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What changed in LIQTECH INTERNATIONAL INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LIQTECH INTERNATIONAL INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+173 added−190 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-28)

Top changes in LIQTECH INTERNATIONAL INC's 2025 10-K

173 paragraphs added · 190 removed · 137 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

57 edited+6 added−6 removed37 unchanged
Biggest changeRecently, we have intensified our focus on the direct sale of SiC and HTM membrane products to clients and integrators across jurisdictions to directly access the global market for ceramics membrane solutions in the context of the growing need for clean water and responsible handling of industrial wastewater, while also placing value-enhancing applications across core industrial processes such as chemical/petrochemical, enhanced oil recovery, and other applications. 7 Table of Contents Research and Development We have eight (8) full-time employees who are primarily engaged in R&D activities pertaining to the development of technology and intellectual property rights related to silicon carbide product formulas, applications, and manufacturing processes.
Biggest changeResearch and Development We have six (6) full-time employees who are primarily engaged in R&D activities pertaining to the development of technology and intellectual property rights related to silicon carbide product formulas, applications, automation, and manufacturing processes. Manufacturing We currently manufacture our ceramic membrane and DPF products in Ballerup, Denmark (Copenhagen area).
According to Clarkson shipping intelligence and other public sources, there are greater than 400 new dual-engine vessels on order for 2024 to 2027. In addition to our industrial, oil & gas, and marine applications, our Company offers industry-leading commercial pool filtration systems globally through distributors and local partners.
According to Clarkson shipping intelligence and other public sources, there are greater than 400 new dual-engine vessels on order for 2024 to 2027. In addition to our industrial, oil & gas, and marine applications, the Company offers industry-leading commercial pool filtration systems globally through distributors and local partners.
We have successfully sold products and installed systems into several end market segments--including automotive/transportation, clean water and pool filtration, marine, industrial wastewater, chemical/petrochemical, energy, and oil & gas applications.
We have successfully sold products and installed systems into several end market segments--including automotive/transportation, clean water and pool filtration, marine, industrial wastewater, chemical/petrochemical, and oil & gas applications.
We seek to leverage our innovative and patented SiC ceramic membrane technology by designing and deploying our filtration systems into complex and demanding industrial applications where our clients can benefit from cost savings and value creation. Recent deployments have showcased attractive returns on investment, as our solutions yield improved product characteristics, lower operational costs, and higher output.
We seek to leverage our innovative and patented SiC ceramic membrane technology by designing and deploying our filtration systems into complex and demanding industrial applications where our clients can benefit from cost savings and value creation. Recent deployments have validated attractive returns on investment, as our solutions yield improved product characteristics, lower operational costs, and higher output.
We believe that supplying our customers with a modular-based solution built upon our silicon carbide membranes is unique in the market, considering our vertical integration with in-house manufacturing of silicon carbide products and engineered plastic components, coupled with the design, engineering, and assembly of the integrated systems. ● Broad Application of LiqTech Membranes: Our membranes can be applied in a variety of applications, including the filtration of industrial wastewater, separation of metals from liquids in industrial processes, marine scrubber wastewater, chemicals and produced water within oil & gas, oil emulsion separation, bacteria removal, commercial swimming pool water treatment, food and beverage production, chemicals/petrochemicals processing, and other applications. 4 Table of Contents ● Marketing and Manufacturing in Key Markets and Expanding to Other Markets: While production is centered in Denmark, we have distribution and sales activities across multiple jurisdictions.
We believe that supplying our customers with a modular-based solution built upon our silicon carbide membranes is unique in the market, considering our vertical integration with in-house manufacturing of silicon carbide products and engineered plastic components, coupled with the design, engineering, and assembly of the integrated systems. ● Broad Application of LiqTech Membranes: Our membranes can be applied in a variety of applications, including the filtration of industrial wastewater, separation of metals from liquids in industrial processes, marine water treatment, chemicals and produced water within oil & gas, oil emulsion separation, bacteria removal, commercial swimming pool water treatment, food and beverage production, chemicals/petrochemicals processing, and other applications. ● Marketing and Manufacturing in Key Markets and Expanding to Other Markets: While production is centered in Denmark, we have distribution and sales activities across multiple jurisdictions.
Our existing products and systems are relevant for and valuable to other end markets, and we regularly evaluate opportunities to develop strategic partners to perfect new applications and validate associated value propositions. Our Industry Overview We serve primarily two industries: the liquid filtration market and the silicon carbide ceramic membrane & diesel particulate filter (DPF) market.
Our existing products and systems are relevant for and valuable to other end markets, and we regularly evaluate opportunities to develop strategic partners to perfect new applications and validate associated value propositions. Our Industry Overview We serve primarily two industries: the liquid filtration system market and the silicon carbide ceramic membrane & diesel particulate filter (DPF) component market.
Our Aqua Solution® ceramic membranes provide unique advantages for the commercial pool filtration industry in terms of reduced energy consumption, lower CO2 emissions, smaller footprint, reduced water and chemical consumption, and consistent, high-quality water filtration. ● Produced Water: Our systems can be used for the filtration of produced water, which is a byproduct of oil & gas production.
Our Aqua Solution® ceramic membranes provide unique advantages for the commercial pool filtration industry in terms of reduced energy consumption, lower CO2 emissions, smaller footprint, reduced water and chemical consumption, and consistent, high-quality and long-lasting water filtration. ● Produced Water: Our systems can be used for the filtration of produced water, which is a byproduct of oil & gas production.
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.
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.
We are actively repositioning our WTU to match the emerging new opportunity for exhaust gas recirculation in dual-fuel engines. This new market development supports the energy transition for the marine industry and will be a major trend in the coming years.
We are actively repositioning our WTU to match the emerging new opportunity for exhaust gas recirculation in dual-fuel engines. This new market development supports the energy transition for the marine industry and will be a major trend in future years.
We possess in-house engineering capabilities for process design, 3D modeling, automation, and control. Our professional staff of dedicated engineers and craftsmen assume responsibility for the specification, engineering, fabrication, and commissioning process.
We possess in-house engineering capabilities for process design, 3D modeling, automation, and control. Our professional staff of dedicated engineers and craftsmen assume responsibility for the product specification, engineering, fabrication, commissioning, and service.
The information contained in, or accessible from, our website is not a part of this Annual Report. Additionally, the SEC maintains a website that contains reports, proxy statements, information statements, and other information regarding issuers, including us, that file electronically with the SEC at www.sec.gov. 9 Table of Contents
The information contained in, or accessible from, our website is not a part of this Annual Report. Additionally, the SEC maintains a website that contains reports, proxy statements, information statements, and other information regarding issuers, including us, that file electronically with the SEC at www.sec.gov.
We also provide engineered plastic parts and products for various internal and external industrial applications in the food & beverage and pharmaceutical industries. 1 Table of Contents Silicon Carbide Ceramic Membranes for Liquid Filtration For more than two decades, LiqTech has developed, manufactured, and sold innovative silicon carbide ceramic membranes for liquids purification.
We also provide engineered plastic parts and products for various internal and external industrial applications in the food & beverage and pharmaceutical industries. Silicon Carbide Ceramic Membranes for Liquid Filtration For more than two decades, LiqTech has developed, manufactured, and sold innovative silicon carbide ceramic membranes for liquids purification.
Our Competitive Strengths Our products and systems compete with other filtration technologies made from ceramic, aluminum oxide, and polymeric materials. While most of our competitors are large industrial companies, we hold a unique position by combining proprietary membrane technology with extensive system and application expertise.
Our Competitive Strengths Our products and systems compete with other filtration technologies made from ceramic, aluminum oxide, and polymeric materials. While most of our competitors are large industrial companies, we hold a unique position by combining proprietary membrane technology with integrated modular filtration systems and application expertise.
We also believe that having distinctive names is an important factor in marketing our products and therefore use trademarks to brand some of our products. As of March 2025, we had three trademark registrations in China and four trademark registrations in Denmark (AQUA SOLUTION, CoMem, CDPX, and FUTURE FILTRATION).
We also believe that having distinctive names is an important factor in marketing our products and therefore use trademarks to brand some of our products. As of February 2026, we had three trademark registrations in China and four trademark registrations in Denmark (AQUA SOLUTION, CoMem, CDPX, and FUTURE FILTRATION).
With an intense focus on customer demand, LiqTech serves market leaders in the clean technology, pharmaceuticals, foods, healthcare, and graphics industries. Furthermore, LiqTech delivers benefits through vertical integration by manufacturing some key components for the fabrication and assembly of liquid filtration systems for pool and marine scrubber applications.
With an intense focus on customer demand, LiqTech serves market leaders in the clean technology, pharmaceuticals, food & beverage, healthcare, and graphics industries. Furthermore, LiqTech delivers benefits through vertical integration by manufacturing some key components for the fabrication and assembly of liquid filtration systems for pool and marine water treatment and scrubber applications.
Examples include: ● Garbage trucks and port vehicles; ● Diesel pickup trucks not carrying a full load; ● Intra-city vehicles that do not reach highway speeds; ● Off-road construction vehicles that idle for long periods of time; ● Marine “black carbon” exhaust applications; and ● Back-up generators and general “gen-set” applications.
Examples include: ● Garbage trucks and port vehicles; ● Diesel pickup trucks not carrying a full load; ● Intra-city vehicles that do not reach highway speeds; ● Off-road construction vehicles that idle for long periods of time; ● Marine “black carbon” exhaust applications; and ● Back-up generators and general “gen-set” applications used in data centers and other applications.
To accelerate our entry into the emerging dual-fuel engine market, we established a joint venture in Nantong, China, in December 2024. 3 Table of Contents ● Industrial Applications: We have delivered complete liquid filtration systems for aggressive fluid applications such as heavy metal removal for energy providers and water treatment systems for mining wastewater.
To accelerate our entry into the emerging dual-fuel engine market, we established a joint venture in Nantong, China, in December 2024. ● Industrial Applications: We have delivered complete liquid filtration systems for aggressive fluid applications such as heavy metals removal for energy providers and water treatment systems for mining wastewater.
Our products are based on unique 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.
Our products are based on innovative silicon carbide membranes that facilitate new applications and improve existing technologies. We marke t 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.
We are actively repositioning our WTU to match the emerging new opportunity for exhaust gas recirculation in dual-fuel engines. This new market development supports the energy transition for the marine industry and will be a major trend in the coming years. Today, more than 80% of commercial ships are manufactured in China.
We are actively repositioning our water treatment units to match the emerging new opportunity for exhaust gas recirculation in dual-fuel engines. This new market development supports the energy transition for the marine industry and will be a major trend in future years. Today, more than 70-80% of commercial ships are manufactured in China.
Certain employees in Denmark are represented by workers’ councils that have collective bargaining agreements. With the exception of such Danish employees, no other employees are members of a labor union or are represented by workers’ councils that have collective bargaining agreements. We believe that we have good relations with our employees.
Certain employees in Denmark are represented by workers’ councils that have collective bargaining agreements. With the exception of such Danish employees, no other employees are members of a labor union or are represented by workers’ councils that have collective bargaining agreements.
The terms “LiqTech”, “we”, “our”, “us”, the “Company” or any derivative thereof, as used herein, refer to LiqTech International, Inc., a Nevada corporation, together with its direct and indirect wholly owned subsidiaries, which we collectively refer to herein as our “Subsidiaries”. At present, we conduct our operations in the Kingdom of Denmark.
