# EDGAR Filing Document

**Accession Number:** 0001307579
**File Stem:** 0001437749-25-026498
**Filing Date:** 2025-8
**Character Count:** 98429
**Document Hash:** 9f6b04628a99608f56e848d56c47f6a8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-026498.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001437749-25-026498

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 69

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LIQTECH INTERNATIONAL INC
- **CENTRAL INDEX KEY:** 0001307579
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 201431677
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36210
- **FILM NUMBER:** 251211352

**BUSINESS ADDRESS:**
- **STREET 1:** INDUSTRIPARKEN 22C
- **CITY:** BALLERUP
- **STATE:** G7
- **ZIP:** DK-2750
- **BUSINESS PHONE:** 01145 2390 4545

**MAIL ADDRESS:**
- **STREET 1:** INDUSTRIPARKEN 22C
- **CITY:** BALLERUP
- **STATE:** G7
- **ZIP:** DK-2750

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Blue Moose Media Inc
- **DATE OF NAME CHANGE:** 20041101

?xml version='1.0' encoding='ASCII'? liqt20250630_10q.htm

[<u>**Table of Contents**</u>](#toc)

**UNITED STATES**

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended June 30, 2025

or

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from to

Commission File Number: **<u>001-36210</u>**

**<u>LiqTech International, Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **20-1431677** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| **Industriparken 22C, DK 2750 Ballerup, Denmark** |  |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **+45 3131 5941**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading symbol(s) | Name of each exchange on which<br> registered |
| **Common Stock, $0.001 par value** | **LIQT** | **The Nasdaq Stock Market LLC** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer  | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |  |  |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of August 13, 2025, there were 9,614,043 shares of Common Stock, $0.001 par value per share, outstanding.

------

[**Table of Contents**](#toc)

LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q

For the Period Ended June 30, 2025

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [<u>PART I. FINANCIAL INFORMATION</u>](#p1) | <u>[5](#p1)</u> |
| [<u>Item 1. Financial Statements</u>](#item1) | <u>[5](#item1)</u> |
| [<u>Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024</u>](#bs) | <u>[5](#bs)</u> |
| [<u>Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)</u>](#ops) | <u>[7](#ops)</u> |
| [<u>Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)</u>](#comploss) | <u>[8](#comploss)</u> |
| [<u>Condensed Consolidated Statements of Stockholders</u><u>'</u> <u>Equity for the Three and Six Months ended June 30, 2025 and June 30, 2024 (unaudited)</u>](#eq) | <u>[9](#eq)</u> |
| [<u>Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)</u>](#cf) | <u>[11](#cf)</u> |
| [<u>Notes to Condensed Consolidated Financial Statements (unaudited)</u>](#notes) | <u>[13](#notes)</u> |
| [<u>Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item2) | <u>[22](#item2)</u> |
| [<u>Item 3. Quantitative and Qualitative Disclosures About Market Risk</u>](#item3) | <u>[28](#item3)</u> |
| [<u>Item 4. Controls and Procedures</u>](#item4) | <u>[29](#item4)</u> |
| [<u>PART II. OTHER INFORMATION</u>](#part2) | <u>[30](#part2)</u> |
| [<u>Item 1. Legal Proceedings</u>](#legal) | <u>[30](#legal)</u> |
| [<u>Item 1A. Risk Factors</u>](#risk) | <u>[30](#risk)</u> |
| [<u>Item 2. Unregistered Sales of Equity Securities and Use of Proceeds</u>](#unreg) | <u>[30](#unreg)</u> |
| [<u>Item 3. Defaults Upon Senior Securities</u>](#defaults) | <u>[30](#defaults)</u> |
| [<u>Item 4. Mine Safety Disclosures</u>](#mine) | <u>[30](#mine)</u> |
| [<u>Item 5. Other Information</u>](#other) | <u>[30](#other)</u> |
| [<u>Item 6. Exhibits</u>](#exhibits) | <u>[31](#exhibits)</u> |
| [<u>SIGNATURES</u>](#sigs) | <u>[33](#sigs)</u> |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

------

[**Table of Contents**](#toc)

FORWARD-LOOKING STATEMENTS

Certain statements made in this Quarterly Report on Form 10-Q are "forward-looking statements" regarding the plans and objectives of management for future operations and market trends and expectations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the continued expansion of our business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future political, legislative, economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. This is especially underlined by the potential impacts from the prevailing macro-economic uncertainty on the Company, including the related effects to our business operations, results of operations, cash flows, and financial position. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Quarterly Report on Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Forward-looking statements include, but are not limited to, statements concerning:

● The potential adverse effects on our operations and financial performance from armed conflicts or geopolitical tensions; 

● The potential adverse impact of global trade restrictions, tariffs and geopolitical tensions on our business and supply chain;

● The potential negative impact of prolonged energy market volatility and supply disruptions on our business;

● The potential adverse impact of health crises, pandemics, and public health emergencies on our business, financial condition, and operations;

● Our dependence on a few major customers and the ability to maintain future relationships with one or more of these major customers;

● Our ability to operate with financial stability and secure access to external financing and adequate liquidity;

● Our ability to secure and source supplies of raw materials and key components in due time and at competitive prices;

● Our ability to achieve revenue growth and penetrate new markets;

● Our dependence on the expertise and experience of our management team and the retention of key employees;

● Our reliance and access to qualified personnel to expand our business;

● Our ability to adapt to potentially adverse changes in legislative, regulatory and political frameworks;

● Changes in interest rates or tightening of debt capital markets;

● Changes in emissions and environmental regulations, and potential further tightening of emission standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

------

[**Table of Contents**](#toc)

● Exposure to potentially adverse tax consequences;

● Our ability to compete under changing governmental standards by which our products are evaluated;

● The financial impact from the fluctuation and volatility of foreign currencies;

● The potential monetary costs of defending our intellectual property rights;

● Our ability to successfully protect our intellectual property rights and manufacturing know-how;

● The possibility of a dispute over intellectual property developed in conjunction with third parties with whom we have contractual relationships;

● The possibility that we could become subject to litigation that could be costly, limit or cancel our intellectual property rights or divert time and efforts away from our business operations;

● The potential negative impact to the sale of our products caused by technological advances of our competitors;

● The potential liability for environmental harm or damages resulting from technical faults or failures of our products;

● The possibility that an investor located within the United States may not be able to, or find it difficult to, enforce any judgments obtained in United States courts because a significant portion of our assets and some of our officers and directors may be located outside of the United States;

● The possibility that we may not be able to develop and maintain an effective system of internal control over financial reporting, leading to inaccurate reports of our financial results;

● The possibility of breaches in the security of our information technology systems;

● The liability risk of our compliance to environmental laws and regulations; and

● The potential negative impact of more stringent environmental laws and regulations as governmental agencies seek to improve minimum standards.

Any forward-looking statement made by us herein speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

------

[**Table of Contents**](#toc)

**PART I - FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
|  | **(Unaudited)** |  |
| **Assets** |  |  |
| **Current Assets:** |  |  |
| Cash and restricted cash | $8673449 | $10868728 |
| Accounts receivable, net | 4095991 | 2396056 |
| Inventories, net | 5514889 | 5541192 |
| Contract assets | 1140358 | 1666698 |
| Prepaid expenses and other current assets | 367630 | 168443 |
| Total Current Assets | 19792317 | 20641117 |
| **Non-Current Assets:** |  |  |
| Property and equipment, net | 6445062 | 6618822 |
| Operating lease right-of-use assets | 4690909 | 4450822 |
| Deposits and other assets | 505382 | 456658 |
| Intangible assets, net | 40110 | 39367 |
| Goodwill | 247626 | 220693 |
| Total Non-Current Assets | 11929089 | 11786362 |
| **Total Assets** | $**31721406** | $**32427479** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)**

