LIQTECH INTERNATIONAL INC
For the period ended Mar 31, 2025. Filed May 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
LIQT$0.29-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001437749-24-035290
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001437749-25-016825
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 64 previous paragraphs and 40 current paragraphs.
22 unchanged; 13 reworded; 5 added; 27 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Selling expenses for the three months ended March 31, 2025 were $718,016 compared to $517,579 for the same period in 2024, representing an increase of $200,437, or 38.7%. The increase in selling expenses is mainly related to lower sales commissions in 2024, along with the cost associated with the newly formed joint venture, Nantong JiTRI LiqTech Green Energy Technology Co., Ltd. The primary focus of the JV is to develop and commercialize systems for the marine water treatment market in China. The increase was partially offset by decreased bad debt expense and lower depreciation.
Current report
General and administrative expenses for the three months ended March 31, 2025 were $1,362,246 compared to $1,544,731 for the same period in 2024, representing a decrease of $182,485, or 11.8%. The decrease was mainly attributable to non-recurring costs in the comparable period related to recruitment expenses associated with the CFO transition along with savings on external consulting services during this period. Included in general and administrative expenses were non-cash compensation of $241,245 and $193,321 for the three months ended March 31, 2025, and 2024, respectively.
Current report
Based on current projections, which are subject to significant uncertainties--including the duration and severity of global macroeconomic issues, trade wars and associated tariffs, geopolitical instability, commodity price volatility, and continued global supply chain disruptions--the Company believes that the cash on hand, as well as ongoing cash generated from operations, will be sufficient to cover its capital requirements and committed investments for the next 12 months.
Current report
While the Company anticipates that its proactive measures will be sufficient to protect the business over the coming 12 months, the Company cannot predict the specific duration and severity of the unfavorable market dynamics that may adversely affect the business. In the future, the Company may experience reduced or changed demand for its products and services, especially if there is a global recession, structural shift in regulation, or the continuation of escalating interest rates and tariffs that adversely impact the investment decisions of our customers.
Current report
Cash flows provided from financing activities were $989,722 for the three months ended March 31, 2025 compared to cash flows used by financing activities of $1,009,437 for the three months ended March 31, 2024, representing a favorable change of $1,999,159. The finance activities include proceeds from a long term loan received and capital contribution from noncontrolling interest in the JV. Additionally, in the comparing period finance activities included the repayment of a lease agreement.
Removed paragraphs (27)
Previous report
Selling expenses for the three months ended September 30, 2024 were $610,713 compared to $965,039 for the same period in 2023, representing a decrease of $354,326, or 36.7%. The decrease in selling expenses is attributable to a decrease in executive officers, as well as reductions in travel costs, investor relations, and expenses related to external sales consultancy services.
Previous report
General and administrative expenses for the three months ended September 30, 2024 were $1,491,366 compared to $1,253,779 for the same period in 2023, representing an increase of $237,587, or 18.9%. The increase was attributable to the addition of new positions in supply chain and project management, as well as increased legal expenses and insurance costs. Additionally, one-time expenses were incurred for the relocation of our plastics production facility. Included in general and administrative expenses were non-cash compensation of $161,853 and $143,195 for the three months ended September 30, 2024 and 2023, respectively.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and September 30, 2023
Previous report
Revenue
Previous report
Revenue for the nine months ended September 30, 2024 was $11,198,627 compared to $14,071,984 for the same period in 2023, representing a decrease of $2,873,357, or 20.4%. 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.
Previous report
The decrease in deliveries of liquid filtration systems was mainly driven by reduced deliveries of pool filtration systems and marine scrubber systems. The decline in aftermarket sales was primarily due to remediation work executed in the same period in 2023. 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. The increase in sales of DPFs was primarily driven by the effective execution of strategies designed to capitalize on the increased demand for DPFs.
Previous report
Gross Profit (Loss)
Previous report
Gross profit for the nine months ended September 30, 2024 was $778,780 (or gross profit margin of 7%) compared to gross profit of $2,502,435 (or a gross profit margin of 17.8%) for the same period in 2023, representing a decrease of $1,723,655, or 68.9%. This decline in gross profit can be attributed to the decrease in revenue and an unfavorable sales mix, which resulted in a lower proportion of high-margin products such as liquid filtration systems and ceramic membranes. 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. 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 $1,372,482 and $1,915,515 for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
Expenses
Previous report
Total operating expenses for the nine months ended September 30, 2024 were $7,501,292, representing a decrease of $495,621, or 6.2%, compared to $7,996,913 for the same period in 2023.