The terms “LiqTech”, “we”, “our”, “us”, the “Company” or any derivative thereof, as used herein, refer to LiqTech International, Inc., a Nevada corporation, together with its direct and indirect wholly owned subsidiaries, which we collectively refer to herein as our “Subsidiaries”.
Our current focus is to strengthen our position within certain industrial applications such as difficult industrial water streams and hydrocarbon production-derived contaminated water, which we refer to herein as “produced water”. Furthermore, we remain focused on segments within marine scrubber wastewater, pool, metal & mining, microplastics removal, and other applications.
Our current focus is to strengthen our position within certain industrial applications such as difficult industrial water streams and hydrocarbon production-derived contaminated water, which we refer to herein as “produced water”. Furthermore, we focus on segments within marine waste treatment, pool, metals & mining, microplastics removal, and other applications.
In 2024, we developed the PureFlow™ container solution, designed to operate cost-effectively at capacities starting from 10,000 barrels per day. ● Marine Scrubber Wastewater: Sustainability is getting more and more attention in the shipping industry. Most commercial new vessels are built with dual-fuel engines.
In 2024, we developed the QureFlow™ container solution, designed to operate cost-effectively at capacities starting from 10,000 barrels per day. ● Marine Water treatment for dual fuel engine vessels: Sustainability is getting increasing attention in the shipping industry. Most new commercial vessels are built with dual-fuel engines.
We believe our patented technology as well as our in-depth application knowledge allow us to offer reliable products that provide an advantage over many of our direct and, in many cases, larger competitors.
We believe our patented technology as well as our in-depth application knowledge allow us to offer reliable products that provide an advantage over many other players and competitors in the market.
We intend to continue to devote resources to the development of new technologies and the improvement of our products to retain existing customers and acquire new customers. Employees At December 31, 2024 we had 105 employees, including 66 in production; 20 in administration; 8 in research and development; 10 in sales, marketing and strategy; and 1 in executive management.
We intend to continue to devote resources to the development of new technologies and the improvement of our products to retain existing customers and acquire new customers. Employees At December 31, 2025 we had 92 employees, including 62 in production; 12 in administration; 6 in research and development; 10 in sales, marketing and strategy; and 2 in executive management.
The amount of produced water varies from 0.1 to 10 times the amount of oil or gas produced. We have today three installations with international oil & gas companies both in the US and Middle East, all of which are operating with stable performance. Oil & Gas companies require water treatment units with high capacity and efficiency.
The amount of produced water varies from 0.1 to 10 times the amount of oil or gas produced. We have had three commercial installations with international oil & gas companies both in the U.S. and Middle East with successful performance. Oil & Gas companies require water treatment units with high capacity and efficiency.
Scope and duration of each of our foreign patents vary in keeping with local laws. On July 7, 2014, we obtained a new Danish patent application related to our silicon carbide membrane technology.
Intellectual Property We have one patent granted in Europe and one patent granted in Denmark. Furthermore, we have four patent application submitted for international coverage. Scope and duration of each of our foreign patents vary in keeping with local laws. On July 7, 2014, we obtained a new Danish patent application related to our silicon carbide membrane technology.
Our Products We manufacture and sell a broad range of systems and products based on the application of our ceramic filters and membranes for the filtration of liquids and gases within a range of uses, such as industrial wastewater, oil & gas, commercial pool, road & non-road machinery, marine, chemicals/petrochemicals and other industrial applications.
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 Our Products We manufacture and sell a broad range of systems and products based on the application of our ceramic filters and membranes for the filtration of liquids and gases within a range of uses, such as industrial wastewater, oil & gas, commercial pool, road & non-road machinery, marine, chemicals/petrochemicals, and other industrial applications.
According to Frost & Sullivan's report European Swimming Pool Water Treatment Growth Opportunities (June 2022), the European commercial pool market is projected to grow at a CAGR of 6.1% from 2024 to 2028, reaching a total addressable market of $687 million. We remain committed to expand our geographical reach outside of Europe through new partnerships and distribution agreements.
According to Frost & Sullivan's report European Swimming Pool Water Treatment Growth Opportunities (June 2022), the European commercial pool market is projected to grow at a CAGR of 6.1% from 2024 to 2028, reaching a total addressable market of $687 million.
This type of engine requires efficient and reliable water treatment systems for exhaust gas recirculation, for which it is necessary for engine combustion efficiency. Based on our many commercially operated water treatment systems, we have developed a special water treatment solution for this new application.
This type of engine requires efficient and reliable water treatment systems for exhaust gas recirculation, which is necessary for engine combustion efficiency. Based on our many marine scrubber water treatment systems currently in operation, we have leveraged this installed base to develop a special water treatment solution for this new application.
In the oil & gas market, we see growing global demand for high-quality re-injection water. In addition, we see tightening water discharge legislation, increasing public awareness of water scarcity, and heightening adoption of reuse as key growth drivers in this end market.
In addition, we see tightening water discharge legislation, increasing public awareness of water scarcity, and heightening adoption of reuse as key growth drivers in this end market.
Corporate Information We filed our Articles of Incorporation on July 1, 2004, and are incorporated under the laws of the State of Nevada. Our principal executive office is located at Industriparken 22C, 2750 Ballerup, Denmark, and our telephone number is +45 3131 5941. We maintain an Internet website at www.liqtech.com .
We believe that we have good relations with our employees. 5 Table of Contents Corporate Information We filed our Articles of Incorporation on July 1, 2004, and are incorporated under the laws of the State of Nevada. Our principal executive office is located at Industriparken 22C, 2750 Ballerup, Denmark, and our telephone number is +45 3131 5941.
Furthermore, we have recently intensified our focus on aftermarket sales through service & maintenance agreements and the sale of spare parts to our clients and partners.
We remain committed to expand our geographical reach both within and outside of Europe through new partnerships and distribution agreements. Furthermore, we have recently intensified our focus on aftermarket sales through service & maintenance agreements and the sale of spare parts to our clients and partners.
Our Strategy 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 regulatory tailwinds. Essential imperatives associated with our strategy include the following: ● Develop and reinforce new products and applications to provide clean water and reduce pollution.
Our Strategy 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 tailwinds.
In 2020, IMO (International Maritime Organization) issued Marpol VI with clear regulation of SOx emissions for marine ships. The regulation can be reached in one of two ways: 1) use of fuel with low SOx content for a cost that is 150-200 $/MT higher than normal bunker fuel; 2) installation of open-loop, hybrid, or closed-loop scrubbers.
The regulation can be reached in one of two ways: 1) use of fuel with low SOx content for a cost that is 150-200 $/MT higher than normal bunker fuel; and 2) installation of open-loop, hybrid, or closed-loop scrubbers. Only hybrid and closed-loop systems can be used in “ECA” zones (Emission Control Areas).
This type of engines requires an efficient and reliable water treatment system for exhaust gas recirculation, for which it is necessary for engine combustion efficiency. Based on our many commercially operated water treatment systems, we have developed a unique for this new application.
Sustainability is gaining increasing attention in the shipping industry. Most commercial new vessels are built with dual-fuel engines. This type of engine requires an efficient and reliable water treatment system for exhaust gas recirculation, for which engine combustion efficiency is critical. Based on our many commercially operated water treatment systems, we have developed a unique solution for this new application.
In 2014, we acquired Provital Solutions, a Danish filtration system manufacturing company that enabled our Company to broaden our offering of products and systems for ceramic filters, SiC membranes, and modular liquid filtration systems. The liquid filtration systems business has become a highly complementary offering to our SiC membrane and DPF business.
Our Company initially focused on selling DPF filters to the automotive industry to reduce exhaust gas emissions from diesel engines. In 2014, we acquired Provital Solutions, a Danish filtration system manufacturing company, that enabled our Company to broaden our offering of products and systems for ceramic filters, SiC membranes, and modular liquid filtration systems.
We believe the following strengths underpin our ability to increase revenue and profitability: ● Advantages of Silicon Carbide Membranes and Filters: Our liquid filtration and diesel exhaust products utilize silicon carbide substrate and membrane technology, which have unique qualities that we believe make our products more effective than those of our competitors.
We intend to continue investing in R&D with the aim of developing new technologies and improving our existing products to strengthen our competitive advantages, retain our existing customers, and acquire new customers. 2 Table of Contents We believe the following strengths underpin our ability to increase revenue and profitability: ● Advantages of Silicon Carbide Membranes and Filters: Our liquid filtration and diesel exhaust products utilize silicon carbide substrate and membrane technology, which have unique qualities that we believe make our products more effective than other players and competitors.
In 2023, we have submitted 3 patent applications to further strengthen our intellectual property for SiC membranes. 8 Table of Contents We also rely on trade secret protection for our confidential and proprietary information. Trade secrets, however, can be difficult to protect.
In 2023, we submitted three patent applications to further strengthen our intellectual property for SiC membranes. In 2025, we submitted one patent application to defend our unique technological position within cross-flow integrated filtration systems. We also rely on trade secret protection for our confidential and proprietary information. Trade secrets, however, can be difficult to protect.
Our DPF filters can handle higher soot loads than filters that do not use a silicon carbide membrane, making them ideal for situations in which engines infrequently reach high enough temperatures to burn off the soot.
Our DPFs are ideal for both on- and off-road vehicles and machinery because of their strength, chemical non-reactive nature, temperature resilience, and thermal conductivity. 1 Table of Contents Our DPF filters can handle higher soot loads than filters that do not use a silicon carbide membrane, making them ideal for situations in which engines infrequently reach high enough temperatures to burn off the soot.
Furthermore, our systems have been deployed successfully to reduce OPEX and enhance product quality in chemicals/petrochemicals applications. In 2024, we piloted a new application area for microplastics removal for a chemical/petrochemical company. Highly Flexible & Innovative Plastic Manufacturing LiqTech provides highly flexible and innovative plastics manufacturing, focusing on machining, welding, bending, and solvent cementing.
Furthermore, our systems have been deployed successfully to reduce operating expenses and enhance product quality in chemicals/petrochemicals applications. In 2025, we have delivered a filtration system for steel processing wastewater treatment in the U.S. with strong success. Highly Flexible & Innovative Plastic Manufacturing LiqTech provides highly flexible and innovative plastics manufacturing, focusing on machining, welding, bending, and solvent cementing.
Item 1. Business Overview LiqTech International, Inc. is a clean technology company that manufactures and markets highly specialized filtration products and systems. For more than two decades, we have developed and manufactured products of re-crystallized silicon carbide.
Item 1. Business Overview LiqTech International, Inc. is a clean technology company that provides state-of-the-art gas and liquid purification products by manufacturing ceramic silicon carbide filters and membranes as well as developing industry-leading and fully automated filtration solutions and systems. For more than two decades, we have developed and manufactured products of re-crystallized silicon carbide.
We are currently focused on evaluating future market potential to more accurately assess the commercial potential within each industrial end-market segment. Based on industry research, the total addressable market within the global industrial water & wastewater treatment market is projected to reach $7.7 billion by 2030.
We are currently focused on evaluating future market potential to more accurately assess the commercial potential within each industrial end-market segment.
