x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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20-1431677
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Industriparken 22C, DK 2750 Ballerup, Denmark
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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Page | |||
PART I
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|||
Item 1
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Business
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1 | |
Item 1B
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Unresolved Staff Comments
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10 | |
Item 1A
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Risk Factors
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20 | |
Item 2
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Properties
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20 | |
Item 3
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Legal Proceedings
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21 | |
Item 4
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Mine Safety Disclosures
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21 | |
PART II
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|||
Item 5
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Market for the Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
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21 | |
Item 6
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Selected Financial Data
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22 | |
Item 7
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Management’s Discussion and Analysis of Financial Condition and
Results of Operations
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22 | |
Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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23 | |
Item 8
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Financial Statements and Supplementary Data
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34 | |
Item 9
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Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
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35 | |
Item 9A
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Controls and Procedures
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35 | |
Item 9B
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Other Information
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36 | |
PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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36 | |
Item 11
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Executive Compensation
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41 | |
Item 12
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Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
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45 | |
Item 13
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Certain Relationships and Related Transactions, and Director
Independence
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47 | |
Item 14
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Principal Accountant Fees and Services
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48 | |
PART IV
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Item 15
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Exhibits and Financial Statement Schedules
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48 | |
Signatures | 53 |
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Garbage trucks;
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Port vehicles;
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Diesel pickup trucks not carrying a full load;
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Off-road construction vehicles that idle for long periods of time; and
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Intra-city vehicles that do not reach highway speeds.
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●
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Produced water
: Our membranes can be used for the filtration of water from oil produced in offshore platforms. We have performed testing with many of the major international private and public oil and gas companies. We have recently been awarded a contract by one of the major international oil and gas companies to provide and service produced water filters on one of its offshore platforms. Our products have been delivered and the initial service period under the contract will commence on April 1, 2012.
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●
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Pre-filtration of reverse osmosis drinking water
: Prior to passing through reverse osmosis membranes to produce drinking or industrial water from sea or surface water, the sea or surface water must be pre-filtered. We have performed successful tests for the pre-filtration of sea and surface water for this purpose with numerous clients, including Arteron, Malaysia, a company producing compact drinking water, Hoimyung Corp, Korea, a supplier of industrial waste water systems and pretreatment for reverse osmosis, Kemic Vater Cleaning Denmark, a supplier of drinking water equipment, and Puretec, Israel, a producer of reverse osmosis systems.
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●
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Treatment of ballast water
: Our liquid filtration membranes can be applied to limit the spreading of non-native species that may be transported in the ballast water of sea-going vessels. LiqTech has partnered with Singapore based companies and R&D centers to develop a solution for the ballast water treatment market. A distributor in Japan is in contact with shipyards seeking filtration solutions for our ballast water systems.
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Industrial applications
: Our membranes have performed successful tests in industrial applications for the removal of a variety of substances such as heavy metal (Haldor Topsoe, Denmark), legionella (HYTEK Italy), manure (Bioffuel Technology), pool and spa water (Provital) and raw sugar (Al Khaleej Sugar).
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●
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Producing clean drinking water
: The potential for the use of LiqTech SIC membranes in drinking water production is diverse and the benefits numerous. Some examples are: group water – removal of precipitated salts like iron and manganese; surface water – removal of organic suspended solids and humic acid; and sea water – pre-filtration before reverse osmosis.
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Waste water treatment
: Our membranes can be used to remove suspended solids in waste water treatment. Our membranes have performed successful tests for treating waste water with Hydrosolutions, Puretec Israel and Asia Pacific Water Technologies—Korea.
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CoMem is a unique patented membrane technology that utilizes a cross-flow structure to handle high concentrations of suspended solids found in produced water from the oil and chemical industry, wastewater from industrial processes and manure filtration;
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Aqua Solution integrates a dead-end structural design with cutting-edge membrane technology in a solution specifically designed for applications in pre-treatment for reverse osmosis, wastewater treatment and pool and spa filtration.
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Our SiC membrane offers the same water flow as commonly used sand filters which take up to 400 times more space and have pore sizes at least three times bigger than our SiC membrane, and reduces the number of membrane elements and pressure vessels;
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With our SiC membrane, high flow capacities are achieved at very low pressures, which reduces energy costs;
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Our SiC membrane reduces water consumption for sand filter backwash; and
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Our SiC membrane eliminates consumption/maintenance of cartridges.
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Advantages of Silicon Carbide Membranes
. Our diesel and liquid filtration products utilize silicon carbide membranes which have certain qualities that we believe make our products more desirable than those of our competitors. Unlike filtration products that use aluminum oxide, silicon carbide membranes are chemically inert and temperature resistant. Furthermore, silicon carbide membranes exhibit a high degree of hydrophilicity which results in unique flux (low energy consumption). Silicon carbide is also highly durable, with a hardness next to diamonds, making it conducive to being used in a variety of industrial settings. As a result, we believe that such superior qualities make our products desirable in both exhaust emissions control products and liquid filtration products.
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End Markets with Attractive Growth Characteristics
.
We provide filtration products for end markets with attractive growth prospects. The increase in global regulation of diesel particles is expected to drive growth in the DPF market. According to an industry publication, the global market for new DPF filters manufactured by original equipment manufacturers (OEMs) will increase from approximately 1.7 million units in 2010 to over 9 million units in 2020. The global market for retrofitting diesel engines with DPFs is expected to grow from approximately 5 million cumulative retrofit units in 2010 to approximately 20 million cumulative retrofits by 2025. Water is essential to life on earth, and clean water shortages are expected to affect two-thirds of the human population by 2025. According to Pike Research, the annual global investment in desalinization was estimated to reach $16.6 billion by 2016. As a result, we anticipate that global demand will increase for products such as ours that can be used to provide clean water
.
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●
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Broad Application of LiqTech Membranes
. Our membranes can and have been applied in a variety of settings, including the processing of industrial waste water, produced water and pretreatment of drinking water, including reverse osmosis, oil emulsion separation, bacteria removal in milk, clearing of wine and beer, and separating metals from liquids used in industrial processes. Our membranes have also been utilized in Milan, Italy to remove manganese and iron from the municipal water supply.
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Marketing and Manufacturing in Two Key Markets and Expanding to Other Key Market.
As we have successfully started production in the United States in addition to Denmark, we have production and sales capacity in North America and Europe. We also sell our products through offices and agents in several key countries such as Brazil, Italy, and South Korea, and we have established customer relations in more than 15 countries. We also plan to expand our production capabilities to Asia by building a new production facility in South Korea which would provide us with sales and production capability on the Asian continent
.
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Strong and Experienced Management Team
. Our management team has significant experience in the clean technology and filtration industries, driving growth through development of new applications and technologies and cultivating relationships with customers. Our team has an average of more than 10 years of management experience. Our four key managers have worked in the industry during the last 10 years.
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●
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Enter New Geographic Markets and Expand Existing Markets
.
We plan on continuing to manufacture and sell our products out of Denmark and the United States. In October 2011, the Company opened sales offices in France and Germany and in
January
2012, we opened a sales office in Singapore. We also intend to expand our production capability to Asia by investing in a new production facility in South Korea, along with opening new marketing offices on the continent. In addition, we intend to establish sales outlets with technical support in other European nations such as Italy, while expanding to other markets such as Brazil. In certain other locations such as Japan, China and Australia, we intend to work with agents and partners to access such markets
.
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Continue to Strengthen Position in DPF Market
. We believe that we have a strong position in the retrofit market for diesel particle systems. We intend to continue our efforts to maintain our strength in this area. Furthermore, we intend to leverage our experience in the OEM market and expand our presence in the OEM market with new products relating to diesel particle systems. We intend to leverage our products and experience as the global DPF market is expected to undergo significant growth.
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Continue to Develop and Improve Technologies and Open New End Markets
.
We intend to continuously develop our ceramic membrane and improve the filtration efficiency for our filtration products. Through continuous development, we intend to find new uses for our products and plan to expand into any new markets that we believe would be appropriate for our company. One of our key strategies is to develop our membrane applications together with our customers including, for example, the development of the next generation of diesel filters with asymmetric design for the OEM market, which is being tested at Hyundai. We also plan on manufacturing a SiC membrane of 0.01 microns or less, which would position us to enter the ultrafiltration market. In our kiln furniture business, we plan on working towards developing a second generation of kiln furniture with no porosity
.
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Continue Our Focus on Developing an Inorganic Reverse Osmosis Membrane
. There is no inorganic reverse osmosis membrane in the market today. In 2011, we received a $2 million grant from The Danish National Advanced Technology Foundation to develop a SiC-based membrane that can perform reverse osmosis. We intend to continue our research and development efforts to modify our membrane into one that can perform reverse osmosis over the next several years.
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The best plastic RO membranes use 3.5 kWh/m
3
water and the flux (flow per square meter of membrane area) is low (typically 11 LMH).