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
|  | **(Unaudited)** |  |
| **Liabilities and Stockholders' Equity** |  |  |
| **Current Liabilities:** |  |  |
| Accounts payable | $1532813 | $1300966 |
| Accrued expenses | 2698239 | 2491479 |
| Current portion of finance lease liabilities | 522815 | 458347 |
| Current portion of operating lease liabilities | 623766 | 544197 |
| Contract liabilities | 102710 | 109319 |
| Total Current Liabilities | 5480343 | 4904308 |
| **Non-Current Liabilities:** |  |  |
| Deferred tax liability | 64281 | 57960 |
| Finance lease liabilities, net of current portion | 1676281 | 1600931 |
| Operating lease liabilities, net of current portion | 4067143 | 3906625 |
| Loan from related party, net of current portion | 1167215 |  |
| Notes payable, net | 5335911 | 5303563 |
| Total Non-Current Liabilities | 12310831 | 10869079 |
| **Total Liabilities** | 17791174 | 15773387 |
| **Stockholders' Equity:** |  |  |
| Preferred stock; par value $0.001, 2,500,000 shares authorized, 0 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively |  |  |
| Common stock; par value $0.001, 50,000,000 shares authorized and 9,614,043 and 9,475,443 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively | 9614 | 9475 |
| Additional paid-in capital | 109912732 | 109274166 |
| Accumulated deficit | (90770715) | (86267438) |
| Accumulated other comprehensive loss | (5218427) | (6362111) |
| Total Stockholders' Equity | 13933204 | 16654092 |
| Noncontrolling Interest | (2972) |  |
| Total Equity | 13930232 | 16654092 |
| **Total Liabilities and Equity** | $**31721406** | $**32427479** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Revenue** | $4957489 | $4485062 | $9575030 | $8720406 |
| **Cost of goods sold** | 4472911 | 3767851 | 8965396 | 7732093 |
| **Gross Profit** | 484578 | 717211 | 609634 | 988313 |
| **Operating Expenses:** |  |  |  |  |
| Selling expenses | 812568 | 855122 | 1530584 | 1372701 |
| General and administrative expenses | 1539323 | 1541316 | 2901569 | 3086047 |
| Research and development expenses | 242556 | 407292 | 472679 | 662104 |
| Total Operating Expenses | 2594447 | 2803730 | 4904832 | 5120852 |
| **Loss from Operations** | (2109869) | (2086519) | (4295198) | (4132539) |
| **Other Income (Expense):** |  |  |  |  |
| Interest and other income | 64605 | 45744 | 133356 | 114830 |
| Interest expense | (63466) | (29290) | (111749) | (101009) |
| Amortization of debt discount | (84318) | (150591) | (252348) | (296631) |
| Gain (loss) on foreign currency transactions | 34060 | 84462 | 69576 | 339998 |
| Gain (loss) on disposal of property and equipment | (2158) | 10344 | (63464) | (453233) |
| Total Other Expense | (51277) | (39331) | (224629) | (396045) |
| **Loss Before Income Taxes** | (2161146) | (2125850) | (4519827) | (4528584) |
| **Income tax benefit** | (360) | (14150) | (699) | (28589) |
| **Net Loss** | $(2160786) | $(2111700) | $(4519128) | $(4499995) |
| Net Loss attributable to noncontrolling interest | (8901) |  | (15851) |  |
| Net Loss attributable to LiqTech International, Inc. | (2151885) | (2111700) | (4503277) | (4499995) |
| **Loss Per Common Share – Basic and Diluted** | $(0.22) | $(0.36) | $(0.47) | $(0.77) |
| **Weighted-Average Common Shares Outstanding – Basic and Diluted** | 9606902 | 5808127 | 9606902 | 5806480 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF** 

**COMPREHENSIVE LOSS (UNAUDITED)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months Ended*** | ***For the Three Months Ended*** | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Net Loss** | (2160786) | (2111700) | (4519128) | (4499995) |
| Loss on foreign currency translation adjustments | 794429 | (213191) | 1142775 | (756771) |
| Total Other Comprehensive Loss | $(1366357) | $(2324891) | $(3376353) | $(5256766) |
| Net loss attributable to non-controlling interests | 8901 |  | 15851 |  |
| **Total Other Comprehensive Loss Attributable to LiqTech International, Inc.** | $(1357456) | $(2324891) | $(3360502) | $(5256766) |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS**' **EQUITY (UNAUDITED)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | ***Accumulated*** |  | ***Non-*** |  |
|  |  |  | ***Additional*** |  | ***Other*** | ***Total*** | ***controlled*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Accumulated*** | ***Comprehensive*** | ***Stockholders'*** | ***Interest in*** | ***Total*** |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Income (Loss)*** | ***Equity*** | ***Subsidiaries*** | ***Equity*** |
| **Balance at December 31, 2024** | **9475443** | **9475** | **109274166** | **(86267438)** | **(6362111)** | **16654092** | **-** | **16654092** |
| Common stock issued in settlement of RSUs | 158975 | 159 | (159) | *-* | *-* | *-* | *-* | *-* |
| Tax withholdings paid related to stock-based compensation | (28394) | (28) | (53065) | *-* | *-* | (53093) | *-* | (53093) |
| Warrants issued in connection with Senior Promissory Notes | *-* |  | 220000 |  |  | 220000 |  | 220000 |
| Stock-based compensation | *-* |  | 241245 |  |  | 241245 |  | 241245 |
| Currency translation, net | *-* |  |  |  | 348346 | 348346 |  | 348346 |
| Net loss | *-* |  |  | (2351392) |  | (2351392) |  | (2351392) |
| Capital contribution from noncontrolling interest | *-* |  |  |  |  |  | 13788 | 13788 |
| Net loss attributable to noncontrolling interest | *-* |  |  |  |  |  | (6950) | (6950) |
| **Balance at March 31, 2025** | **9606024** | **9606** | **109682187** | **(88618830)** | **(6013765)** | **15059198** | **6838** | **15066036** |
| Common stock issued in settlement of RSUs | 8019 | 8 | (8) | *-* | *-* | *-* | *-* | *-* |
| Stock-based compensation | *-* |  | 230553 |  |  | 230553 |  | 230553 |
| Currency translation, net | *-* |  |  |  | 795338 | 795338 | (909) | 794429 |
| Net loss | *-* |  |  | (2151885) |  | (2151885) |  | (2151885) |
| Net loss attributable to noncontrolling interest | *-* |  |  |  |  |  | (8901) | (8901) |
| **Balance at June 30, 2025** | **9614043** | **9614** | **109912732** | **(90770715)** | **(5218427)** | **13933204** | **(2972)** | **13930232** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS**' **EQUITY (UNAUDITED)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | ***Accumulated*** |  | ***Non-*** |  |
|  |  |  | ***Additional*** |  | ***Other*** | ***Total*** | ***controlled*** |  |
|  | ***Common Stock*** | ***Common Stock*** | ***Paid-in*** | ***Accumulated*** | ***Comprehensive*** | ***Stockholders'*** | ***Interest in*** | ***Total*** |
|  | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Income (Loss)*** | ***Equity*** | ***Subsidiaries*** | ***Equity*** |
| **Balance at December 31, 2023** | **5727310** | **5727** | **98796357** | **(75922180)** | **(5603888)** | **17276016** |  | **17276016** |
| Common Stock issued in settlement of RSUs | 110028 | 110 | (110) |  |  |  |  |  |
| Tax withholdings paid related to stock-based compensation | (29998) | (30) | 30 |  |  |  |  |  |
| Stock-based compensation | *-* |  | 193321 |  |  | 193321 |  | 193321 |
| Currency translation, net | *-* |  |  |  | (543580) | (543580) |  | (543580) |
| Net loss | *-* |  |  | (2388295) |  | (2388295) |  | (2388295) |
| **Balance at March 31, 2024** | **5807340** | **5807** | **98989598** | **(78310475)** | **(6147468)** | **14537462** |  | **14537462** |
| Common Stock issued in settlement of RSUs | 11932 | 12 | (12) |  |  |  |  |  |
| Tax withholdings paid related to stock-based compensation |  |  | (104940) |  |  | (104940) |  | (104940) |
| Stock-based compensation | *-* |  | 166617 |  |  | 166617 |  | 166617 |
| Currency translation, net | *-* |  |  |  | (213191) | (213191) |  | (213191) |
| Net loss | *-* |  |  | (2111700) |  | (2111700) |  | (2111700) |
| **Balance at June 30, 2024** | **5819272** | **5819** | **99051263** | **(80422175)** | **(6360659)** | **12274248** |  | **12274248** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** |
| **Cash Flows from Operating Activities:** |  |  |
| Net loss | $(4519128) | $(4499995) |
| Adjustments to reconcile net loss to net cash used in operations: |  |  |
| Depreciation and amortization | 900766 | 1067312 |
| Amortization of debt discount | 252348 | 296631 |
| Stock-based compensation | 471798 | 359938 |
| Amortization of right-of-use assets | 281639 | 271926 |
| Deferred taxes | (699) | (28589) |
| (Gain) loss on disposal of property and equipment | 63464 | 453233 |
| Changes in assets and liabilities: |  |  |
| Accounts receivable | (1307919) | 268143 |
| Inventories | 652828 | (525240) |
| Contract assets | 678102 | (79639) |
| Prepaid expenses and other current assets | (227584) | (227077) |
| Accounts payable | 74808 | (562014) |
| Accrued expenses | 71919 | (263144) |
| Operating lease liabilities | (281639) | (273833) |
| Contract liabilities | (18539) | (37331) |
| **Net Cash used in Operating Activities** | **(2907836)** | **(3779679)** |
| **Cash Flows from Investing Activities:** |  |  |
| Purchase of property and equipment | (102342) | (612090) |
| Proceeds from the disposal of property and equipment | 54457 | 945261 |
| **Net Cash used in Investing Activities** | **(47885)** | **333171** |
| **Cash Flows from Financing Activities:** |  |  |
| Repayments of finance lease liabilities | (240849) | (1115153) |
| Proceeds from related party loan | 1084616 |  |
| Capital contribution from noncontrolling interest | 12729 |  |
| **Net Cash provided by Financing Activities** | **856496** | **(1115153)** |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (96054) | (370744) |
| **Net Change in Cash, Cash Equivalents, and Restricted Cash** | **(2195279)** | **(4932405)** |
| Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 10868728 | 10422181 |
| **Cash, Cash Equivalents, and Restricted Cash at End of Period** | $**8673449** | $**5489776** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | ***For the Six Months Ended*** | ***For the Six Months Ended*** |
|  | ***June 30,*** | ***June 30,*** |
|  | ***2025*** | ***2024*** |
| **Supplemental Disclosures of Cash Flow Information:** |  |  |
| Cash paid for interest | $107753 | $97769 |
| Cash paid for income taxes |  |  |
| **Non-Cash Investing and Financing Activities** |  |  |
| Financed purchases of property and equipment | $149219 | $83378 |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12