We believe the aftermarket segment benefits from robust growth fundamentals as clients and technology providers are increasingly focused on unlocking value through close collaboration, for which service and maintenance will yield improved customer satisfaction and growth. 6 Table of Contents Silicon Carbide Ceramic Membrane & Diesel Particulate Filter (DPF) Market Our legacy business related to the provision of DPF filters is expected to continue growing across Europe and North America as regulators require diesel engines to comply with new and more stringent environmental rules and regulations.
Silicon Carbide Ceramic Membrane & Diesel Particulate Filter (DPF) Market Our legacy business related to the provision of DPF filters is expected to continue growing across Europe and North America as regulators require diesel engines to comply with new and more stringent environmental rules and regulations.
These system integrators use our filtration products and membranes in larger filtration systems, which eventually are installed in systems used by the end customers. Due to legislative regulation, system integrators are often required by the end customers to receive approval for their systems, including the components used in such systems, which requires significant time and expense.
Due to legislative regulation, system integrators are often required by the end customers to receive approval for their systems, including the components used in such systems, which requires significant time and expense. As a result, we believe that certain system integrators using our products will not replace our filters with competitive products unless there are compelling reasons to do so.
Only hybrid and closed-loop systems can be used in “ECA” zones (Emission Control Areas). For hybrid and closed-loop systems, there is a need to install a water treatment system. Up to now, approximately 6,000 vessels have installed a scrubber, of which 1,200 include hybrid or closed-loop systems.
For hybrid and closed-loop systems, there is a need to install a water treatment system. Up to now, approximately 6,000 vessels have installed a scrubber, of which 1,200 include hybrid or closed-loop systems. Since 2018, LiqTech has sold and installed more than 170 water treatment units (WTU) for marine scrubbers, with an estimated market share of 14%.
The Aqua Solution® also reduces the number of membrane elements, pressure vessels, and both water and energy consumption as well as CO 2 footprint by offering high-flow capabilities at very low pressure with improved filtration characteristics. 2 Table of Contents Diesel Particulate Filters (DPFs) for Gas Purification We offer diesel particulate filters for exhaust emission control solutions to the verified retrofit and original equipment manufacturer (OEM) markets through our direct sales force and distributors specializing in sales to end users.
Diesel Particulate Filters (DPFs) for Gas Purification We offer diesel particulate filters for exhaust emission control solutions to the verified retrofit and original equipment manufacturer (OEM) markets through our direct sales force and distributors specializing in sales to end users.
We promote our products through direct sales to potential customers and marketing activities such as participation in tradeshows and exhibitions, with a new focus on digital marketing. In certain instances, our products are delivered to the end customer through system integrators.
As of December 2025, we employed ten (10) full-time sales, marketing, and strategy personnel in addition to partnership and distribution agents. We promote our products through direct sales to potential customers and marketing activities such as participation in tradeshows and exhibitions, with a recent focus on digital marketing.
In 2024, we have succeeded in two commercial installations in the U.S. onshore market. The projected global market for produced water treatment has large potential for the Company.
In 2025, we have succeeded in commercial installations in the U.S. onshore market. The projected global market for produced water treatment has large potential for the Company. According to Zion Market Research, the market will grow with a CAGR of 8% and reach a market size of $16 billion in 2032 from $8 billion in 2023.
Sales, Marketing and Business Intelligence Our products and services are sold both directly and indirectly to end users across multiple jurisdictions and end-markets through direct sales, systems integrators, distributors, agents, and partners. Our Company initially focused on selling DPF filters to the automotive industry to reduce exhaust gas emissions in diesel engines.
We purchase these commodities from various sources generally based upon availability, lead time, quality, and price. Sales, Marketing and Business Intelligence Our products and services are sold both directly and indirectly to end users across multiple jurisdictions and end markets through direct sales, systems integrators, distributors, agents, and partners.
We currently provide water filtration systems for commercial pool owners, scrubber technology providers, shipowners, and ship operators as well as tailored filtration systems for oil & gas operators, energy companies, and services companies.
Essential imperatives associated with our strategy include the following: ● Develop and reinforce new products and applications to provide clean water and reduce pollution. We currently provide water filtration systems for commercial pool owners, dual fuel marine vessels, shipowners, and ship operators as well as tailored filtration systems for oil & gas operators, industrial operators and services companies.
According to Zion Market Research, the market will grow with a CAGR of 8% and reach a market size of $16 billion in 2032 from $8 billion in 2023 The market for marine water filtration systems is dependent on the development of new regulations for sulfur and ballast water emissions.
The market for marine water filtration systems is dependent on the development of new regulations for sulfur and ballast water emissions. In 2020, IMO (International Maritime Organization) issued Marpol VI with clear regulation of SOx emissions for marine ships.
LiqTech is differentiated by what we believe is our superior SiC membrane technology and our ability to provide a complete water treatment system for select industries and applications. 5 Table of Contents Our applications within industrial wastewater and more specific applications such as chemical/petrochemical purification represent a core part of our strategic plan.
LiqTech has an addressable market of approximately $6 billion. Our applications within industrial wastewater and more specific applications such as chemical/petrochemical purification represent a core part of our strategic plan.
Raw Materials and Components The main raw materials used in our manufacturing processes are silicon carbide, steel, pumps, electrical components, plastic, platinum, and palladium. We purchase these commodities from various sources generally based upon availability, lead time, quality, and price.
We continue to evaluate and assess the possibility of expanding our production capacity with further support from partnerships across the U.S. 4 Table of Contents Raw Materials and Components The main raw materials used in our manufacturing processes are silicon carbide, steel, pumps, electrical components, plastic, platinum, and palladium.
If properly maintained, a LiqTech DPF can last as long as the application machinery or engine. Our DPFs are ideal for both on- and off-road vehicles and machinery because of their strength, chemical non-reactive nature, temperature resilience, and thermal conductivity.
If properly maintained, a LiqTech DPF can last as long as the application machinery or engine.
We plan to actively market our existing products to new customers as we penetrate new end markets and optimize our manufacturing capacity. As of December 2024, we employed ten (10) full-time sales, marketing and strategy personnel in addition to partnership and distribution agents.
The liquid filtration systems business has become a highly complementary offering to our SiC membrane and DPF business. We plan to actively market our existing products to new customers as we penetrate new end markets and optimize our manufacturing capacity.
Manufacturing We currently manufacture our ceramic membrane and DPF products in Ballerup, Denmark (Copenhagen area). We assemble our liquid filtration systems and manufacture plastic products at our facilities located in Hobro, Denmark. We plan to consolidate, optimize, and expand our production capacity within the existing facilities with further support from partnerships across the U.S. and Asia.
We assemble our liquid filtration systems and manufacture plastic products at our facilities located in Hobro, Denmark. In 2025, we started to assemble marine water treatment systems in China with the purpose of being closer to our customers and reducing the cost of production.
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Our Danish operations are located in the Copenhagen area and Hobro.
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The Aqua Solution® also reduces the number of membrane elements, pressure vessels, water and energy consumption, and CO 2 footprint by offering high-flow capabilities at very low pressure with improved filtration characteristics.
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We intend to continue investing in R&D with the aim of developing new technologies and improving our existing products to strengthen our competitive advantages, retain our existing customers, and acquire new customers.
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Accordingto the recent GWI publication combined with our inhouse evaluation, the global industry and municipal wastewater equipment market is approximately $300 billion, where filtration technology serves today a $14 billion market. LiqTech silicon carbon membrane technology is outstanding in the places where water is difficult to treat, while water purity is critical for industrial processes.
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According to relevant industry research published in 2022, the global ceramic membrane market is expected to grow at a compound annual growth rate (CAGR) of 11.4%, from $5.4 billion in 2021 to $14.3 billion in 2030.
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Based on industry research, the total addressable market within the global industrial water & wastewater treatment market is projected to reach $7.7 billion by 2030. 3 Table of Contents In the oil & gas market, we see growing global demand for high-quality re-injection water.
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Since 2018, LiqTech has sold and installed more than 170 water treatment units (WTU) for marine scrubbers, with an estimated market share of 14%. Sustainability is gaining increasing attention in the shipping industry. Most commercial new vessels are built with dual-fuel engines.
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We believe the aftermarket segment benefits from robust growth fundamentals as clients and technology providers are increasingly focused on unlocking value through close collaboration, for which service and maintenance will yield improved customer satisfaction and growth.
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Historically, our business has predominantly sold our integrated filtration systems with embedded SiC, HTM, and Aqua Solution® membranes to our partners, distributors, and end users.
Added
In certain instances, our products are delivered to the end customer through system integrators. These system integrators use our filtration products and membranes in larger filtration systems, which eventually are installed in systems used by the end customers.
Removed
As a result, we believe that certain system integrators using our products will not replace our filters with competitive products unless there are compelling reasons to do so. Intellectual Property We have two issued patents in Denmark, one issued European patent, and one pending European and US patent application that we co-own with a third party.
Added
We maintain an Internet website at www.liqtech.com .

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

43 edited+12 added−12 removed126 unchanged
Biggest changeIf one or more of these analysts ceases coverage altogether, we could lose visibility, which could also lead to a decline in the price of our common stock. Future sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline.
Biggest changeFuture sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline. If any significant number of our outstanding shares are sold, such sales could have a depressive effect on the market price of our stock.
In the event that our products fail to meet these evolving standards, some or all of our products may become obsolete, which could have an adverse effect on our business, operating results, financial condition, and long-term prospects. Our international operations are exposed to potential adverse tax consequence. Our international operations create a risk of potentially adverse tax consequences.
In the event that our products fail to meet these evolving standards, some or all of our products may become obsolete, which could have an adverse effect on our business, operating results, financial condition, and long-term prospects. Our international operations are exposed to potential adverse tax consequences. Our international operations create a risk of potentially adverse tax consequences.
As of December 31, 2024, we have issued pre-funded warrants to purchase a total of 5,299,879 shares of our common stock, consisting of 3,930,008 pre-funded warrants issued prior to 2024 and an additional 1,369,871 pre-funded warrants issued in 2024. Of these, none have been exercised.
As of December 31, 2025, we have issued pre-funded warrants to purchase a total of 5,299,879 shares of our common stock, consisting of 3,930,008 pre-funded warrants issued prior to 2024 and an additional 1,369,871 pre-funded warrants issued in 2024. Of these, none have been exercised.
As a result, it may be difficult for an investor to affect service of process or enforce within the United States any judgments obtained against us or such officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
As a result, it may be difficult for an investor to effect service of process or enforce within the United States any judgments obtained against us or such officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
Our ability to achieve financial beak-even is heavily dependent on external macroeconomic and competitive industry dynamics that are outside of our control; therefore, our business may not achieve its financial objectives in a period with increased competition or weakening market fundamentals. Furthermore, future growth and operations may require public or private equity offerings or debt financings.
Our ability to achieve financial breakeven is heavily dependent on external macroeconomic and competitive industry dynamics that are outside of our control; therefore, our business may not achieve its financial objectives in a period with increased competition or weakening market fundamentals. Furthermore, future growth and operations may require public or private equity offerings or debt financings.
Additionally, fluctuation in demand for ceramics or global bottlenecks in shipping may result in supply chain constraints and longer lead times on key components which may result in delayed order shipments or risk of cancellation from clients demanding short lead times. If we are unable to manage our expected growth, our business may be materially and adversely affected.