Previous report
Selling expenses for the nine months ended September 30, 2024, were $1,983,414, compared to $3,175,699 for the same period in 2023, representing a decrease of $1,192,285, or 37.5%. The decrease in selling expenses is attributable a decrease in executive officers, as well as reductions in bonus payouts, travel costs, marketing expenses, and expenses related to external sales consultancy services.
Previous report
General and administrative expenses for the nine months ended September 30, 2024, were $4,577,413, compared to $3,690,211 for the same period in 2023, representing an increase of $887,202, or 24.0%. The increase in general and administrative expenses was attributable to newly created positions in supply chain and project management, as well as increased 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. Furthermore, the increase is partly attributable to the release of bonus provisions in the comparable period of 2023. Included in general and administrative expenses was non-cash compensation amounting to $521,791 and $494,292 for the nine months ended September 30, 2024, and 2023, respectively.
Previous report
Research and development expenses for the nine months ended September 30, 2024 were $940,465 compared to $1,131,003 for the same period in 2023, representing a decrease of $190,538, or 16.8%. The change is attributable to more focused R&D efforts with fewer ongoing projects combined with a decrease in the average number of employees engaged in research and development activities, as the Company streamlined and centralized the R&D function, partly offset by one-time exit costs of a loss-making external development project.
Previous report
Other Income (Expenses)
Previous report
Other expenses for the nine months ended September 30, 2024 were $656,659 compared to other income of $92,360 for the comparable period in 2023, representing a decrease of $749,019, or 811.0%. The increase in other expenses was attributable to the non-cash loss associated with the disposal of property and equipment, decreased interest income and increased debt discount amortization cost due to the extension of the maturity date for the senior promissory notes, with additional warrants issued as consideration for the extension. The increase in other expenses was offset by a gain on currency transactions due to the EUR/DKK decline against the USD during the period.
Previous report
Net Loss
Previous report
The Company has incurred significant recent losses, which raises substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. Continued market uncertainty and reduced order intake caused by weakening global macroeconomic conditions or recession could unfavorably impact the Company’s ability to generate positive cash flow and thereby significantly reduce its profitability and liquidity position. There is no assurance that the Company will be successful in executing the planned revenue growth, cost reductions, strategy, and profitability improvement measures, thus achieving profitable operations.
Previous report
We continue to analyze various alternatives, including potentially obtaining debt or equity financings or other arrangements. As further disclosed in Note 10 in the accompanying consolidated financial statements, on September 27, 2024, the Company entered into an agreement with certain investors, pursuant to which the Company agreed to issue and sell Common Stock and warrants for gross proceeds of up to $10 million in two tranches. In connection with the closing of the first tranche, the Company received gross proceeds of approximately $1.2 million. The Company obtained stockholder approval at our stockholders' meeting on November 8, 2024 on the issuance of the securities in the second tranche. On November 12, 2024, the second tranche closed and the Company received gross proceeds of approximately $8.8 million. Our future success depends on our ability to accelerate growth, restore profitability, and raise capital as needed.
Previous report
As we issue additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of our common stock, and our current shareholders may experience dilution. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current development programs, reduce operating costs, forgo future development and other opportunities, or even terminate our operations.
Previous report
Senior Promissory Notes
Previous report
On June 22, 2022, the Company issued and sold Senior Promissory Notes in an aggregate principal amount of $6.0 million (the “Notes”) and issued warrants to purchase 531,250 shares of Common Stock to affiliates of Bleichroeder L.P., 21 April Fund, L.P., and 21 April Fund, Ltd. (together, the “Purchasers”), pursuant to a note and warrant purchase agreement entered into with the Purchasers (the “Note and Warrant Purchase Agreement”). The warrants issued in this transaction have an exercise price of $5.20 per share, a term of five years and are exercisable for cash at any time.
Previous report
The Notes originally had a term of 24 months and do not bear interest during this period. If the Notes are not repaid on or before the second anniversary of issuance, however, the Notes will thereafter bear interest of 10% per annum, which will increase by 1% each month the Notes remain unpaid, up to a maximum of 16% per annum, payable monthly.
