisation expense for the six months ended 30 June 2025 and 2024, and the
year ended 31 December 2024 was approximately $35,000, $34,000 and $68,000,
respectively.
7. Income taxes
The components of income taxes shown in the Statements of Operations are as
follows:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Current:
Federal - - -
Foreign 0 62 81
State 1 4 4
Total current provision 1 66 85
Deferred:
Federal - - -
Foreign - - -
State - - -
Total deferred provision - - -
Total provision for income taxes 1 66 85
The provision for income tax varies from the amount computed by applying the
statutory corporate federal tax rate of 21 percent, primarily due to the
effect of certain non-deductible expenses, foreign withholding tax, and
changes in valuation allowances.
A reconciliation of the differences between the effective tax rate and the
federal statutory tax rate is as follows:
30 June 30 June 31 December
2025 2024 2024
Federal statutory income tax rate 21.0% 21.0% 21.0%
State tax rate, net of federal benefit 0.7% 1.3% (1.0%)
Valuation allowance (21.7%) (23.4%) (14.0%)
Other (0.1%) (0.2%) (6.8%)
Foreign withholding tax 0.0% (3.7%) (2.4%)
Effective income tax rate (0.1%) (5.0%) (3.2%)
The significant components of deferred income taxes included in the balance
sheets are as follows:
30 June 30 June 31 December
2025 2024 2024
US$000 US$000 US$000
Deferred tax assets
Net operating loss 8,231 7,812 7,822
Equity compensation 125 211 119
Research and development credits 91 159 91
Right of use liability 233 297 274
Inventory valuation reserve 147 265 147
Other 54 34 53
Total gross deferred tax asset 8,881 8,778 8,506
Deferred tax liabilities
Property and equipment (323) (638) (323)
Right of use asset (223) (287) (263)
Total gross deferred tax liability (546) (925) (586)
Net deferred tax asset before valuation allowance 8,335 7,853 7,920
Valuation allowance (8,335) (7,853) (7,920)
Net deferred tax asset (liability) - - -
Deferred tax assets and liabilities are recorded based on the difference
between an asset or liability's financial statement value and its tax
reporting value using enacted rates in effect for the year in which the
differences are expected to reverse, and for other temporary differences as
defined by ASC-740, Income Taxes. At 30 June 2025 and 2024 and 31 December
2024, the Company has recorded a valuation allowance of $8.3 million, $7.9
million and $7.9 million, respectively, a change of $415,000, $303,000 and
$370,000 for each period, for which it is more likely than not that the
Company will not receive future tax benefits due to the uncertainty regarding
the realisation of such deferred tax assets.
As of 30 June 2025, the Company has approximately $38.1 million of gross U.S.
federal net operating loss carry forwards and $3.6 million of gross state net
operating loss carry forwards that will begin to expire in the 2025 tax year
and will continue through 2044 when the current year net operating losses will
expire. As of 30 June 2024, the Company had approximately $35.9 million of
gross U.S. federal net operating loss carry forwards and $3.7 million of gross
state net operating loss carry forwards and at 31 December 2024, the Company
had approximately $36.2 million of gross U.S. federal net operating loss carry
forwards and $3.3 million of gross state net operating loss carry forwards.
On 27 March 2020, the U.S. Government enacted the Coronavirus Aid, Relief, and
Economic Security Act (the 'CARES Act'). The CARES Act includes, but is not
limited to, tax law changes related to (1) accelerated depreciation deductions
for qualified improvement property placed in service after 27 September 2017,
(2) reduced limitation of interest deductions, and (3) temporary changes to
the use and limitation of NOLs. There was no material impact of the CARES Act
to the Company's income tax provision for the six months ended 30 June 2025
and 2024 or for the year ended 31 December 2024.
On 16 August 2022, the Inflation Reduction Act of 2022 ('IRA') was signed into
law. The IRA levies a 1 percent excise tax on net stock repurchases after 31
December 2022 and imposes a 15 percent corporate alternative minimum tax for
tax years beginning after 31 December 2022. There was no material impact of
the IRA on the Company's income tax provision for 2024 or the period ending 30
June 2025.
The Company's tax years 2020 through 2024 remain subject to examination by
federal, state and foreign income tax jurisdictions. However, net operating
losses that were generated in previous years may still be adjusted by the
Internal Revenue Service if they are used in a future period.
8. Stock compensation
In July 2011, the Company's shareholders approved the Conversion Shares and
the Directors' Shares, as well as the Plan Shares and Omnibus Performance
Incentive Plan ('Plan'). This included the termination of all outstanding
stock incentive plans, cancellation of all outstanding stock incentive
agreements, and the awarding of stock incentives to Directors and certain
employees and consultants. The Company established the Plan to attract and
retain Directors, officers, employees and consultants. The Company reserved an
amount equal to 10 percent of the Common Shares issued and outstanding
immediately following its Public Offering.