------

[**Table of Contents**](#toc)

**LIQTECH INTERNATIONAL, INC.** 

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

**NOTE *1*** – **BASIS OF PRESENTATION AND OTHER INFORMATION**

The accompanying unaudited condensed consolidated financial statements of LiqTech International, Inc. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form *10*-Q of Regulation S-*X.* They do *not* include all the information and footnotes required by GAAP for complete financial statements. The *December 31, 2024* consolidated balance sheet data were derived from audited financial statements but does *not* include all disclosures required by GAAP. However, except as disclosed herein, there has been *no* material change in the information disclosed in the notes to the consolidated financial statements for the year ended *December 31, 2024* included in the Company's Annual Report on Form *10*-K, as filed with the Securities and Exchange Commission on *March 28, 2025.* The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Company's Annual Report on Form *10*-K. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the *three* and *six* months ended *June 30, 2025* are *not* necessarily indicative of the results that *may* be expected for the year ending *December 31, 2025*.

***Recently Adopted Accounting Pronouncements***

In *August 2023,* the FASB issued ASU *2023*-*05,* "*Business Combinations*—*Joint Venture Formations (Subtopic *805*-*60*): Recognition and Initial Measurement*," which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU *2023*-*05* is effective for all joint venture formations with a formation date on or after *January 1, 2025,* with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU *2023*-*05* did *not* have a material impact on the Company's condensed consolidated financial statements.

***Recently Issued Accounting Pronouncements *Not* Yet Adopted***

In *December 2023,* the FASB issued ASU *2023*-*09,* "*Income Taxes (Topic *740*): Improvements to Income Tax Disclosures*," which enhances the transparency and decision usefulness of income tax disclosures by requiring; (*1*) consistent categories and greater disaggregation of information in the rate reconciliation and (*2*) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU *2023*-*09* is effective for fiscal years beginning after *December 15, 2025,* with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

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*," which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are *not* separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity's definition of selling expenses. ASU *2024*-*03* is effective for annual periods beginning after *December 15, 2026,* and interim periods beginning after *December 15, 2027.* The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

The Company currently believes there are *no* other issued and *not* yet effective accounting standards that are materially relevant to its condensed consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

------

[**Table of Contents**](#toc)

**NOTE *2*** – **NONCONTROLLING INTEREST**

In *January 2025,* the Company established a joint venture Nantong JiTRI LiqTech Green Energy Technology Co., Ltd (the "JV") in which it holds a 90% ownership interest. The remaining 10% is owned by an unrelated *third* party. The primary focus of the JV is to develop and commercialize systems for the marine water treatment market in China. The JV is fully consolidated in the Company's condensed financial statements, and the *10%* noncontrolling interest is presented separately in the consolidated balance sheet within equity and in the consolidated statement of operations as a component of net income (loss).

As part of the JV agreement, LiqTech has agreed to make our technology utilization available to the JV and to transfer the utilization rights necessary for operations in the marine scrubber market in China. In *February 2025,* the JV received R&D funding of RMB 8,000,000 (approximately USD 1.1 million) from the JV partner to support capability development and system construction. The funding is classified as a long-term loan in the financial statements and *may* be increased to up to RMB 10,000,000 within *12* months if certain technical and commercial milestones are achieved.

The loan bears a fixed annual interest rate of 12% per annum and has *no* set maturity date. At the sole discretion of LiqTech, the loan *may* be either converted into equity of the JV in connection with future capital increases or equity injections, or it *may* be repaid in full with accrued interest. There is *no* separate default rate beyond the stated contractual interest, and *no* mandatory repayment terms exist unless elected by LiqTech.

As of *June 30, 2025*, the noncontrolling interest in the JV amounted to $2,972 and reflects the *third* party's share of the JV's net assets and net loss for the period.

**NOTE *3*** – **DISAGGREGATION OF REVENUES AND SEGMENT REPORTING**

The Company operates in three reportable segments: Water, Ceramics, and Plastics.

The Company sells products throughout the world, and sales by geographical region are as follows for the *three* and *six* months ended *June 30, 2025* and *2024*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months*** | ***For the Three Months*** | ***For the Six Months*** | ***For the Six Months*** |
|  | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Americas | $1252870 | $329711 | $3486771 | $1526908 |
| Asia-Pacific | 376413 | 92535 | 510868 | 435496 |
| Europe | 3205345 | 3285925 | 5454530 | 5936840 |
| Middle East & Africa | 122861 | 776891 | 122861 | 821162 |
| Total revenue | $4957489 | $4485062 | $9575030 | $8720406 |

---

The Company's sales by segment are as follows for the *three* and *six* months ended *June 30, 2025* and *2024*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months*** | ***For the Three Months*** | ***For the Six Months*** | ***For the Six Months*** |
|  | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** |
| **Revenues** | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Water | $2442696 | $1870625 | $5136418 | $3419291 |
| Ceramics | 1299412 | 1665138 | 2253258 | 3471474 |
| Plastics | 1215381 | 949299 | 2185354 | 1829641 |
| Corporate |  |  |  |  |
| Total revenues | $4957489 | $4485062 | $9575030 | $8720406 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *14*

------

[**Table of Contents**](#toc)

The Company's income and total assets by segment are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months*** | ***For the Three Months*** | ***For the Six Months*** | ***For the Six Months*** |
|  | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** |
| **Net loss** | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Water | (187961) | (254251) | (261305) | (688739) |
| Ceramics | (790593) | (340160) | (1794153) | (1318834) |
| Plastics | (37689) | (240414) | (155169) | (514181) |
| Corporate | (1144543) | (1276875) | (2308501) | (1978241) |
| Total net loss | (2160786) | (2111700) | (4519128) | (4499995) |