Previous report
Additionally, as part of the transaction, the Company issued 28,846 warrants to the placement agent. The warrants issued in this transaction have an exercise price of $5.20 per share, a term of five years and are exercisable for cash at any time.
Previous report
As a result, the Company recorded an initial debt discount of $695,749, based on the relative fair value of the warrants and Notes issued. The Company determined the fair value of the warrants by using the Black-Scholes Option Pricing Model, with the following assumptions: expected term of 2.5 years, stock price of $3.44, exercise price of $5.20, volatility of 80.8%, risk-free rate of 3.13%, and no forfeiture rate. The debt discount will be accreted according to the effective interest method over the contractual term of the Notes. The warrants qualified for equity classification and were reported within Additional Paid-In Capital.
Previous report
On October 13, 2023, the Company and the Purchasers entered into an amendment to the Note and Warrant Purchase Agreement (the “Amendment”) and Allonge No. 1 to each of the Notes (collectively, the “Allonges”) effective as of September 30, 2023, pursuant to which the Company and the Purchasers extended the maturity date of the Notes from June 20, 2024, to January 1, 2026 (the “Extension”). As consideration for the Extension, simultaneously with the entry into the Amendment and Allonges, the Company issued to the Purchasers additional warrants to purchase an aggregate of 531,250 shares of Common Stock at an exercise price of $5.20 per share, subject to adjustment as provided therein (the “2023 Warrants”). The 2023 Warrants are exercisable at any time prior to the five-year anniversary of the initial exercise date of September 30, 2023. The Amendment qualifies as a modification and entitles the Purchasers to registration rights with respect to the shares of Common Stock issuable upon exercise of the 2023 Warrants pursuant to the existing Registration Rights Agreement, dated June 22, 2022, by and between the Company and the Purchasers.
Previous report
As a result of the amendment, the Company recorded an initial debt discount of $1,193,206, based on the fair value of the warrants issued. The Company determined the fair value of the warrants by using the Black-Scholes Option Pricing Model, with the following assumptions: expected term of 5.0 years, stock price of $3.89, exercise price of $5.20, volatility of 73.66%, risk-free rate of 4.60%, and no forfeiture rate. The debt discount will be accreted according to the effective interest method over the contractual term of the Notes. The warrants qualified for equity classification and were reported within Additional Paid-In Capital
Previous report
Cash flows used in financing activities were $125,718 for the nine months ended September 30, 2024 compared to cash flows provided by financing activities of $718,327 for the nine months ended September 30, 2023, representing an unfavorable change of $844,045. The finance activities include the repayment of lease agreements in connection with the sales of production equipment in Ballerup as mentioned above, partly offset by the equity raise, generating net proceeds $1,107,385 from the issuance of common stock and prefunded warrants.
Reworded paragraphs (13)
Previous wording
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. In addition, the following discussion should be read in conjunction with our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 22, 2024 and our Amendment No. 1 to our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on April 30, 2024, and the financial statements and notes thereto. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Current wording
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. In addition, the following discussion should be read in conjunction with our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 28, 2025 and* the financial statements and notes thereto. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.*
Previous wording
LiqTech International, Inc. is a clean technology company that provides state-of-the-art gas and liquid purification products by manufacturing ceramic silicon carbide filters and membranes as well as developing industry-leading and fully automated filtration solutions and systems. For more than two decades, we have developed and manufactured products of re-crystallized silicon carbide. We specialize in three business areas: ceramic membranes for liquid filtration systems, ceramic diesel particulate filters (DPFs) to control soot exhaust particles and black carbon emission from diesel engines, and plastic components for usage across various industries. Using nanotechnology, we develop proprietary products using patented silicon carbide technology. Our products are based on 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.
Current wording
LiqTech International, Inc. is a clean technology company that provides state-of-the-art gas and liquid purification products by manufacturing ceramic silicon carbide filters and membranes as well as developing industry-leading and fully automated filtration solutions and systems. For more than two decades, we have developed and manufactured products of re-crystallized silicon carbide. We specialize in three business areas: ceramic membranes for liquid filtration systems, ceramic diesel particulate filters (DPFs) to control soot exhaust particles and black carbon emission from diesel engines, and plastic components for usage across various industries. Using nanotechnology, we develop proprietary products using patented silicon carbide technology. Our products are based on innovative silicon carbide membranes that facilitate new applications and improve existing technologies. We market our products from our offices in Denmark and through local representatives and distributors. The products are shipped directly to customers from our production facilities in Denmark.