Upon the issuance of these shares, an award of share options was made to the
Directors and certain employees and consultants, and a single award of
restricted shares was made to a former Chief Financial Officer. In addition,
additional stock options were awarded in each year subsequent. The awards of
stock options and restricted shares made upon issuance were in respect of 85
percent of the Common Shares available under the Plan, equivalent to 8.5
percent of the Public Offering.
In July 2019, the Company's shareholders approved the extension of the Plan to
2029 and the increase in the possible number of shares to be awarded pursuant
to the Plan to 15 percent of the Company's issued capital at the date of any
award. The total number of shares reserved for stock options under this Plan
is 3,654,572 with 1,499,668 shares allocated as of 30 June 2025. The shares
are all allocated to employees, executives and consultants.
Any options granted to Non-Executive Directors, unless otherwise agreed, vest
contingent on continuing service with the Company at the vesting date and
compliance with the covenants applicable to such service.
Employee options vest over three years with a third vesting ratably each year,
partially on issuance and partially over the following 24-month period, or if
there is a change in control, and expire on the tenth anniversary date the
option vests. Vesting accelerates in the event of a change of control. Options
granted to Non-Executive Directors, Consultants and one Executive vest
partially on issuance and will vest partially one to two years later. The
remaining Non-Executive Director options expired at the end of 2016 on the
five-year anniversary date of the grant.
As discussed in Note 2, the Company uses the Black Scholes valuation model to
measure the fair value of options granted. The Company's expected volatility
is calculated as the historical volatility of the Company's stock over a
period equal to the expected term of the awards. The expected terms of options
are calculated using the weighted average vesting period and the contractual
term of the options. The risk-free interest rate is based on a blended average
yield of two- and five-year United States Treasury Bills at the time of grant.
The assumptions used in the Black Scholes option pricing model for options
granted in 2025 and 2024 were as follows:
Number of Options Granted Grant Date Risk-Free Interest Rate Expected Term Volatility Exercise Price Fair Value Per Option
2024 25,000 13/03/2024 3.97% 6.0 years 65% $0.64 $0.40
225,000 15/03/2024 3.97% 6.0 years 65% $0.59 $0.37
50,000 15/03/2024 3.97% 5.75 years 65% $0.59 $0.36
2025 200,000 09/04/2025 4.04% 5.75 years 62% $0.31 $0.19
The Company assumes a dividend yield of 0.0%.
The following table summarises the Company's stock option activity for the six
months ended 30 June 2025:
Stock Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Average Grant Date Fair Value
Outstanding at 31 December 2024 1,311,668 $0.80 5.8 $0.50
Granted 200,000 $0.31 5.8 $0.37
Forfeited (12,000) $2.15
Outstanding at 30 June 2025 1,499,668 $0.72 5.8 $0.45
Exercisable at 30 June 2025 1,091,334 $0.82 5.5
The total intrinsic value of the stock options exercised during the six months
ended 30 June 2025 and 2024, and 31 December 2024 was $nil.
A summary of the status of unvested options as of 30 June 2025 and changes
during the six months ended 30 June 2025 is presented below:
Unvested Options Shares Weighted-Average Fair Value at Grant Date
Unvested at 31 December 2024 208,334 $0.37
Granted 200,000 $0.19
Forfeited -
Unvested at 30 June 2025 408,334 $0.28
As of 30 June 2025, total unrecognised compensation cost of $90,000 was
related to unvested share-based compensation arrangements awarded under the
Plan.
Total stock compensation expense for the six months ended 30 June 2025 and
2024, and 31 December 2024 was approximately $27,000, $14,000 and $37,000,
respectively.
9. Commitments and contingencies
Operating leases - As of 30 June 2025, the Operating Lease ROU Asset has a
balance of $1,022,000, net of accumulated amortisation of $888,000 and an
Operating Lease Liability of $1,071,000, which are included in the
accompanying balance sheet. The weighted-average discount rate used for leases
is 5.25 percent, which is based on the Company's secured incremental borrowing
rate.
The Company's leases do not include any options to renew that are reasonably
certain to be exercised. The Company's leases mature at various dates through
March 2027 and have a weighted average remaining life of 3.4 years.
Future maturities under the Operating Lease Liability are as follows for the
years ended 31 December:
(USD, in thousands) Future Lease Payments
2025 219
2026 452
2027 241
2028 173
2029 73
Total future maturities 1,159
Portion representing interest (87)
1,071
Total lease expense for the six months ended 30 June 2025 and 2024, and the
year ended 31 December 2024 was approximately $216,000, $195,000 and $412,000,
respectively.
