Summary of LiqTech International Conference Call Company Overview - **Company**: LiqTech International (NASDAQ: LIQT) - **Industry**: Advanced membrane filtration technology for liquid and gas purification - **Mission**: To provide high-end filtration systems that enhance operational efficiency and sustainability for customers [5][2] Core Differentiation - **Technology**: Offers fully automatic filtration systems with in-house membrane production and system assembly, allowing for optimized designs [7][6] - **Proprietary Technology**: Specializes in silicon carbide ceramic membranes, which are mechanically stronger and more chemically resistant than polymer membranes, leading to longer operational lifetimes and reduced cleaning frequency [9][8] - **Market Validation**: Focus on transitioning customers from a CapEx-driven mindset to a total cost of ownership perspective, emphasizing the long-term benefits of their filtration technology [11][10] Market Focus - **Key Markets**: - Oil and Gas: Addressing produced water treatment, with over 20 billion barrels produced annually in the U.S. [14][12] - Maritime: Targeting new commercial vessels with dual fuel engine designs [25][24] - Commercial Swimming Pools: Offering a more efficient alternative to traditional sand filtration, reducing water, energy, and chemical consumption by significant percentages [17][16] - Industrial Wastewater Treatment: Catering to industries like steel processing and chemical manufacturing, with a focus on high-load wastewater streams [19][18] Geographic Expansion - **U.S. and China**: Recent establishment of a service center in the U.S. and a joint venture in China to enhance market presence and service capabilities [24][23][25] Financial Outlook - **Guidance for FY 2025**: Projected revenue of $19 to $20 million, representing a 30% to 37% increase compared to the previous fiscal year [32][26] - **Growth Drivers**: Anticipated strong growth in system business, particularly in maritime and water treatment sectors, due to significant market potential [28][27] Strategic Initiatives - **Operational Improvements**: Focus on innovation, execution, and cost reduction through streamlined assembly processes and potential relocation of assembly operations [30][29][31] - **Risk Management**: Monitoring geopolitical situations and ensuring cohesive organizational development to match commercial growth and customer service demands [32][32] Investment Appeal - **Reasons for Investor Interest**: - Strong market adaptation and demand for advanced filtration solutions - Unique technology and in-house capabilities position the company as a reliable industry partner - Commitment to sustainable growth and long-term shareholder value through a knowledgeable team [33][33]

BALLERUP, Denmark, Sept. 15, 2025 (GLOBE NEWSWIRE) -- LiqTech International, Inc. (NASDAQ: LIQT), a clean technology company specializing in advanced ceramic filtration systems, today announced the opening of a dedicated Service Center in Cresson, Texas, near Fort Worth. The new facility, launching in partnership with Halldor Systems, is scheduled to open on November 1, 2025, to enhance LiqTech’s U.S. service capabilities. Halldor Systems is an industrial services provider with extensive experience in the e ...

```python import urllib.parse import re def bold_financial_metrics(text): """ Applies bold formatting to common financial metrics within a string. Specifically targets currency amounts, percentages, and numbers followed by specific units. """ Bold currency amounts: $X, RMB X, USD X Handles formats like "$1,234,567", "$1.1 million", "RMB 8,000,000", "USD 1.1 million" The regex is designed to capture the currency symbol/prefix and the number/amount together. text = re.sub(r'(\b(?:USD|RMB)?\s*\$?\s*\d{1,3}(?:,\d{3})*(?:\.\d+)?(?:\s*(?:million|billion))?\b)', r'**\1**', text, flags=re.IGNORECASE) Bold percentages: X% Handles formats like "10.5%", "90%" text = re.sub(r'(\d+(?:\.\d+)?%)', r'**\1**', text) Bold numbers followed by specific units like "shares", "years" Handles "166,993 shares", "7.7 years", "4 years" text = re.sub(r'(\b\d{1,3}(?:,\d{3})*(?:\.\d+)?)\s*(shares|years)\b', r'**\1 \2**', text, flags=re.IGNORECASE) return text def generate_report_outline(outline_data): """ Generates a professionally structured report outline in Markdown format based on the provided outline content and specific requirements. """ markdown_output_lines = [] def append_item_content(item, current_output_list): """Recursively processes an outline item and appends its Markdown representation.""" level = item["level"] title = item["title"] item_id = urllib.parse.quote(item["item_id"]) start_page = item["start_page"] summary = item["summary"] key_points = item.get("key_points", []) children = item.get("children", []) heading_prefix = "" * level current_output_list.append(f"{heading_prefix} [{title}](index={start_page}&type=section&id={item_id})") has_content_after_summary = bool(key_points or children) if summary: current_output_list.append(summary) if has_content_after_summary: current_output_list.append("") Blank line after summary if there's more content for kp in key_points: if kp["type"] == "insight": Apply bolding to key financial metrics in insight content formatted_content = bold_financial_metrics(kp["content"]) Append chunk references in ascending order references = "".join([f"[{num}](index={num}&type=chunk)" for num in sorted(kp["chunk_num"])]) current_output_list.append(f"- {formatted_content}{references}") elif kp["type"] == "table": current_output_list.append(f" {kp['title']}") Table title as subheading current_output_list.append(kp["content"]) Raw markdown table content Recursively process children items for child_item in children: append_item_content(child_item, current_output_list) Add a blank line after the entire section's content (summary, key_points, and all children) This will be cleaned up later to avoid multiple blank lines. current_output_list.append("") Process all top-level items for item in outline_data: append_item_content(item, markdown_output_lines) Clean up blank lines: ensure no more than one blank line between any two non-blank lines cleaned_output = [] last_was_blank = False for line in markdown_output_lines: if line.strip() == "": if not last_was_blank: cleaned_output.append("") last_was_blank = True else: cleaned_output.append(line) last_was_blank = False Remove any leading or trailing blank lines from the entire document while cleaned_output and cleaned_output[0] == "": cleaned_output.pop(0) while cleaned_output and cleaned_output[-1] == "": cleaned_output.pop() return "\n".join(cleaned_output) Provided outline content outline_content = [ {"level": 1, "title": "Filing Information", "item_id": "Filing Information", "summary": "LiqTech International, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025, outlining its registrant and filing status", "children": [], "end_page": 1, "key_points": [{"type": "insight", "content": "LiqTech International, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025", "chunk_num": [2]}, {"type": "table", "title": "Registrant and Filing Status", "content": "| Attribute | Value |\n| :--- | :--- |\n| **Registrant Name** | LiqTech International, Inc. |\n| **State of Incorporation** | Nevada |\n| **Commission File Number** | 001-36210 |\n| **Trading Symbol** | LIQT |\n| **Exchange** | The Nasdaq Stock Market LLC |\n| **Filer Status** | Non-accelerated filer, Smaller reporting company |\n| **Common Stock Outstanding (as of Aug 13, 2025)** | 9,614,043 shares |", "chunk_num": [2, 4]}], "start_page": 1}, {"level": 1, "title": "Forward-Looking Statements", "item_id": "FORWARD-LOOKING STATEMENTS", "summary": "This section cautions that forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially", "children": [], "end_page": 4, "key_points": [{"type": "insight", "content": "The report contains forward-looking statements regarding management's plans and objectives, which involve known and unknown risks and uncertainties that could cause actual results to differ materially", "chunk_num": [8, 9]}, {"type": "insight", "content": "Key risks include potential adverse effects from armed conflicts, geopolitical tensions, global trade restrictions, energy market volatility, health crises, dependence on major customers, ability to secure financing and raw materials, achieving revenue growth, retaining key employees, adapting to regulatory changes, interest rate fluctuations, environmental regulations, tax consequences, competition, intellectual property protection, litigation, internal control effectiveness, and IT security breaches", "chunk_num": [10, 13]}, {"type": "insight", "content": "The company undertakes no obligation to revise or update any forward-looking statements", "chunk_num": [9, 12]}], "start_page": 3}, {"level": 1, "title": "PART I. FINANCIAL INFORMATION", "item_id": "PART I. FINANCIAL INFORMATION", "summary": "This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations", "children": [{"level": 2, "title": "Item 1. Financial Statements", "item_id": "Item 1. Financial Statements", "summary": "This section presents the unaudited condensed consolidated financial statements of LiqTech International, Inc., prepared in accordance with GAAP for interim financial information", "children": [{"level": 3, "title": "Condensed Consolidated Balance Sheets", "item_id": "Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024", "summary": "The