---

---

| | | |
|:---|:---|:---|
|  | ***As of*** | ***As of*** |
|  | ***June 30,*** | ***December 31,*** |
| **Total assets** | ***2025*** | ***2024*** |
| Water | $8893465 | $8235726 |
| Ceramics | 10258473 | 10679025 |
| Plastics | 2156260 | 1670644 |
| Corporate | 10413208 | 11842084 |
| Total assets | $31721406 | $32427479 |

---

**NOTE *4*** – **ACCOUNTS RECEIVABLE**

Accounts receivable consisted of the following on *June 30, 2025*, and *December 31, 2024*:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Trade accounts receivable | $4290599 | $3033612 |
| Allowance for current expected credit losses | (194608) | (637556) |
| Total accounts receivable, net | $4095991 | $2396056 |

---

The roll-forward of the allowance for doubtful accounts for the periods ended *June 30, 2025* and *December 31, 2024* is as follows:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Allowance for current expected credit losses at the beginning of the period | $637556 | $134912 |
| Bad debt expense | (38891) | 578423 |
| Receivables written off during the period | (481864) | (49577) |
| Effect of exchange rate changes | 77807 | (26202) |
| Allowance for current expected credit losses at the end of the period | $194608 | $637556 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *15*

------

[**Table of Contents**](#toc)

**NOTE *5*** – **INVENTORIES**

Inventories consisted of the following on *June 30, 2025*, and *December 31, 2024*:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Raw materials | $3405195 | $2734781 |
| Work in process | 1890956 | 2435280 |
| Finished goods and filtration systems | 1619526 | 1580255 |
| Reserve for obsolescence | (1400788) | (1209124) |
| Total inventories, net | $5514889 | $5541192 |

---

Inventory valuation adjustments for excess and obsolete inventory are calculated based on current inventory levels, movements, expected useful lives, and estimated future demand for the products.

**NOTE *6*** – **CONTRACT ASSETS AND CONTRACT LIABILITIES**

The roll-forward of Contract assets and Contract liabilities for the periods ended *June 30, 2025* and *December 31, 2024* is as follows:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Cost incurred | $2110111 | $2512901 |
| Unbilled project deliveries |  | 51442 |
| VAT | 254767 | 93961 |
| Other receivables | 9584 | 20972 |
| Prepayments | (1336814) | (1121897) |
|  | $1037648 | $1557379 |
| Distributed as follows: |  |  |
| Contract assets | $1140358 | $1666698 |
| Contract liabilities | (102710) | (109319) |
|  | $1037648 | $1557379 |

---

**NOTE *7*** – **LEASES**

The Company leases certain vehicles, real property, production equipment and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The majority of our operating leases are non-cancelable leases for production and office space in Hobro and Copenhagen, Denmark.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *16*

------

[**Table of Contents**](#toc)

During the *six* months ended *June 30, 2025*, cash paid for amounts included for the measurement of finance lease liabilities was $243,724, and the Company recorded finance lease expenses in other income (expenses) of $64,806.

During the *six* months ended *June 30, 2025*, cash paid for amounts included for the measurement of operating lease liabilities was $435,174, and the Company recorded operating lease expense of $435,174.

Supplemental balance sheet information related to leases as of *June 30, 2025* and *December 31, 2024* was as follows:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| **Operating leases:** |  |  |
| Operating lease right-of-use assets | $4690909 | $4450822 |
| Operating lease liabilities – current | $623766 | $544197 |
| Operating lease liabilities – long-term | $4067143 | 3906625 |
| Total operating lease liabilities | $4690909 | $4450822 |
| **Finance leases:** |  |  |
| Property and equipment, at cost | $4581132 | $4082864 |
| Accumulated depreciation | (1503101) | (1157025) |
| Property and equipment, net | $3078031 | $2925839 |
| Finance lease liabilities – current | $522815 | $458347 |
| Finance lease liabilities – long-term | 1676281 | 1600931 |
| Total finance lease liabilities | $2199096 | $2059278 |
| Weighted average remaining lease term: |  |  |
| Operating leases | 7.7 | 8.1 |
| Finance leases | 2.9 | 3.1 |
| Weighted average discount rate: |  |  |
| Operating leases | 6.8% | 6.8% |
| Finance leases | 5.3% | 5.5% |

---

Maturities of lease liabilities at *June 30, 2025* were as follows:

---

| | | |
|:---|:---|:---|
|  | ***Operating*** | ***Finance*** |
|  | ***Leases*** | ***Leases*** |
| 2025 | $461841 | $327957 |
| 2026 | 918751 | 617279 |
| 2027 | 918751 | 1173121 |
| 2028 | 785515 | 125201 |
| 2029 | 519041 | 176646 |
| Thereafter | 2388180 | 45136 |
| Total payment under lease agreements | 5992079 | 2465340 |
| Less imputed interest | (1301170) | (266244) |
| Total lease liabilities | $4690909 | $2199096 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *17*

------

[**Table of Contents**](#toc)

**NOTE *8*** – **LONG-TERM DEBT**

The components of notes payable are as follows:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Senior promissory notes | $6000000 | $6000000 |
| Less: unamortized debt discount | (664089) | (696437) |
| Total senior promissory notes payable, net | $5335911 | $5303563 |
| Current portion of senior promissory notes payable |  |  |
| Senior promissory notes payable, less current portion | 5335911 | 5303563 |
| Total senior promissory notes payable, net | $5335911 | $5303563 |

---

For the *six* months ended *June 30, 2025,* and *2024*, the Company recognized interest expense of $0 and $0, respectively, and $252,348 and $296,632, respectively, on the Senior Promissory Notes related to the amortization of debt issuance costs.

**NOTE *9*** – **AGREEMENTS AND COMMITMENTS**

**Contingencies** – From time to time, we *may* be involved in litigation relating to claims arising out of our operations in the normal course of business.

**Product Warranties** – The Company provides a standard warranty for its systems, generally for a period of one to three years after customer acceptance. The Company estimates the costs that *may* be incurred under its standard warranty programs and records a liability for such costs at the time product revenue is recognized.

In addition, the Company sells an extended warranty for certain systems, which generally provides a warranty for up to four years from the date of commissioning. The specific terms and conditions of the warranties vary depending upon the product sold and the country in which the installation occurred. Revenue received for the sale of extended warranty contracts is deferred and recognized in the same manner as the costs incurred to perform under the warranty contracts.

The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Factors that affect the warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and the cost per claim.

Changes in the Company's current and long-term warranty obligations included in accrued expenses on the balance sheet, as of *June 30, 2025* and *December 31, 2024*, were as follows:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Balance at January 1 | $621031 | $629100 |
| Warranty costs charged to cost of goods sold | 66193 | 100726 |
| Utilization charges against reserve |  | (72736) |
| Foreign currency effect | 80831 | (36059) |
| Balance at the end of the period | $768055 | $621031 |

---

**NOTE *10*** – **STOCKHOLDERS**' **EQUITY**

***Common Stock*** – The Company has 50,000,000 authorized shares of Common Stock, $0.001 par value. As of *June 30, 2025* and *December 31, 2024*, there were 9,614,043 and 9,475,443 shares of Common Stock issued and outstanding, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

------

[**Table of Contents**](#toc)

**Stock Issuances**

During the *six* months ended *June 30, 2025*, the Company has made the following issuances of Common Stock:

On *January 1, 2025,* the Company issued 30,703 shares of Common Stock to settle RSUs. The RSUs were valued at $81,886 for services provided by management in *2024*. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended *December 31, 2024*.

On *January 3, 2025,* the Company issued 52,350 shares of Common Stock to settle RSUs. The RSUs were valued at $183,750 for services provided by the Board of Directors in *2024*. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended *December 31, 2024*.