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The plastic membranes are sensitive to damage, oxidizing chemicals (chlorine, ozone, etc.), temperatures above 40 C, and pH below 2 or above 12. These constraints limit the cleaning-in-place (CIP) methods that can be used to recover the membranes’ permeability and limit microbial growth.
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●
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The plastic membranes require excessive feed water pre-treatment for removal of particulates in order to prolong membrane life. For example, during stormy weather, interruptions of service may occur due to the amount of suspended solids in the feed water.
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●
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There is a risk of bacterial contamination of the membranes. While bacteria are retained in the brine stream, bacterial growth on the plastic membrane itself can introduce tastes and odors into the product water. It is difficult to remove due to the sensitivity of the membrane.
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Actions taken by regulatory bodies relating to the verification, registration or health effects of our products;
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The extent to which existing and newly developed products obtain market acceptance;
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The timing and size of customer purchases;
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●
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Customer concerns about the stability of our business, which could cause them to seek alternatives to our solutions and products; and
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●
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Increases in raw material costs.
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•
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actual or anticipated fluctuations in our financial condition or results of operations;
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•
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the success or failure of our operating strategies and our perceived prospects; realization of any of the risks described in this section; failure to be covered by securities analysts or failure to meet the expectations of securities analysts;
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•
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a decline in the stock prices of peer companies; and
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•
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a discount in the trading multiple of our common stock relative to that of common stock of certain of our peer companies due to perceived risks associated with our smaller size.
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2012
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High
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Low
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||||||
1st Quarter (through March 26, 2012)
|
$ | 4.95 | $ | 3.13 |
2011
|
High
|
Low
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||||||
4th Quarter
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$ | 3.90 | $ | 3.11 | ||||
3rd Quarter
|
3.5 | 3.1 | ||||||
2nd Quarter
|
— | — | ||||||
1st Quarter
|
— | — |
2010
|
High
|
Low
|
||||||
4th Quarter
|
$ | — | $ | — | ||||
3rd Quarter
|
— | — | ||||||
2nd Quarter
|
— | — | ||||||
1st Quarter
|
— | — |
●
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any contractual restrictions limiting our ability to pay dividends that may be applicable at such time;
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●
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our earnings and cash flow;
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●
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our capital requirements;
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●
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our financial condition; and
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●
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other factors our board of directors deems relevant.
|
Period to period change
|
||||||||||||||||||||||||
2011
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As a % of Sales
|
2010
|
As a % of Sales
|
US$
|
Percent %
|
|||||||||||||||||||
NET SALES
|
21,192,177 | 100 | % | 15,728,817 | 100 | % | 5,463,360 | 34.7 | ||||||||||||||||
Cost of Goods Sold
|
16,164,366 | 76.3 | 12,054,973 | 76.6 | 4,109,393 | 34.1 | ||||||||||||||||||
Gross Profit
|
5,027,811 | 23.7 | 3,673,844 | 23.4 | 1,353,967 | 36.9 | ||||||||||||||||||
OPERATING EXPENSE:
|
||||||||||||||||||||||||
Selling and Marketing
|
1,484,992 | 7.0 | 1,476,656 | 9.4 | 8,336 | 0.6 | ||||||||||||||||||
General and Administrative Expenses
|
1,943,333 | 9.2 | 1,748,596 | 11.1 | 194,737 | 11.1 | ||||||||||||||||||
Research and Development
|
502,413 | 2.4 | 421,518 | 2.7 | 80,895 | 19.2 | ||||||||||||||||||
Total Operating Expenses
|
3,930,738 | 18.5 | 3,646,770 | 23.2 | 283,968 | 7.8 | ||||||||||||||||||
Income from Operations
|
1,097,073 | 5.2 | 27,074 | 0.2 | 1,069,999 | 3952.1 | ||||||||||||||||||
Interest and Other Income
|
100,986 | 0.5 | 64,916 | 0.4 | 36,070 | 55.6 | ||||||||||||||||||
Interest (Expense)
|
(203,682 | ) | (1.0 | ) | (214,520 | ) | (1.4 | ) | 10,838 | (5.1 | ) | |||||||||||||
(Loss) on Investments
|
(57,684 | ) | (0.3 | ) | (123,647 | ) | (0.8 | ) | 65,963 | (53.3 | ) | |||||||||||||
Gain on Currency Transactions
|
10,271 | 0.0 | 86,377 | 0.5 | (76,106 | ) | (88.1 | ) | ||||||||||||||||
Gain (Loss) on Sale of Fixed Assets
|
411,436 | 2.0 | (9,801 | ) | (0.1 | ) | 421,237 | (4297.9 | ) | |||||||||||||||
Total Other Income (Expense)
|
261,327 | 1.2 | (196,675 | ) | (1.3 | ) | 458,002 | (232.9 | ) | |||||||||||||||
Income Before Income Taxes
|
1,358,400 | 6.4 | (169,601 | ) | (1.1 | ) | 1,528,001 | (900.9 | ) | |||||||||||||||
Income Taxes Expense
|
359,508 | 1.7 | 145,531 | 0.9 | 213,977 | 147.0 | ||||||||||||||||||
Net Income
|
998,892 | 4.7 | (315,132 | ) | (2.0 | ) | 1,314,024 | (417.0 | ) | |||||||||||||||
Less Net Loss Attributable to the Non-controlled Interest in Subsidiaries
|
81,681 | 0.4 | (308,503 | ) | 2.0 | (390,184 | ) | (126.5 | ) | |||||||||||||||
Net Income attributable to LiqTech
|
917,211 | 4.3 | (6,629 | ) | (0.04 | ) | 923,840 | (13936.3 | ) |
Year ended December 31,
|
||||||||||||||||||||||||
Period to period change
|
||||||||||||||||||||||||
2010
|
As a % of Sales
|
2009
|
As a % of Sales
|
US$
|
Percent %
|
|||||||||||||||||||
NET SALES
|
15,728,817 | 100 | % | 12,897,223 | 100 | % | 2,831,594 | 22.0 | ||||||||||||||||
Cost of Goods Sold
|
12,054,973 | 76.6 | 9,023,289 | 70.0 | 3,031,684 | 33.6 | ||||||||||||||||||
Gross Profit
|
3,673,844 | 23.4 | 3,873,934 | 30.0 | (200,090 | ) | (5.2 | ) | ||||||||||||||||
OPERATING EXPENSE:
|
||||||||||||||||||||||||
Selling and Marketing
|
1,476,656 | 9.4 | 1,421,246 | 11.0 | 55,410 | 3.9 | ||||||||||||||||||
General and Administrative Expenses
|
1,748,596 | 11.1 | 1,394,082 | 10.8 | 354,514 | 25.4 | ||||||||||||||||||