balance sheet highlights show changes in total assets, liabilities, and equity, including cash, accounts receivable, and a related party loan", "children": [], "end_page": 6, "key_points": [{"type": "table", "title": "Condensed Consolidated Balance Sheet Highlights", "content": "| Metric | June 30, 2025 | December 31, 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| **Total Assets** | $31,721,406 | $32,427,479 | $(706,073) |\n| **Total Liabilities** | $17,791,174 | $15,773,387 | $2,017,787 |\n| **Total Equity** | $13,930,232 | $16,654,092 | $(2,723,860) |\n| Cash and restricted cash | $8,673,449 | $10,868,728 | $(2,195,279) |\n| Accounts receivable, net | $4,095,991 | $2,396,056 | $1,699,935 |\n| Loan from related party, net of current portion | $1,167,215 | $- | $1,167,215 |", "chunk_num": [16, 19]}], "start_page": 5}, {"level": 3, "title": "Condensed Consolidated Statements of Operations", "item_id": "Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)", "summary": "This section details revenue, gross profit, operating loss, and net loss for the three and six months ended June 30, 2025 and 2024", "children": [], "end_page": 7, "key_points": [{"type": "table", "title": "Statements of Operations Highlights (Three Months Ended June 30)", "content": "| Metric | 2025 | 2024 | Change | % Change |\n| :--- | :--- | :--- | :--- | :--- |\n| **Revenue** | $4,957,489 | $4,485,062 | $472,427 | 10.5% |\n| **Gross Profit** | $484,578 | $717,211 | $(232,633) | (32.4)% |\n| **Loss from Operations** | $(2,109,869) | $(2,086,519) | $(23,350) | 1.1% |\n| **Net Loss** | $(2,160,786) | $(2,111,700) | $(49,086) | 2.3% |\n| **Loss Per Common Share – Basic and Diluted** | $(0.22) | $(0.36) | $0.14 | (38.9)% |", "chunk_num": [21]}, {"type": "table", "title": "Statements of Operations Highlights (Six Months Ended June 30)", "content": "| Metric | 2025 | 2024 | Change | % Change |\n| :--- | :--- | :--- | :--- | :--- |\n| **Revenue** | $9,575,030 | $8,720,406 | $854,624 | 9.8% |\n| **Gross Profit** | $609,634 | $988,313 | $(378,679) | (38.3)% |\n| **Loss from Operations** | $(4,295,198) | $(4,132,539) | $(162,659) | 3.9% |\n| **Net Loss** | $(4,519,128) | $(4,499,995) | $(19,133) | 0.4% |\n| **Loss Per Common Share – Basic and Diluted** | $(0.47) | $(0.77) | $0.30 | (39.0)% |", "chunk_num": [21]}], "start_page": 7}, {"level": 3, "title": "Condensed Consolidated Statements of Comprehensive Loss", "item_id": "Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)", "summary": "This section presents the net loss and foreign currency translation adjustments contributing to total comprehensive loss for the periods", "children": [], "end_page": 8, "key_points": [{"type": "table", "title": "Comprehensive Loss Highlights (Three Months Ended June 30)", "content": "| Metric | 2025 | 2024 |\n| :--- | :--- | :--- |\n| **Net Loss** | $(2,160,786) | $(2,111,700) |\n| Loss on foreign currency translation adjustments | $794,429 | $(213,191) |\n| **Total Other Comprehensive Loss** | $(1,366,357) | $(2,324,891) |", "chunk_num": [24]}, {"type": "table", "title": "Comprehensive Loss Highlights (Six Months Ended June 30)", "content": "| Metric | 2025 | 2024 |\n| :--- | :--- | :--- |\n| **Net Loss** | $(4,519,128) | $(4,499,995) |\n| Loss on foreign currency translation adjustments | $1,142,775 | $(756,771) |\n| **Total Other Comprehensive Loss** | $(3,376,353) | $(5,256,766) |", "chunk_num": [24]}], "start_page": 8}, {"level": 3, "title": "Condensed Consolidated Statements of Stockholders' Equity", "item_id": "Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months ended June 30, 2025 and June 30, 2024 (unaudited)", "summary": "This section details changes in common stock, additional paid-in capital, accumulated deficit, and total stockholders' equity", "children": [], "end_page": 10, "key_points": [{"type": "table", "title": "Stockholders' Equity Changes (December 31, 2024 to June 30, 2025)", "content": "| Metric | December 31, 2024 | June 30, 2025 | Change |\n| :--- | :--- | :--- | :--- |\n| **Common Stock Shares Outstanding** | 9,475,443 | 9,614,043 | +138,600 |\n| **Additional Paid-in Capital** | $109,274,166 | $109,912,732 | +$638,566 |\n| **Accumulated Deficit** | $(86,267,438) | $(90,770,715) | $(4,503,277) |\n| **Total Stockholders' Equity** | $16,654,092 | $13,933,204 | $(2,720,888) |", "chunk_num": [19, 25, 26]}, {"type": "insight", "content": "During the six months ended June 30, 2025, the company issued 166,993 shares of Common Stock to settle RSUs and recognized $471,798 in stock-based compensation expense", "chunk_num": [25, 26, 65]}, {"type": "insight", "content": "Warrants were amended on March 26, 2025, extending the maturity date to May 1, 2027, reducing the exercise price from $5.20 to $2.00 per share, and resulting in an incremental change in warrant value of $220,000", "chunk_num": [58, 60]}], "start_page": 9}, {"level": 3, "title": "Condensed Consolidated Statements of Cash Flows", "item_id": "Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and June 30, 2024 (unaudited)", "summary": "This section presents cash flows from operating, investing, and financing activities, and the net change in cash and restricted cash", "children": [], "end_page": 12, "key_points": [{"type": "table", "title": "Cash Flow Highlights (Six Months Ended June 30)", "content": "| Cash Flow Activity | 2025 | 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| **Net Cash used in Operating Activities** | $(2,907,836) | $(3,779,679) | $871,843 |\n| **Net Cash used in Investing Activities** | $(47,885) | $333,171 | $(381,056) |\n| **Net Cash provided by (used in) Financing Activities** | $856,496 | $(1,115,153) | $1,971,649 |\n| **Net Change in Cash, Cash Equivalents, and Restricted Cash** | $(2,195,279) | $(4,932,405) | $2,737,126 |\n| **Cash, Cash Equivalents, and Restricted Cash at End of Period** | $8,673,449 | $5,489,776 | $3,183,673 |", "chunk_num": [28]}, {"type": "insight", "content": "The favorable change in cash from financing activities was primarily due to proceeds from a related party loan and capital contribution from a noncontrolling interest in the newly formed joint venture", "chunk_num": [100]}], "start_page": 11}, {"level": 3, "title": "Notes to Condensed Consolidated Financial Statements", "item_id": "Notes to Condensed Consolidated Financial Statements (unaudited)", "summary": "This section provides detailed explanations and disclosures for the condensed consolidated financial statements", "children": [{"level": 3, "title": "NOTE 1 – BASIS OF PRESENTATION AND OTHER INFORMATION", "item_id": "NOTE 1 – BASIS OF PRESENTATION AND OTHER INFORMATION", "summary": "The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, with recent ASU adoptions and evaluations", "children": [], "end_page": 14, "key_points": [{"type": "insight", "content": "The financial statements are unaudited and prepared in accordance with GAAP for interim financial information, not including all disclosures required for complete annual statements", "chunk_num": [32]}, {"type": "insight", "content": "ASU 2023-05 (Business Combinations—Joint Venture Formations) was adopted and had no material impact", "chunk_num": [33]}, {"type": "insight", "content": "ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures) are not yet effective, and the company is currently evaluating their potential impact", "chunk_num": [34, 35]}], "start_page": 14}, {"level": 3, "title": "NOTE 2 – NONCONTROLLING INTEREST", "item_id": "NOTE 2 – NONCONTROLLING INTEREST", "summary": "In January 2025, the company established a joint venture in China, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd., with a 90% ownership interest", "children": [], "end_page": 15, "key_points": [{"type": "insight", "content": "A joint venture, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd., was established in January 2025, with LiqTech holding a 90% ownership interest", "chunk_num": [37]}, {"type": "insight", "content": "The JV received RMB 8,000,000 (approximately USD 1.1 million) in R&D funding from the JV partner, classified as a long-term loan with a 12% annual interest rate and no set maturity date, convertible to equity or repayable at LiqTech's discretion", "chunk_num": [38, 39]}, {"type": "insight", "content": "As of June 30, 2025, the noncontrolling interest in the JV amounted to $2,972", "chunk_num": [40]}], "start_page": 15}, {"level": 3, "title": "NOTE 3 – DISAGGREGATION OF REVENUES AND SEGMENT REPORTING", "item_id": "NOTE 3 – DISAGGREGATION OF REVENUES AND SEGMENT REPORTING", "summary": "The company operates in three segments: Water, Ceramics, and Plastics, with revenue and asset breakdowns provided by segment", "children": [], "end_page": 16, "key_points": [{"type": "table", "title": "Revenue by Segment (Three Months Ended June 30)", "content": "| Segment | 2025 Revenue | 2024 Revenue | Change | % Change |\n| :--- | :--- | :--- | :--- | :--- |\n| Water | $2,442,696 | $1,870,625 | $572,071 | 30.6% |\n| Ceramics | $1,299,412 | $1,665,138 | $(365,726) | (22.0)% |\n| Plastics | $1,215,381 | $949,299 | $266,082 | 28.0% |\n| **Total Revenue** | **$4,957,489** | **$4,485,062** | **$472,427** | **10.5%** |", "chunk_num": [41]}, {"type": "table", "title": "Revenue by Segment (Six Months Ended June 30)", "content": "| Segment | 2025 Revenue | 2024 Revenue | Change | % Change |\n| :--- | :--- | :--- | :--- | :--- |\n| Water | $5,136,418 | $3,419,291 | $1,717,127 | 50.2% |\n| Ceramics | $2,253,258 | $3,471,474 | $(1,218,216) | (35.1)% |\n| Plastics | $2,185,354 | $1,829,641 | $355,713 | 19.4% |\n| **Total Revenue** | **$9,575,030** | **$8,720,406** | **$854,624** | **9.8%** |", "chunk_num": [41]}, {"type": "table", "title": "Total Assets by Segment", "content": "| Segment | June 30, 2025 | December 31, 2024 |\n| :--- | :--- | :--- |\n| Water | $8,893,465 | $8,235,726 |\n| Ceramics | $10,258,473 | $10,679,025 |\n| Plastics | $2,156,260 | $1,670,644 |\n| Corporate | $10,413,208 | $11,842,084 |\n| **Total Assets** | **$31,721,406** | **$32,427,479** |", "chunk_num": [42]}], "start_page": 15}, {"level": 3, "title": "NOTE 4 – ACCOUNTS RECEIVABLE", "item_id": "NOTE 4 – ACCOUNTS RECEIVABLE", "summary": "Net accounts receivable increased significantly due to higher trade accounts receivable, while the allowance for credit losses decreased", "children": [], "end_page": 16, "key_points": [{"type": "table", "title": "Accounts Receivable, Net", "content": "| Metric | June 30, 2025 | December 31, 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| Trade accounts receivable | $4,290,599 | $3,033,612 | $1,256,987 |\n| Allowance for current expected credit losses | $(194,608) | $(637,556) | $442,948 |\n| **Total accounts receivable, net** | **$4,095,991** | **$2,396,056** | **$1,699,935** |", "chunk_num": [43]}, {"type": "insight", "content": "The allowance for current expected credit losses decreased from $637,556 to $194,608, influenced by bad debt expense of $(38,891) and receivables written off of $(481,864) during the six months ended June 30, 2025", "chunk_num": [43]}], "start_page": 16}, {"level": 3, "title": "NOTE 5 – INVENTORIES", "item_id": "NOTE 5 – INVENTORIES", "summary": "Total net inventories remained stable, with raw materials increasing and work in process decreasing, alongside a higher obsolescence reserve", "children": [], "end_page": 17, "key_points": [{"type": "table", "title": "Inventories, Net", "content": "| Metric | June 30, 2025 | December 31, 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| Raw materials | $3,405,195 | $2,734,781 | $670,414 |\n| Work in process | $1,890,956 | $2,435,280 | $(544,324) |\n| Finished goods and filtration systems | $1,619,526 | $1,580,255 | $39,271 |\n| Reserve for obsolescence | $(1,400,788) | $(1,209,124) | $(191,664) |\n| **Total inventories, net** | **$5,514,889** | **$5,541,192** | **$(26,303)** |", "chunk_num": [44]}], "start_page": 17}, {"level": 3, "title": "NOTE 6 – CONTRACT ASSETS AND CONTRACT LIABILITIES", "item_id": "NOTE 6 – CONTRACT ASSETS AND CONTRACT LIABILITIES", "summary": "Contract assets decreased, while contract liabilities saw a slight decrease from December 31, 2024, to June 30, 2025", "children": [], "end_page": 17, "key_points": [{"type": "table", "title": "Contract Assets and Liabilities", "content": "| Metric | June 30, 2025 | December 31, 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| Contract assets | $1,140,358 | $1,666,698 | $(526,340) |\n| Contract liabilities | $(102,710) | $(109,319) | $6,609 |", "chunk_num": [45]}], "start_page": 17}, {"level": 3, "title": "NOTE 7 – LEASES", "item_id": "NOTE 7 – LEASES", "summary": "Operating and finance lease assets and liabilities increased, while the weighted average remaining operating lease term decreased", "children": [], "end_page": 18, "key_points": [{"type": "table", "title": "Lease Information", "content": "| Metric | June 30, 2025 | December 31, 2024 |\n| :--- | :--- | :--- |\n| Operating lease right-of-use assets | $4,690,909 | $4,450,822 |\n| Total operating lease liabilities | $4,690,909 | $4,450,822 |\n| Total finance lease liabilities | $2,199,096 | $2,059,278 |\n| Weighted average remaining operating lease term | 7.7 years | 8.1 years |\n| Weighted average operating lease discount rate | 6.8% | 6.8% |\n| Weighted average remaining finance lease term | 2.9 years | 3.1 years |\n| Weighted average finance lease discount rate | 5.3% | 5.5% |", "chunk_num": [48]}, {"type": "insight", "content": "Cash paid for finance lease liabilities was $243,724 and for operating lease liabilities was $435,174 for the six months ended June 30, 2025", "chunk_num": [47]}], "start_page": 17}, {"level": 3, "title": "NOTE 8 – LONG-TERM DEBT", "item_id": "NOTE 8 – LONG-TERM DEBT", "summary": "Senior promissory notes remained stable, with a decrease in unamortized debt discount and lower related interest expense", "children": [], "end_page": 19, "key_points": [{"type": "table", "title": "Notes Payable, Net", "content": "| Metric | June 30, 2025 | December 31, 2024 |\n| :--- | :--- | :--- |\n| Senior promissory notes, net | $5,335,911 | $5,303,563 |\n| Unamortized debt discount | $(664,089) | $(696,437) |", "chunk_num": [49]}, {"type": "insight", "content": "Amortization of debt discount was $252,348 for the six months ended June 30, 2025, a decrease from $296,632 in the prior-year period", "chunk_num": [49]}], "start_page": 19}, {"level": 3, "title": "NOTE 9 – AGREEMENTS AND COMMITMENTS", "item_id": "NOTE 9 – AGREEMENTS AND COMMITMENTS", "summary": "The company provides product warranties, and the warranty obligation increased as of June 30, 2025", "children": [], "end_page": 19, "key_points": [{"type": "insight", "content": "The company provides standard product warranties (1-3 years) and extended warranties (up to 4 years) for its systems", "chunk_num": [50, 51]}, {"type": "table", "title": "Warranty Obligations", "content": "| Metric | June 30, 2025 | December 31, 2024 |\n| :--- | :--- | :--- |\n| Balance at end of period | $768,055 | $621,031 |\n| Warranty costs charged to cost of goods sold (H1) | $66,193 | $100,726 |", "chunk_num": [52]}], "start_page": 19}, {"level": 3, "title": "NOTE 10 – STOCKHOLDERS' EQUITY", "item_id": "NOTE 10 – STOCKHOLDERS' EQUITY", "summary": "Common stock outstanding increased due to RSU settlements, warrants were repriced, and stock-based compensation expense rose", "children": [], "end_page": 21, "key_points": [{"type": "insight", "content": "As of June 30, 2025, there were 9,614,043 shares of Common Stock issued and outstanding, up from 9,475,443 shares at December 31, 2024", "chunk_num": [53]}, {"type": "insight", "content": "During the six months ended June 30, 2025, the company issued 166,993 shares of Common Stock to settle RSUs", "chunk_num": [54, 55, 56, 57, 66]}, {"type": "insight", "content": "Warrants were amended on March 26, 2025, extending the maturity date to May 1, 2027, reducing the exercise price from $5.20 to $2.00 per share, and resulting in an incremental change in warrant value of $220,000", "chunk_num": [58, 60]}, {"type": "insight", "content": "Stock-based compensation expense for the six months ended June 30, 2025, was $471,798, an increase from $359,938 in the prior-year period", "chunk_num": [65]}], "start_page": 19}, {"level": 3, "title": "NOTE 11 – LOSS PER SHARE", "item_id": "NOTE 11 – LOSS PER SHARE", "summary": "Basic and diluted net loss per common share are identical due to the anti-dilutive effect of outstanding securities during periods of net loss", "children": [], "end_page": 22, "key_points": [{"type": "insight", "content": "Basic and diluted net loss per common share are identical because stock options, warrants, and RSUs are anti-dilutive during periods of net loss", "chunk_num": [67]}, {"type": "table", "title": "Outstanding Dilutive Securities", "content": "| Security Type | June 30, 2025 | June 30, 2024 |\n| :--- | :--- | :--- |\n| RSUs | 537,693 | 405,553 |\n| Prefunded warrants | 5,299,879 | 3,930,008 |\n| Warrants | 6,091,346 | 1,091,346 |", "chunk_num": [68]}], "start_page": 22}, {"level": 3, "title": "NOTE 12 – SIGNIFICANT CUSTOMERS AND CONCENTRATIONS", "item_id": "NOTE 12 – SIGNIFICANT CUSTOMERS AND CONCENTRATIONS", "summary": "The company has customer concentrations in revenue and accounts receivable, with most assets located in Denmark and a growing presence in China", "children": [], "end_page": 22, "key_points": [{"type": "table", "title": "Significant Customer Revenue Concentration (Three Months Ended June 30, 2025)", "content": "| Customer | % of Revenue |\n| :--- | :--- |\n| Customer C | 11% |", "chunk_num": [69]}, {"type": "table", "title": "Significant Customer Revenue Concentration (Six Months Ended June 30, 2025)", "content": "| Customer | % of Revenue |\n| :--- | :--- |\n| Customer D | 20% |", "chunk_num": [69]}, {"type": "table", "title": "Significant Customer Accounts Receivable Concentration (June 30, 2025)", "content": "| Customer | % of Accounts Receivable |\n| :--- | :--- |\n| Customer D | 36% |\n| Customer E | 12% |", "chunk_num": [69]}, {"type": "insight", "content": "As of June 30, 2025, approximately 94% of the company's assets were located in Denmark, 4% in China, and 2% in the U.S., reflecting a shift from December 31, 2024, when 86% were in Denmark and 14% in the U.S. (0% in China)", "chunk_num": [69]}], "start_page": 22}, {"level": 3, "title": "NOTE 13 – SUBSEQUENT EVENTS", "item_id": "NOTE 13 – SUBSEQUENT EVENTS", "summary": "No subsequent events were reported after June 30, 2025", "children": [], "end_page": 22, "key_points": [{"type": "insight", "content": "No subsequent events were reported as of the filing date", "chunk_num": [70]}], "start_page": 22}], "end_page": 22, "start_page": 14}], "end_page": 22, "start_page": 5}, {"level": 2, "title": "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", "item_id": "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations", "summary": "This