LIQTECH INTERNATIONAL INC 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the design and effectiveness of our internal controls over financial reporting and disclosure controls and procedures (pursuant to Rule 13a-15(b) and (c) under the Exchange Act) as of the end of the period covered by this Annual Report. A weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a misstatement of the registrant's financial statements will not be prevented or detected on a timely basis. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2025 , were not effective due to material weaknesses in internal controls over financial reporting, described below. Notwithstanding this finding, we concluded that the consolidated financial statements included in this Report present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States. During the year ended December 31, 2025 , the Company was not subject to the requirements of Section 404(b) of the Sarbanes-Oxley Act. As such, our independent registered public accounting firm was not required to, and thus did not, audit our internal control structure. Management's Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company's principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting is defined in rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the audited consolidated financial statements. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the Company's management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 , based on the criteria set forth in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commissions (2013). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2025 , were not effective due to material weaknesses in internal controls over financial reporting. Material weaknesses as of December 31, 2025 A material weakness is a deficiency, or combination thereof, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses we identified related to the following: 1) Ineffective information technology general controls (ITGCs) in the areas of user access and program change management over certain IT systems that support the Company’s financial reporting processes Additionally, management has identified a material weakness in its internal control over financial reporting related to ITGCs in the areas of control report reviews for service organizations; 2) The lack of formal documentation of the design, and related execution of, certain transaction-level controls related to disbursements, procurement, and inventory management and valuation; and 3) Ineffective design and operation of process level controls over the existence and accuracy of revenue transactions. 45 Table of Contents Management's Remediation Initiatives In response to the identified material weaknesses, our management, with oversight from the Company’s Audit Committee, has been and will continue to dedicate necessary resources to enhance the Company’s internal control over financial reporting and remediate the identified material weaknesses. As an example of such remediation, the Company in 2025 hired additional employees into the finance department, and we plan to continue to work on remediating the material weaknesses during 2026 by improving competencies and processes. Further, the Company is evaluating an ERP reimplementation along with other IT programs to help reinforce its controls and processes, and these investments are an important step in the remediation of the material weaknesses. During 2022, the Company introduced an updated Delegation of Authority, with the overall purpose to provide clarity for all employees on the extent to which they can commit the Company and at the same time provide the Company with assurance that decisions about agreements are made by the appropriate functions and employees. Lastly, the Company has started the process of redesigning and ensuring documentation of all processes and procedures related to the financial reporting process to ensure the effective design and operation of process-level controls. While management believes that the steps that we have taken and plan to take will improve the overall system of internal control over financial reporting and will remediate identified material weaknesses, the material weaknesses cannot be considered remediated until the applicable relevant controls operate for a sufficient period of time. Following identification of the material weakness and prior to filing this Annual Report on Form 10-K, we completed substantive procedures for the year ended December 31, 2025 . Based on these procedures, management believes that our consolidated financial statements included in this Form 10-K have been prepared in accordance with U.S. GAAP. Our CEO and CFO have certified that, based on their knowledge, the financial statements and other financial information included in this Form 10-K fairly present, in all material respects, the financial condition, results of operations, and cash flows of the Company as of, and for, the periods presented in this Form 10-K. Changes in Internal Control During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on the Effectiveness of Internal Controls