Research and Development
|
421,518 | 2.7 | 239,712 | 1.9 | 181,806 | 75.8 | ||||||||||||||||||
Total Operating Expenses
|
3,646,770 | 23.2 | 3,055,040 | 23.7 | 591,730 | 19.4 | ||||||||||||||||||
Income from Operations
|
27,074 | 0.2 | 818,894 | 6.3 | (791,820 | ) | (96.7 | ) | ||||||||||||||||
Interest and Other Income
|
64,916 | 0.4 | 37,903 | 0.3 | 27,013 | 71.3 | ||||||||||||||||||
Interest (Expense)
|
(214,520 | ) | (1.4 | ) | (116,919 | ) | (0.9 | ) | (97,601 | ) | 83.5 | |||||||||||||
(Loss) on Investments
|
(123,647 | ) | (0.8 | ) | (86,673 | ) | (0.7 | ) | (36,974 | ) | 42.7 | |||||||||||||
Gain on Currency Transactions
|
86,377 | 0.5 | (26,955 | ) | (0.2 | ) | 113,332 | (420.4 | ) | |||||||||||||||
Gain (Loss) on Sale of Fixed Assets
|
(9,801 | ) | (0.1 | ) | (5,248 | ) | (0.0 | ) | (4,553 | ) | 86.8 | |||||||||||||
Total Other Income (Expense)
|
(196,675 | ) | (1.3 | ) | (197,892 | ) | (1.5 | ) | 1,217 | (0.6 | ) | |||||||||||||
Income Before Income Taxes
|
(169,601 | ) | (1.1 | ) | 621,002 | 4.8 | (790,603 | ) | (127.3 | ) | ||||||||||||||
Income Taxes Expense
|
145,531 | 0.9 | 300,803 | 2.3 | (155,272 | ) | (51.6 | ) | ||||||||||||||||
Net Income
|
(315,132 | ) | (2.0 | ) | 320,199 | 2.5 | (635,331 | ) | (198.4 | ) | ||||||||||||||
Less Net Loss Attributable to the Non-controlled Interest in Subsidiaries
|
(308,503 | ) | (2.0 | ) | (9,303 | ) | (0.1 | ) | (299,200 | ) | 3216.2 | |||||||||||||
Net Income Attributable to LiqTech
|
(6,629 | ) | (0.0 | ) | 329,502 | 2.55 | (336,131 | ) | (102.0 | ) |
|
2011
|
2010
|
||||||
Allowance for doubtful accounts at the beginning of the period
|
$ | 452,266 | $ | 221,400 | ||||
Bad debt expense
|
208,275 | 675,341 | ||||||
Amount of receivables written off
|
(257,610 | ) | (428,960 | ) | ||||
Effect of currency translation
|
(13,899 | ) | (15,515 | ) | ||||
Allowance for doubtful accounts at the end of the period
|
$ | 389,032 | $ | 452,266 |
Page
|
|
Reports of Independent Registered Public Accounting Firm
|
F1 |
Consolidated Balance Sheets at December 31, 2011 and 2010
|
F2 |
Consolidated Statements of Income for the years ended December 31, 2011 and 2010
|
F4 |
Consolidated Statement of Other Comprehensive Income for the years ended December 31, 2011 and 2010 | F5 |
Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2011 and 2010 | F6 |
Consolidated Statement of Cash Flows for the years ended December 31, 2011 and 2010
|
F7 |
Notes to the Consolidated Financial Statements
|
F9 |
4397 South Albright Drive, Salt Lake City, Utah 84124
(801) 277-2763 Phone • (801) 277-6509 Fax
|
As of December 31,
2011
|
As of December 31,
2010
|
|||||||
Current Assets:
|
||||||||
Cash
|
$ | 1,033,057 | $ | 559,259 | ||||
Accounts receivable, net
|
5,299,569 | 3,029,075 | ||||||
Other receivables
|
1,528,362 | 517,296 | ||||||
Inventories
|
2,980,583 | 1,885,681 | ||||||
Prepaid expenses
|
301,375 | 110,552 | ||||||
Current deferred tax asset
|
17,786 | 7,000 | ||||||
Total Current Assets
|
11,160,732 | 6,108,863 | ||||||
Property and Equipment
, net of
accumulated depreciation
|
6,647,217 | 6,423,027 | ||||||
Other Assets:
|
||||||||
Other intangible assets
|
34,167 | 81,554 | ||||||
Other investments
|
6,483 | - | ||||||
Deposits
|
146,184 | 43,537 | ||||||
Total Other Assets
|
186,834 | 125,091 | ||||||
Total Assets
|
$ | 17,994,783 | $ | 12,656,981 |
As of December 31,
2011
|
As of December 31,
2010
|
|||||||
Current Liabilities:
|
||||||||
Lines of credit
|
$ | 1,259,936 | $ | 1,033,088 | ||||
Notes payable - current portion | 259,396 | 100,000 | ||||||
Notes payable - related party, net of discount
|
3,328,183 | - | ||||||
Current portion of capital lease obligation
|
191,444 | 156,204 | ||||||
Accounts payable - trade
|
3,026,960 | 1,065,567 | ||||||
Accrued expenses
|
1,212,746 | 718,712 | ||||||
Accrued income taxes payable
|
3,710 | - | ||||||
Other accrued liabilities
|
154 | 7,155 | ||||||
Total Current Liabilities
|
9,282,529 | 3,080,726 | ||||||
Notes payable and long-term debt, less current portion
|
350,000 | 400,000 | ||||||
Long-term capital lease obligations, less current portion
|
950,351 | 925,749 | ||||||
Deferred tax liability
|
668,484 | 480,040 | ||||||
Total Long-Term Liabilities
|
1,968,835 | 1,805,789 | ||||||
Total Liabilities
|
11,251,364 | 4,886,515 | ||||||
Stockholders' Equity:
|
||||||||
Common stock; par value $0.001,
100,000,000 and 100,000,000 shares authorized,
21,600,000 and 9,308,333 shares issued and
outstanding at December 31, 2011 and
December 31, 2010, respectively.
|
21,600 | 9,309 | ||||||
Additional paid-in capital
|
5,603,517 | 2,532,776 | ||||||
Treasury stock, at cost, 0 and 46,070 shares held
at December 31, 2011 and December 31, 2010
|
- | (25,019 | ) | |||||
Retained earnings
|
5,284,583 | 4,367,372 | ||||||
Deferred compensation
|
(268,282 | ) | - | |||||
Other comprehensive income, net
|
(596,011 | ) | (256,123 | ) | ||||
Note receivable from a shareholder, net of discount
|
(3,328,183 | ) | (80,000 | ) | ||||
Uncontrolled interest in subsidiaries
|
26,195 | 1,222,151 | ||||||
Total Stockholders' Equity
|
6,743,419 | 7,770,466 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 17,994,783 | $ | 12,656,981 |
For the Year Ended
December
31,
|
||||||||
2011
|
2010
|
|||||||
Net Sales
|
$ | 21,192,177 | $ | 15,728,817 | ||||
Cost of Goods Sold
|
16,164,366 | 12,054,973 | ||||||
Gross Profit
|
5,027,811 | 3,673,844 | ||||||
Operating Expenses:
|
||||||||
Selling expense
|
1,484,992 | 1,476,656 | ||||||
General and administrative expenses
|
1,943,333 | 1,748,596 | ||||||
Research and development
|
502,413 | 421,518 | ||||||
Total Operating Expense
|
3,930,738 | 3,646,770 | ||||||
Income From Operations
|
1,097,073 | 27,074 | ||||||
Other Income (Expense)
|
||||||||
Interest and other income
|
100,986 | 64,916 | ||||||
Interest (expense)
|
(203,682 | ) | (214,520 | ) | ||||
(Loss) on investments
|
(57,684 | ) | (123,647 | ) | ||||
Gain on currency transactions
|
10,271 | 86,377 | ||||||
Gain (loss) on sale of fixed assets
|
411,436 | (9,801 | ) | |||||
Total Other Income (Expense)
|
261,327 | (196,675 | ) | |||||
Income Before Income Taxes
|
1,358,400 | (169,601 | ) | |||||
Income Tax Expense
|
359,508 | 145,531 | ||||||
Net Income (Loss)
|
998,892 | (315,132 | ) | |||||
|
||||||||
Less Net Income (Loss)
Attributable To Non Controlled Interest
in Subsidiaries
|
81,681 | (308,503 | ) | |||||
Net Income (Loss) Attributable
To Liqtech
|
$ | 917,211 | $ | (6,629 | ) |
For the Year Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
Basic Earnings Per Share
|
$ | 0.06 | $ | (0.00 | ) | |||
Weighted Average Common
Shares Outstanding
|
14,165,217 | 9,308,333 | ||||||
Diluted Earnings Per Share
|
$ | 0.06 | $ | (0.00 | ) | |||
|
||||||||
Weighted Average Common
Shares Outstanding
Assuming Dilution
|
16,096,973 | 9,308,333 |
For the Year Ended
December 31,
|
||||||||
2011
|
2010
|
|||||||
Net Income (Loss)
|
$ | 998,892 | $ | (315,132 | ) | |||
Currency Translation Net of Taxes
|
327,323 | 486,693 | ||||||
Other Comprehensive Income
|
$ | 1,326,215 | $ | 171,561 | ||||
Comprehensive Income (Loss)
Attributable to Non-Controlling Interest in
Subsidiaries
|
94,246 | (351,548 | ) | |||||
Comprehensive Income Attributable
To Liqtech International, Inc.