section provides management's perspective on the company's financial performance, condition, and future outlook, including operating results and liquidity", "children": [{"level": 3, "title": "Overview", "item_id": "Overview", "summary": "LiqTech International, Inc. is a clean technology company specializing in ceramic silicon carbide filters, membranes, and plastic components, with operations in Denmark and China", "children": [], "end_page": 23, "key_points": [{"type": "insight", "content": "LiqTech International, Inc. is a clean technology company manufacturing ceramic silicon carbide filters and membranes, and developing filtration solutions and systems", "chunk_num": [72]}, {"type": "insight", "content": "The company specializes in three business areas: ceramic membranes for liquid filtration, ceramic diesel particulate filters (DPFs), and plastic components, leveraging patented silicon carbide nanotechnology", "chunk_num": [72]}, {"type": "insight", "content": "Operations are conducted in Denmark (Copenhagen area, Hobro) and China (Nantong)", "chunk_num": [73]}], "start_page": 23}, {"level": 3, "title": "Our Strategy", "item_id": "Our Strategy", "summary": "The company's strategy focuses on leveraging core competencies to develop differentiated products for attractive end markets driven by regulatory tailwinds and sustainability", "children": [], "end_page": 23, "key_points": [{"type": "insight", "content": "Strategy involves leveraging material science, advanced filtration, and systems integration to create differentiated products for attractive end markets driven by regulatory tailwinds and sustainability", "chunk_num": [74]}, {"type": "insight", "content": "Focus areas include developing new products for clean water and pollution reduction (e.g., commercial pools, marine scrubbers, oil & gas), better penetrating existing markets (e.g., automotive/transportation, industrial wastewater, chemicals/petrochemicals), and developing new end markets for core products", "chunk_num": [74]}], "start_page": 23}, {"level": 3, "title": "Results of Operations", "item_id": "Results of Operations", "summary": "This section details the financial performance for the three and six months ended June 30, 2025, covering revenue, gross profit, operating expenses, and net loss", "children": [{"level": 3, "title": "Comparison of the Three Months Ended June 30, 2025, and June 30, 2024", "item_id": "Comparison of the Three Months Ended June 30, 2025, and June 30, 2024", "summary": "Revenue increased by 10.5%, but gross profit declined by 32.4% due to underutilization and inventory write-offs, while net loss slightly increased", "children": [{"level": 3, "title": "Revenues", "item_id": "Revenues_Q2_2025", "summary": "Revenue increased by 10.5% for the three months ended June 30, 2025, driven by liquid filtration and plastics sales", "children": [], "end_page": 24, "key_points": [{"type": "insight", "content": "Revenue increased by $472,427, or 10.5%, to $4,957,489 for the three months ended June 30, 2025", "chunk_num": [77]}, {"type": "insight", "content": "The increase was primarily due to higher sales of liquid filtration systems (pool and aftermarket), plastics products, and ceramic membranes, partially offset by decreased DPF deliveries", "chunk_num": [77]}], "start_page": 24}, {"level": 3, "title": "Gross Profit (Loss)", "item_id": "Gross Profit (Loss)_Q2_2025", "summary": "Gross profit decreased by 32.4% to $484,578, primarily due to manufacturing underutilization and increased DPF inventory write-offs", "children": [], "end_page": 25, "key_points": [{"type": "insight", "content": "Gross profit decreased by $232,633, or 32.4%, to $484,578 (9.8% margin) for the three months ended June 30, 2025", "chunk_num": [78]}, {"type": "insight", "content": "This decline was mainly due to underutilization of manufacturing capacity following a decrease in DPF sales and increased provisions/write-offs for slow-moving DPF inventory, partially offset by lower depreciation expenses", "chunk_num": [78]}], "start_page": 25}, {"level": 3, "title": "Expenses", "item_id": "Expenses_Q2_2025", "summary": "Total operating expenses decreased by 7.5%, driven by lower selling and research and development expenses", "children": [], "end_page": 25, "key_points": [{"type": "insight", "content": "Total operating expenses decreased by $209,283, or 7.5%, to $2,594,447", "chunk_num": [79]}, {"type": "insight", "content": "Selling expenses decreased by 5.0% due to bad debt provision release and lower depreciation, partially offset by costs for the new joint venture", "chunk_num": [80]}, {"type": "insight", "content": "Research and development expenses decreased by 40.4% due to one-time exit costs in the prior year and R&D function streamlining", "chunk_num": [82]}], "start_page": 25}, {"level": 3, "title": "Other Income (Expenses)", "item_id": "Other Income (Expenses)_Q2_2025", "summary": "Total other expenses increased by 30.4%, primarily due to lower gain on currency transactions and increased interest expenses", "children": [], "end_page": 25, "key_points": [{"type": "insight", "content": "Total other expenses increased by $11,946, or 30.4%, to $51,277, primarily due to lower gain on currency transactions and increased interest expenses", "chunk_num": [83]}], "start_page": 25}, {"level": 3, "title": "Net Loss", "item_id": "Net Loss_Q2_2025", "summary": "Net loss increased by 2.3% to $2,160,786 for the three months ended June 30, 2025", "children": [], "end_page": 25, "key_points": [{"type": "insight", "content": "Net loss increased by $49,086, or 2.3%, to $2,160,786 for the three months ended June 30, 2025", "chunk_num": [84]}], "start_page": 25}], "end_page": 25, "start_page": 24}, {"level": 3, "title": "Comparison of the Six Months Ended June 30, 2025, and June 30, 2024", "item_id": "Comparison of the Six Months Ended June 30, 2025, and June 30, 2024", "summary": "Revenue increased by 9.8%, but gross profit decreased by 38.3% due to development costs and DPF sales decline, while net loss slightly increased", "children": [{"level": 3, "title": "Revenues", "item_id": "Revenues_H1_2025", "summary": "Revenue increased by 9.8% for the six months ended June 30, 2025, driven by liquid filtration systems and plastics products", "children": [], "end_page": 26, "key_points": [{"type": "insight", "content": "Revenue increased by $854,624, or 9.8%, to $9,575,030 for the six months ended June 30, 2025", "chunk_num": [86]}, {"type": "insight", "content": "The increase was driven by higher sales of liquid filtration systems (including a full-scale PureFlow™ system and pool filtration), plastics products, and ceramic membranes, partially offset by decreased DPF deliveries", "chunk_num": [86]}], "start_page": 26}, {"level": 3, "title": "Gross Profit (Loss)", "item_id": "Gross Profit (Loss)_H1_2025", "summary": "Gross profit decreased by 38.3% to $609,634, primarily due to low margins on a new system delivery and DPF manufacturing underutilization", "children": [], "end_page": 27, "key_points": [{"type": "insight", "content": "Gross profit decreased by $378,679, or 38.3%, to $609,634 (6.4% margin) for the six months ended June 30, 2025", "chunk_num": [87]}, {"type": "insight", "content": "This decline was primarily due to the low gross profit margin on a first-time full-scale PureFlow™ liquid filtration system delivery and underutilization of manufacturing capacity following decreased DPF sales, partially offset by lower depreciation expenses", "chunk_num": [87]}], "start_page": 27}, {"level": 3, "title": "Expenses", "item_id": "Expenses_H1_2025", "summary": "Total operating expenses decreased by 4.2%, with general and administrative and R&D expenses declining, while selling expenses increased", "children": [], "end_page": 27, "key_points": [{"type": "insight", "content": "Total operating expenses decreased by $216,020, or 4.2%, to $4,904,832", "chunk_num": [88]}, {"type": "insight", "content": "Selling expenses increased by 11.5% due to lower sales commissions in the prior year and costs associated with the new joint venture", "chunk_num": [89]}, {"type": "insight", "content": "General and administrative expenses decreased by 6.0% due to non-recurring CFO transition costs and savings on external consulting services in the prior year", "chunk_num": [90]}, {"type": "insight", "content": "Research and development expenses decreased by 28.6% due to one-time exit costs in the prior year and R&D function streamlining", "chunk_num": [91]}], "start_page": 27}, {"level": 3, "title": "Other Income (Expenses)", "item_id": "Other Income (Expenses)_H1_2025", "summary": "Total other expenses decreased by 43.3%, primarily due to significant losses on asset disposal in the prior year", "children": [], "end_page": 27, "key_points": [{"type": "insight", "content": "Total other expenses decreased by $171,416, or 43.3%, to $224,629, primarily due to significant losses on the disposal of property and equipment in the prior-year period", "chunk_num": [92]}], "start_page": 27}, {"level": 3, "title": "Net Loss", "item_id": "Net Loss_H1_2025", "summary": "Net loss slightly decreased by 0.4% to $4,519,128 for the six months ended June 30, 2025", "children": [], "end_page": 27, "key_points": [{"type": "insight", "content": "Net loss slightly decreased by $19,133, or 0.4%, to $4,519,128 for the six months ended