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.
•	EBITDA¹ 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

Kim Slayton, CFO

Tel: +1 888 306 6843

Cavendish Capital Markets Limited (Nomad and Sole Broker)

Giles Balleny / Callum Davidson (Corporate Finance)

Jamie Anderson (Corporate Broking)

Jasper Berry / Michael Johnson (Sales)

Tel: +44 20 7220 0500

Celicourt Communications (Financial PR)

Mark Antelme

Jimmy Lea

Charlie Denley-Myerson

Tel: +44 20 7770 6424

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 Ended 30 June 2025	Six Months Ended 30 June 2024	Year Ended 31 December 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

30 June

31 December

2025

2024

(unaudited)

ASSETS

Current Assets

Cash and cash equivalents

643

2,073

1,260

Restricted cash

Accounts receivable - net

1,324

443

558

Unbilled accounts receivable

1,206

Inventory

5,462

2,690

4,002

Prepaid expenses

113

155

Other assets

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

178

Contract liability

4,319

1,040

2,913

Customer deposits

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 Ended 30 June 2025 (unaudited)		Six Months Ended 30 June 2024 (unaudited)	Year Ended 31 December 2024
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)		1,690	877
Cash, cash equivalents and restricted cash, beginning of period	1,310		433	433
Cash, cash equivalents and restricted cash, end of period	693		2,123	1,310

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
(USD, in thousands)	30 June 2025	30 June 2024	31 December 2024	30 June 2025	30 June 2024	31 December 2024
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 2025 US$000	30 June 2024 US$000	31 December 2024 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 2025	30 June 2024	31 December 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 2025 US$000	30 June 2024 US$000	31 December 2024 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 2025 US$000	30 June 2024 US$000	31 December 2024 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 2025 US$000	30 June 2024 US$000	31 December 2024 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 Useful lives	30 June 2025 US$000	30 June 2024 US$000	31 December 2024 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 2025 US$000	30 June 2024 US$000	31 December 2024 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 2025	30 June 2024	31 December 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 2025 US$000	30 June 2024 US$000	31 December 2024 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 2026 2027 2028 2029		219 452 241 173 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 2025	Six months ended 30 June 2024	Year ended 31 December 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.