|
$ | 1,231,969 | $ | 523,109 |
Additional
|
Other
|
Noncontrolled
|
||||||||||||||||||||||||||||
Common Stock
|
Treasury Stock
|
Paid-in
|
Retained
|
Comprehensive
|
Deferred
|
Shareholder
|
Interest in
|
|||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Compensation
|
Receivable
|
Subsidiaries
|
|||||||||||||||||||||
Balance, December 31, 2009
|
9,308,333 | $ | 9,309 | 46,070 | $ | (25,019 | ) | $ | 2,491,830 | $ | 4,374,001 | $ | 187,524 | $ | - | $ | (80,000 | ) | $ | 1,573,699 | ||||||||||
Stock based compensation
|
- | - | - | - | 40,946 | - | - | - | - | - | ||||||||||||||||||||
Currency translation, net
|
- | - | - | - | - | - | (443,647 | ) | - | - | (43,045 | ) | ||||||||||||||||||
Net Loss for the year ended December 31, 2010
|
- | - | - | - | - | (6,629 | ) | - | - | - | (308,503 | ) | ||||||||||||||||||
Balance, December 31, 2010
|
9,308,333 | $ | 9,309 | 46,070 | $ | (25,019 | ) | $ | 2,532,776 | $ | 4,367,372 | $ | (256,123 | ) | $ | - | $ | (80,000 | ) | $ | 1,222,151 | |||||||||
Contribution of 15% interest of LiqTech International AS
|
- | - | - | - | 280,039 | - | - | - | - | (325,208 | ) | |||||||||||||||||||
Cancellation of shares held in treasury
|
- | - | (46,070 | ) | 25,019 | (25,019 | ) | - | - | - | - | - | ||||||||||||||||||
Recapitalization of subsidiary and acquisition of non-controlled interest in LiqTech International AS and LiqTech NA
|
8,136,417 | 8,136 | - | - | 2,427,610 | - | - | - | (5,144,751 | ) | (964,994 | ) | ||||||||||||||||||
Amortization of discount on shareholder receivable
|
- | - | - | - | - | - | - | - | (54,882 | ) | - | |||||||||||||||||||
Currency adjustment on note receivable / payable
|
- | - | - | - | - | - | - | - | 371,450 | - | ||||||||||||||||||||
Recapitalization of subsidiary
|
4,155,250 | 4,155 | - | - | (4,155 | ) | - | - | - | - | - | |||||||||||||||||||
Deferred compensation on options issued to directors and employees
|
- | - | - | - | 392,266 | - | - | (392,266 | ) | - | - | |||||||||||||||||||
Stock based compensation expense
|
- | - | - | - | - | - | - | 123,984 | - | - | ||||||||||||||||||||
Payments received on shareholder receivables
|
- | - | - | - | - | - | - | - | 1,580,000 | - | ||||||||||||||||||||
Currency translation, net
|
- | - | - | - | - | - | (339,888 | ) | - | - | 12,565 | |||||||||||||||||||
Net income for the year
ended December 31, 2011
|
- | - | - | - | - | 917,211 | - | - | - | 81,681 | ||||||||||||||||||||
Balance, December 31, 2011
|
21,600,000 | $ | 21,600 | - | - | $ | 5,603,517 | $ | 5,284,583 | $ | (596,011 | ) | $ | (268,282 | ) | $ | (3,328,183 | ) | $ | 26,195 |
For the Years Ended
December 31
|
||||||||
2011
|
2010
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net Income (Loss)
|
$ | 998,892 | $ | (315,132 | ) | |||
Adjustments to reconcile net income (loss)
to net cash provided by operations:
|
||||||||
Depreciation and amortization
|
1,379,667 | 1,152,099 | ||||||
Compensation from stock options
|
123,984 | 40,946 | ||||||
Bad debt expense
|
208,275 | 428,960 | ||||||
Change in deferred tax asset / liability
|
177,658 | 118,410 | ||||||
(Gain) /loss on sale of equipment
|
(411,436 | ) | 9,801 | |||||
Loss on Long- term investments
|
57,684 | 43,476 | ||||||
Changes in assets and liabilities:
|
||||||||
(Increase) decrease in accounts receivable
|
(3,593,340 | ) | 715,075 | |||||
(Increase) decrease in inventory
|
(1,094,902 | ) | 45,112 | |||||
(Increase) decrease in prepaid expenses/deposits
|
(293,470 | ) | 50,738 | |||||
Increase (decrease) in accounts payable
|
1,961,393 | (206,364 | ) | |||||
Increase (decrease) in accrued expenses
|
490,743 | (333,979 | ) | |||||
Total Adjustments
|
(993,744 | ) | 2,064,274 | |||||
Net Cash Provided by Operating Activities
|
5,148 | 1,749,142 | ||||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of property and equipment
|
(1,572,300 | ) | (1,307,413 | ) | ||||
Proceeds from sale / recovery of property and equipment
|
689,827 | - | ||||||
Purchase of intangible assets
|
- | (31,652 | ) | |||||
Purchase of long-term investments
|
(64,167 | ) | - | |||||
Net Cash Used by Investing Activities
|
(946,640 | ) | (1,339,065 | ) | ||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from notes payable
|
109,396 | 500,000 | ||||||
Net proceed on lines of credit
|
226,848 | 118,898 | ||||||
Payments on notes payable - related party
|
- | (305,620 | ) | |||||
Payments on capital lease obligation
|
(202,719 | ) | (246,099 | ) | ||||
Proceeds from issuance of common stock and warrants
|
4,607,087 | - | ||||||
Repurchase of common stock
|
(4,577,999 | ) | - | |||||
Payments on Related Party Notes Receivable
|
1,580,000 | - | ||||||
Net Cash Used by Financing Activities
|
1,742,613 | 67,179 | ||||||
(Gain) on Currency translation
|
(327,323 | ) | (486,693 | ) | ||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
473,798 | (9,437 | ) | |||||
Cash and Cash Equivalents at Beginning of the Period
|
559,259 | 568,696 | ||||||
Cash and Cash Equivalents at the End of Period
|
$ | 1,033,057 | $ | 559,259 |
For the Years Ended
December 31
|
||||||||
2011
|
2010
|
|||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 203,682 | $ | 214,520 | ||||
Income Taxes
|
$ | 359,508 | $ | 145,531 |
|
2011
|
2010
|
||||||
Allowance for doubtful accounts at the beginning of the period
|
$ | 452,266 | $ | 221,400 | ||||
Bad debt expense
|
208,275 | 675,341 | ||||||
Amount of receivables written off
|
(257,610 | ) | (428,960 | ) | ||||
Effect of currency translation
|
(13,899 | ) | (15,515 | ) | ||||
Allowance for doubtful accounts at the end of the period
|
$ | 389,032 | $ | 452,266 |
●
|
Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
●
|
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
●
|
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
2011
|
2010
|
|||||||
Furnace parts and supplies
|
$ | 151,412 | $ | 250,526 | ||||
Raw materials
|
920,064 | 397,634 | ||||||
Work in process
|
867,988 | 529,253 | ||||||
Finished goods
|
1,054,118 | 721,268 | ||||||
Reserve for obsolescence
|
(13,000 | ) | (13,000 | ) | ||||
Net Inventory
|
$ | 2,980,583 | $ | 1,885,681 |
Useful Life
|
2011
|
2010
|
||||||||||
Production equipment
|
3 - 10 | $ | 10,025,051 | $ | 9,177,522 | |||||||
Lab equipment
|
3 - 10 | 349,750 | 354,435 | |||||||||
Computer equipment
|
3 - 10 | 236,155 | 171,232 | |||||||||
Vehicles
|
3 | 10,565 | 10,814 | |||||||||
Furniture and fixture
|
5 | 47,898 | - | |||||||||
Building
|
20 | - | 214,807 | |||||||||
Leasehold improvements
|
10 | 443,448 | 573,650 | |||||||||
11,112,867 | 10,502,460 | |||||||||||
Less Accumulated Depreciation
|
(4,465,650 | ) | (4,079,433 | ) | ||||||||
Net Property and Equipment
|
$ | 6,647,217 | $ | 6,423,027 |
Year ending December 31,
|
||||
2012
|
$ | 5,455 | ||
2013
|
5,455 | |||
2014
|
5,455 | |||
2015
|
5,455 | |||
2016
|
5,455 | |||
Thereafter
|
6,891 | |||
|
$ | 34,166 |
Year ending December 31,
|
||||
2012
|
$ | 100,000 | ||
2013
|
100,000 | |||
2014
|
100,000 | |||
2015
|
100,000 | |||
2016
|
50,000 | |||
Thereafter
|
- | |||
|
$ | 450,000 |
Year ending December 31,
|
Lease Payments
|
|||
2012
|
$ | 552,968 | ||
2013
|
$ | 537,435 | ||
2014
|
$ | 571,103 | ||
2015
|
$ | 585,292 | ||
2016
|
$ | 475,369 | ||
Thereafter
|
$ | 51,196 | ||
Total Minimum Lease Payments
|
$ | 2,773,363 |
As of December 31, 2011
|
||||
2012
|
$ | 287,511 | ||
2013
|
249,455 | |||
2014
|
244,880 | |||
2015
|
213,618 | |||
2016
|
206,790 | |||
Thereafter
|
132,781 | |||
Total minimum lease payments
|
1,335,035 | |||
Less amount representing interest
|
(193,240 | ) | ||
Present value of minimum lease payments
|
1,141,795 | |||
Less Current Portion
|
(191,444 | ) | ||
|
$ | 950,351 |
2011
|
2010
|
|||||||
Deferred rent
|
$ | - | $ | 2,506 | ||||
Vacation Accrual
|
13,234 | - | ||||||
Reserve for obsolete inventory
|
4,552 | 4,494 | ||||||
Net current tax assets
|
$ | 17,786 | $ | 7,000 | ||||
Business tax credit carryover
|
- | 2,528 | ||||||
Net operating loss carryover
|
130,118 | 307,227 | ||||||
Excess of book over tax depreciation
|
(798,602 | ) | (789,795 | ) | ||||
Net deferred tax liability
|
(668,484 | ) | $ | (480,040 | ) |
2011
|
2010
|
|||||||
Computed tax at expected statutory rate
|
$ | 444,553 | $ | (57,664 | ) | |||
State and local income taxes, net of federal benefits
|
6,945 | 63,586 | ||||||
Non-deductible expenses
|
26,269 | 1,723 | ||||||
Non-US income taxed at different rates
|
(87,033 | ) | 105,892 | |||||
Manufacture and other tax credits
|
(30,974 | ) | - | |||||
Other items
|
(252 | ) | 31,994 | |||||
Income tax expense
|
$ | 359,508 | $ | 145,531 |
2011
|
2010
|
|||||||
Current income tax expense (benefit)
|
||||||||
Danish
|
$ | 25,665 | $ | 8,783 | ||||
Federal
|
145,662 | - | ||||||
State
|
10,523 | 13,992 | ||||||
Current tax expense
|
$ | 181,850 | $ | 22,775 | ||||
Deferred tax expense (benefit) arising from:
|
||||||||
Excess of tax over financial accounting depreciation
|
$ | 8,749 | $ | 386,109 | ||||
Deferred rent
|
2,506 | (2,506 | ) | |||||
Business tax credit carryover
|
2,528 | - | ||||||
Net operating loss carryover
|
177,109 | (303,921 | ) | |||||
Allowance for doubtful accounts
|
- | 47,568 | ||||||
Accrued Rent
|
(13,234 | ) | - | |||||
Reserve for obsolete inventory
|
- | (4,494 | ) | |||||
Current tax expense
|
$ | 177,658 | $ | 122,756 |
For the Year Ended December 31
|
||||||||
2011
|
2010
|
|||||||
Net Income (Loss) attributable to LiqTech International Inc.