Previous wording
At present, we conduct our operations in the Kingdom of Denmark, with locations in the Copenhagen area and Hobro.
Current wording
At present, we conduct our operations in the Kingdom of Denmark and China, with locations in the Copenhagen area, Hobro and Shanghai.
Previous wording
Revenue for the three months ended September 30, 2024 was $2,478,221 compared to $5,070,446 for the same period in 2023, representing a decrease of $2,592,225 or 51.1%. The unfavorable change was attributable to a decrease in deliveries of ceramic membranes, DPFs, liquid filtration systems, and aftermarket sales, partly offset by increased sales of plastics products and progress on an external R&D project to further strengthen our technology base. The decrease in deliveries of liquid filtration systems was primarily attributed to reduced deliveries of pool filtration systems and fewer deliveries of pilot systems for industrial applications. The decline in aftermarket sales was attributable to elevated remediation work and associated deliveries in the same period of 2023. The Company believes that the decrease in sales of ceramic membranes and DPFs reflects temporary market conditions, with customers awaiting potential interest rate cuts.
Current wording
Revenue for the three months ended March 31, 2025 was $4,617,541 compared to $4,235,344 for the same period in 2024, representing an increase of $382,197, or 9.0%. The favorable change was attributable to an increase in liquid filtration systems, specifically a full-scale system delivery to the U.S., and increased sales of plastics products, partly offset by a decrease in deliveries of ceramic membranes and DPFs. The Company believes that the decrease in sales of ceramic membranes and DPFs reflects temporary market conditions, with customers awaiting potential interest rate cuts.
Previous wording
Gross loss for the three months ended September 30, 2024, was $209,533 (representing a gross loss margin of 8.5%) compared to a gross profit of $948,565 (representing a gross profit margin of 18.7%) for the same period in 2023, marking a decrease of $1,158,098, or 122.1%. This decline was primarily driven by the reduction in revenue and an unfavorable sales mix, which resulted in a lower proportion of high-margin products such as liquid filtration systems and ceramic membranes. This impact was partly offset by lower depreciation expenses. Included in the gross profit was depreciation of $478,902 and $663,938 for the three months ended September 30, 2024, and 2023, respectively.
Current wording
Gross profit for the three months ended March 31, 2025 was $125,056 (representing a gross loss margin of 2.7%) compared to a gross profit of $271,102 (representing a gross profit margin of 6.4%) for the same period in 2024, marking a decrease of $146,046, or 53.9%. This decline was primarily driven by the low gross profit margin related to the delivery of a full-scale liquid filtration system to the U.S., caused by associated development costs for the system. Also impacting gross profit was, the underutilization of our manufacturing capacity as a direct result of the decline in ceramic membranes and DPFs. This impact were partly offset by lower depreciation expenses. Included in the gross profit was depreciation of $392,292 and $451,644 for the three months ended March 31, 2025, and 2024, respectively.
Previous wording
Total operating expenses for the three months ended September 30, 2024 were $2,380,440, representing a decrease of $266,978, or 10.1%, compared to $2,647,418 for the same period in 2023.
Current wording
Total operating expenses for the three months ended March 31, 2025 were $2,310,385, representing a decrease of $6,737, or 0.3%, compared to $2,317,122 for the same period in 2024.
Previous wording
Research and development expenses for the three months ended September 30, 2024 were $278,361 compared to $428,600 for the same period in 2023, representing a decrease of $150,239, or 35.1%. The decrease was primarily attributed to a reduction in external costs associated with finalizing ongoing projects in the same period in 2023, as well as a decrease in the average number of employees engaged in research and development activity as the Company streamlined and centralized the R&D function.
Current wording
Research and development expenses for the three months ended March 31, 2025 were $230,123 compared to $254,812 for the same period in 2024, representing a decrease of $24,689, or 9.7%. The decrease was primarily attributed to a reduction in the average number of employees engaged in research and development activity as the Company streamlined and centralized the R&D function, partially offset by increased patent costs.
Previous wording
Other expenses for the three months ended September 30, 2024 were $260,614 compared to other income of $270,143 for the comparable period in 2023, representing a decrease of $530,757, or 196.5%. The decrease was attributable to a loss on currency transactions, reduced interest income as well as increased debt discount amortization due to the extension of the maturity date for the senior promissory notes, with additional warrants issued as consideration for the extension.