On *January 3, 2025,* the Company issued 75,921 shares of Common Stock to settle RSUs. The RSUs were valued at $245,899 for services provided by management in *2024*. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended *December 31, 2024*. In connection with the issuance, 28,394 shares of Common Stock, with a total value of $53,097, were withheld from vesting to settle tax withholdings associated with stock-based compensation.

On *April 30, 2025,* the Company issued 8,019 shares of Common Stock to settle RSUs. The RSUs were valued at $11,868 for services provided by management.

**Warrants**

On *March 26, 2025,* the Company entered into a Second Amendment to the Note and Warrant Purchase Agreement (the "Second Amendment") originally dated *June 22, 2022,* with the holders of the Company's senior promissory notes. In connection with the Second Amendment, the parties executed Allonge *No. 2* (the "Allonges") to each of the existing amended notes, resulting in an extension of the maturity date from *January 1, 2026* to *May 1, 2027.*

Additionally, pursuant to the Allonges, beginning on *January 1, 2026,* the notes will bear interest at a rate of 10% per annum, payable semiannually. In the event of a default or if the notes are *not* repaid on or before the new maturity date, the interest rate increases to 13% per annum, with a monthly 1% step-up up to a cap of 16% per annum, payable monthly. Accrued interest (excluding default interest) *may* be paid in cash or in shares of common stock, at the Company's election, subject to certain limitations.

As part of the transaction, the Company and the noteholders also agreed to amend and restate the related warrants, reducing the exercise price from $5.20 to $2.00 per share and extending the expiration date to *December 31, 2029.* The repricing resulted in an incremental change in warrant value of $220,000.

The following is a summary of the periodic changes in warrants outstanding for the *six* months ended *June 30, 2025,* and *2024*:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***2025*** | ***2025*** | ***2024*** | ***2024*** |
| Outstanding, December 31 |  | 11391225 |  | 5021354 |
| Warrants issued in connection with public offering and private placement |  |  |  |  |
| Exercises and conversions |  |  |  |  |
| Outstanding, June 30 |  | 11391225 |  | 5021354 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

------

[**Table of Contents**](#toc)

**Stock-based Compensation**

In *2013,* the Company's Board of Directors adopted a Share Incentive Plan (as amended, the "Incentive Plan"). Under the terms and conditions of the Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs, to officers, directors, and consultants of the Company. At *June 30, 2025*, 26,042 RSUs were granted and outstanding under the Incentive Plan.

Directors of the Company receive share compensation consisting of annual grants of $36,750 ($73,500 for the Chairman of the Board) in RSUs per annum with *one*-year vesting.

In *2022,* the Company's Board of Directors adopted an Equity Incentive Plan (the *"2022* Incentive Plan"). Under the terms and conditions of the *2022* Incentive Plan, the Board of Directors is empowered to grant stock awards, including RSUs, to officers and directors of the Company. At *June 30, 2025*, 511,651 RSUs were granted and outstanding under the *2022* Incentive Plan.

The Company recognizes compensation costs for RSU grants to Directors and management based on the stock price on the date of the grant.

The Company recognized stock-based compensation expense related to RSU grants of $471,798 and $359,938 for the *six*-month periods ended *June 30, 2025,* and *2024*, respectively. On *June 30, 2025*, the Company had $820,628 of unrecognized compensation cost related to non-vested stock grants.

A summary of the status of the RSUs as of *June 30, 2025* and changes during the period are presented below:

---

| | | | |
|:---|:---|:---|:---|
|  | ***June 30, 2025*** | ***June 30, 2025*** | ***June 30, 2025*** |
|  |  | ***Weighted*** |  |
|  |  | ***Average*** | ***Aggregated*** |
|  | ***Number of*** | ***Grant-Date*** | ***Intrinsic*** |
|  | ***units*** | ***Fair value*** | ***Value*** |
| Outstanding, December 31, 2024 | 357903 | $3.25 | $- |
| Granted | 376431 | 1.97 | *-* |
| Vested and settled with share issuance | (166994) | 3.19 | *-* |
| Forfeited | (29647) | 2.19 | *-* |
| Outstanding, June 30, 2025 | 537693 | $2.43 | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

------

[**Table of Contents**](#toc)

**NOTE *11*** – **LOSS PER SHARE**

Basic and diluted net income (loss) per common share is determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. For the periods where there is a net loss, stock options, warrants, and RSUs have been excluded from the calculation of diluted net loss per common share because their effect would be anti-dilutive. Consequently, the weighted average number of shares of Common Stock used to calculate both basic and diluted net loss per common share is the same for the reported periods.

As of *June 30, 2025*, the Company had 537,693 RSUs, 5,299,879 prefunded warrants, and 6,091,346 warrants, all exercisable for shares of Common Stock.

As of *June 30, 2024*, the Company had 405,553 RSUs, 3,930,008 prefunded warrants, and 1,091,346 warrants, all exercisable for shares of Common Stock.

**NOTE *12*** – **SIGNIFICANT CUSTOMERS AND CONCENTRATIONS**

The following table presents customers accounting for *10%* or more of the Company's revenue:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***For the Three Months*** | ***For the Three Months*** | ***For the Six Months*** | ***For the Six Months*** |
|  | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** | ***Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Customer A | *\**% | 16% | *\**% | *\**% |
| Customer B | *\**% | 10% | *\**% | *\**% |
| Customer C | 11% | *\**% | *\**% | *\**% |
| Customer D | *\**% | *\**% | 20% | 11% |

---

\* Zero or less than *10%*

The following table presents customers accounting for *10%* or more of the Company's Accounts receivable:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Customer D | 36% | *\**% |
| Customer E | 12% | *\**% |
| Customer F | *\**% | 20% |

---

\* Zero or less than *10%*

As of *June 30, 2025*, approximately 94% of the Company's assets were located in Denmark, 4% were located in China, and 2% were located in the U.S. As of *December 31, 2024*, approximately 86% of the Company's assets were located in Denmark, 0% were located in China, and 14% were located in the U.S.

**NOTE *13*** – **SUBSEQUENT EVENTS**

*None.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

------

[**Table of Contents**](#toc)

**ITEM 2. MANAGEMENT**'**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. In addition, the following discussion should be read in conjunction with our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 28, 2025 and the financial statements and notes thereto. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.*

**Overview**

LiqTech International, Inc. is a clean technology company that provides state-of-the-art gas and liquid purification products by manufacturing ceramic silicon carbide filters and membranes as well as developing industry-leading and fully automated filtration solutions and systems. For more than two decades, we have developed and manufactured products of re-crystallized silicon carbide. We specialize in three business areas: ceramic membranes for liquid filtration systems, ceramic diesel particulate filters (DPFs) to control soot exhaust particles and black carbon emission from diesel engines, and plastic components for usage across various industries. Using nanotechnology, we develop proprietary products using patented silicon carbide technology. Our products are based on innovative silicon carbide membranes that facilitate new applications and improve existing technologies. We market our products from our offices in Denmark and through local representatives and distributors. The products are shipped directly to customers from our production facilities in Denmark.

The terms "LiqTech", "we", "our", "us", the "Company" or any derivative thereof, as used herein, refer to LiqTech International, Inc., a Nevada corporation, together with its direct and indirect wholly-owned subsidiaries, which we collectively refer to herein as our "Subsidiaries".

At present, we conduct our operations in the Kingdom of Denmark and China, with locations in the Copenhagen area, Hobro and Nantong.

**Our Strategy**

Our strategy is to leverage our core competencies in material science, advanced filtration, and systems integration, creating differentiated products with compelling value propositions to penetrate attractive end markets with regulatory tailwinds and sustainability implications. Essential imperatives associated with our strategy include the following:

● **Develop and reinforce new products and applications to provide clean water and reduce pollution.** We currently provide water filtration systems for commercial pool owners, marine scrubber technology providers, shipowners, and ship operators as well as tailored filtration systems for oil & gas operators and services companies. We are expanding our range of products to better leverage existing customer relationships and develop new relationships within the oil & gas, marine, chemical, and other industries.