June 30, 2025", "chunk_num": [93]}], "start_page": 27}], "end_page": 27, "start_page": 26}], "end_page": 27, "start_page": 24}, {"level": 3, "title": "Liquidity and Capital Resources", "item_id": "Liquidity and Capital Resources", "summary": "Cash and net working capital decreased due to funding operating losses, though management expects sufficient liquidity for the next 12 months", "children": [], "end_page": 28, "key_points": [{"type": "table", "title": "Liquidity Position", "content": "| Metric | June 30, 2025 | December 31, 2024 | Change |\n| :--- | :--- | :--- | :--- |\n| Cash | $8,673,449 | $10,868,728 | $(2,195,279) |\n| Net Working Capital | $14,311,974 | $15,736,809 | $(1,424,835) |", "chunk_num": [94]}, {"type": "insight", "content": "The decrease in net working capital was mainly a result of a reduction in cash and cash equivalents used to fund operating losses", "chunk_num": [94]}, {"type": "insight", "content": "Management projects that cash on hand and ongoing cash generated from operations will be sufficient to cover capital requirements for the next 12 months, despite significant uncertainties from global macroeconomic issues, trade wars, geopolitical instability, and supply chain disruptions", "chunk_num": [95, 96]}], "start_page": 28}, {"level": 3, "title": "Cash Flows", "item_id": "Cash Flows", "summary": "Operating cash flows showed a favorable change, while investing activities saw an unfavorable change, and financing activities provided significant cash", "children": [], "end_page": 29, "key_points": [{"type": "insight", "content": "Cash flows used in operating activities for the six months ended June 30, 2025, were $2,907,836, a favorable change of $871,843 compared to the prior year", "chunk_num": [98]}, {"type": "insight", "content": "Cash flows used in investing activities were $47,885, an unfavorable change of $381,056, primarily due to purchases of production equipment partially offset by proceeds from asset disposals", "chunk_num": [99]}, {"type": "insight", "content": "Cash flows provided by financing activities were $856,496, a favorable change of $1,971,649, driven by proceeds from a long-term related party loan and capital contribution from a noncontrolling interest in the JV", "chunk_num": [100]}], "start_page": 29}, {"level": 3, "title": "Off Balance Sheet Arrangements", "item_id": "Off Balance Sheet Arrangements", "summary": "As of June 30, 2025, the company had no off-balance sheet arrangements", "children": [], "end_page": 29, "key_points": [{"type": "insight", "content": "The company had no off-balance sheet arrangements as of June 30, 2025", "chunk_num": [101]}], "start_page": 29}, {"level": 3, "title": "Significant Accounting Policies and Critical Accounting Estimates", "item_id": "Significant Accounting Policies and Critical Accounting Estimates", "summary": "The company's financial statements rely on critical accounting estimates and judgments across various areas, including revenue and inventory valuation", "children": [], "end_page": 29, "key_points": [{"type": "insight", "content": "Critical accounting estimates include revenue recognition, allowance for product warranties, collectability of accounts receivable, recoverability of long-lived assets, recognition and measurement of income taxes, inventory valuation, and recognition and measurement of loss contingencies", "chunk_num": [102, 105]}], "start_page": 29}, {"level": 3, "title": "Recently Enacted Accounting Standards", "item_id": "Recently Enacted Accounting Standards", "summary": "Information regarding recently enacted accounting standards, their adoption dates, and estimated effects is provided in Note 1", "children": [], "end_page": 29, "key_points": [{"type": "insight", "content": "Details on accounting changes and recent accounting standards, including adoption dates and estimated effects, are provided in Note 1 of the condensed consolidated financial statements", "chunk_num": [103]}], "start_page": 29}], "end_page": 28, "start_page": 23}, {"level": 2, "title": "Item 3. Quantitative and Qualitative Disclosures About Market Risk", "item_id": "Item 3. Quantitative and Qualitative Disclosures About Market Risk", "summary": "As a smaller reporting company, LiqTech International, Inc. is not required to provide quantitative and qualitative disclosures about market risk", "children": [], "end_page": 29, "key_points": [{"type": "insight", "content": "The company is not required to provide quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company", "chunk_num": [104]}], "start_page": 29}, {"level": 2, "title": "Item 4. Controls and Procedures", "item_id": "Item 4. Controls and Procedures", "summary": "Management concluded that disclosure controls were ineffective due to material weaknesses in internal controls over financial reporting, with ongoing remediation efforts", "children": [{"level": 3, "title": "Evaluation of Disclosure Controls and Procedures", "item_id": "Evaluation of Disclosure Controls and Procedures", "summary": "The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses", "children": [], "end_page": 30, "key_points": [{"type": "insight", "content": "The CEO and CFO concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal controls over financial reporting", "chunk_num": [106, 108]}], "start_page": 30}, {"level": 3, "title": "Changes in Internal Control over Financial Reporting", "item_id": "Changes in Internal Control over Financial Reporting", "summary": "There was no material change in the company's internal control over financial reporting during the period covered by this report", "children": [], "end_page": 30, "key_points": [{"type": "insight", "content": "There was no material change in the company's internal control over financial reporting during the period covered by this report", "chunk_num": [109]}], "start_page": 30}, {"level": 3, "title": "Management's Remediation Initiatives", "item_id": "Management's Remediation Initiatives", "summary": "Management is dedicating resources to remediate identified material weaknesses through hiring, new IT systems, and process redesign", "children": [], "end_page": 30, "key_points": [{"type": "insight", "content": "Management is dedicating resources to remediate identified material weaknesses, including hiring additional finance employees, implementing a new ERP system and other IT programs, and redesigning/documenting financial reporting processes", "chunk_num": [110]}, {"type": "insight", "content": "Remediation efforts are ongoing and will not be considered fully complete until the relevant controls operate for a sufficient period", "chunk_num": [111]}], "start_page": 30}, {"level": 3, "title": "Limitations on the Effectiveness of Internal Controls", "item_id": "Limitations on the Effectiveness of Internal Controls", "summary": "Internal control systems provide only reasonable assurance and are subject to inherent limitations such as human error and circumvention", "children": [], "end_page": 30, "key_points": [{"type": "insight", "content": "Internal control systems provide only reasonable assurance and are subject to inherent limitations such as human error, circumvention, and management override", "chunk_num": [112]}, {"type": "insight", "content": "The effectiveness of controls can deteriorate over time due to changes in conditions or compliance", "chunk_num": [112]}], "start_page": 30}], "end_page": 30, "start_page": 30}], "end_page": 29, "start_page": 5}, {"level": 1, "title": "PART II. OTHER INFORMATION", "item_id": "PART II. OTHER INFORMATION", "summary": "This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits", "children": [{"level": 2, "title": "Item 1. Legal Proceedings", "item_id": "Item 1. Legal Proceedings", "summary": "The company may be involved in litigation arising from normal business operations, with further details on contingencies in Note 9", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "The company may be involved in litigation in the normal course of business, with further details on contingencies provided in Note 9", "chunk_num": [115]}], "start_page": 31}, {"level": 2, "title": "Item 1A. Risk Factors", "item_id": "Item 1A. Risk Factors", "summary": "No material changes to risk factors, except for the potential adverse impact of changes in U.S. trade policy, including new or increased tariffs", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "A new risk factor highlights the potential adverse impact of changes in U.S. policy, including new or increased tariffs and resulting trade wars, particularly with China and the EU", "chunk_num": [116]}, {"type": "insight", "content": "While recent tariffs have not significantly impacted business operations or financial results due to prior inventory accumulation, there is no guarantee of avoiding future impacts, which could increase costs or reduce global product demand", "chunk_num": [116]}], "start_page": 31}, {"level": 2, "title": "Item 2. Unregistered Sales of Equity Securities and Use of Proceeds", "item_id": "Item 2. Unregistered Sales of Equity Securities and Use of Proceeds", "summary": "The company did not sell any unregistered equity securities during the quarter ended June 30, 2025, beyond what was previously disclosed", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "No unregistered sales of equity securities occurred during the quarter ended June 30, 2025, other than those previously disclosed", "chunk_num": [117]}], "start_page": 