Additionally, fluctuation in demand for ceramics or global bottlenecks in shipping may result in supply chain constraints and longer lead times on key components which may result in delayed order shipments or risk of cancellation from clients demanding short lead times. 7 Table of Contents If we are unable to manage our expected growth, our business may be materially and adversely affected.
Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services. 16 Table of Contents For example, the General Data Protection Regulation, which became effective in May 2018, imposes more stringent data protection requirements and provides for significantly greater penalties for noncompliance than the European Union laws that previously applied.
Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products and services. For example, the General Data Protection Regulation, which became effective in May 2018, imposes more stringent data protection requirements and provides for significantly greater penalties for noncompliance than the European Union laws that previously applied.
Accordingly, at least some of the technology employed in our manufacture of re-crystallized silicon carbide products is not protected by patents. Where we consider it appropriate, we seek patent protection in the United States and other countries for technologies used in, or relating to, our re-crystallized silicon carbide product forms, applications, and manufacturing processes.
Accordingly, at least some of the technology employed in our manufacture of re-crystallized silicon carbide products is not protected by patents. 8 Table of Contents Where we consider it appropriate, we seek patent protection in the United States and other countries for technologies used in, or relating to, our re-crystallized silicon carbide product forms, applications, and manufacturing processes.
As of December 31, 2024, we have not entered into any derivative contracts to hedge our currency exposure. Our inability to protect our intellectual property rights could negatively affect our business and results of operations.
As of December 31, 2025, we have not entered into any derivative contracts to hedge our currency exposure. Our inability to protect our intellectual property rights could negatively affect our business and results of operations.
Our business may also be adversely affected if we are unable to continue to attract and retain such personnel. 12 Table of Contents Adverse conditions, regulatory challenges, or lack of funding for emission control programs, may delay or negatively affect our future growth and market potential within the transportation and marine industries.
Our business may also be adversely affected if we are unable to continue to attract and retain such personnel. Adverse conditions, regulatory challenges, or lack of funding for emission control programs, may delay or negatively affect our future growth and market potential within the transportation and marine industries.
Any failure to have or maintain such internal controls could adversely impact our ability to report our financial results accurately and on a timely basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. 17 Table of Contents We may have risks associated with security of our information technology systems.
Any failure to have or maintain such internal controls could adversely impact our ability to report our financial results accurately and on a timely basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. We may have risks associated with security of our information technology systems.
These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. There is limited trading volume of our common stock, which could make it difficult for you to liquidate an investment in our common stock in a timely manner.
These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. 11 Table of Contents There is limited trading volume of our common stock, which could make it difficult for you to liquidate an investment in our common stock in a timely manner.
Increased market and interest rate uncertainty may also elevate execution risk and ultimately restrict our ability to refinance our debt obligations. 13 Table of Contents Foreign currency fluctuations could adversely impact financial performance. Our reporting currency is the United States Dollar ($).
Increased market and interest rate uncertainty may also elevate execution risk and ultimately restrict our ability to refinance our debt obligations. Foreign currency fluctuations could adversely impact financial performance. Our reporting currency is the United States Dollar ($).
Because of our activities in Denmark, the European Continent, Middle East, U.S., and other countries, we are exposed to fluctuations in foreign currency rates.
Because of our activities in Denmark, the European Continent, China, the U.S., and other countries, we are exposed to fluctuations in foreign currency rates.
The continuation of the war between Ukraine and Russia as well as the war/armed conflict related to Hamas/Israel and the situation in the Red Sea fuels uncertainty and risk to our business as we rely on the ability to manufacture, ship, service, and operate across multiple jurisdictions.
The continuation of the war between Ukraine and Russia as well as the conflict related to Hamas/Israel and the situation in the Red Sea, including tensions with Iran, fuels uncertainty and risk to our business as we rely on the ability to manufacture, ship, service, and operate across multiple jurisdictions.
The costs of being a public company, as well as the diversion of management’s time and attention, may have a material adverse effect on our future business, financial condition, and results of operations. Changes in U.S.
The costs of being a public company, as well as the diversion of management’s time and attention, may have a material adverse effect on our future business, financial condition, and results of operations.
Item 1A. Risk Factors RISKS RELATED TO OUR BUSINESS AND OPERATIONS The adverse effect to our business operations from armed conflicts (such as Ukraine/Russia and Hamas/Israel) or similar political, social, regulatory, or economic tension may challenge our operational flexibility and financial performance.
The adverse effect to our business operations from armed conflicts (such as Ukraine/Russia and Hamas/Israel) or similar political, social, regulatory, or economic tension may challenge our operational flexibility and financial performance.
If we are found to infringe any patents, we could be required to (1) pay substantial monetary damages, including lost profits, reasonable royalties, and/or treble damages if an infringement is found to be willful and/or (2) totally discontinue or substantially modify any products or processes that are found to be in violation of another party’s intellectual property rights.
If we are found to infringe any patents, we could be required to (1) pay substantial monetary damages, including lost profits, reasonable royalties, and/or treble damages if an infringement is found to be willful and/or (2) totally discontinue or substantially modify any products or processes that are found to be in violation of another party’s intellectual property rights. 9 Table of Contents We face competition and technological advances by competitors, which could adversely affect the sales of our products.
If such funding is not available, or delayed, it can negatively affect our future growth prospects. In addition to funding, we also expect that our future business growth will be driven, in part, by the enforcement of existing emissions-related environmental regulations and tightening of emissions standards worldwide, where regulations and standards are frequently contested in litigation.
In addition to funding, we also expect that our future business growth will be driven, in part, by the enforcement of existing emissions-related environmental regulations and tightening of emissions standards worldwide, where regulations and standards are frequently contested in litigation.
Periodic and/or continuous market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock.
Periodic and/or continuous market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. Price volatility may be worse if the trading volume of our common stock is low.
While the global impact of COVID-19 has diminished, recent years have demonstrated the significant disruptions that pandemics or widespread health emergencies can cause to supply chains, labor markets, and overall economic activity.
Our business could be adversely affected by the emergence or resurgence of health crises, pandemics, or other public health emergencies. While the global impact of COVID-19 has diminished, recent years have demonstrated the significant disruptions that pandemics or widespread health emergencies can cause to supply chains, labor markets, and overall economic activity.
In any joint venture in which we engage, we will rely on our local partner for the implementation of much of any such joint venture operation, and the success of any such operation is thus not entirely within our control. Any failure or perceived failure of a joint venture may have a material impact on our operations and financial condition.
In any joint venture in which we engage, we will rely on our local partner for the implementation of much of any such joint venture operation, and the success of any such operation is thus not entirely within our control.
Our management and other personnel will continue to devote a substantial amount of time and financial resources to these compliance initiatives. 20 Table of Contents If we fail to staff our accounting and finance function adequately or maintain internal control systems sufficient to meet the demands that are placed upon us as a public company, we may be unable to report our financial results accurately or in a timely manner and our business and stock price may suffer.
If we fail to staff our accounting and finance function adequately or maintain internal control systems sufficient to meet the demands that are placed upon us as a public company, we may be unable to report our financial results accurately or in a timely manner and our business and stock price may suffer.
Our business has undergone significant changes in the past few years to help restore financial flexibility to the Company through an enhanced capital structure, improved profitability, reduced investments, and changes to the organization.
If we fail to restore financial stability through improved profitability and access to adequate liquidity, our business options and financial condition would be impacted. Our business has undergone significant changes in the past few years to help restore financial flexibility to the Company through an enhanced capital structure, improved profitability, reduced investments, and changes to the organization.
We may not be able to maintain our technology or know-how as trade secrets, and competitors may develop or acquire equally valuable or more valuable technology or know-how related to the manufacture of comparable silicon carbide products.
We also rely on trade secret protection for our confidential and proprietary information. Trade secrets, however, can be difficult to protect. We may not be able to maintain our technology or know-how as trade secrets, and competitors may develop or acquire equally valuable or more valuable technology or know-how related to the manufacture of comparable silicon carbide products.
If any significant number of our outstanding shares are sold, such sales could have a depressive effect on the market price of our stock. We are unable to predict the effect, if any, that the sale of shares, or the availability of shares for future sale, will have on the market price of the shares prevailing from time to time.
We are unable to predict the effect, if any, that the sale of shares, or the availability of shares for future sale, will have on the market price of the shares prevailing from time to time.
The trading market for our common stock will depend in part on research and reports that industry or financial analysts publish about us or our business.
If securities analysts do not publish research or reports about our business or if they downgrade us or our sector, the price of our common stock could decline. The trading market for our common stock will depend in part on research and reports that industry or financial analysts publish about us or our business.
Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock, causing our stock price to decline. 18 Table of Contents Provisions in our articles of incorporation and bylaws could discourage a change in control or an acquisition of us by a third party, even if the acquisition would be favorable to you, thereby adversely affecting existing stockholders.
Provisions in our articles of incorporation and bylaws could discourage a change in control or an acquisition of us by a third party, even if the acquisition would be favorable to you, thereby adversely affecting existing stockholders.
For the year ended December 31, 2024, our four largest customers accounted for approximately 7%, 7%, 5%, and 5% of our net sales (approximately 24% in total). For the year ended December 31, 2023, our four largest customers accounted for approximately 7%, 5%, 4%, and 4% of our net sales (approximately 20% in total).
For the year ended December 31, 2025, our four largest customers accounted for approx imately 12%, 7%, 6%, and 5% of our net sales (approximately 30% in tota l). For the year ended December 31, 2024, our four largest customers accounted for approximately 7%, 7%, 5%, and 5% of our net sales (approximately 24% in total).
These and other such standards generally result in different accounting principles, which may significantly impact our reported results or could result in variability of our financial results. In preparing our financial statements, we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results.
In preparing our financial statements, we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results.
For example, the global shipping industry has been negatively impacted by the coronavirus outbreak and may be further adversely affected by an extended shutdown of various businesses or delayed implementation of regulatory frameworks and environmental policies.
For example, the global shipping industry has been negatively impacted by the coronavirus outbreak and may be further adversely affected by an extended shutdown of various businesses or delayed implementation of regulatory frameworks and environmental policies. This, in turn, could adversely affect the demand for our marine water systems as shipowners delay or even cancel their orders.
PUBLIC COMPANY RISK FACTORS We will continue to incur significant costs from operating as a public company, and our management may be required to devote substantial time to compliance initiatives that ultimately could have a material adverse effect on our financial condition and results of operations.
We cannot assure investors of a positive return on their investment when they sell their shares, nor can we assure investors will not lose the entire amount of their investment. 12 Table of Contents PUBLIC COMPANY RISK FACTORS We will continue to incur significant costs from operating as a public company, and our management may be required to devote substantial time to compliance initiatives that ultimately could have a material adverse effect on our financial condition and results of operations.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in our financial reporting.
Any failure or perceived failure of a joint venture may have a material impact on our operations and financial condition. 10 Table of Contents If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in our financial reporting.
More recently, the change in administration in the U.S. elevates the potential for trade conflict and tariffs on imports, which could potentially impact our business. New or expanded trade restrictions, including export controls on key materials or technologies used in our products, could disrupt our supply chain, limit our ability to source critical components, and increase costs.
