LIQTECH INTERNATIONAL INC

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Gross profit for the three months ended September 30, 2025 was$747,878 (representing a gross profit margin of 19.6%) compared to a gross profit loss of$209,533 (representing a gross profit margin of -8.5%) for the same period in 2024, marking an increase of$957,411, or 456.9%. This increase was primarily driven by system sales utilization of our manufacturing capacity for membranes and low depreciation expenses offset by write-offs for slow-moving inventory linked to DPF activity. Included in the gross profit was depreciation of$371,654 and$478,902 for the three months ended September 30, 2025, and 2024, respectively.

Current wording

Gross profit for the three months ended March 31, 2026 was$393,744 (representing a gross profit margin of 9.5%) compared to a gross profit of$125,056 (representing a gross profit margin of 2.7%) for the same period in 2025, marking an increase of$268,688, or 214.9%. This increase was primarily driven by mix towards higher value system sales, better utilization of our manufacturing capacity, procurement effects on prices, and low depreciation expenses. Included in the gross profit was depreciation of $330,006 and $392,292 for the three months ended March 31, 2026, and 2025, respectively.

Previous wording

General and administrative expenses for the three months ended September 30, 2025 were$1,270,195 compared to$1,491,366 for the same period in 2024, representing a decrease of$221,171, or 14.8%. While overall expenses remained stable, an increase in non-cash compensation was offset by corresponding decrease in salaries. Included in general and administrative expenses were non-cash compensation of $258,538 and $157,000 for the three months ended September 30, 2025, and 2024, respectively.

Current wording

General and administrative expenses for the three months ended March 31, 2026 were$1,414,145 compared to$1,362,246 for the same period in 2025, representing an increase of$51,899, or 3.8%. Adjusting for foreign exchange rate developments, expenses remained stable and below general inflation, as filing of open positions were covered by savings on other overhead expenses. Included in general and administrative expenses were non-cash compensation of $218,252 and $241,245 for the three months ended March 31, 2026, and 2025, respectively.

Previous wording

Other expenses for the three months ended September 30, 2025 were$127,135 compared to other expenses of$260,614 for the comparable period in 2024, representing a favorable change of$133,479, or 51.2%. The change was primarily attributable to slower amortization of debt discount, reduced losses on currency transactions, and a decrease of net interest expenses for the three months ended September 30, 2025

Current wording

Other expenses for the three months ended March 31, 2026 were$448,267 compared to other expenses of$173,352 for the comparable period in 2025, representing an increase of$274,915, or 158.6%. The change was primarily attributable to losses on foreign currency transactions, lower interest income, and accrued interests on the senior promissory notes, partly balanced by lower amortization of debt discount, and a decrease of net interest expenses for the three months ended March 31, 2026

Previous wording

As a result of the cumulative effect of the factors described above, we reported a net loss for the three months ended September 30, 2025 of$1,459,762 compared to$2,840,526 for the comparable period in 2024, representing a favorable change in net loss of$1,380,764, or 48.6%.

Current wording

As a result of the cumulative effect of the factors described above, we reported a net loss for the three months ended March 31, 2026 of$2,725,099 compared to$2,358,342 for the comparable period in 2025, representing an increase in net loss of$366,757, or 15.6%.

Previous wording

The Company has historically financed operations through offerings of equity or debt instruments, internally generated cash from operations, and our available lines of credit. On September 30, 2025, we had cash of $7,354,024 and net working capital of $13,406,883, and on December 31, 2024, we had cash of $10,868,728 and net working capital of $15,736,809. On September 30, 2025, our net working capital had decreased by $2,329,926 compared to December 31, 2024, mainly as a result of a focused effort to improve working capital through improved inventory management.

Current wording

The Company has historically financed operations through offerings of equity or debt instruments, internally generated cash from operations, and our available lines of credit. On March 31, 2026, we had cash of $2,732,739 and net working capital of $8,483,730, and on December 31, 2025, we had cash of $5,070,385 and net working capital of $11,237,788. On March 31, 2026, our net working capital had decreased by $2,754,058 compared to December 31, 2025, mainly as a result of a reduction in cash and cash equivalents used to fund operating losses

Previous wording

Cash flows from operating activities for the period ending September 30, 2025 derived from the net loss for the period, adjusted for non-cash items and changes in assets and liabilities. Cash flows used in operating activities for thenine months ended September 30, 2025 were $3,977,121 representing a favorable change of $1,551,321 compared to cash flows used in operating activities of $5,528,442 for thenine months ended September 30, 2024. The cash flows used in operating activities for the period consists mainly of the net loss of $5,978,890, adjusted for depreciation and other non-cash-related items of $2,884,217, and an increase in accounts receivables of $1,010,624, partially offset by decrease in contract assets of $863,564 and inventories of $190,640.

Current wording

Cash flows used in operating activities for the three months ended March 31, 2026 were $1,941,544 representing an increase of $644,358 compared to cash flows used in operating activities of $1,297,186 for the three months ended March 31, 2025. The cash flows used in operating activities for the period consists mainly of the net loss of $2,725,099, adjusted for depreciation and other non-cash-related items of $835,210, an increase in accounts receivables of $317,277, prepaid expenses and other current assets of $399,522, and partially offset by an increase in accounts payable of $526,117.

Previous wording

Cash flows used in investing activities were $173,139 for thenine months ended September 30, 2025 as compared to cash flows used in investing activities of $28,767 for thenine months ended September 30, 2024, representing an unfavorable change of $144,372. The investing activities include general purchases of production equipment to continue optimizing production throughput and the internal production of rental assets, partly offset by proceeds from the disposal of production equipment in our Ballerup facility.

Current wording

Cash flows used in investing activities were $269,724 for the three months ended March 31, 2026 as compared to cash flows used in investing activities of $110,860 for the three months ended March 31, 2025, representing a change of $158,864. The investing activities include general purchases of production equipment to continue optimizing production throughput and the internal production of rental assets. For the three months ended March 31, 2026, the main additions were investments in assembly equipment in our JV in China and in the U.S. Service Center.

Previous wording

Cash flows provided from financing activities were $787,024 for thenine months ended September 30, 2025 compared to cash flows used by financing activities of $125,718 for thenine months ended September 30, 2024, representing a favorable change of $912,742. The finance activities include proceeds from a long-term loan and capital contribution from the noncontrolling interest in the JV. Additionally, in the prior-year period, finance activities included the repayment of a lease agreement.

Current wording

Cash flows provided from financing activities were $(311,911) for the three months ended March 31, 2026 compared to cash flows used by financing activities of $989,722 for the three months ended March 31, 2025, representing a change of $1,301,633. Financing activities primarily consisted of repayments of lease obligations and the acquisition of common stock to satisfy tax withholding obligations. Additionally, in the prior-year period, the Company received proceeds from a long-term loan as well as a capital contribution from the noncontrolling interest in the joint venture.