31}, {"level": 2, "title": "Item 3. Defaults Upon Senior Securities", "item_id": "Item 3. Defaults Upon Senior Securities", "summary": "There were no defaults upon senior securities during the reporting period", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "No defaults upon senior securities were reported", "chunk_num": [118]}], "start_page": 31}, {"level": 2, "title": "Item 4. Mine Safety Disclosures", "item_id": "Item 4. Mine Safety Disclosures", "summary": "The company has no mine safety disclosures to report", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "No mine safety disclosures were reported", "chunk_num": [119]}], "start_page": 31}, {"level": 2, "title": "Item 5. Other Information", "item_id": "Item 5. Other Information", "summary": "No director or Section 16 officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025", "children": [], "end_page": 31, "key_points": [{"type": "insight", "content": "No director or Section 16 officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025", "chunk_num": [120]}], "start_page": 31}, {"level": 2, "title": "Item 6. Exhibits", "item_id": "Item 6. Exhibits", "summary": "This section lists all exhibits filed with the Form 10-Q, including organizational documents, equity incentive plan amendments, and certifications", "children": [], "end_page": 32, "key_points": [{"type": "insight", "content": "Exhibits include Articles of Incorporation, Amended and Restated Bylaws, Amendment No. 1 to the 2022 Equity Incentive Plan, CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and various Inline XBRL documents", "chunk_num": [121, 123]}], "start_page": 31}], "end_page": 32, "start_page": 31}, {"level": 1, "title": "SIGNATURES", "item_id": "SIGNATURES", "summary": "The report was duly signed on August 13, 2025, by the Chief Executive Officer and Chief Financial and Operating Officer", "children": [], "end_page": 34, "key_points": [{"type": "insight", "content": "The report was duly signed on August 13, 2025, by Fei Chen, Chief Executive Officer, and David Noerby Foss Kowalczyk, Chief Financial and Operating Officer", "chunk_num": [126]}], "start_page": 33} ] Generate the report outline generated_markdown = generate_report_outline(outline_content) print(generated_markdown) ``` ```markdown [Filing Information](index=1&type=section&id=Filing%20Information) LiqTech International, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025, outlining its registrant and filing status - LiqTech International, Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) Registrant and Filing Status | Attribute | Value | | :--- | :--- | | **Registrant Name** | LiqTech International, Inc. | | **State of Incorporation** | Nevada | | **Commission File Number** | 001-36210 | | **Trading Symbol** | LIQT | | **Exchange** | The Nasdaq Stock Market LLC | | **Filer Status** | Non-accelerated filer, Smaller reporting company | | **Common Stock Outstanding (as of Aug 13, 2025)** | **9,614,043 shares** | [Forward-Looking Statements](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section cautions that forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements regarding management's plans and objectives, which involve known and unknown risks and uncertainties that could cause actual results to differ materially[8](index=8&type=chunk)[9](index=9&type=chunk) - Key risks include potential adverse effects from armed conflicts, geopolitical tensions, global trade restrictions, energy market volatility, health crises, dependence on major customers, ability to secure financing and raw materials, achieving revenue growth, retaining key employees, adapting to regulatory changes, interest rate fluctuations, environmental regulations, tax consequences, competition, intellectual property protection, litigation, internal control effectiveness, and IT security breaches[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) - The company undertakes no obligation to revise or update any forward-looking statements[9](index=9&type=chunk)[12](index=12&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of LiqTech International, Inc., prepared in accordance with GAAP for interim financial information [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20(unaudited)%20and%20December%2031%2C%202024) The balance sheet highlights show changes in total assets, liabilities, and equity, including cash, accounts receivable, and a related party loan Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | $31,721,406 | $32,427,479 | $(706,073) | | **Total Liabilities** | $17,791,174 | $15,773,387 | $2,017,787 | | **Total Equity** | $13,930,232 | $16,654,092 | $(2,723,860) | | Cash and restricted cash | $8,673,449 | $10,868,728 | $(2,195,279) | | Accounts receivable, net | $4,095,991 | $2,396,056 | $1,699,935 | | Loan from related party, net of current portion | $1,167,215 | $- | $1,167,215 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024%20(unaudited)) This section details revenue, gross profit, operating loss, and net loss for the three and six months ended June 30, 2025 and 2024 Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $4,957,489 | $4,485,062 | $472,427 | **10.5%** | | **Gross Profit** | $484,578 | $717,211 | $(232,633) | (32.4)% | | **Loss from Operations** | $(2,109,869) | $(2,086,519) | $(23,350) | **1.1%** | | **Net Loss** | $(2,160,786) | $(2,111,700) | $(49,086) | **2.3%** | | **Loss Per Common Share – Basic and Diluted** | $(0.22) | $(0.36) | $0.14 | (38.9)% | Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- |\n| **Revenue** | $9,575,030 | $8,720,406 | $854,624 | **9.8%** | | **Gross Profit** | $609,634 | $988,313 | $(378,679) | (38.3)% | | **Loss from Operations** | $(4,295,198) | $(4,132,539) | $(162,659) | **3.9%** | | **Net Loss** | $(4,519,128) | $(4,499,995) | $(19,133) | **0.4%** | | **Loss Per Common Share – Basic and Diluted** | $(0.47) | $(0.77) | $0.30 | (39.0)% | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024%20(unaudited)) This section presents the net loss and foreign currency translation adjustments contributing to total comprehensive loss for the periods Comprehensive Loss Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net Loss** | $(2,160,786) | $(2,111,700) | | Loss on foreign currency translation adjustments | $794,429 | $(213,191) | | **Total Other Comprehensive Loss** | $(1,366,357) | $(2,324,891) | Comprehensive Loss Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net Loss** | $(4,519,128) | $(4,499,995) | | Loss on foreign currency translation adjustments | $1,142,775 | $(756,771) | | **Total Other Comprehensive Loss** | $(3,376,353) | $(5,256,766) | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20ended%20June%2030%2C%202025%20and%20June%2030%2C%202024%20(unaudited)) This section details changes in common stock, additional paid-in capital, accumulated deficit, and total stockholders' equity Stockholders' Equity Changes (December 31, 2024 to June 30, 2025) | Metric | December 31, 2024 | June 30, 2025 | Change | | :--- | :--- | :--- | :--- | | **Common Stock Shares Outstanding** | 9,475,443 | 9,614,043 | +138,600 | | **Additional Paid-in Capital** | $109,274,166 | $109,912,732 | +$638,566 | | **Accumulated Deficit** | $(86,267,438) | $(90,770,715) | $(4,503,277) | | **Total Stockholders' Equity** | $16,654,092 | $13,933,204 | $(2,720,888) | - During the six months ended June 30, 2025, the company issued **166,993 shares** of Common Stock to settle RSUs and recognized **$471,798** in stock-based compensation expense[25](index=25&type=chunk)[26](index=26&type=chunk)[65](index=65&type=chunk) - Warrants were amended on March 26, 2025, extending the maturity date to May 1, 2027, reducing the exercise price from **$5.20** to **$2.00 per share**, and resulting in an incremental change in warrant value of **$220,000**[58](index=58&type=chunk)[60](index=60&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024%20(unaudited)) This section presents cash flows from operating, investing, and financing activities, and the net change in cash and restricted cash Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Cash used in Operating Activities** | $(2,907,836) | $(3,779,679) | $871,843 | | **Net Cash used in Investing Activities** | $(47,885) | $333,171 | $(381,056) | | **Net Cash provided by (used in) Financing Activities** | $856,496 | $(1,115,153) | $1,971,649 | | **Net Change in Cash, Cash Equivalents, and Restricted Cash** | $(2,195,279) | $(4,932,405) | $2,737,126 | | **Cash, Cash Equivalents, and Restricted Cash at End of Period** | $8,673,449 | $5,489,776 | $3,183,673 | - The favorable change in cash from financing activities was primarily due to proceeds from a related party loan and capital contribution from a noncontrolling interest in the newly formed joint venture[100](index=100&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and disclosures for the condensed consolidated financial statements [NOTE 1 – BASIS OF PRESENTATION AND OTHER INFORMATION](index=14&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION%20AND%20OTHER%20INFORMATION) The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, with recent ASU adoptions and evaluations - The financial statements are unaudited and prepared in accordance with GAAP for interim financial information, not including all disclosures required for complete annual statements[32](index=32&type=chunk) - ASU 2023-05 (Business Combinations—Joint Venture