|
$ | 0.06 | (0.00 | ) | ||||
Weighted average number of common shares used in basic earnings per share
|
14,165,217 | 9,308,333 | ||||||
Effect of dilutive securities, stock options and warrants
|
$ | 0.06 | (0.00 | ) | ||||
Weighted average number of common shares and potential dilutive common shares outstanding used in dilutive earnings per share
|
16,096,973 | 9,308,333 |
LiqTech International, Inc.
|
|
Expected term
|
3.0 - 3.5 Years
|
Volatility
|
0.07% - 52.69%
|
Risk free interest rate
|
2.33%
|
Dividend yield
|
0%
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||
Range of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
||||||||||||||
$ | 1.50-$3.60 | 2,060,000 |
3.11 years
|
$ | 2.653 | 686,667 | $ | 2.653 |
December 31, 2011
|
||||||||||||||||
Shares
|
Weighted Average Exercise Price
|
Average
Remaining Life
|
Weighted Average Intrinsic Value
|
|||||||||||||
Outstanding at beginning of period
|
- | $ | - | - | $ | - | ||||||||||
Granted
|
2,060,000 | 2.653 | 3.11 | - | ||||||||||||
Exercised
|
- | - | - | - | ||||||||||||
Forfeited
|
- | - | - | - | ||||||||||||
Expired
|
- | - | - | - | ||||||||||||
Outstanding at end of period
|
2,060,000 | $ | 2.653 | 3.11 | $ | 2,341,400 | ||||||||||
Vested and Expected to Vest
|
686,667 | $ | 2.653 | 3.11 | $ | 780,467 | ||||||||||
Exercisable end of period
|
2,060,000 | $ | 2.653 | 3.11 | $ | 583,334 |
For the Year Ended December 31
|
||||||||
2011
|
2010
|
|||||||
United States and Canada
|
$ | 6,640,642 | $ | 5,593,498 | ||||
South America
|
17,949 | 76,121 | ||||||
Asia
|
1,292,143 | 2,514,095 | ||||||
Europe
|
13,241,443 | 7,545,103 | ||||||
$ | 21,192,177 | $ | 15,728,817 |
For the Year Ended December 31
|
||||||||
2011
|
2010
|
|||||||
Ceramic diesel particulate
|
$ | 17,211,557 | $ | 13,820,862 | ||||
Liquid filters
|
3,708,624 | 1,907,955 | ||||||
Kiln furniture
|
271,996 | - | ||||||
$ | 21,192,177 | $ | 15,728,817 |
●
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
●
|
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
|
●
|
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 financial statements.
|
Name
|
Age
|
Titles
|
||
Aldo Petersen
|
50
|
Chairman of the Board
|
||
Lasse Andreassen
|
59
|
Chief Executive Officer (Principal Executive Officer) and Director
|
||
Soren Degn
|
42
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
||
Donald S. Debelak
|
62
|
Head of U.S. Operations
|
||
Paul Burgon
|
41
|
Director
|
||
John F. Nemelka
|
46
|
Director
|
||
Michael Sonneland
|
43
|
Director
|
Audit Committee
|
Compensation Committee
|
Governance Committee
|
||
Paul Burgon*
|
John F. Nemelka*
|
Aldo Petersen*
|
||
Michael Sonneland
|
Paul Burgon
|
John F. Nemelka
|
||
|
Michael Sonneland
|
|
||
* Chairman of the committee
|
|
|
●
|
appointing, compensating, retaining, overseeing and terminating our independent auditors and pre-approving all audit and non-audit services permitted to be performed by the independent auditors;
|
●
|
discussing with management and the independent auditors our annual audited financial statements, our internal control over financial reporting, and related matters;
|
●
|
reviewing and approving any related party transactions;
|
●
|
meeting separately, periodically, with management, the internal auditors and the independent auditors;
|
●
|
annually reviewing and reassessing the adequacy of our audit committee charter;
|
●
|
such other matters that are specifically delegated to our audit committee by our Board of Directors from time to time; and
|
●
|
reporting regularly to the Board of Directors.
|
●
|
reviewing and making recommendations to our Board Directors regarding our compensation policies and forms of compensation provided to our directors and officers;
|
●
|
reviewing and making recommendations to our Board of Directors regarding bonuses for our officers and other employees;
|
●
|
reviewing and making recommendations to our Board of Directors regarding stock-based compensation for our directors and officers;
|
●
|
administering our stock option plans in accordance with the terms thereof; and
|
●
|
such other matters that are specifically delegated to the compensation committee by our Board of Directors after the business combination from time to time.
|
●
|
overseeing the process by which individuals may be nominated to our Board of Directors;
|
●
|
identifying potential directors and making recommendations as to the size, functions and composition of our Board of Directors and its committees;
|
●
|
considering nominees proposed by our stockholders;
|
●
|
establishing and periodically assessing the criteria for the selection of potential directors;
|
●
|
making recommendations to the Board of Directors on new candidates for Board membership; and
|
●
|
overseeing corporate governance matters.
|
Name and
Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)(2)
|
Nonequity
Incentive
Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
Other
|
Total
($)
|
|||||||||||||||||
Lasse Andreassen,
|
2011
|
$
|
104,428
|
—
|
—
|
$
|
3,139
|
—
|
—
|
$
|
7,832
(4)
|
$
|
115,399
|
|||||||||||||
Chief executive officer (3)
|
2010
|
147,438
|
—
|
—
|
—
|
—
|
—
|
—
|
147,438
|
|||||||||||||||||
2009
|
166,034
|
—
|
—
|
—
|
—
|
—
|
—
|
166,034
|
||||||||||||||||||
Donald S. Debelak,
|
2011
|
162,000
|
—
|
—
|
2,485
|
—
|
—
|
—
|
164,485
|
|||||||||||||||||
Head of U.S. Operations
|
2010
|
162,000
|
—
|
—
|
—
|
—
|
—
|
—
|
162,000
|
|||||||||||||||||
2009
|
144,000
|
—
|
—
|
—
|
—
|
—
|
—
|
144,000
|
||||||||||||||||||
Soren Degn,
|
2011
|
64,397
|
—
|
—
|
2,616
|
—
|
—
|
—
|
67,013
|
|||||||||||||||||
Chief Financial Officer (5)
|
2010
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||
2009
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Jens Husted Kjær, CEO of
|
2011
|
45,027
|
—
|
—
|
—
|
—
|
—
|
—
|
45,027
|
|||||||||||||||||
Cometas (6)
|
2010
|
166,568
|
—
|
—
|
—
|
—
|
—
|
—
|
166,568
|
|||||||||||||||||
2009
|
173,516
|
—
|
—
|
—
|
—
|
—
|
—
|
173,516
|
(1)
|
Total salaries for Messrs. Andreassen and Kjær for 2009 and 2010 are reported on an as-converted basis from Danish Krone (DKK) to U.S. dollars ($) based on the currency exchange rate of $1.00 = DKK 5.6133, as of December 31, 2010. Total salaries for Messrs. Andreassen, Degn and Kjær for 2011 are reported on an as-converted basis from Danish Krone (DKK) to U.S. dollars ($) based on the currency exchange rate of $1.00 = DKK 5.7456, as of December 31, 2011. We do not make any representation that the Danish Krone amounts could have been, or could be, converted into U.S. dollars at such rate on December 30, 2010 or December 31, 2011, or at any other rate.