● **Better penetrate existing end markets where our value proposition is strong.** We have successfully sold products and installed systems into several end market segments--including automotive/transportation, clean water and pool filtration, marine, industrial wastewater, chemicals/petrochemicals, and oil & gas applications. We are focused on targeting and developing new customers in these end markets while working with distributors, agents, and partners to access other important geographic markets.

● **Develop new end markets for our core products and applications**. Our existing products and systems are relevant for and valuable to other end markets, and we regularly evaluate opportunities to develop strategic partners to perfect new applications and validate associated value propositions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 22

------

[**Table of Contents**](#toc)

**Results of Operations**

The financial information below is derived from our unaudited condensed consolidated financial statements included elsewhere in this report.

**Comparison of the Three Months Ended June 30, 2025, and June 30, 2024**

The following table sets forth our revenues, expenses, and net loss for the three months ended June 30, 2025, and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  |  |  |  |  | **Period to Period Change** | **Period to Period Change** |
|  |  | **As a %** |  | **As a %** |  | **Percent** |
|  | **2025** | **of Sales** | **2024** | **of Sales** | **Variance** | **%** |
| **Revenue** | $4957489 | 100.0% | $4485062 | 100.0% | $472427 | 10.5% |
| Cost of goods sold | 4472911 | 90.2 | 3767851 | 84 | 705060 | 18.7 |
| **Gross Profit (Loss)** | 484578 | 9.8 | 717211 | 16 | (232633) | (32.4) |
| **Operating Expenses** |  |  |  |  |  |  |
| Selling expenses | 812568 | 16.4 | 855122 | 19.1 | (42554) | (5.0) |
| General and administrative expenses | 1539323 | 31.1 | 1541316 | 34.4 | (1993) | (0.1) |
| Research and development expenses | 242556 | 4.9 | 407292 | 9.1 | (164736) | (40.4) |
| Total Operating Expenses | 2594447 | 52.3 | 2803730 | 62.5 | (209283) | (7.5) |
| **Loss from Operation** | (2109869) | (42.6) | (2086519) | (46.5) | (23350) | 1.1 |
| **Other Income (Expense)** |  |  |  |  |  |  |
| Interest and other income | 64605 | 1.3 | 45744 | 1 | 18861 | 41.2 |
| Interest expense | (63466) | (1.3) | (29290) | (0.7) | (34176) | 116.7 |
| Amortization of debt discount | (84318) | (1.7) | (150591) | (3.4) | 66273 | (44.0) |
| Gain on currency transactions | 34060 | 0.7 | 84462 | 1.9 | (50402) | (59.7) |
| Loss on disposal of property and equipment | (2158) | (0.0) | 10344 | 0.2 | (12502) | (120.9) |
| Total Other Income (Expense) | (51277) | (1.0) | (39331) | (0.9) | (11946) | 30.4 |
| **Loss Before Income Taxes** | (2161146) | (43.6) | (2125850) | (47.4) | (35296) | 1.7 |
| Income tax benefit | (360) | (0.0) | (14150) | (0.3) | 13790 | (97.5) |
| **Net Loss** | $(2160786) | (43.6)% | $(2111700) | (47.1)% | $(49086) | 2.3% |
| Net Loss attributable to Noncontrolling Interest | (8901) | (0.2) |  |  | (8901) |  |
| Net Loss attributable to LiqTech International, Inc. | (2151885) | (43.4) | (2111700) | (47.1) | (40185) | 1.9 |

---

***Revenues***

Revenue for the three months ended June 30, 2025 was $4,957,489 compared to $4,485,062 for the same period in 2024, representing an increase of $472,427, or 10.5%. The favorable change was attributable to an increase in liquid filtration systems, specifically an increase in pool system deliveries and aftermarket sales, increased sales of plastics products, and increased sales of ceramic membranes, partially offset by a decrease in deliveries of DPFs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 23

------

[**Table of Contents**](#toc)

***Gross Profit (Loss)***

Gross profit for the three months ended June 30, 2025 was $484,578 (representing a gross profit margin of 9.8%) compared to a gross profit of $717,211 (representing a gross profit margin of 16.0%) for the same period in 2024, marking a decrease of $232,633, or 32.4%. This decline was primarily driven by the underutilization of our manufacturing capacity following the decline in DPFs sales. Gross profit was further impacted by increased provisions and write-offs for slow-moving inventory also linked to the DPF activity. This impact was partially offset by lower depreciation expenses. Included in the gross profit was depreciation of $412,291 and $441,936 for the three months ended June 30, 2025, and 2024, respectively.

***Expenses***

Total operating expenses for the three months ended June 30, 2025 were $2,594,447, representing a decrease of $209,283, or 7.5%, compared to $2,803,730 for the same period in 2024.

Selling expenses for the three months ended June 30, 2025 were $812,568 compared to $855,122 for the same period in 2024, representing a decrease of $42,554, or 5.0%. The decrease in selling expenses is mainly related to the release of bad debt provision due to aging improvements and lower depreciation. The decrease was partially offset by costs associated with the newly formed joint venture, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd. The primary focus of the JV is to develop and commercialize systems for the marine water treatment market in China.

General and administrative expenses for the three months ended June 30, 2025 were $1,539,323 compared to $1,541,316 for the same period in 2024, representing a decrease of $1,993, or 0.1%. While overall expenses remained stable, an increase in non-cash compensation was offset by corresponding decrease in salaries. Included in general and administrative expenses were non-cash compensation of $230,553 and $166,617 for the three months ended June 30, 2025, and 2024, respectively.

Research and development expenses for the three months ended June 30, 2025 were $242,556 compared to $407,292 for the same period in 2024, representing a decrease of $164,736, or 40.4%. The decrease was primarily attributed to one-time exit costs of a loss-making external development project in the prior-year period and additionally, a reduction in the average number of employees engaged in research and development activity as the Company streamlined and centralized the R&D function.

***Other Income (Expenses)***

Other expenses for the three months ended June 30, 2025 were $51,277 compared to other expenses of $39,331 for the comparable period in 2024, representing an unfavorable change of $11,946, or 30.4%. The change was primarily attributable to lower gain on currency transactions and increased interest expenses for the three months ended June 30, 2025, partially offset by decreased debt discount amortization.

***Net Loss***

As a result of the cumulative effect of the factors described above, we had a net loss for the three months ended June 30, 2025 of $2,160,786 compared to $2,111,700 for the comparable period in 2024, representing a favorable change in net loss of $49,086, or 2.3%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24

------

[**Table of Contents**](#toc)

**Comparison of the Six Months Ended June 30, 2025, and June 30, 2024**

The following table sets forth our revenues, expenses, and net loss for the six months ended June 30, 2025, and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  |  |  |  |  | **Period to Period Change** | **Period to Period Change** |
|  |  | **As a %** |  | **As a %** |  | **Percent** |
|  | **2025** | **of Sales** | **2024** | **of Sales** | **Variance** |% |
| **Revenue** | $9575030 | 100.0% | $8720406 | 100.0% | $854624 | 9.8% |
| Cost of goods sold | 8965396 | 93.6 | 7732093 | 88.7 | 1233303 | 16.0 |
| **Gross Loss** | 609634 | 6.4 | 988313 | 11.3 | (378679) | (38.3) |
| **Operating Expenses** |  |  |  |  |  |  |
| Selling expenses | 1530584 | 16.0 | 1372701 | 15.7 | 157883 | 11.5 |
| General and administrative expenses | 2901569 | 30.3 | 3086047 | 35.4 | (184478) | (6.0) |
| Research and development expenses | 472679 | 4.9 | 662104 | 7.6 | (189425) | (28.6) |
| Total Operating Expenses | 4904832 | 51.2 | 5120852 | 58.7 | (216020) | (4.2) |
| **Loss from Operation** | (4295198) | (44.9) | (4132539) | (47.4) | (162659) | 3.9 |
| **Other Income (Expense)** |  |  |  |  |  |  |
| Interest and other income | 133356 | 1.4 | 114830 | 1.3 | 18526 | 16.1 |
| Interest expense | (111749) | (1.2) | (101009) | (1.2) | (10740) | 10.6 |
| Amortization of debt discount | (252348) | (2.6) | (296631) | (3.4) | 44283 | (14.9) |
| Gain (loss) on foreign currency transactions | 69576 | 0.7 | 339998 | 3.9 | (270422) | (79.5) |
| Gain (loss) on disposal of property and equipment | (63464) | (0.7) | (453233) | (5.2) | 389769 | (86.0) |
| Loss on assets held for sale |  |  |  |  |  |  |
| Total Other Expense | (224629) | (2.3) | (396045) | (4.5) | 171416 | (43.3) |
| **Loss Before Income Taxes** | (4519827) | (47.2) | (4528584) | (51.9) | 8757 | (0.2) |
| Income Tax Benefit | (699) | (0.0) | (28589) | (0.3) | 27890 | (97.6) |
| **Net Loss** | $(4519128) | (47.2)% | $(4499995) | (51.6)% | $(19133) | 0.4% |
| Net Loss attributable to Noncontrolling Interest | (15851) | (0.3) |  |  | (15851) |  |
| Net Loss attributable to LiqTech International, Inc. | (4503277) | (90.8) | (4499995) | (51.6) | (3282) | 0.1 |