Formations) was adopted and had no material impact[33](index=33&type=chunk) - ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures) are not yet effective, and the company is currently evaluating their potential impact[34](index=34&type=chunk)[35](index=35&type=chunk) [NOTE 2 – NONCONTROLLING INTEREST](index=15&type=section&id=NOTE%202%20%E2%80%93%20NONCONTROLLING%20INTEREST) In January 2025, the company established a joint venture in China, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd., with a 90% ownership interest - A joint venture, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd., was established in January 2025, with LiqTech holding a **90% ownership interest**[37](index=37&type=chunk) - The JV received **RMB 8,000,000** (approximately **USD 1.1 million**) in R&D funding from the JV partner, classified as a long-term loan with a **12% annual interest rate** and no set maturity date, convertible to equity or repayable at LiqTech's discretion[38](index=38&type=chunk)[39](index=39&type=chunk) - As of June 30, 2025, the noncontrolling interest in the JV amounted to **$2,972**[40](index=40&type=chunk) [NOTE 3 – DISAGGREGATION OF REVENUES AND SEGMENT REPORTING](index=15&type=section&id=NOTE%203%20%E2%80%93%20DISAGGREGATION%20OF%20REVENUES%20AND%20SEGMENT%20REPORTING) The company operates in three segments: Water, Ceramics, and Plastics, with revenue and asset breakdowns provided by segment Revenue by Segment (Three Months Ended June 30) | Segment | 2025 Revenue | 2024 Revenue | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Water | $2,442,696 | $1,870,625 | $572,071 | **30.6%** | | Ceramics | $1,299,412 | $1,665,138 | $(365,726) | (22.0)% | | Plastics | $1,215,381 | $949,299 | $266,082 | **28.0%** | | **Total Revenue** | **$4,957,489** | **$4,485,062** | **$472,427** | **10.5%** | Revenue by Segment (Six Months Ended June 30) | Segment | 2025 Revenue | 2024 Revenue | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Water | $5,136,418 | $3,419,291 | $1,717,127 | **50.2%** | | Ceramics | $2,253,258 | $3,471,474 | $(1,218,216) | (35.1)% | | Plastics | $2,185,354 | $1,829,641 | $355,713 | **19.4%** | | **Total Revenue** | **$9,575,030** | **$8,720,406** | **$854,624** | **9.8%** | Total Assets by Segment | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Water | $8,893,465 | $8,235,726 | | Ceramics | $10,258,473 | $10,679,025 | | Plastics | $2,156,260 | $1,670,644 | | Corporate | $10,413,208 | $11,842,084 | | **Total Assets** | **$31,721,406** | **$32,427,479** | [NOTE 4 – ACCOUNTS RECEIVABLE](index=16&type=section&id=NOTE%204%20%E2%80%93%20ACCOUNTS%20RECEIVABLE) Net accounts receivable increased significantly due to higher trade accounts receivable, while the allowance for credit losses decreased Accounts Receivable, Net | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Trade accounts receivable | $4,290,599 | $3,033,612 | $1,256,987 | | Allowance for current expected credit losses | $(194,608) | $(637,556) | $442,948 | | **Total accounts receivable, net** | **$4,095,991** | **$2,396,056** | **$1,699,935** | - The allowance for current expected credit losses decreased from **$637,556** to **$194,608**, influenced by bad debt expense of **$(38,891)** and receivables written off of **$(481,864)** during the six months ended June 30, 2025[43](index=43&type=chunk) [NOTE 5 – INVENTORIES](index=17&type=section&id=NOTE%205%20%E2%80%93%20INVENTORIES) Total net inventories remained stable, with raw materials increasing and work in process decreasing, alongside a higher obsolescence reserve Inventories, Net | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Raw materials | $3,405,195 | $2,734,781 | $670,414 | | Work in process | $1,890,956 | $2,435,280 | $(544,324) | | Finished goods and filtration systems | $1,619,526 | $1,580,255 | $39,271 | | Reserve for obsolescence | $(1,400,788) | $(1,209,124) | $(191,664) | | **Total inventories, net** | **$5,514,889** | **$5,541,192** | **$(26,303)** | [NOTE 6 – CONTRACT ASSETS AND CONTRACT LIABILITIES](index=17&type=section&id=NOTE%206%20%E2%80%93%20CONTRACT%20ASSETS%20AND%20CONTRACT%20LIABILITIES) Contract assets decreased, while contract liabilities saw a slight decrease from December 31, 2024, to June 30, 2025 Contract Assets and Liabilities | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Contract assets | $1,140,358 | $1,666,698 | $(526,340) | | Contract liabilities | $(102,710) | $(109,319) | $6,609 | [NOTE 7 – LEASES](index=17&type=section&id=NOTE%207%20%E2%80%93%20LEASES) Operating and finance lease assets and liabilities increased, while the weighted average remaining operating lease term decreased Lease Information | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Operating lease right-of-use assets | $4,690,909 | $4,450,822 | | Total operating lease liabilities | $4,690,909 | $4,450,822 | | Total finance lease liabilities | $2,199,096 | $2,059,278 | | Weighted average remaining operating lease term | **7.7 years** | **8.1 years** | | Weighted average operating lease discount rate | **6.8%** | **6.8%** | | Weighted average remaining finance lease term | **2.9 years** | **3.1 years** | | Weighted average finance lease discount rate | **5.3%** | **5.5%** | - Cash paid for finance lease liabilities was **$243,724** and for operating lease liabilities was **$435,174** for the six months ended June 30, 2025[47](index=47&type=chunk) [NOTE 8 – LONG-TERM DEBT](index=19&type=section&id=NOTE%208%20%E2%80%93%20LONG-TERM%20DEBT) Senior promissory notes remained stable, with a decrease in unamortized debt discount and lower related interest expense Notes Payable, Net | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior promissory notes, net | $5,335,911 | $5,303,563 | | Unamortized debt discount | $(664,089) | $(696,437) | - Amortization of debt discount was **$252,348** for the six months ended June 30, 2025, a decrease from **$296,632** in the prior-year period[49](index=49&type=chunk) [NOTE 9 – AGREEMENTS AND COMMITMENTS](index=19&type=section&id=NOTE%209%20%E2%80%93%20AGREEMENTS%20AND%20COMMITMENTS) The company provides product warranties, and the warranty obligation increased as of June 30, 2025 - The company provides standard product warranties (**1-3 years**) and extended warranties (up to **4 years**) for its systems[50](index=50&type=chunk)[51](index=51&type=chunk) Warranty Obligations | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Balance at end of period | $768,055 | $621,031 | | Warranty costs charged to cost of goods sold (H1) | $66,193 | $100,726 | [NOTE 10 – STOCKHOLDERS' EQUITY](index=19&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) Common stock outstanding increased due to RSU settlements, warrants were repriced, and stock-based compensation expense rose - As of June 30, 2025, there were **9,614,043 shares** of Common Stock issued and outstanding, up from **9,475,443 shares** at December 31, 2024[53](index=53&type=chunk) - During the six months ended June 30, 2025, the company issued **166,993 shares** of Common Stock to settle RSUs[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[66](index=66&type=chunk) - Warrants were amended on March 26, 2025, extending the maturity date to May 1, 2027, reducing the exercise price from **$5.20** to **$2.00 per share**, and resulting in an incremental change in warrant value of **$220,000**[58](index=58&type=chunk)[60](index=60&type=chunk) - Stock-based compensation expense for the six months ended

Company Performance - LiqTech International, Inc. reported a quarterly loss of $0.22 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.21, representing an earnings surprise of -4.76% [1] - The company posted revenues of $4.96 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.86%, but showing an increase from $4.49 million in the same quarter last year [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - LiqTech International shares have increased by approximately 6.9% since the beginning of the year, compared to the S&P 500's gain of 9.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.17 on revenues of $5 million, and for the current fiscal year, it is -$0.81 on revenues of $19.6 million [7] Industry Outlook - The Pollution Control industry, to which LiqTech belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LiqTech's stock performance [5][6]