|
(2)
|
These amounts represent the aggregate grant date fair value for stock awards granted in fiscal year 2011, computed in accordance with FASB ASC Topic 718. See notes to consolidated financial statements contained elsewhere in this report for further information on the assumptions used to value stock options. On August 24, 2011, Messrs. Andreassen, Debelak and Degn were granted stock options to purchase 180,000, 142,500 and 150,000 shares of common stock, respectively, at $3.00 per share. On August 24, 2011, Messrs. Andreassen, Debelak, and Degn were granted stock options to purchase 60,000, 47,500 and 50,000 shares of common stock, respectively, at $1.50 per share. The vesting schedule of such options is as follows: one-third of the options vested immediately, one third of such options vest on September 1, 2012 and one third of such options vest on September 1, 2013. All of these options will expire on February 28, 2015.
|
(3)
|
For the years ended December 31, 2011, 2010 and 2009, Mr. Andreassen was entitled to an annual base salary of approximately $182,749, $178,000 and $178,000, respectively. From January 2011 until October 2011, Mr. Andreassen was entitled to an annual base salary of DKK 1,000,000. From October 2011 until December 2011, Mr. Andreassen was entitled to an annual base salary of DKK 1,200,000.
|
(4)
|
Pursuant to Mr. Andreassen’s employment agreement, Mr. Andreassen received $7,832 of contributions from the Company to his individual retirement account in 2011.
|
(5)
|
Mr. Degn became our chief financial officer in August 2011. Pursuant to his employment agreement, Mr. Degn is entitled to an annual base salary of approximately $177,527. Mr. Degn was not an executive officer of the Company in fiscal year 2010 or 2009.
|
(6)
|
Resigned from his position in April 2011.
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Exercisable
(1)
|
Number of
Securities
Underlying
Unexercised
Unexercisable
|
Equity
Incentive
Plan
Awards:
No. of
Securities
Underlying
Unexercised
Unearned
Options
(1)
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
That Have
Not Vested
|
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units, or
Other
Rights That
Have Not
Vested
|
Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units, or
Other Rights
That Have
Not Vested
|
|||||||||||||||||||||||||||
Lasse Andreassen
|
180,000
|
—
|
120,000
|
$
|
3.00
|
02/28/15
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
60,000
|
—
|
40,000
|
$
|
1.50
|
02/28/15
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Donald S. Debelak
|
142,500
|
—
|
95,000
|
$
|
3.00
|
02/28/15
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
47,500
|
—
|
31,667
|
$
|
1.50
|
02/28/15
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Soren Degn
|
150,000
|
—
|
100,000
|
$
|
3.00
|
02/28/15
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
50,000
|
—
|
33,334
|
$
|
1.50
|
02/28/15
|
—
|
—
|
—
|
—
|
Name
|
Fees
earned or
paid in cash
(1)
|
Stock
awards
|
Option
awards
(2)(3)
|
Non-equity
incentive plan
compensation
|
Non-qualified
deferred
compensation
earnings
|
All other
compensation
|
Total
|
|||||||||||||||||||||
John Nemelka
|
$
|
4,167
|
—
|
$
|
6,407
|
—
|
—
|
—
|
$
|
10,574
|
||||||||||||||||||
Michael Sonneland
|
4,167
|
—
|
6,407
|
—
|
—
|
—
|
10,574
|
|||||||||||||||||||||
Paul Burgon
|
8,333
|
—
|
6,407
|
—
|
—
|
—
|
14,740
|
(1)
|
Of the stock options granted on August 24, 2011, one-third of the options vested immediately, one third of such options vest on September 1, 2012 and one third of such options vest on September 1, 2013.
Messrs. Nemelka, Sonneland and Burgon joined our Board of directors in August 2011. Although our independent directors are entitled to cash compensation of $10,000 per year and the chairman of our audit committee is entitled to $20,000 per year, the actual cash amounts paid to such directors in 2011 reflect the fact that such annual compensation was pro rated for the number of months of service actually provided to us.
|
|||||||||||||||||||||||||||||
(2)
|
These amounts represent the aggregate grant date fair value for stock awards granted in fiscal year 2011, computed in accordance with FASB ASC Topic 718. As such, these amounts do not correspond to the compensation actually realized by each director for the period. See notes to consolidated financial statements contained elsewhere in this report for further information on the assumptions used to value stock options.
|
|||||||||||||||||||||||||||||
(3)
|
There were a total of 60,000 stock options granted to non-employee directors outstanding at December 31, 2011 with an aggregate grant date fair value of approximately $19,221. The options vest in three equal annual installments on December 16, 2011, September 1, 2012 and September 1, 2013.
|
Name of Beneficial Owner(1)
|
Shares
of
Common
Stock
Beneficially
Owned (2)
|
Percentage
of
Common
Stock
Beneficially
Owned (3)
|
||||||
Lasse Andreassen(4)
|
1,955,000
|
8.1
|
%
|
|||||
Donald S. Debelak(5)
|
463,333
|
1.9
|
%
|
|||||
Soren Degn(6)
|
384,667
|
1.6
|
%
|
|||||
Aldo Petersen(7)
|
5,703,541
|
21.9
|
%
|
|||||
Paul Burgon(8)
|
14,167
|
*
|
||||||
John F. Nemelka(9)
|
108,667
|
*
|
||||||
Michael Sonneland(10)
|
483,917
|
2.0
|
%
|
|||||
All executive officers and directors as a group (7 persons)(11)
|
9,113,291
|
34.7
|
%
|
|||||
5% Shareholders:
|
|
|
||||||
LaksyaVentures, Inc.(12)
|
3,199,792
|
13.3
|
%
|
|||||
David Nemelka(13)
|
4,666,417
|
19.4
|
%
|
*
|
Less than one percent.
|
(1)
|
Unless otherwise indicated, the address for each person listed above is: c/o LiqTech, Grusbakken 12, DK-2820 Gentofte, Denmark.
|
|
(2) | Under the rules and regulations of the SEC, beneficial ownership includes (i) shares actually owned, (ii) shares underlying options and warrants that are currently exercisable and (iii) shares underlying options and warrants that are exercisable within 60 days of March 1, 2012. All shares beneficially owned by a particular person under clauses (ii) and (iii) of the previous sentence are deemed to be outstanding for the purpose of computing the percentage ownership of that person but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. | |
(3) | Based on 24,111,500 shares issued and outstanding as of March 19, 2012. | |
(4) | Shares are owned by El Salto ApS, a Danish entity. The voting and disposition of the shares owned by El Salto is controlled by Mr. Andreassen. Includes 240,000 stock options, of which 60,000 stock options have an exercise price of $1.50 per share and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013, and 180,000 stock options have an exercise price of $3.00 and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013. | |
(5) | Includes 190,000 stock options, of which 47,500 stock options have an exercise price of $1.50 per share and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013, and 142,500 stock options have an exercise price of $3.00 and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013. | |
(6) | Includes 205,000 shares and 113,000 shares owned by SHD Invest ApS and LHD Invest ApS, respectively, each of which is a Danish entity. The voting and disposition of the shares owned by SHD Invest ApS and LHD Invest ApS are controlled by Mr. Degn. Also includes 200,000 stock options. 50,000 stock options have an exercise price of $1.50 and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013. 150,000 stock options have an exercise price of $3.00 and vest in three equal annual installments on August 24, 2011, September 1, 2012 and September 1, 2013. | |
(7) | Includes (i) 3,428,541 shares owned by APE Invest A/S, a Danish entity controlled by Mr. Petersen, of which 900,000 shares underlie a 5-year warrant immediately exercisable at an exercise price of $1.50 per share; and (ii) 2,275,000 shares owned by four entities controlled by Mr. Petersen’s spouse of which 1,000,000 shares underlie a 5-year warrant immediately exercisable at an exercise price of $1.50 per share. Mr. Petersen disclaims beneficial ownership of the 2,275,000 shares owned by the four entities controlled by Mr. Petersen’s spouse. |
(8)
|
Includes 20,000 stock options at an exercise price of $3.60. The options vest in three equal annual installments on December 16, 2011, September 1, 2012 and September 1, 2013.
