LQWD Technologies

LQWD's core business revolves around the Bitcoin Lightning Network, forming a trinity model of "infrastructure + asset reserves + ecological cooperation": Lightning Network Infrastructure: As an enterprise-level Lightning Network liquidity service provider (LSP), it operates a global node network, offering low-cost, high-scalability Bitcoin payment routing services for institutions and individuals. Its technology platform supports real-time cross-border payments, micropayments, and other scenarios, with clients including institutions such as the government of El Salvador. In July 2025, the company launched a $10 million ATM equity program specifically aimed at expanding Lightning Network nodes and technology research and development. Bitcoin Reserve Strategy: Build reserve assets by continuously increasing Bitcoin holdings. As of July 18, 2025, hold 181 Bitcoins (worth approximately $8.9 million), with an average purchase cost of $49,174 per coin, accounting for 18% of the company's total assets. This strategy hedges against fiat currency inflation risks and provides liquidity support for the Lightning Network business. Ecological cooperation and technology output: Collaborating with companies like Amboss to provide liquidity for the Lightning Network on their platform, and opening up technical capabilities to third-party developers through API interfaces. In May 2025, Amboss launched the Rails platform, with LQWD as a core partner, providing Bitcoin liquidity leasing and payment routing services for enterprises, promoting the application of Bitcoin in real-world scenarios.

The profits related to cryptocurrency mainly come from three major paths: Lightning Network fee revenue: By routing Bitcoin transactions through nodes, fees are charged based on transaction volume in satoshi (the smallest unit of Bitcoin). As the daily transaction volume of the Lightning Network grows (averaging over 120,000 transactions per day in Q2 2025), this business's revenue has increased by 170% year-on-year. The Rails platform, in collaboration with Amboss, further expands the sources of fee income. Bitcoin appreciation gains: The price fluctuations of held Bitcoin directly affect the balance sheet. In the first half of 2025, the price of Bitcoin rose from $28,000 to $42,000, driving an increase in the company's unrealized gains of approximately $19 million. However, since LQWD's average purchase cost is $49,000 per coin, the current price is below the cost price, which may result in unrealized losses. Strategic investment and profit-sharing with partners: Raising funds through a targeted private placement (such as the completion of a CAD 2.3 million private placement in July 2025) to expand Bitcoin reserves, and proportionally distributing liquidity service revenues with partners. The launch of the ATM equity plan provides ongoing financial support for increasing Bitcoin holdings.

Building an anti-inflation asset portfolio: The proportion of Bitcoin reserves is significantly higher than that of traditional financial assets. The Q1 2025 financial report shows that its debt-to-asset ratio is only 9%, far below the industry average, enhancing financial stability. Although the current Bitcoin price is below the purchase cost, a long-term holding strategy is still regarded as an effective means to hedge against the depreciation of fiat currency. Promoting the scaling of the Lightning Network: Transaction fee income is positively correlated with network usage. LQWD's nodes cover 32 countries worldwide, processing an average of 3.2% of the total transaction volume of the Lightning Network daily, making it one of the core driving forces behind network expansion. The collaboration with Amboss further enhances its influence in the Lightning Network ecosystem. Creating long-term shareholder value: Through a dual revenue structure of "holding Bitcoin + technology services," LQWD achieved earnings per share of 0.08 CAD in Q2 2025, turning a profit year-on-year, with a market capitalization growth of 210% compared to the low point in 2024. The implementation of the ATM plan provides funding flexibility for its future business expansion.

Bitcoin ( BTC ): Liquidity enhancement: As a major node operator of the Lightning Network, LQWD's routing services reduce the friction costs of Bitcoin payments. In the first half of 2025, the Lightning transaction volume facilitated by its nodes accounted for 5.7% of the entire network, directly enhancing the practicality of Bitcoin in daily payments. Market confidence boosted: The continuous accumulation of Bitcoin is seen by the market as a signal of institutional recognition, with its reserves accounting for 0.00085% of the total circulating Bitcoin supply, demonstrating a stabilizing effect on short-term price fluctuations. Although the current price is below the cost price, its long-term holding strategy is still regarded as an endorsement of Bitcoin's value. USDT (Tether): Indirect Synergy Effect: Although USDT is not directly held, its partner Tether promotes the application of stablecoins in payment scenarios through investments (such as the $775 million investment in Rumble in December 2024). LQWD's Lightning Network technology may become a bridge connecting USDT with the Bitcoin ecosystem. If USDT connects to the Lightning Network in the future, LQWD's node services will directly benefit.

5. Current Reserve Amount of Associated Currencies