Financial Data and Key Metrics Changes - The company reported revenue of nearly $5 million for Q2 2025, an increase from $4.5 million in Q2 2024 and $4.6 million in Q1 2025 [19] - Gross margin for Q2 2025 was 9.8%, down from 16% in the same period last year but improved from 2.7% in Q1 2025 [21] - Net loss for the quarter was $2 million, slightly better than the $2.1 million loss in the same period of 2024 [23] Business Line Data and Key Metrics Changes - Water system sales and related services generated $2.4 million, up from $1.9 million in Q2 2024 but down from $2.7 million in Q1 2025 [19] - DPF and ceramic membrane sales were $1.3 million, down from $1.7 million in Q2 2024 but up from $1 million in Q1 2025 [20] - Plastic revenue reached $1.2 million, compared to $900,000 in Q2 2024 and $1 million in Q1 2025 [20] Market Data and Key Metrics Changes - The swimming pool segment delivered six systems, generating nearly $800,000 in revenue, marking a significant increase from previous quarters [5][12] - The company anticipates continued year-over-year revenue improvements in the third and fourth quarters, with full-year revenue expected to be the highest in four years [6][17] Company Strategy and Development Direction - The company is focusing on expanding its presence in water treatment, particularly in the steel industry and swimming pool markets, while also pursuing pilot projects in various sectors [10][27] - Strategic partnerships, such as with ResoVac Direct, are being leveraged to enhance market reach and deliver tailored solutions [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational performance and revenue outlook for the remainder of the year, citing strong order flow and successful pilot projects [6][17] - The company is committed to addressing environmental challenges through its advanced filtration technologies, aiming to meet increasing global demand for sustainable solutions [25][27] Other Important Information - The company plans to record revenue on a percentage of completion basis for large orders, which is expected to stabilize financial reporting [8] - Cash at the end of the quarter was $8.7 million, down from $10.4 million at the end of Q1 2025 [23] Q&A Session Summary Question: Can you discuss the area of focus for the new Razorback pilot? - The focus is on an industry outside oil and gas, specifically in water treatment, with more details to be shared after receiving customer feedback [29] Question: What does the approval of the pilot at the US oil and gas industry application mean in terms of potential timing? - This approval allows for commercialization across the company, with expectations for exciting results in the near future [30] Question: What timing do you think will be for the bidding process in the marine segment? - The bidding process is expected to occur in Q3, with developments anticipated in the next two months [31] Question: Based on your full year guide, does that mean you will be EBITDA profitable in Q4? - The company expects Q4 to potentially be EBITDA positive, depending on sales volume and mix [34]

Core Viewpoint - LiqTech International, Inc. reported improved financial performance in Q2 2025, with revenue growth, gross margin improvement, and decreased operating expenses, driven by strong demand in swimming pool markets and other filtration systems [3][4]. Recent Financial Highlights - Q2 2025 revenue was $5.0 million, an 11% increase from $4.5 million in Q2 2024, and a 7% sequential increase from $4.6 million in Q1 2025 [4][5]. - The net loss for Q2 2025 was $(2.0) million, slightly improved from $(2.1) million in Q2 2024 [5][12]. - The ending cash balance on June 30, 2025, was $8.7 million [5][12]. - Q3 2025 revenue is expected to be between $3.8 million and $4.2 million, representing a 52% to 68% increase from Q3 2024 [5]. - Full year 2025 revenue is projected to be between $19.0 million and $20.0 million, indicating a 30% to 37% increase from 2024 [5]. Recent Operational Highlights - Six swimming pool systems were delivered in Q2 2025, generating nearly $800,000 in revenue [5]. - An order was received for an advanced membrane-based filtration system from NorthStar BlueScope Steel, with part of the revenue recognized in Q2 2025 and the remainder expected in Q3 2025 [5]. - A pilot unit was delivered to Razorback Direct for customer testing in a new industry [5]. - The ceramics and plastics segments experienced a combined sequential growth of 31% compared to Q1 2025 [5]. Management Commentary - The CEO highlighted the successful execution of strategic priorities, with strong performance in swimming pool markets and a robust order flow for the second half of the year [3]. - The company anticipates continued year-over-year revenue improvements in the latter half of 2025, aiming for the highest revenue level in four years [3]. Q2 2025 Financial Results - Gross profit for Q2 2025 was $0.5 million, with a gross profit margin of 9.8%, down from $0.7 million and 16% in Q2 2024, primarily due to underutilization of manufacturing capacity and increased provisions for slow-moving inventory [7]. - Total operating expenses decreased by 7.5% to $2.6 million compared to $2.8 million in Q2 2024 [8]. - Selling expenses decreased by 5% to $0.8 million, attributed to the release of bad debt provisions and lower depreciation [9]. - Research and development expenses decreased by 40% to $0.2 million, mainly due to one-time exit costs from a loss-making project [11].

Group 1 - LiqTech International, Inc. will report its second quarter 2025 financial results on August 13, 2025, before the market opens [1] - A conference call to review the results is scheduled for the same day at 9:00 a.m. Eastern time [2] - The conference call will be accessible via a live webcast on the company's Investor Relations website [2] Group 2 - LiqTech International, Inc. specializes in advanced ceramic silicon carbide filtration technologies for gas and liquid purification [3] - The company's products include silicon carbide membranes and filters designed for challenging purification applications, including diesel exhaust soot emissions control [3] - LiqTech utilizes nanotechnology to develop a range of filtration products, offering unique turnkey solutions for water purification [3]

Core Insights - LiqTech International, Inc. has received an order for an advanced membrane-based filtration system from North Star BlueScope Steel to treat oily wastewater [1][2] - The system is set to be commissioned in the second half of 2025 and aims to address filtration process challenges due to high oil content and variability in wastewater quality [2][3] - LiqTech's Silicon Carbide (SiC) membrane technology is designed for harsh industrial conditions, enhancing process stability and water recovery efficiency [3][4] Company Overview - LiqTech International, Inc. specializes in clean technology, manufacturing and marketing advanced filtration products for liquid and gas applications [6] - The company was founded in 2000 and its patented SiC membranes are utilized in various sectors including industrial and municipal water treatment, marine scrubbers, and oil & gas applications [6] Industry Trends - The project with North Star BlueScope Steel reflects a growing trend in the steel industry towards sustainable water management practices [5] - The addition of advanced wastewater pre-treatment filtration supports broader water reclamation initiatives within the industry [5]

Revenue and Profit - Revenue for Q1 2025 was $4,617,541, an increase of $382,197 or 9.0% compared to Q1 2024's $4,235,344, driven by liquid filtration systems and plastics sales[76] - Gross profit for Q1 2025 was $125,056, a decrease of $146,046 or 53.9% from $271,102 in Q1 2024, resulting in a gross profit margin of 2.7%[77] - Net loss for Q1 2025 was $2,358,342, a decrease of $29,953 or 1.3% from $2,388,295 in Q1 2024[83] Operating Expenses - Total operating expenses for Q1 2025 were $2,310,385, a slight decrease of $6,737 or 0.3% from $2,317,122 in Q1 2024[78] - Selling expenses increased by $200,437 or 38.7% to $718,016 in Q1 2025, primarily due to costs associated with a new joint venture[79] - General and administrative expenses decreased by $182,485 or 11.8% to $1,362,246 in Q1 2025, attributed to non-recurring costs in the prior period[80] - Research and development expenses decreased by $24,689 or 9.7% to $230,123 in Q1 2025, due to a reduction in R&D personnel[81] Cash Flow and Working Capital - Cash flows used in operating activities for Q1 2025 were $1,297,186, a favorable change of $659,516 compared to $1,956,702 in Q1 2024[89] - Cash flows provided from financing activities were $989,722 in Q1 2025, a favorable change of $1,999,159 compared to cash flows used of $1,009,437 in Q1 2024[91] - As of March 31, 2025, the company had cash of $10,447,432 and net working capital of $15,404,982, a decrease in net working capital of $331,827 from December 31, 2024[85] Revenue and Expense Recognition - Revenue recognition assessment impacts revenue and cost of sales[96] - Allowance for product warranties assessment impacts gross profit[96] - Collectability of accounts receivable assessment impacts operating expenses through bad debt adjustments[96] - Recoverability of long-lived assets assessment impacts gross profit or operating expenses through asset impairments[96] - Current and deferred income taxes recognition impacts provision for taxes[96] - Inventory valuation impacts gross profit[96] - Loss contingencies recognition impacts gross profit or operating expenses through loss contingency adjustments[96]

Company Performance - LiqTech International, Inc. reported a quarterly loss of $0.25 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.18, representing an earnings surprise of -38.89% [1] - The company posted revenues of $4.62 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 2.62%, compared to revenues of $4.24 million a year ago [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Movement and Outlook - LiqTech International shares have declined approximately 21.3% since the beginning of the year, while the S&P 500 has gained 0.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.16 on revenues of $4.7 million, and -$0.60 on revenues of $19 million for the current fiscal year [7] Industry Context - The Pollution Control industry, to which LiqTech International belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for LiqTech International is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6]