---

***Revenues***

Revenue for the six months ended June 30, 2025 was $9,575,030 compared to $8,720,406 for the same period in 2024, representing an increase of $854,624, or 9.8%. The favorable change was attributable to an increase in liquid filtration systems, specifically a full-scale PureFlow™ system delivery and pool filtration systems, increased sales of plastics products, and increased sales of ceramic membranes, partially offset by a decrease in deliveries of DPFs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25

------

[**Table of Contents**](#toc)

***Gross Profit (Loss)***

Gross profit for the six months ended June 30, 2025 was $609,634 (representing a gross profit margin of 6.4%) compared to a gross profit of $988,313 (representing a gross profit margin of 11.3%) for the same period in 2024, marking a decrease of $378,679, or 38.3%. This decline was primarily driven by the low gross profit margin related to the delivery of a first time full-scale PureFlow™ liquid filtration system to the U.S., caused by associated development costs for the system. Also impacting gross profit was the underutilization of our manufacturing capacity following the decline in DPFs sales. This impact was partially offset by lower depreciation expenses. Included in the gross profit was depreciation of $804,583 and $893,580 for the six months ended June 30, 2025, and 2024, respectively.

***Expenses***

Total operating expenses for the six months ended June 30, 2025 were $4,904,832, representing a decrease of $216,020, or 4.2%, compared to $5,120,852 for the same period in 2024.

Selling expenses for the six months ended June 30, 2025 were $1,530,584 compared to $1,372,701 for the same period in 2024, representing an increase of $157,883, or 11.5%. The increase in selling expenses was mainly related to lower sales commissions in 2024, along with the cost associated with the newly formed joint venture, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd. The primary focus of the JV is to develop and commercialize systems for the marine water treatment market in China. The increase was partially offset by decreased bad debt expense and lower depreciation.

General and administrative expenses for the six months ended June 30, 2025 were $2,901,569 compared to $3,086,047 for the same period in 2024, representing a decrease of $184,478, or 6.0%. The decrease was mainly attributable to non-recurring costs in the comparable period related to recruitment expenses associated with the CFO transition along with savings on external consulting services during this period. Included in general and administrative expenses were non-cash compensation of $471,798 and $359,938 for the six months ended June 30, 2025, and 2024, respectively.

Research and development expenses for the six months ended June 30, 2025 were $472,679 compared to $662,104 for the same period in 2024, representing a decrease of $189,425, or 28.6%. The decrease was primarily attributed to one-time exit costs of a loss-making external development project in the prior-year period and additionally, reduction in the average number of employees engaged in research and development activity as the Company streamlined and centralized the R&D function.

***Other Income (Expenses)***

Other expenses for the six months ended June 30, 2025 were $224,629 compared to other expenses of $396,045 for the comparable period in 2024, representing a favorable change of $171,416, or 43.3%. The change was primarily attributable to significant losses on the disposal of property and equipment in the prior-year period, partially offset by a lower gain on currency transactions for the six months ended June 30, 2025.

***Net Loss***

As a result of the cumulative effect of the factors described above, we had a net loss for the six months ended June 30, 2025 of $4,519,128 compared to $4,499,995 for the comparable period in 2024, representing a decrease in net loss of $19,133, or 0.4%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 26

------

[**Table of Contents**](#toc)

**Liquidity and Capital Resources**

The Company has historically financed operations through offerings of equity or debt instruments, internally generated cash from operations, and our available lines of credit. On June 30, 2025, we had cash of $8,673,449 and net working capital of $14,311,974, and on December 31, 2024, we had cash of $10,868,728 and net working capital of $15,736,809. On June 30, 2025, our net working capital had decreased by $1,424,835 compared to December 31, 2024, mainly as a result of a reduction in cash and cash equivalents to fund operating losses.

Based on current projections, which are subject to significant uncertainties--including the duration and severity of global macroeconomic issues, trade wars and associated tariffs, geopolitical instability, commodity price volatility, and continued global supply chain disruptions--the Company believes that the cash on hand, as well as ongoing cash generated from operations, will be sufficient to cover its capital requirements and committed investments for the next 12 months.

While the Company anticipates that its proactive measures will be sufficient to protect the business over the coming 12 months, the Company cannot predict the specific duration and severity of the unfavorable market dynamics that may adversely affect the business. In the future, the Company may experience reduced or changed demand for its products and services, especially if there is a global recession, structural shift in regulation, or the escalating interest rates and tariffs that adversely impact the investment decisions of our customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 27

------

[**Table of Contents**](#toc)

**Cash Flows**

***Six months ended June 30, 2025 compared to six months ended June 30, 2024***

Cash flows from operating activities for the period ending June 30, 2025 derived from the net loss for the period, adjusted for non-cash items and changes in assets and liabilities. Cash flows used in operating activities for the six months ended June 30, 2025 were $2,907,836 representing a favorable change of $871,843 compared to cash flows used in operating activities of $3,779,679 for the six months ended June 30, 2024. The cash flows used in operating activities for the period consists mainly of the net loss of $2,549,812, when adjusted for depreciation and other non-cash-related items of $1,969,316, increase in accounts receivables of $1,307,919, partially offset by decrease in contract assets of $678,102 and inventories of $652,828.

Cash flows used in investing activities were $47,885 for the six months ended June 30, 2025 as compared to cash flows from investing activities of $333,171 for the six months ended June 30, 2024, representing an unfavorable change of $381,056. The investing activities include general purchases of production equipment to continue optimizing production throughput and the internal production of rental assets, partly offset by proceeds from the disposal of production equipment in our Ballerup facility.

Cash flows provided from financing activities were $856,496 for the six months ended June 30, 2025 compared to cash flows used by financing activities of $1,115,153 for the six months ended June 30, 2024, representing a favorable change of $1,971,649. The finance activities include proceeds from a long-term loan and capital contribution from the noncontrolling interest in the JV. Additionally, in the prior-year period, finance activities included the repayment of a lease agreement.

**Off Balance Sheet Arrangements**

As of June 30, 2025, we had no off-balance sheet arrangements. We are not aware of any material transactions that are not disclosed in our consolidated financial statements.

**Significant Accounting Policies and Critical Accounting Estimates**

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Our most critical accounting estimates include:

● The assessment of revenue recognition, which impacts revenue and cost of sales;

● the assessment of allowance for product warranties, which impacts gross profit;

● the assessment of collectability of accounts receivable, which impacts operating expenses if and when we record bad debt or adjust the allowance for doubtful accounts;

● the assessment of recoverability of long-lived assets, which impacts gross profit or operating expenses if and when we record asset impairments or accelerate their depreciation;

● the recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions), which impact our provision for taxes;

● the valuation of inventory, which impacts gross profit; and

● the recognition and measurement of loss contingencies, which impact gross profit or operating expenses when we recognize a loss contingency, revise the estimate for a loss contingency, or record an asset impairment.