An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. While management believes that the steps that we have taken and plan to take will improve the overall system of internal control over financial reporting and will remediate identified material weaknesses, the material weaknesses cannot be considered remediated until the applicable relevant controls operate for a sufficient period of time. Item 9B. Other Information Item   5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On February 25, 2026, Richard Meeusen notified the Board of Directors of his intention to retire as a director of the Company, effective on March 11, 2026. Mr. Meeusen’s decision was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices. Item 408 (a) – Insider Trading Arrangements and Policies During the quarter ended December 31, 2025, no director or Section 16 officer adopted, modified, or terminated any “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement” (in each case, as defined in Item 408 (a) of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 46 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by Item 10 is incorporated herein by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Stockholders. Alternatively, it will be included in an amendment to this Form 10 -K, filed under cover of Form 10 -K/A, no later than 120 days after the end of the fiscal year covered by this report. Item 11. Executive Compensation The information required by this Item 11 will be included in the Definitive Proxy Statement referenced above in Item 10 and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item 12 will be included in the Definitive Proxy Statement referenced above in Item 10 and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item 13 will be included in the Definitive Proxy Statement referenced above in Item 10 and is incorporated herein by reference. Item 14. Principal Accountant Fees and Services The information required by this Item 14 will be included in the Definitive Proxy Statement referenced above in Item 10 and is incorporated herein by reference. 47 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Schedules The financial statements are set forth under Item 8 of this Annual Report. The following financial statement schedule for the years ended December 31, 2025, and December 31, 2024 , is included in this Annual Report on Form 10 -K: a. Valuation and Qualifying Accounts for the years ended December 31, 2025, and December 31, 2024 . 2025 2024 Bad debt expense $ 29,439 $ 578,423 Reserve for obsolete inventory $ 74,587 $ 404,306 Balance Charges to Balance Beginning Costs and Deductions End of of Year Expenses (1) Year Year Ended December 31, 2025 Allowance for inventory obsolescence $ 1,209,124 $ 74,587 $ ( 323,016 ) $ 960,695 Allowance for current expected credit losses 637,556 29,439 ( 529,026 ) 137,969 Totals $ 1,846,680 $ 104,026 $ ( 852,042 ) $ 1,098,664 Year Ended December 31, 2024 Allowance for inventory obsolescence $ 867,458 $ 404,306 $ ( 62,640 ) $ 1,209,124 Allowance for current expected credit losses 134,912 578,423 ( 75,779 ) 637,556 Totals $ 1,002,370 $ 982,729 $ ( 138,419 ) $ 1,846,680 2025 2024 Allowance for current expected credit losses at the beginning of the period $ 637,556 $ 134,912 Bad debt expense 29,439 578,423 Receivables written off during the periods ( 608,331 ) ( 49,577 ) Effect of exchange rate changes 79,305 ( 26,202 ) Allowance for current expected credit losses at the end of the period $ 137,969 $ 637,556 ( 1 ) Includes write-offs and the impact of foreign currency exchange rates. Schedules other than that listed above are omitted because the conditions requiring their filing do not exist or because the required information is provided in the Consolidated Financial Statements, including the Notes thereto. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included. 48 Table of Contents (b) Exhibits Exhibit No. Description Location 3.1 Articles of Incorporation, as amended as of November 13, 2023 Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 22, 2024 3.2 Amended and Restated Bylaws Incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q as filed with the SEC on May 14, 2025 4.1 Form of Pre-Funded Warrant Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K as filed with the SEC on June 2, 2020 4.2 Form of Amendment to Pre-Funded Warrant Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q as filed with the SEC on November 9, 2020 4.3 Description of our Common Stock Incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 30, 2020 4.4 Form of Pre-Funded Warrant Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on August 20, 2021 4.5 Form of Pre-Funded Warrant Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on May 17, 2022 4.6 Form of Warrant Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on October 19, 2023 4.7 Form of Pre-Funded Warrant Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K as filed with the SEC on September 27, 2024 4.8 Form of Warrant Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K as filed with the SEC on September 27, 2024 4.9 Form of Amended and Restated Warrant Included in Exhibit 10.17 10.1 Lease Agreement for Industriparken 