New or expanded trade restrictions, including export controls on key materials or technologies used in our products, could disrupt our supply chain, limit our ability to source critical components, and increase costs.
Prolonged period of energy market volatility and supply disruptions could negatively impact our business The European energy crisis, which escalated in 2022 amid the Russia-Ukraine war, has largely stabilized; however, our business remains exposed to fluctuations in energy prices and potential supply disruptions caused by geopolitical instability, regulatory changes, or natural disasters.
There can be no assurance that future trade restrictions or geopolitical conflicts will not have a material adverse effect on our business, financial condition, and results of operations. 6 Table of Contents Prolonged periods of energy market volatility and supply disruptions could negatively impact our business The European energy crisis, which escalated in 2022 amid the Russia-Ukraine war, has largely stabilized; however, our business remains exposed to fluctuations in energy prices and potential supply disruptions caused by geopolitical instability, regulatory changes, or natural disasters.
Additionally, changes in import/export regulations or retaliatory trade policies from foreign governments could affect our ability to serve certain markets or delay customer orders. Our ability to mitigate these risks depends on the stability of global trade relations, our ability to identify alternative suppliers, and potential shifts in regulatory frameworks that could impact our industry.
Our ability to mitigate these risks depends on the stability of global trade relations, our ability to identify alternative suppliers, and potential shifts in regulatory frameworks that could impact our industry.
While the Company has procedures to monitor and limit exposure to credit risk on its receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses. 11 Table of Contents If we fail to restore financial stability through improved profitability and access to adequate liquidity, our business options and financial condition would be impacted .
While the Company has procedures to monitor and limit exposure to credit risk on its receivables, there can be no assurance such procedures will effectively limit our credit risk and avoid losses.
Furthermore, if one or more of the analysts who cover us downgrades us, the industry in which we operate, or the stock of any of our competitors, the price of our common stock may decline.
Furthermore, if an analyst downgrades us, the industry in which we operate, or the stock of any of our competitors, the price of our common stock may decline. If the analyst discontinues coverage altogether, we could lose visibility, which could also lead to a decline in the price of our common stock.
This, in turn, could adversely affect the demand for our marine scrubbers as shipowners delay or even cancel their orders for new closed-loop scrubber systems. Future growth of our business depends in part on the availability of funding for emissions control programs, which can be affected by economic as well as political reasons that are beyond our control.
Future growth of our business depends in part on the availability of funding for emissions control programs, which can be affected by economic as well as political reasons that are beyond our control. If such funding is not available, or delayed, it can negatively affect our future growth prospects.
Additionally, it is not possible to predict with certainty what patent claims may issue from any relevant third-party pending patent applications.
Additionally, it is not possible to predict with certainty what patent claims may issue from any relevant third-party pending patent applications. Third parties may be able to obtain patents with claims relating to our product forms, applications, and/or manufacturing processes, which they could attempt to assert against us or our customers.
Third parties may be able to obtain patents with claims relating to our product forms, applications, and/or manufacturing processes, which they could attempt to assert against us or our customers. 15 Table of Contents In any case, litigation may be necessary to enforce, protect, or defend our intellectual property rights or to determine the validity and scope of the intellectual property rights of others.
In any case, litigation may be necessary to enforce, protect, or defend our intellectual property rights or to determine the validity and scope of the intellectual property rights of others.
There can be no assurance that future trade restrictions or geopolitical conflicts will not have a material adverse effect on our business, financial condition, and results of operations.
While management continues to evaluate energy efficiency measures and alternative supply arrangements, there can be no assurance that future energy market volatility or supply disruptions will not have a material adverse effect on our business, financial condition, and results of operations. Health crises, pandemics, and other public health emergencies could adversely affect our business, financial condition, and results of operations.
In addition, the rights granted under any issued patents may not provide us with competitive advantages against competitors with similar technology.
In addition, the rights granted under any issued patents may not provide us with competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies, duplicate technology developed by us, or otherwise possess intellectual property rights that could limit our ability to manufacture our products and operate our business.
Removed
Global trade restrictions and geopolitical tensions could adversely impact our business and supply chain Our business operates in a global market and is subject to risks arising from increasing trade restrictions, geopolitical tensions, and shifting regulatory frameworks.
Added
Item 1A. Risk Factors RISKS RELATED TO OUR BUSINESS AND OPERATIONS We will require substantial capital investment in the future, and our inability to raise adequate capital could affect our ability to continue as a going concern. We will require significant funding to continue our operations and advance our development of new products.
Removed
In recent years, governments have imposed new tariffs, sanctions, and export controls, particularly in relation to advanced technologies, critical raw materials, and industrial goods. Trade conflicts between major economies, such as the United States and China, as well as evolving sanctions on Russia, have created uncertainty in supply chains and increased the complexity of cross-border trade.
Added
Our ability to raise additional capital, on timely and favorable terms or at all, will depend on various factors, including macroeconomic conditions, future commodity prices, our exploration success, and market conditions. If these factors deteriorate, our ability to raise capital to fund ongoing operations and business activities could be significantly impacted.
Removed
While management continues to evaluate energy efficiency measures and alternative supply arrangements, there can be no assurance that future energy market volatility or supply disruptions will not have a material adverse effect on our business, financial condition, and results of operations. 10 Table of Contents Our business has been right-sized to help protect our profitability and cash flow; however, we remain exposed to near-term market fundamentals as we rely on short lead-time products and orders that may be cancelled if customers are facing weakened end-market demand or increased uncertainty.
Added
If we cannot obtain adequate additional financing, we may have to substantially curtail our exploration and development activities or sell assets, which could materially and adversely affect our business plan. Inadequate financial resources could also raise substantial doubt about our ability to continue as a going concern.
Removed
Health crises, pandemics, and other public health emergencies could adversely affect our business, financial condition, and results of operations. Our business could be adversely affected by the emergence or resurgence of health crises, pandemics, or other public health emergencies.
Added
Global trade restrictions, tariffs, and geopolitical tensions could adversely impact our business and supply chain In April/May 2025, the global tariff landscape began to quickly change with the U.S. implementing new and/or increased tariffs on various foreign countries, either generally or with respect to certain products.
Removed
Furthermore, our competitors may independently develop similar technologies, duplicate technology developed by us, or otherwise possess intellectual property rights that could limit our ability to manufacture our products and operate our business. 14 Table of Contents We also rely on trade secret protection for our confidential and proprietary information. Trade secrets, however, can be difficult to protect.
Added
Certain foreign countries, including China and those in the EU, have, and may continue to, change their tariff policies in response to changes in the U.S. tariff policy.
Removed
In some cases, litigation may be threatened or brought by a patent-holding company or other adverse patent owner who has no relevant product revenues and against which our patents may provide little or no deterrence.
Added
These recent tariffs and the subsequent retaliatory tariffs could increase the cost of goods for our products or reduce our ability to sell products globally, particularly in China and the U.S., which may adversely affect our operating results and financial condition.
Removed
If our competitors are able to use our technology without payment to us, our ability to compete effectively could be harmed. We face competition and technological advances by competitors, which could adversely affect the sales of our products.
Added
So far, these new tariffs and trade policies have not had a significant impact on our business operations and financial results, primarily due to our prior efforts to accumulate and maintain inventories at favorable cost.
Removed
Price volatility may be worse if the trading volume of our common stock is low. 19 Table of Contents If securities analysts do not publish research or reports about our business or if they downgrade us or our sector, the price of our common stock could decline.
Added
There is no guarantee, however, that we can avoid the impact of tariff and related economic effects in the future, and these trade measures and retaliations may directly impact our business by increasing trade-related costs or affecting the demand for our products globally.
Removed
We cannot assure investors of a positive return on their investment when they sell their shares, nor can we assure investors will not lose the entire amount of their investment.
Added
Any further unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impacting the competitive position of our products.
Removed
Generally Accepted Accounting Principles ( “ GAAP ” ) could adversely affect our financial results and may require significant changes to our internal accounting systems and processes. We prepare our consolidated financial statements in conformity with GAAP.
Added
If any new tariffs, legislation, and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent trade tension, such changes could have an adverse effect on our business, financial condition, and results of operations.
Removed
These principles are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to interpret and create appropriate accounting principles and guidance. The FASB periodically issues new accounting standards on a variety of topics.
Added
Sales of substantial shares in the public market could adversely affect the market price of our common stock, causing our stock price to decline.
Removed
For information regarding new accounting standards, please refer to Note 1, “Description of Business and Significant Accounting Policies – Recent Accounting Pronouncements,” of the Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K.
Added
Our management and other personnel will continue to devote a substantial amount of time and financial resources to these compliance initiatives.

Item 2. Properties

Properties — owned and leased real estate

0 edited+2 added−0 removed3 unchanged
Added
In December 2024, we entered into a new lease agreement for production and office space at No 588, Hong Kong Road, Jian Gong Lake Science and Innovation Center, Building 7, Haimen Districy, Nantong City, China. The facility consists of approximately 19,200 square feet, including 13,000 square feet of production space and 600 square feet of office space.
Added
The lease will expire in September 2026. In September 2025, we entered into a lease agreement for our service center in the U.S. at 714 Hughie Long, Cresson, Texas 76035. This facility consists of approximately 3,800 square feet of production & assembly space. The lease will expire in July 2028.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed4 unchanged
Biggest changeSince the beginning of our fiscal year ended December 31, 2024, we have not repurchased any of our equity securities. 22 Table of Contents
Biggest changeSince the beginning of our fiscal year ended December 31, 2025, we have not repurchased any of our equity securities.
Since the beginning of our fiscal year ended December 31, 2024, we have not sold any equity securities that were not registered under the Securities Act of 1933 and that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.
Since the beginning of our fiscal year ended December 31, 2025, we have not sold any equity securities that were not registered under the Securities Act of 1933 and that were not previously reported in a quarterly report on Form 10-Q or in a current report on Form 8-K.
As of December 31, 2024, there were approximately 42 stockholders of record of our common stock as reported by our transfer agent, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).