|
|
(9) | Includes 20,000 stock options at an exercise price of $3.60. The options vest in three equal annual installments on December 16, 2011, September 1, 2012 and September 1, 2013. | |
(10) | Shares are owned by NSMSO Holding ApS, a Danish entity. The voting and disposition of the shares owned by NSMSO are controlled by Mr. Sonneland. Includes 20,000 stock options at an exercise price of $3.60. The options vest in three equal annual installments on December 16, 2011, September 1, 2012 and September 1, 2013. | |
(11) | Includes five-year warrants immediately exercisable for an aggregate of 1,900,000 shares at an exercise price of $1.50 per share. | |
(12) | Includes five-year warrants immediately exercisable for an aggregate of 1,900,000 shares at an exercise price of $1.50 per share. The voting and disposition of the shares owned by Laksya Ventures is controlled by Neil Persh. | |
(13) | Includes five-year warrants immediately exercisable for an aggregate of 1,135,000 shares at an exercise price of $1.50 per share. |
Balance Beginning of Year
|
Charges to Costs and Expenses
|
Deductions
(1)
|
Balance End of Year
|
|||||||||||||
Year Ended December 31, 2011
|
||||||||||||||||
Allowance for inventory obsolescense
|
$ | 13,000 | $ | - | $ | - | $ | 13,000 | ||||||||
Allowance for doubtful accounts
|
452,266 | 208,275 | (271,509 | ) | 389,032 | |||||||||||
Totals
|
$ | 465,266 | $ | 208,275 | $ | (271,509 | ) | $ | 402,032 |
Balance Beginning of Year
|
Charges to Costs and Expenses
|
Deductions
(1)
|
Balance End of Year
|
|||||||||||||
Year Ended December 31, 2010
|
||||||||||||||||
Allowance for inventory obsolescense
|
$ | 13,000 | $ | - | $ | - | $ | 13,000 | ||||||||
Allowance for doubtful accounts
|
221,400 | 675,341 | (444,475 | ) | 452,266 | |||||||||||
Totals
|
$ | 234,400 | $ | 675,341 | $ | (444,475 | ) | $ | 465,266 |
(1)
|
Includes writeoffs and the impact of foreign currency exchange rates.
|
Exhibit No.
|
Description
|
Location
|
||
1.1
|
Placement Agency Agreement, dated March 2, 2012, by and between LiqTech International, Inc. and Sunrise Securities Corp.
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on March 8, 2012
|
||
2.1
|
Agreement and Plan of Merger dated as of August 23, 2011 by and among Blue Moose Media, Inc., LiqTech USA, Inc. and BMD Sub
|
Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A as filed with the SEC on October 11, 2011
|
||
3.1
|
Articles of Incorporation
|
Incorporated by reference to Exhibit 3(i) to the Company’s Registration Statement on Form 10 (SEC Accession No. 0001078782-09-001287) as filed with the SEC on August 19, 2009
|
||
3.2
|
Certificate of Amendment to the Articles of Incorporation
|
Incorporated by reference to Exhibit A to the Company’s Information Statement on Schedule 14C as filed with the SEC on September 20, 2011
|
3.3
|
Bylaws
|
Incorporated by reference to Exhibit 3(ii) to the Company’s Registration Statement on Form 10 (SEC Accession No. 0001078782-09-001287) as filed with the SEC on August 19, 2009
|
||
4.1
|
Form of Common Stock Certificate
|
Provided herewith
|
||
4.2
|
Form of Warrant issued to Investors in the Private Placement
|
Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K as filed with the SEC on August 25, 2011
|
||
4.3
|
Form of Warrant issued to Sunrise Securities Corp.
|
Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K as filed with the SEC on March 8, 2012
|
||
10.1
|
Form of Securities Purchase Agreement by and between LiqTech USA, Inc. and each of the investors in the Private Placement
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on August 25, 2011
|
||
10.2
|
Employment Agreement dated July 29, 2011 between LiqTech A/S and Lasse Andreasson
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A as filed with the SEC on October 11, 2011 (translated in English)
|
||
10.3
|
Employment Agreement dated November 16, 2005 between LiqTech NA, Inc. and Donald S. Debelak
|
Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K/A as filed with the SEC on October 11, 2011
|
||
10.4
|
Addendum to Employment Agreement, dated December 15, 2011, between LiqTech NA, Inc. and Donald S. Debelak
|
Provided herewith
|
10.5
|
Employment Agreement, dated July 29, 2011, between LiqTech International Inc. and Soren Degn (translated in English)
|
Provided herewith
|
||
10.6
|
Lease Agreements for 1800 - 1810 Buerkle Road, White Bear Lake, Minnesota 55110
|
Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K/A as filed with the SEC on November 15, 2011
|
||
10.7
|
Lease Agreement for 1800 - 1816 Buerkle Road, White Bear Lake, Minnesota 55110
|
Provided herewith
|
||
10.8
|
Lease Agreement for Grusbakken 12, DK-2820 Gentofte Denmark
|
Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K/A as filed with the SEC on November 15, 2011 (translated in English)
|
||
10.9
|
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)
|
||
10.10
|
DKK 6,000,000 Line of Credit Agreement, between LiqTech A/S and Sydbank A/S
|
Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K/A as filed with the SEC on November 15, 2011 (translated in English)
|
||
10.11
|
DKK 3,000,000 Line of Credit Agreement, between LiqTech A/S and Sydbank A/S
|
Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K/A as filed with the SEC on November 15, 2011 (translated in English)
|
||
10.12
|
Note Payable Agreement between LiqTech A/S and Sydbank A/S, for the principal amount of $475,000 USD
|
Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q as filed with the SEC on November 15, 2011 (translated in English)
|
10.13
|
Form of Guarantee in respect of obligations of LiqTech A/S (translated in English)
|
Provided herewith
|
||
10.14
|
Form of Guarantee in respect of obligations of LiqTech International A/S (translated in English)
|
Provided herewith
|
||
10.15
|
Form of Guarantee in respect of obligations of LiqTech NA, Inc. (translated in English)
|
Provided herewith
|
||
10.16
|
Form of Promissory Note payable to certain related parties
|
Provided herewith
|
||
10.17
|
Business Mortgage of LiqTech A/S (translated in English)
|
Provided herewith
|
||
10.18
|
Business Mortgage of LiqTech International A/S (translated in English)
|
Provided herewith
|
||
21
|
List of Subsidiaries
|
Provided herewith
|
||
31.1
|
Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Provided herewith
|
||
31.2
|
Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Provided 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, not filed 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, not filed herewith
|
||
101. INS
|
XBRL Instance Document
|
Provided herewith
|
||
101. CAL
|
XBRL Taxonomy Extension Calculation Link base Document
|
Provided herewith
|
||
101. DEF
|
XBRL Taxonomy Extension Definition Link base Document
|
Provided herewith
|
||
101. LAB
|
XBRL Taxonomy Label Link base Document
|
Provided herewith
|
||
101. PRE
|
XBRL Extension Presentation Link base Document
|
Provided herewith
|
||
101. SCH
|
XBRL Taxonomy Extension Scheme Document
|
Provided herewith
|
LIQTECH INTERNATIONAL, INC.
|
|||
Date: March 29, 2012
|
|||
By:
|
/s/ Lasse Andreassen | ||
Lasse Andreassen, Chief Executive Officer, Principal Executive Officer and Director
|
Signatures
|
Title
|
Date
|
||
/s/
Lasse Andreassen
|
March 29, 2012
|
|||
Lasse Andreassen
|
Chief Executive Officer, Principal Executive Officer and Director
|
|||
/s/
Aldo Peterson
|
March 29, 2012
|
|||
Aldo Peterson
|
Chairman of the Board of Directors
|
|||
/s/
Soren Degn
|
March 29, 2012
|
|||
Soren Degn
|
Chief Finacial Officer, Principal Financial and Accounting Officer
|
|||
/s/
Paul Burgon
|
March 29, 2012
|
|||
Paul Burgon
|
Director
|
|||
/s/
John F. Nemelka
|
March 29, 2012
|
|||
John F. Nemelka
|
Director
|
|||
/s/
Michael Sonneland
|
March 29, 2012
|
|||
Michael Sonneland
|
Director |
INCORPORATED UNDER THE LAWS OF NEVADA
|
NUMBER
|
SHARES
|
|
|
|
|
Shares of
|
LiqTech International, Inc.
|
Common Stock
|
Dated:
|
COUNTERSIGNED AND REGISTERED
|
||
ACTION STOCK TRANSFER CORP.
|
|||
2469 E Ft. Union Blvd., #214, Salt Lake City, UT 84121
|
|||
By:
|
|||
TRANSFER AGENT-AUTHORIZED SIGNATURE
|
|
|
|
||
CEO
|
CFO
|
TEN COM -
|
as tenants in common
|
UNIF GIFT MIN ACT -
|
.......................Custodian..................
|
||
TEN ENT -
|
as tenants by the entireties
|
(Cust)
|
(Minor)
|
||
JT TEN -
|
as joint tenants with rights of
|
under Uniform Gifts to Minors
|
|||
survivorship and not as tenants
|
Act .....................................................
|
||||
in common
|
(State)
|
||||
UNIF TRF MIN ACT -
|
............Custodian (until age.........)