Total cash paid for leases for the six months ended 30 June 2025 and 2024, and
the year ended 31 December 2024 was $216,000, $196,000 and $310,000,
respectively, and is part of prepaid operating leases on the Statements of
Cash Flows.
The Company has elected to apply the short-term lease exception to all leases
of one year or less and is not separating lease and non-lease components when
evaluating leases. Total costs associated with short-term leases was $19,000,
$47,000 and $62,000 for the six months ended 30 June 2025 and 2024, and 31
December 2024, respectively.
Legal - From time to time, the Company is a party to certain legal proceedings
arising in the ordinary course of business. In the opinion of management,
there are no current legal proceedings or other claims outstanding which could
have a material adverse effect on the results of operations or financial
position of the Company.
10. Related party transactions
The Company has held a patent rights purchase agreement since 2009 with a
Director, who is also a shareholder, as described in Note 6.
11. Segment and geographic information
ASC 280-10, Disclosures About Segments of an Enterprise and Related
Information, establishes standards for reporting information about operating
segments. ASC 280-10 requires that the Company report financial and
descriptive information about its reportable operating segments. Operating
segments are components of an enterprise for which separate financial
information is available that is evaluated regularly by the chief operating
decision maker ('CODM') in deciding how to allocate resources and in assessing
performance. The Company's CODM is the Chief Executive Officer ('CEO'). While
the CEO is apprised of a variety of financial metrics and information, the
business is principally managed on an aggregate basis as of 30 June 2025. The
CODM, or CEO, uses net income to evaluate income generated from the Company's
assets (return on assets) in deciding whether to reinvest profits into further
business development activities or to pay dividends. Net income is also used
by the CEO to monitor overall budget versus actual results. The CEO is
regularly provided with only the consolidated expenses as noted on the face of
the income statement. For the six months ended 30 June 2025, the Company's
revenues were generated primarily in the United States ('U.S.'). Additionally,
the majority of the Company's expenditures and personnel either directly
supported its efforts in the U.S., or cannot be specifically attributed to a
geography. Therefore, the Company has only one reportable operating segment.
Revenue from customers by geography is as follows:
(USD, in thousands) Six months ended 30 June Six months ended 30 June Year ended 31 December
2025 2024 2024
Middle East - 1,612 1,825
United States 1,131 1,083 1,856
Australia 151 513 772
Other 388 292 450
Total 1,670 3,500 4,903
12. Concentrations
At 30 June 2025, four customers represented 82 percent of accounts receivable.
During the six months ended 30 June 2025, the Company received 62 percent of
its gross revenue from five customers.
At 30 June 2024, seven customers represented 89 percent of accounts
receivable. During the six months ended 30 June 2024, the Company received 85
percent of its gross revenue from seven customers.
At 31 December 2024, five customers represented 93 percent of accounts
receivable. During the year ended 31 December 2024, the Company received 64
percent of its gross revenue from seven customers.
13. Gain on sale of Saudi Arabia business operations
On 29 February 2024, the Company sold its Saudi Arabia branch assets,
including equipment and inventory, for an acquisition price of up to $7.125
(the 'Total Consideration') million to Twarid Water Treatment LLC ('Twarid').
The Total Consideration was split $3.125 million paid at closing with up to $4
million deferred on a 24 month earn-out structure based on Twarid achieving
defined revenue targets. The assets sold had a net book value of $2.2 million.
The Company initially recognised a gain of $838,000 from the sale of fixed
assets and operating profit of $100,000 from the sale of inventory. The
Company recognised an additional gain of $1.1 million related to the earn-out
for the period ended 31 December 2024. The proceeds of the sale will enable
the Company to focus on accelerating its marketing and sales plan for its
unique technologies in the PFAS remediation and Produced Water markets while
continuing to grow its propriety media and product sales in Saudi Arabia
through an exclusive distribution agreement with Twarid.
14. Subsequent events
The Company discloses material events that occur after the balance sheet date
but before the financials are issued. In general, these events are recognised
in the financial statements if the conditions existed at the date of the
balance sheet but are not recognised if the conditions did not exist at the
balance sheet date. Management has evaluated subsequent events through 17
September 2025, the date the interim results were available to be issued, and
no events have occurred which require further disclosure other than the
following:
On 19 August 2025, the Company opened a line of credit ('LOC') allowing the
Company to access up to $500,000. The proceeds will enable MYCELX to increase
funds available for sales and marketing and trial equipment. The LOC carries a
floating rate based on the Adjusted One Month Term of the Secured Overnight
Financing Rate ('SOFR') plus 1.5% margin. The LOC has been personally
guaranteed by the Company's CEO at no cost to the Company.
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. END IR VQLFFEKLBBBVRecent news on Mycelx Technologies
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