As of February 26, 2026 there were approximately 44 stockholders of record of our common stock as reported by our transfer agent, one of which is Cede & Co., a nominee for Depository Trust Company (“DTC”).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

34 edited+16 added−35 removed31 unchanged
Biggest changeYear Ended December 31, Period to Period Change As a % As a % Percent 2024 of Sales 2023 of Sales Variance % Revenue $ 14,604,618 100.0 % $ 18,001,652 100.0 % $ (3,397,034 ) (18.9 )% Cost of goods sold 14,353,713 98.3 $ 15,226,176 84.6 (872,463 ) (5.7 ) Gross Profit 250,905 1.7 2,775,476 15.4 (2,524,571 ) (91.0 ) Operating Expenses Selling expenses 2,725,239 18.7 4,298,905 23.9 (1,573,666 ) (36.6 ) General and administrative expenses 5,661,455 38.8 4,856,779 27.0 804,676 16.6 Research and development expenses 1,352,060 9.3 1,418,842 7.9 (66,782 ) (4.7 ) Total Operating Expenses 9,738,754 66.7 10,574,526 58.7 (835,772 ) (7.9 ) Loss from Operation (9,487,849 ) (65.0 ) (7,799,050 ) (43.3 ) (1,688,799 ) 21.7 Other Income (Expense) Interest and other income 178,834 1.2 366,365 2.0 (187,531 ) (51.2 ) Interest expense (167,556 ) (1.1 ) (151,670 ) (0.8 ) (15,886 ) 10.5 Amortization of debt discount (615,552 ) (4.2 ) (400,903 ) (2.2 ) (214,649 ) 53.5 Gain (loss) on foreign currency transactions 164,310 1.1 (359,960 ) (2.0 ) 524,270 (145.6 ) Gain (loss) on disposal of property and equipment (456,282 ) (3.1 ) 7,254 0.0 (463,536 ) (6,390.1 ) Loss on assets held for sale - - (439,388 ) (2.4 ) 439,388 (100.0 ) Total Other Expense (896,246 ) (6.1 ) (978,302 ) (5.4 ) 82,056 (8.4 ) Loss Before Income Taxes (10,384,095 ) (71.1 ) (8,777,352 ) (48.8 ) (1,606,743 ) 18.3 Income Tax Benefit (38,837 ) (0.3 ) (206,207 ) (1.1 ) 167,370 (81.2 ) Net Loss $ (10,345,258 ) (70.8 )% $ (8,571,145 ) (47.6 )% $ (1,774,113 ) 20.7 % Revenues Revenue for the year ended December 31, 2024, was $14,604,618 compared to $18,001,652 for the same period in 2023, representing a decrease of $3,397,034, or 18.9%.
Biggest changeYear Ended December 31, Period to Period Change As a % As a % Percent 2025 of Sales 2024 of Sales Variance % Revenue $ 16,507,558 100.0 % $ 14,604,618 100.0 % $ 1,902,940 13.0 % Cost of goods sold 15,257,035 92.4 $ 14,353,713 98.3 903,322 6.3 Gross Profit 1,250,523 7.6 250,905 1.7 999,618 398.4 Operating Expenses Selling expenses 2,718,047 16.5 2,725,239 18.7 (7,192 ) (0.3 ) General and administrative expenses 5,677,525 34.4 5,661,455 38.8 16,070 0.3 Research and development expenses 1,163,651 7.0 1,352,060 9.3 (188,409 ) (13.9 ) Total Operating Expenses 9,559,223 57.9 9,738,754 66.7 (179,531 ) (1.8 ) Loss from Operation (8,308,700 ) (50.3 ) (9,487,849 ) (65.0 ) 1,179,149 (12.4 ) Other Income (Expense) Interest and other income 445,496 2.7 178,834 1.2 266,662 149.1 Interest and other expense (315,458 ) (1.9 ) (167,556 ) (1.1 ) (147,902 ) 88.3 Amortization of debt discount (426,982 ) (2.6 ) (615,552 ) (4.2 ) 188,570 (30.6 ) Gain (loss) on foreign currency transactions 67,917 0.4 164,310 1.1 (96,393 ) (58.7 ) Gain (loss) on disposal of property and equipment (65,667 ) (0.4 ) (456,282 ) (3.1 ) 390,615 (85.6 ) Total Other Expense (294,694 ) (1.8 ) (896,246 ) (6.1 ) 601,552 (67.1 ) Loss Before Income Taxes (8,603,394 ) (52.1 ) (10,384,095 ) (71.1 ) 1,780,701 (17.1 ) Income Tax Benefit (1,454 ) (0.0 ) (38,837 ) (0.3 ) 37,383 (96.3 ) Net Loss $ (8,601,940 ) (52.1 )% $ (10,345,258 ) (70.8 )% $ 1,743,318 (16.9 )% 15 Table of Contents Revenues Revenue for the year ended December 31, 2025, was $16,507,558 compared to $14,604,618 for the same period in 2024, representing an increase of $1,902,940, or 13.0%.
The majority of the Company's sales contracts contain performance obligations satisfied at a point in time when title along with risks and rewards of ownership have transferred to the customer. This generally occurs when the product is shipped or accepted by the customer. Revenue for service contracts is recognized as the services are provided.
The majority of the Company's sales contracts contain performance obligations satisfied at a point in time when title along with risks and rewards of ownership have been transferred to the customer. This generally occurs when the product is shipped or accepted by the customer. Revenue for service contracts is recognized as the services are provided.
Management has analyzed the impact of the current economic climate on its financial statements as of December 31, 2024, and has determined that the changes to its significant judgements and estimates did not have a material impact with respect to goodwill, intangible assets, or long-lived assets.
Management has analyzed the impact of the current economic climate on its financial statements as of December 31, 2025, and has determined that the changes to its significant judgements and estimates did not have a material impact with respect to goodwill, intangible assets, or long-lived assets.
Considering the relatively short time between revenue recognition and receipt of payment, financing components do not exist between the Company and its customers. For contracts with customers that include multiple performance obligations, judgment is required to determine whether performance obligations specified in these contracts are distinct and should be accounted for as separate revenue transactions for recognition purposes.
Considering the relatively short time between revenue recognition and receipt of payment, financing components do not exist between the Company and its customers. 18 Table of Contents For contracts with customers that include multiple performance obligations, judgment is required to determine whether performance obligations specified in these contracts are distinct and should be accounted for as separate revenue transactions for recognition purposes.
Cash Flows Year Ended December 31, 2024, Compared to Year Ended December 31, 2023 Cash used by operating activities is net loss adjusted for certain non-cash items and changes in assets and liabilities.
Cash Flows Year Ended December 31, 2025, Compared to Year Ended December 31, 2024 Cash used by operating activities is net loss adjusted for certain non-cash items and changes in assets and liabilities.
Revenue Recognition The Company records revenue in accordance with FASB ASC Topic 606, “ Revenue from Contracts with Customers .” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Revenue Recognition The Company records revenue in accord ance with FASB ASC Topic 606, “ Revenue from Contracts with Customers .” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
For the sale of aftermarket parts, the Company transfers control and recognizes revenue when parts are shipped to the customer. When customers are given the right to return eligible parts and accessories, the Company estimates the expected returns based on an analysis of historical experience.
Aftermarket sales represent spare parts, extended warranties, and maintenance services. For the sale of aftermarket parts, the Company transfers control and recognizes revenue when parts are shipped to the customer. When customers are given the right to return eligible parts and accessories, the Company estimates the expected returns based on an analysis of historical experience.
We discuss these policies further below as well as the estimates and judgments involved. Accounts Receivable and Allowance for Current Expected Credit Losses Accounts receivable consist of trade receivables arising from credit sales to customers in the normal course of business. These receivables are recorded at the time of sale, net of an allowance for current expected credit losses.
We discuss these policies further below as well as the estimates and judgments involved. 17 Table of Contents Accounts Receivable and Allowance for Current Expected Credit Losses Accounts receivable consist of trade receivables arising from credit sales to customers in the normal course of business.
Specifically, the deliveries of containerized oil and gas pilot systems to the Middle East and the U.S. contributed to lower-than-usual margins, reflecting a strategic decision aimed at demonstrating and validating the value proposition associated with our technology and seeding the market for future growth.
We did, however, continue to invest in deliveries of containerized oil and gas systems to the U.S., which contributed to lower-than-usual margins, reflecting a strategic decision aimed at demonstrating and validating the value proposition associated with our technology and seeding the market for future growth.
Warrant liabilities are recognized at fair value, with changes in fair value recognized in the consolidated statement of operations each period. Loss Contingencies We are subject to various legal and administrative proceedings along with asserted and potential claims, accruals related to product warranties, and potential asset impairments (loss contingencies) that arise in the ordinary course of business.
Loss Contingencies We are subject to various legal and administrative proceedings along with asserted and potential claims, accruals related to product warranties, and potential asset impairments (loss contingencies) that arise in the ordinary course of business.
Net cash used in investing activities was $424,036 for the year ended December 31, 2024, as compared to $2,886,036 for the year ended December 31, 2023, representing a decrease of $2,462,000.
Net cash used in investing activities was $217,930 for the year ended December 31, 2025, as compared to $424,036 for the year ended December 31, 2024, representing a decrease of $206,106.
For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using expected cost-plus margin. System sales are recognized when the Company transfers control to the customer based upon sales and delivery conditions specified in the sales contract.
For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are generally determined based on the prices charged to customers or using expected cost-plus margin.
Our most critical accounting estimates include: 26 Table of Contents ● The assessment of revenue recognition, which impacts revenue and cost of sales; ● The assessment of allowance for product warranties, which impacts cost of sales; ● The assessment of collectability of accounts receivable, which impacts operating expenses when and if we record bad debt or adjust the allowance for doubtful accounts; ● The assessment of recoverability of long-lived assets, which impacts gross margin or operating expenses when and if we record asset impairments or accelerate their depreciation; ● The recognition and measurement of current and deferred income taxes (including the measurement of uncertain tax positions), which impact our provision for taxes; ● The valuation of inventory, which impacts cost of sales; and ● The recognition and measurement of loss contingencies, which impact cost of sales or operating expenses when we recognize a loss contingency, revise the estimate for a loss contingency, or record an asset impairment.
Our most critical accounting estimates include: ● The assessment of collectability of accounts receivable, which impacts operating expenses when and if we record bad debt or adjust the allowance for doubtful accounts; ● The valuation of inventory, which impacts cost of sales; ● The assessment of recoverability of long-lived assets, which impacts gross margin or operating expenses when and if we record asset impairments or accelerate their depreciation; ● The assessment of Contract assets, which impacts valuation of assets and revenue and cost when performance obligations have been satisfied; ● The assessment of revenue recognition, which impacts revenue and cost of sales; ● The assessment of stock-based awards, which impact operating expenses from the grant date throughout the vesting period; and ● The recognition and measurement of loss contingencies, which impacts cost of sales or operating expenses when we recognize a loss contingency, revise the estimate for a loss contingency, or record an asset impairment.
Contract assets also include unbilled receivables, which usually comprise the last invoice remaining after the delivery of the water treatment unit, where revenue is recognized at the transfer of control based upon signed acceptance of the unit by the customer.
Contract assets also include unbilled receivables, which usually comprise the last invoice remaining after the delivery of the system, where revenue is recognized at the transfer of control based upon signed acceptance of the unit by the customer. Most commonly, this invoice is sent to the customer at commissioning of the product or no later than 12 months after delivery.
The following is a summary of our non-cash compensation: 2024 2023 Compensation for vesting of restricted stock awards issued to the Board of Directors $ 202,125 $ 203,708 Compensation for vesting of restricted stock awards issued to management 462,309 424,196 Total Non-Cash Compensation $ 664,434 $ 627,904 Research and development expense for the year ended December 31, 2024, was $1,352,060 compared to $1,418,842 for the same period in 2023, representing a decrease of $66,782, or 4.7%.
The following is a summary of our non-cash compensation: 2025 2024 Compensation for vesting of restricted stock awards issued to the Board of Directors 271,256 $ 202,125 Compensation for vesting of restricted stock awards issued to management $ 715,816 462,309 Total Non-Cash Compensation $ 987,072 $ 664,434 Research and development expense for the year ended December 31, 2025, was $1,163,651 compared to $1,352,060 for the same period in 2024, representing a decrease of $188,409, or 13.9%.
For inventories produced, standard costs that approximate actual cost on the FIFO method are used to value inventories. Standard costs are reviewed at least annually by management or more often if circumstances indicate a change in cost has occurred. Work in process and finished goods include material, labor, and production overhead costs.