**Recently Enacted Accounting Standards**

For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see "Note 1: Recently Enacted Accounting Standards" in the accompanying financial statements.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are not required to provide quantitative and qualitative disclosures about market risk because we are a smaller reporting company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28

------

[**Table of Contents**](#toc)

**ITEM 4. CONTROLS AND PROCEDURES**

*<u>Evaluation of Disclosure Controls and Procedures</u>*

Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the design and effectiveness of our internal controls over financial reporting and disclosure controls and procedures (pursuant to Rule 13a-15(b) and (c) under the Exchange Act) as of the end of the period covered by this Quarterly Report. A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a misstatement of the registrant's financial statements will not be prevented or detected on a timely basis.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of June 30, 2025 were not effective as of the period covered by this Quarterly Report due to material weaknesses in internal controls over financial reporting. For more information on material weaknesses identified by management, please reference our Form 10-K filed on March 28, 2025 for the year ended December 31, 2024.

*<u>Changes in Internal Control over Financial Reporting</u>*

There was no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

*<u>Management's Remediation Initiatives</u>*

In response to the identified material weaknesses, our management, with oversight from the Company's Audit Committee, has been and will continue to dedicate necessary resources to enhance the Company's internal control over financial reporting and remediate the identified material weaknesses. As an example of such remediation, in 2023 the Company hired additional employees into the finance department, and the Company implemented a new ERP system along with other IT programs to help reinforce its controls and processes, and these investments are an important step in the remediation of the material weaknesses. During 2022, the Company introduced an updated Delegation of Authority, with the overall purpose to provide clarity for all employees on the extent to which they can commit the Company and at the same time provide the Company with assurance that decisions about agreements are made by the appropriate functions and employees. Lastly, the Company has started the process of redesigning and ensuring documentation of all processes and procedures related to the financial reporting process to ensure the effective design and operation of process-level controls.

While management believes that the actions implemented and planned will improve the overall system of internal control over financial reporting and will remediate the identified material weaknesses, these material weaknesses cannot be considered fully remediated until the applicable relevant controls operate for a sufficient period of time.

*<u>Limitations on the Effectiveness of Internal Controls</u>*

An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

While management believes that the steps that we have taken and plan to take will improve the overall system of internal control over financial reporting and will remediate identified material weaknesses, the material weaknesses cannot be considered remediated until the applicable relevant controls operate for a sufficient period of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29

------

[**Table of Contents**](#toc)

**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. For a description of contingencies, see "Note 9 – Agreements And Commitments".

**ITEM 1A. RISK FACTORS**

There have been no material changes to the risk factors discussed in "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 28, 2025 except the following:

***Changes in U.S. policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any resulting changes in international trade relations, such as reciprocal tariffs or trade wars, particularly with regard to China and EU, may have a material adverse impact on our business, results of operations, or financial condition.***

In April-May 2025, the global tariff landscape began to quickly change with the U.S. implementing new and/or increased tariffs on various foreign countries, either generally or with respect to certain products. Certain foreign countries, including China and EU, have, and may continue to, change their tariff policies in response to changes in the U.S. tariff policy. These recent tariffs and the subsequent retaliatory tariffs could increase the cost of goods for our products or reduce our ability to sell products globally, particularly in China and EU, which may adversely affect our operating results and financial condition. So far, these new tariffs and trade policies have not had a significant impact on our business operations and financial results, primarily due to our prior efforts to accumulate and maintain inventories at favorable cost levels. However, there is no guarantee that we can avoid the impact of tariff and related economic effects in the future, and these trade measures and retaliations may directly impact our business by increasing trade-related costs or affecting the demand for our products globally. Any further unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impacting the competitive position of our products. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

We did not sell any equity securities during the quarter ended June 30, 2025 in transactions that were not registered under the Securities Act other than as previously disclosed in our other filings with the SEC.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

None.

**ITEM *5.* OTHER INFORMATION**

(c) *<u>Insider Trading Plans</u>*

During the quarter ended *June 30, 2025*, no director or Section *16* officer adopted, modified, or terminated any "Rule *10b5*-*1* trading arrangement" or "non-Rule *10b5*-*1* trading arrangement" (in each case, as defined in Item *408*(a) of Regulation S-K).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *30*

------

[**Table of Contents**](#toc)

**ITEM 6.**&nbsp;&nbsp;&nbsp;&nbsp;**EXHIBITS**<br>

---

| | | |
|:---|:---|:---|
| 3.1 | [Articles of Incorporation, as amended as of November 13, 2023](http://www.sec.gov/Archives/edgar/data/1307579/000143774924009045/ex_642524.htm) | Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K as filed with the SEC on March 22, 2024 (File No. 001-36210) |
| 3.2 | [Amended and Restated Bylaws](http://www.sec.gov/Archives/edgar/data/1307579/000143774925016825/ex_817582.htm) | Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-Q as filed with the SEC on May 14, 2025 (File No. 001-36210) |
| 10.1\* | [Amendment No. 1 to LiqTech International, Inc. 2022 Equity Incentive Plan, as approved by the Company's stockholders on June 5, 2025](http://www.sec.gov/Archives/edgar/data/1307579/000143774925019741/ex_828079.htm) | Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on June 6, 2025 (File No. 001-36210) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 31

------

[**Table of Contents**](#toc)

---

| | | |
|:---|:---|:---|
| 31.1 | [Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex_829117.htm) | Filed herewith |
| 31.2 | [Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex_829118.htm) | Filed herewith |
| 32.1 | [Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002](ex_829119.htm) | Furnished herewith |
| 32.2 | [Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002](ex_829120.htm) | Furnished herewith |
| 101. INS | Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | Provided herewith |
| 101. CAL | Inline XBRL Taxonomy Extension Calculation Link base Document | Provided herewith |
| 101. DEF | Inline XBRL Taxonomy Extension Definition Link base Document | Provided herewith |
| 101. LAB | Inline XBRL Taxonomy Label Link base Document | Provided herewith |
| 101. PRE | Inline XBRL Extension Presentation Link base Document | Provided herewith |
| 101. SCH | Inline XBRL Taxonomy Extension Scheme Document | Provided herewith |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | Provided herewith |

---

\*Denotes a management contract or compensatory plan or arrangement

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 32

------

[**Table of Contents**](#toc)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | |
|:---|:---|
|  | LiqTech International, Inc. |
| Dated: August 13, 2025 | */s/ Fei Chen*  |
|  | Fei Chen, Chief Executive Officer |
|  | (Principal Executive Officer) |
| Dated: August 13, 2025 | */s/ David Noerby Foss Kowalczyk* |
|  | David Noerby Foss Kowalczyk, Chief Financial and Operating Officer |
|  | (Principal Financial, Accounting and Operating Officer) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 33

## Exhibit 31.1

**Exhibit 31.1**

**OFFICER**'**S CERTIFICATE**

**PURSUANT TO SECTION 302**

I, Fei Chen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of LiqTech International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; Date: August 13, 2025 | By: | */s/ Fei Chen* |
|  | Name: | Fei Chen |
|  | Title: | President and Chief Executive Officer and<br> Principal Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**OFFICER**'**S CERTIFICATE**

**PURSUANT TO SECTION 302**

I, David Noerby Foss Kowalczyk, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2025 of LiqTech International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 13, 2025 | By: | */s/ David Noerby Foss Kowalczyk* |
|  | Name: | David Noerby Foss Kowalczyk |
|  | Title: | Chief Financial and Operating Officer<br> (Principal Financial, Accounting and Operating Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of LiqTech International, Inc. (the "<u>Company</u>") on Form 10-Q for the period ended June 30, 2025 as filed with the U.S. Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to her knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; Date: August 13, 2025 | By: | */s/ Fei Chen* |
|  | Name: | Fei Chen |
|  | Title: | President & Chief Executive Officer and Principal<br> Executive Officer |

---

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of LiqTech International, Inc. (the "<u>Company</u>") on Form 10-Q for the period ended June 30, 2025 as filed with the U.S. Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 13, 2025 By: <u> /*s/ David Noerby Foss Kowalczyk* </u> <br> Name: David Noerby Foss Kowalczyk <br> Title: Chief Financial and Operating Officer (Principal Financial, Accounting and Operating Officer)

A signed original of this written statement required by Section 906, or other document authentications, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.