22C, 2750 Ballerup, Denmark Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K/A as filed with the SEC on November 15, 2011 (translated in English) 10.2 Form of Registration Rights Agreement, by and among the Company and the investors named therein Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K as filed with the SEC on June 2, 2020 10.3 Lease Contract for Benshoej Industrivej 24, 9500 Hobro Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K as filed with the SEC on December 5, 2019 10.4* LiqTech International, Inc. 2013 Share Incentive Plan Incorporated by reference to Exhibit 99.1 to the Company’s Form S-8 as filed with the SEC on January 27, 2014 10.5 Note and Warrant Purchase Agreement, by and among the Company and the Purchasers Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on June 27, 2022 10.6 Form of Note Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the SEC on June 27, 2022 10.7 Registration Rights Agreement, by and among the Company and the Purchasers Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K as filed with the SEC on June 27, 2022 10.8 First Amendment to Note and Warrant Purchase Agreement Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 19, 2023 49 Table of Contents 10.9 Form of Allonge No. 1 Included in Exhibit 10.8 10.10* Executive Service Agreement, dated July 26, 2022, by and between LiqTech Holdings A/S and Fei Chen Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on August 1, 2022 10.11* LiqTech International, Inc. 2022 Equity Incentive Plan Incorporated by reference to Annex A to the Company’s Proxy Statement pursuant to Section 14(a) of the Exchange Act filed with the SEC on October 3, 2022 10.12 Exclusivity Agreement for Collaboration, Marketing and Deployment of Products and Associated Services, dated November 11, 2022, by and between the Company and NESR Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on November 17, 2022 10.13 † Securities Purchase Agreement, by and among the Company and the investors named therein Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on September 27, 2024 10.14 Registration Rights Agreement, by and among the Company and the investors named therein Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K as filed with the SEC on September 27, 2024 10.15* Service Agreement between Liqtech Holding A/S and David Kowalczyk, dated January 27, 2025. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on January 31, 2025 10.16* Separation Agreement between Liqtech Holding A/S and Phillip Massie Price, dated March 20, 2025 Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 28, 2025 10.17 Second Amendment to Note and Warrant Purchase Agreement Incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 28, 2025 10.18 Form of Allonge No. 2 Included in Exhibit 10.17 10.19* Amendment No. 1 to LiqTech International, Inc. 2022 Equity Incentive Plan, as approved by the Company’s stockholders on June 5, 2025 Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on June 6, 2025 19.1 Code of Conduct and Ethics Incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 28, 2025 21.1 List of Subsidiaries Filed herewith 23.1 Consent of Sadler, Gibb Filed herewith 31.1 Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 31.2 Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002 Furnished herewith 32.2 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002 Furnished herewith 97.1 Clawback Policy Incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K as filed with the SEC on March 22, 2024 50 Table of Contents 101. INS Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) Provided herewith 101. CAL Inline XBRL Taxonomy Extension Calculation Link base Document Provided herewith 101. DEF Inline XBRL Taxonomy Extension Definition Link base Document Provided herewith 101. LAB Inline XBRL Taxonomy Label Link base Document Provided herewith 101. PRE Inline XBRL Extension Presentation Link base Document Provided herewith 101. SCH Inline XBRL Taxonomy Extension Scheme Document Provided herewith 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). Provided herewith * Denotes a management contract or compensatory plan or arrangement. † Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such omitted materials to the SEC upon request. Item 16. Form 10-K Summary Not Applicable. 51 Table of Contents SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LIQTECH INTERNATIONAL, INC. Date: February 27, 2026 By: /s/ Fei Chen Fei Chen Chief Executive Officer and Principal Executive Officer In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the dates indicated. Signatures Title Date /s/ Alexander Buehler Chairman of the Board of Directors February 27, 2026 Alexander Buehler /s/ Fei Chen President, Chief Executive Officer, Principal Executive Officer and Director February 27, 2026 Fei Chen /s/ David Nørby Foss Kowalczyk Chief Financial and Operating Officer, Principal Financial and Accounting Officer February 27, 2026 David Nørby Foss Kowalczyk /s/ Peyton Boswell Director February 27, 2026 Peyton Boswell /s/ Richard Meeusen Director February 27, 2026 Richard Meeusen /s/ Martin Kunz Director February 27, 2026 Martin Kunz 52