Standard costs are reviewed at least annually by management or more often if circumstances indicate a change in cost has occurred. Work in process and finished goods include material, labor, and production overhead costs. The Company adjusts the value of its inventories to the extent management determines that the cost cannot be recovered due to obsolescence or other factors.
The decline in gross profit was partly offset by decreased depreciation as well as continued initiatives aimed at optimizing manufacturing processes, which have improved profitability within DPF and ceramic membrane production. Included in the gross profit was depreciation of $1,830,553 and $2,598,095 for the years ended December 31, 2024, and 2023, respectively.
The increase in gross profit was partly supported by decreased depreciation as well as continued initiatives aimed at optimizing manufacturing processes. Included in the gross profit was depreciation of $1,519,439 and $1,830,553 for the years ended December 31, 2025, and 2024, respectively.
The increase was mainly driven by the equity raise, generating net proceeds of $9,922,063 from the issuance of common stock and prefunded warrants, partly offset by the repayment of lease agreements in connection with the sales of production equipment in Ballerup as mentioned above. 2024 2023 Net Cash Used in Operating Activities $ (7,534,072 ) $ (4,183,918 ) Net Cash Used in Investing Activities (424,036 ) (2,886,036 ) Net Cash Provided by Financing Activities 8,493,300 580,645 Net Change in Cash and Cash Equivalents 446,547 (6,175,190 ) Cash and Cash Equivalents at End of Period $ 10,868,728 $ 10,422,181 Off-Balance Sheet Arrangements As of December 31, 2024, we had no off-balance sheet arrangements.
The decrease was mainly driven by the equity raise, generating net proceeds of $9,922,063 from the issuance of common stock and prefunded warrants in 2024. 2025 2024 Net Cash Used in Operating Activities $ (6,108,176 ) $ (7,534,072 ) Net Cash Used in Investing Activities (217,930 ) (424,036 ) Net Cash Provided by Financing Activities 722,005 8,493,300 Net Change in Cash and Cash Equivalents (5,798,343 ) 446,547 Cash and Cash Equivalents at End of Period $ 5,070,385 $ 10,868,728 Off-Balance Sheet Arrangements As of December 31, 2025, we had no off-balance sheet arrangements.
Part of the invoicing to the customer is also attributed to the commissioning, and at transfer of the control of the system (i.e., the first performance obligation), this portion is recognized as contract liabilities. 29 Table of Contents Aftermarket sales represent parts, extended warranties, and maintenance services.
This second performance obligation is recognized as revenue at the time of the commissioning services being rendered together with the cost incurred. Part of the invoicing to the customer is also attributed to the commissioning, and at transfer of the control of the system (i.e., the first performance obligation), this portion is recognized as contract liabilities.
The cash used by operating activities for the year ended December 31, 2024, consists mainly of the net loss for the year of $(10,345,258) adjusted by depreciation and other non-cash items of $4,432,671.
The cash used by operating activities for the year ended December 31, 2025, consists mainly of the net loss for the year which improved by $1,743,318, adjusted by depreciation and other non-cash items of which decreased $657,120.
Cash provided by financing activities was $8,493,300 for the year ended December 31, 2024, as compared to $580,645 for the year ended December 31, 2023, representing an increase of $7,912,655.
Cash provided by financing activities was $719,287 for the year ended December 31, 2025, as compared to $8,493,300 for the year ended December 31, 2024, representing a decrease of $7,774,013 or 92%.
Cash used by operating activities for the year ended December 31, 2024, was $7,534,072 compared to cash used by operating activities of $4,183,918 for the year ended December 31, 2023, representing an increase of $3,350,154.
Cash used by operating activities for the year ended December 31, 2025, was $6,108,176 compared to cash used by operating activities of $7,534,072 for the year ended December 31, 2024, representing an improvement of $1,425,896.
Long-Lived Assets The Company assesses the impairment of long-lived assets when events or changes in circumstances indicate that the carrying value of the assets or the asset grouping may not be recoverable.
Inventory valuation adjustments for excess and obsolete inventories are calculated based on current inventories levels, movement, expected useful lives, and estimated future demand for our products. Long-Lived Assets The Company assesses the impairment of long-lived assets when events or changes in circumstances indicate that the carrying value of the assets or the asset grouping may not be recoverable.
General and administrative expenses for the year ended December 31, 2024, were $5,661,455 compared to $4,856,779 for the same period in 2023, representing an increase of $804,676, or 16.6%.
Costs for outbound distribution, including tariffs, and expenditures related to external sales consultancy services also increased in 2025. General and administrative expenses for the year ended December 31, 2025, were $5,677,525 compared to $5,661,455 for the same period in 2024, representing an increase of $16,070, or 0.3%.
This decline in gross profit can be attributed to the decrease in revenue, resulting in lower overall activity levels and underutilization of our manufacturing capacity, as well as an unfavorable sales mix, which resulted in a lower proportion of high-margin products such as liquid filtration systems and ceramic membranes.
This increase in gross profit can be attributed to both an increase in revenue as well as a more favorable sales mix, which resulted in a higher proportion of high-margin products within our Systems segment.
The decline was mainly due to reduced deliveries of liquid filtration systems, plastics products, ceramic membranes, and aftermarket sales, partly offset by increased sales of DPFs. The decrease in deliveries of liquid filtration systems was mainly driven by reduced deliveries of pool filtration systems and marine scrubber systems.
The increase was mainly due to increased deliveries of systems (Pool, Energy & Industry), and components (plastics), partly offset by decreased sales of filters. The increase in deliveries of systems was mainly driven by increased deliveries of pool filtration systems and water treatment systems for industrial applications.
This typically occurs upon shipment of the system from the production facility but can also occur upon other agreed delivery terms.
System sales are recognized when the Company transfers control to the customer based upon sales and delivery conditions specified in the sales contract, or for larger projects in line with completion. This typically occurs upon shipment of the system from the production facility but can also occur upon other agreed delivery terms.
The increase was also partially attributable to the release of bonus provisions in the comparable period of 2023. Included in general and administrative expenses was non-cash compensation of $664,434 and $627,904 for the years ended December 31, 2024, and 2023, respectively.
The increase was primarily due to higher legal expenses, the filling of open positions, including the CFO, as well as higher recruitment costs. Included in general and administrative expenses was non-cash compensation of $987,072 and $664,434 for the years ended December 31, 2025, and 2024, respectively.
The increase in sales of DPFs was primarily driven by the effective execution of strategies designed to capitalize on the increased demand for DPFs. 24 Table of Contents Gross Profit Gross profit for the year ended December 31, 2024, was $250,905 (or a gross profit margin of 1.7%), compared to $2,775,476 (or a gross profit margin of 15.4%) for the same period in 2023, representing a decrease of $2,524,571, or approximately 91.0%.
Gross Profit Gross profit for the year ended December 31, 2025, was $1,250,523 (or a gross profit margin of 7.6%), compared to $250,905 (or a gross profit margin of 1.7%) for the same period in 2024, representing an increase of $999,618, or 398.4%.
This decrease in other expenses was partially offset by a non-cash loss related to the disposal of property and equipment, decreased interest income, and higher debt discount amortization costs due to the extension of the maturity date for the senior promissory notes, with additional warrants issued as consideration for the extension. 25 Table of Contents Income taxes provision The income tax benefit for the year ended December 31, 2024, was $38,837 compared to a benefit of $206,207 for the comparable period in 2023, representing a decrease of $167,370, or 81.2%, mainly driven by a decrease in tax credits associated with research and development activities in Denmark.
Income taxes provision The income tax benefit for the year ended December 31, 2025 , was $1,454 compared to a benefit of $38,837 for the comparable period in 2024 , representing a decrease of $37,383 , or 96.3% , mainly driven by a decrease in tax credits associated with research and development activities in Denmark.
Net Loss As a result of the cumulative effect of the factors described above, we had a net loss for the year ended December 31, 2024, of $10,345,258 compared to $8,571,145 for the comparable period in 2023, representing an increase in net loss of $1,774,113, or 20.7%.
Net Loss As a result of the cumulative effect of the factors described above, we reported a net loss for the year ended December 31, 2025, of $8,601,940 compared to $10,345,258 for the comparable period in 2024, representing an improvement in net loss of $1,743,318, or 16.9%. 16 Table of Contents Going Concern and Management’s Plans The financial statements included herein for the period ended December 31, 2025, have been prepared under the assumption that the Company will continue as a going concern and contemplate the realization of assets and settlement of liabilities in the normal course of business.
Operating Expenses Total operating expenses for the year ended December 31, 2024, were $9,738,754, representing a decrease of $835,772, or 7.9%, compared to $10,574,526 for the same period in 2023. Selling expenses for the year ended December 31, 2024, were $2,725,239, compared to $4,298,905 for the same period in 2023, representing a decrease of $1,573,666, or 36.6%.
Operating Expenses Total operating expenses for the year ended December 31, 2025, were $9,559,223, representing a decrease of $179,531, or 1.8%, compared to $9,738,754 for the same period in 2024. In local currency, the cost decrease was higher driven by a DKK/USD appreciation of 3.9% for the full year.
The decrease was primarily due to a more focused R&D strategy with fewer ongoing projects and a reduced average number of employees engaged in external research and development activities, as the Company streamlined and centralized its R&D function. This was partially offset by one-time exit costs associated with a loss-making external development project.
The decrease was primarily due to a more focused R&D strategy with fewer ongoing projects and a reduced average number of employees engaged in external research and development activities. Other income (expense) Total Other expense for the year ended December 31, 2025, was $294,694 compared to $896,246 for the comparable period in 2024, representing a decrease of $601,552, or 67.1%.
Most commonly, this invoice is sent to the customer at commissioning of the product or no later than 12 months after delivery. Further included in Contract Assets are short-term receivables such as VAT and other receivables.
Also included in Contract Assets are short-term receivables such as VAT and other receivables.
Removed
By incorporating LiqTech's SiC liquid membrane technology with its long-standing systems design experience and capabilities, the Company offers solutions to the most difficult water pollution problems. 2024 Developments On January 10, 2024, Simon Stadil tendered his resignation as Chief Financial Officer of the Company, effective as of April 10, 2024.
Added
By incorporating LiqTech's SiC liquid membrane technology with its long-standing systems design experience and capabilities, the Company offers solutions to the most difficult water pollution problems. 2025 Developments On January 31, 2025, LiqTech announced appointment of David Kowalczyk as Chief Financial and Operating Officer On February 20, 2025, LiqTech received supplier approval water treatment system for the WinGD Dual-Fuel Engine On March 11, 2025, LiqTech expanded distribution coverage in the Irish swimming pool water filtration system market On May 13, 2025, LiqTech International Signed distribution and Partnership Agreement with NAF Aquatics for U.S. commercial swimming pool market On June 25, 2025, LiqTech' s Advanced Oily Wastewater Filtration was selected by North Star BlueScope Steel On September 15, 2025, LiqTech expanded its U.S. presence with Texas service center to support produced water and industrial filtration solutions On November 20, 2025, Jitri LiqTech broke ground on marine-focused R&D Test Center and Localization Facility in China and completes regional spare parts warehouse Results of Operations Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The following table sets forth our revenues, expenses, and net income for the years ended December 31, 2025, and 2024 in U.S. dollars, except for percentages.