Current wording
Other expenses for the three months ended March 31, 2025 were $173,352 compared to other expenses of $356,714 for the comparable period in 2024, representing a favorable change of $183,362, or 51.4%. The change was primarily attributable to significant losses on the disposal of property and equipment in the prior-year period, partially offset by a lower gain on currency transactions for the three months ended March 31, 2025 as well as increased debt discount amortization due to the extension of the maturity date for the senior promissory notes.
Previous wording
As a result of the cumulative effect of the factors described above, we had a net loss for the three months ended September 30, 2024 of $2,840,526 compared to $1,414,230 for the comparable period in 2023, representing an increase in net loss of $1,426,296, or 100.9%.
Current wording
As a result of the cumulative effect of the factors described above, we had a net loss for the three months ended March 31, 2025 of $2,358,342 compared to $2,388,295 for the comparable period in 2024, representing a decrease in net loss of $29,953, or 1.3%.
Previous wording
The Company has historically financed operations through offerings of equity or debt instruments, internally generated cash from operations and our available lines of credit. On September 30, 2024, we had cash of $4,535,266 and net working capital of $9,963,511, and on December 31, 2023, we had cash of $10,422,181 and net working capital of $14,590,432. On September 30, 2024, our net working capital had decreased by $4,626,921 compared to December 31, 2023, mainly as a result of a reduction in cash and cash equivalents to fund operating losses.
Current wording
The Company has historically financed operations through offerings of equity or debt instruments, internally generated cash from operations, and our available lines of credit. On March 31, 2025, we had cash of $10,447,432 and net working capital of $15,404,982, and on December 31, 2024, we had cash of $10,868,728 and net working capital of $15,736,809. On March 31, 2025, our net working capital had decreased by $331,827 compared to December 31, 2024, mainly as a result of a reduction in cash and cash equivalents to fund operating losses.
Previous wording
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Current wording
Three months ended March 31, 2025 compared to three months ended March 31, 2024
Previous wording
Cash flows from operating activities for the period ending September 30, 2024 derived from the net loss for the period, adjusted for non-cash items and changes in assets and liabilities. Cash flows used in operating activities for the nine months ended September 30, 2024 were $5,528,442, representing an unfavorable change of $2,554,778 compared to cash flows used in operating activities of $2,973,664 for the nine months ended September 30, 2023. The cash flows used in operating activities for the period consists mainly of the net loss of $7,340,521, adjusted for depreciation and other non-cash-related items of $3,455,950, as well as an increase in inventory of $901,122 and a decrease in accounts payable of $736,726, partly offset by a decrease in accounts receivable of $867,035.
Current wording
Cash flows from operating activities for the period ending March 31, 2025 derived from the net loss for the period, adjusted for non-cash items and changes in assets and liabilities. Cash flows used in operating activities for the three months ended March 31, 2025 were $1,297,186, representing a favorable change of $659,516 compared to cash flows used in operating activities of $1,956,702 for the three months ended March 31, 2024. The cash flows used in operating activities for the period consists mainly of the net loss of $2,358,343, adjusted for depreciation and other non-cash-related items of $1,047,068, increase in accounts receivables of $933,161, partially offset by decrease in contract assets of $850,839.
Previous wording
Cash flows used in investing activities were $28,767 for the nine months ended September 30, 2024 as compared to cash flows used in investing activities of $2,261,131 for the nine months ended September 30, 2023, representing an improvement of $2,232,364. The investing activities include general purchases of production equipment to continue optimizing production throughput and the internal production of rental assets, partly offset by proceeds from the disposition of production equipment in our Ballerup facility.
Current wording
Cash flows used in investing activities were $110,860 for the three months ended March 31, 2025 as compared to cash flows from investing activities of $551,787 for the three months ended March 31, 2024, representing an unfavorable change of $662,647. The investing activities include general purchases of production equipment to continue optimizing production throughput and the internal production of rental assets, partly offset by proceeds from the disposition of production equipment in our Ballerup facility.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table sets forth our revenues, expenses and net loss for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
As a result of the cumulative effect of the factors described above, we had a net loss for the nine months ended September 30, 2024 of $7,340,521 compared to $5,359,025 for the comparable period in 2023, representing an increase in net loss of $1,981,496, or 37.0%.