LiqTech(LIQT) - 2025 Q2 - Quarterly Report

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 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] 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 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][9] - 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][11][12][13] - The company undertakes no obligation to revise or update any forward-looking statements[9][12] PART I. FINANCIAL INFORMATION 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 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 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 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 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 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][26][65] - 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][60] Condensed Consolidated Statements of Cash Flows 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] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements NOTE 1 – BASIS OF PRESENTATION AND OTHER INFORMATION 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] - ASU 2023-05 (Business Combinations—Joint Venture Formations) was adopted and had no material impact[33] - 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][35] NOTE 2 – NONCONTROLLING INTEREST 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] - 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][39] - As of June 30, 2025, the noncontrolling interest in the JV amounted to $2,972[40] NOTE 3 – DISAGGREGATION OF REVENUES AND SEGMENT REPORTING 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 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] NOTE 5 – INVENTORIES 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 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 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] NOTE 8 – LONG-TERM DEBT 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] NOTE 9 – AGREEMENTS AND COMMITMENTS 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][51] 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 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] - During the six months ended June 30, 2025, the company issued 166,993 shares of Common Stock to settle RSUs[54][55][56][57][66] - 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][60] - Stock-based compensation expense for the six months ended