Removed
On February 14, 2024, the Company entered into a distribution agreement with Razorback Direct for produced water treatment solutions in the U.S. On March 19, 2024, the Board of Directors of the Company appointed Phillip Massie Price as Interim Chief Financial Officer of the Company, effective April 1, 2024.
Added
The increase in components was mainly related to machine building for the food & beverage industry. The decrease in sales of filters was primarily driven by a refocusing of our strategy to capitalize on sub segments where we see increased future demand for DPFs outside of the automotives sector.
Removed
On May 7, 2024, the Company entered into a distribution agreement with Dan Marine Group for marine water treatment solutions for the Chinese market. On May 14, 2024, the Company entered into a distribution agreement with Franman for marine water treatment solutions for the Greek Market.
Added
Despite the significant improvement in both gross profit and gross profit margin, we continue to see an underutilization of our manufacturing capacity that has a material, adverse effect on profitability. The continued refocusing of the company led to an inventory review and related adjustments for obsolescence and slow-moving inventory items, which also had an unfavorable impact on gross profit margin.
Removed
On July 25, 2024, the Company entered into a distribution agreement with Danbee Marine Co. for marine water treatment solutions for the South Korean market.
Added
Selling expenses for the year ended December 31, 2025, were $2,718,047, compared to $2,725,239 for the same period in 2024, representing a decrease of $7,192, or 0.3%. This decrease was partly driven by full year effect of savings made in 2024 and lower account receivable write-offs and provision needs.
Removed
On September 27, 2024, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell an aggregate of 3,630,129 shares of Common Stock, 1,369,871 pre-funded warrants to purchase shares of Common Stock, and warrants to purchase up to an aggregate of 5,000,000 shares of Common Stock for gross proceeds of approximately $10 million.
Added
This were partly offset by costs associated with the newly formed joint venture in China, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd.(the "JV"). The primary focus of the JV is to develop and commercialize systems for the marine water treatment market in China.
Removed
The combined purchase price of one share of Common Stock and one accompanying warrant to purchase one share of Common Stock is $2.00. The combined purchase price of one pre-funded warrant and one accompanying warrant to purchase one share of Common Stock under the Purchase Agreement is $1.999.
Added
Non-cash compensation increased due to a 2025 conversion of 50% of the Board fee and 10% of Senior Leadership Team salary to stock awards and due to this being the second year of a new three-year, long-term incentive plan program for the Senior Leadership Team.
Removed
The Company agreed to issue the Common Stock, warrants, and pre-funded warrants in two tranches: (i) a first tranche comprised of 29,227 shares of Common Stock, 555,302 pre-funded warrants, and warrants to purchase an aggregate of 584,529 shares of Common Stock, which closed on September 27, 2024; and (ii) a second tranche comprised of 3,600,902 shares of Common Stock, 814,569 pre-funded warrants, and warrants to purchase an aggregate of 4,415,471 shares of Common Stock, which closed on November 12, 2024.
Added
The decrease was primarily attributable to reduced losses on the disposal of property and equipment, increased interest income, and lower debt discount amortization costs due to the extension of the maturity date for the senior promissory notes.
Removed
On November 7, 2024, the Company announced the establishment of a joint venture in China for the marine water treatment market. 23 Table of Contents Results of Operations Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 The following table sets forth our revenues, expenses, and net income for the years ended December 31, 2024, and 2023 in U.S. dollars, except for percentages.
Added
As of December 31, 2025, the Company had cash and cash equivalents of $5,070,385, net working capital of $11,237,788, an accumulated deficit of 94,795,121, and total assets and liabilities of $27,278,097 and $16,905,861, respectively.
Removed
The decline in aftermarket sales was primarily due to remediation work carried out in the same period of 2023, which did not recur in 2024. The reduction in sales of plastic products was largely due to a significant one-time sale recorded in 2023 that did not recur in the current period.
Added
The Company has experienced operating losses and cash outflows from continuing operations and may require additional funding to support operations for the twelve months following the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Removed
This approach has proven successful, securing an order for a full-scale system scheduled for delivery in 2025. Additionally, a thorough inventory review led to necessary adjustments for obsolescence and slow-moving items.
Added
Management has implemented cost optimization and operational initiatives designed to improve liquidity and support a sustainable path toward profitability, supported by an updated strategic focus and strengthened leadership. The Company continues to evaluate financing alternatives and strategic opportunities to enhance its capital position.
Removed
This decline was primarily driven by a reduction in executive officers, along with reductions in bonus payouts, travel costs, marketing expenses, and expenditures related to external sales consultancy services. The decrease was partially offset by increased bad debt expenses.
Added
While there can be no assurance that additional funding will be obtained on favorable terms, management believes its ongoing initiatives position the Company to support operations and advance its strategic objectives.
Removed
The increase was primarily due to newly created positions in supply chain and project management, as well as higher legal expenses, insurance costs, and recruitment costs associated with the resignations of our CFO and VP of Sales. Additionally, one-time expenses were incurred for the relocation of our plastics production facility.
Added
Further, changes in assets and liabilities decrease $339,698 primarily due to an increase in the development in account payables from 2024 to 2025 of $1,150,188 related to inventory build up of Pool systems and a decrease in contract assets relating to fewer ongoing research and development projects.
Removed
Other income (expense) Total Other expense for the year ended December 31, 2024, was $896,246 compared to $978,302 for the comparable period in 2023, representing decreased expense of $82,056, or 8.4%.
Added
With our current strategic focus and the excess capacity already in place, we expect capital expenditures to be significantly lower than historical levels, allowing us to leverage our existing infrastructure.
Removed
The decrease was primarily attributable to a gain on currency transactions resulting from the EUR/DKK decline against the USD during the period and a loss on assets held for sale in the comparable period in 2023.
Added
These receivables are recorded at the time of sale, net of an allowance for current expected credit losses.
Removed
Further, changes in assets and liabilities included a decrease in accounts payable of $1,050,406, a decrease in accrued expenses of $908,607, and an increase in inventories of $587,806, partly offset by a decrease in contract assets of $1,102,791 and a decrease in accounts receivable of $620,116.
Added
Accounts receivable balances are written off when they are determined to be uncollectible. Inventories Inventories directly purchased are carried at the lower of cost or net realizable value, as determined on the first-in, first-out (“FIFO”) method. For inventories produced, standard costs that approximate actual cost on the FIFO method are used to value inventories.
Removed
Accounts receivable balances are written off when they are determined to be uncollectible.
Added
For Systems and Aftermarket, Filters and Membranes, and Components, revenue is recognized when performance obligations specified within the terms of a contract with the customer are satisfied, which occurs when control of the product transfers to the customer or when services are rendered by the Company.
Removed
The roll-forward of the allowance for current expected credit losses for the year ended December 31, 2024, and December 31, 2023 were as follows: December 31, December 31, 2024 2023 Allowance for current expected credit losses at the beginning of the period $ 134,912 $ 59,559 Bad debt expense 578,423 82,066 Receivables written off during the periods (49,577 ) (10,298 ) Effect of exchange rate changes (26,202 ) 3,585 Allowance for current expected credit losses at the end of the period $ 637,556 $ 134,912 Inventories Inventories directly purchased are carried at the lower of cost or net realizable value, as determined on the first-in, first-out (“FIFO”) method.
Removed
The Company adjusts the value of its inventories to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. Inventory valuation adjustments for excess and obsolete inventories are calculated based on current inventories levels, movement, expected useful lives, and estimated future demand for our products.
Removed
Goodwill and Intangible assets The purchase price of an acquired company is allocated between intangible assets and the net tangible assets of the acquired business, with the residual purchase price recorded as goodwill. The determination of the value of the intangible assets acquired involves certain judgments and estimates.
Removed
These judgments can include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted average cost of capital. Acquired intangible assets with determinable useful lives are amortized on a straight-line or accelerated basis over the estimated periods benefited, ranging from one to ten years.
Removed
Customer relationships and other non-contractual intangible assets with determinable lives are amortized over periods of five years. 27 Table of Contents The Company evaluates the recoverability of long-lived assets by comparing the carrying amount of an asset to estimated future net undiscounted cash flows generated by the asset.
Removed
If such assets are considered to be impaired, the impairment recognized is measured as the amount by which the carrying value of the assets exceeds the fair value of the assets.
Removed
The evaluation of recoverability involves estimates of future operating cash flows based upon certain forecasted assumptions, including, but not limited to, revenue growth rates, gross profit margins, and operating expenses over the expected remaining useful life of the related asset. A shortfall in these estimated operating cash flows could result in an impairment charge in the future.
Removed
Goodwill is not amortized but is evaluated annually for impairment at the reporting unit level or when indicators of a potential impairment are present. The Company estimates the fair value of the reporting unit using the discounted cash flow and market approaches.
Removed
Forecasts of future cash flows are based on the Company’s best estimate of future net sales and operating expenses, using primarily expected category expansion, pricing, market segment fundamentals, and general economic conditions. During the years ended December 31, 2024, and 2023, no impairment charge for goodwill was recorded.
Removed
During the years ended December 31, 2024, and 2023, no impairment charge of long-lived assets has been recorded.
Removed
Sales by geographical region for the years ended December 31, 2024, and 2023 were as follows: % Distribution For the Year Ended December 31 2024 2023 2024 2023 Americas 18 % 12 % $ 2,693,002 $ 2,125,460 Asia-Pacific 5 % 14 % 645,044 2,506,215 Europe 71 % 65 % 10,440,040 11,820,674 Middle East & Africa 6 % 9 % 826,532 1,549,303 Totals 100 % 100 % $ 14,604,618 $ 18,001,652 28 Table of Contents The Company’s sales by product line for the years ended December 31, 2024, and 2023 were as follows: % Distribution For the Year Ended December 31 2024 2023 2024 2023 Water 38 % 42 % $ 5,538,741 $ 7,705,080 Ceramics 39 % 35 % 5,634,973 6,232,628 Plastics 23 % 21 % 3,381,408 3,736,529 Corporate 0 % 2 % 49,496 327,415 Totals 100 % 100 % $ 14,604,618 $ 18,001,652 For Water (systems and aftermarket), Ceramics (diesel particulate filters and membranes), and Plastics (components), revenue is recognized when performance obligations specified within the terms of a contract with the customer are satisfied, which occurs when control of the product transfers to the customer or when services are rendered by the Company.
Removed
This second performance obligation is recognized as revenue at the time of the commissioning services being rendered together with the cost incurred.
Removed
The roll-forward of contract assets and contract liabilities for the years ended December 31, 2024, and 2023 were as follows: December 31, December 31, 2024 2023 Cost incurred $ 2,512,901 $ 3,225,728 Unbilled project deliveries 51,442 582,557 VAT 93,961 329,980 Other receivables 20,972 92,619 Prepayments (1,121,897 ) (1,688,427 ) Deferred Revenue - (33,360 ) $ 1,557,379 $ 2,509,097 Distributed as follows: Contract assets $ 1,666,698 $ 2,891,744 Contract liabilities (109,319 ) (382,647 ) $ 1,557,379 $ 2,509,097 30 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method in accordance with ASC 740, “ Income Taxes .” Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
Removed
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.

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