|
||||
(Cust)
|
|||||
................ under Uniform Transfers | |||||
(Minor)
|
|||||
to Minors Act
|
.................................. | ||||
(State)
|
FOR VALUE RECEIVED,
|
hereby sell, assign and transfer unto
|
PLEASE INSERT SOCIAL SECURITY OR OTHER
|
|||
IDENTIFYING NUMBER OF ASSIGNEE
|
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
|
Shares
|
Attorney
|
Dated
|
X |
|
|
X
|
|
|
NOTICE:
|
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
|
1.
|
Section 3.4 of the Employment Agreement shall be replaced with the following:
|
2.
|
Section 3.5 of the Employment Agreement shall be replaced with the following:
|
4.
|
A new Section 2.7 shall be added to the Employment Agreement, as follows:
|
COMPANY
|
||
LIQTECH NA, INC.,
|
||
a Delaware corporation
|
||
By:
|
/s/ Lasse Andreassen
|
|
Lasse Andreassen
|
||
Title:
|
Director, on behalf of the Board of Directors
|
|
EMPLOYEE
|
||
/s/ Donald S. Debelak
|
||
Donald S. Debelak
|
1.
|
COMMENCEMENT
|
1.1
|
The Director is employed in the Company as Finance Director/CFO. This employment agreement comes into force in the same month as the Company has a minimum of 1,500,000 USD injected into it, minus any additional costs, by an injection of capital from external investors. This is expected to occur in August 2011 at the latest. If the contract does not come into force by 20
th
August 2011 at the latest none of the parties are obligated to each other in accordance with this agreement.
|
2.
|
EMPLOYMENT AND AREA OF RESPONSIBILITY
|
2.1
|
The Director has, under observance of the legislation’s rules, a responsibility to the board of directors to perform normal tasks and those with responsibility, which can be expected by a CFO in a company of LiqTech’s size and scope.
|
2.2
|
The Director is to be registered with the Danish Business Authority.
|
3.
|
SALARY, BONUS, PENSION AND REGULATION OF SALARY
|
3.1
|
On commencing the position the Director’s annual pay constitutes kr. 1,020,000 annually corresponding to 85,000 kr. per month. 1/12 is to be paid monthly in arrears on the last banking day in the month. Due to the previous terms of employment the Director will up until 31.12.2011 send the company an invoice every month of 85,000 kr. including VAT from one of the director’s companies.
|
3.2
|
The Director receives a bonus from the companies’ EBIT in accordance with the Company’s official annual accounts for the first time after approval of the 2011 annual accounts according to the following model:
|
The Director is allocated warrants in the Company according to the following calculation model:
|
|
The company’s EBIT in accordance with the approved annual accounts * 0.15/ the average share price for 10 days before the publication of the profit = the number of warrants.
|
|
For example, EBIT = 2,212,000 USD * 0.15 = 331,800/3 (share price) = 110,600 warrants. 1/3 of the allocated warrants can be made use of immediately, 1/3 after 1 year and 1/3 after 2 years. The allocated warrants automatically expire 3 years after the allocation, if one is not made use of.
|
|
3.3
|
The company pays 10% of the monthly salary, cf. § 3.1 into a pension for the Director. The amount is paid into the pension fund chosen by the Director. The Director can in addition choose to take out a health insurance, and the Director can ask the company to pay the annual premium for this.
|
3.4
|
The Director’s fee is negotiated each year in January, for the first time in January 2013.
|
4.
|
OTHER BENEFITS
|
4.1
|
The company provides a broadband connection at the Director’s address and at the same time pays all installation and operating costs for this purpose.
|
4.2
|
The company provides a mobile telephone for the Director and pays the call charges.
|
4.3
|
The taxable consequences for the Director of the private availability of the abovementioned facilities are handled by the Company in accordance with applicable legislation.
|
4.4
|
The company provides a laptop for the Director.
|
5.
|
ILLNESS
|
5.1
|
Any illness the Director has is not to be considered to be a violation of this contract, and the Director is entitled to full pay whilst ill.
|
6.
|
TRAVEL AND ENTERTAINMENT EXPENSES
|
6.1
|
The Director’s travel expenses in connection with trips and entertainment expenses in the Company’s interest are refunded by the Company as per the account rendered or in accordance with the agreement.
|
7.
|
FURTHER TRAINING
|
7.1
|
The Director is entitled to appropriate further training relative to his position, which is paid for by the Company. The Director plans his own further training and informs the board of directors’ chairman about this.
|
8.
|
HOLIDAY
|
8.1
|
Holiday is earned and taken in accordance with the rules in the Danish Holiday Act, however, 2½ days holiday are earned per month corresponding to 6 weeks annually.
|
The specific holiday supplement with reference to the Danish Holiday Act is paid at 1.5% and included at the same percentage rate when calculating holiday allowance on retirement. The Director is entitled to full pay whilst on holiday from the start date. The Director cannot be required to take a holiday in the notice period. This is regardless of the Director’s possible gardening leave.
|
|
8.2
|
The Director himself decides when his holidays are to be taken, taking into consideration the Company’s interests, and informs the chairman of the board of directors about this.
|
8.3
|
In the case of retirement the Director is entitled to 12.5 % holiday allowance. The holiday allowance is paid in cash on retirement together with the last salary payment.
|
9.
|
TERMINATION
|
9.1
|
The present director’s contract can be terminated by the Company with 24 months’ notice and by the Director with 12 months’ notice to the end of a month.
|
The Director is entitled to have at his disposal the § 4 abovementioned mobile telephone, PCs etc., regardless of gardening leave.
|
9.2
|
If the Director, within a period of 12 successive months, has been in receipt of a salary whilst ill for a total of 120 days (including Sundays and public holidays), termination can occur with 1 month’s notice for termination to a month’s end. Termination must occur in direct association to the expiry of the 120 sick days, and whilst you are still absent owing to illness.
|
9. 3
|
In the case of retirement the Director is obliged to return all material including copies as well as effects which belong to the Company and which are in the Director’s possession. This also applies to credit cards, keys etc. You cannot exercise right of retention to any of this material.
|
9.4
|
Moreover termination occurs according to the Danish Employers’ and Salaried Employees’ Act rules.
|
10.
|
DUTY OF PROFESSIONAL SECRECY
|
10.1
|
The Director has a duty of professional secrecy with regard to everything he discovers in connection with the carrying out of his work as director, unless it is a question of circumstances, which according to their nature must be brought to the attention of a third party. This duty of professional secrecy is also applicable after the Director’s retirement.
|
10.2
|
When the Director leaves his position – regardless of the reason – all material, which belongs to the company and which is in the Director’s possession, must be returned to the company.
|
11.
|
CONTRACT COPIES, CHOICE OF COURT ETC.
|
11.1
|
Any dispute between the Company and the Director on account of the established terms of employment in the present contract must be decided by the ordinary courts of first instance if the parties cannot reach agreement by negotiation/mediation.
|
11.2
|
The present contract has been drawn up in 2 identical signed copies, of which one remains with the Company, whilst the other is handed over to the Director.
|
THE PARTIES’ SIGNATURES
|
||
Copenhagen, on 29
th
July 2011
|
Copenhagen, on 29
th
July 2011
|
|
/s/ Søren Degn
|
/s/ Lasse Andreassen /s/ Michael Sonneland
|
|
Søren Degn
|
For the Company
|
Base Rent Months 1-12
|
$23,607.00 per month
|
(3/01/2012 – 2/28/2013)
|
Base Rent Months 12-24
|
$24,122.00 per month
|
(3/01/2013 – 2/28/2014)
|
Base Rent Months 25-36
|
$24,604.00 per month
|
(3/01/2014 – 2/28/2015)
|
Base Rent Months 37-48
|
$25,096.00 per month
|
(3/01/2015 – 2/29/2016)
|
Base Rent Months 49-60
|
$25,598.00 per month
|
(3/01/2016 – 2/28/2017)
|
1)
|
Security Deposit:
Lessee shall provide Lessor with a security deposit in the amount of $20,000.00 for the
LEASE AGREEMENT
for the 45,700 s.f. Premises located at 1800-1816 Buerkle Road, White Bear Lake, MN. Lessee shall provide Lessor with a check in the amount of $6,437.14 upon the execution of the lease as a portion of the security deposit for the
LEASE AGREEMENT
.
|
2)
|
Lessee agrees to pay Lessor its pro rata share of Real Estate Taxes and Common Area Maintenance charges on a monthly basis for the 45,700 s.f. Premises. The estimated Real Estate Taxes are currently $6333.26 per month for the Premises. The estimated Common Area Maintenance charges are currently $1,637.58 per month for the Premises.
|
3)
|
Lessee shall have an Option to Renew this
LEASE AGREEMENT
for a period of three (3) years. The base rent for the first year shall be $26,110.00 per month. The base rent for the second year shall be $26,632.00 per month. The base rent for the third year shall be $27,165.00 per month. Lessor must receive from Lessee written notice 150 days prior to the end of the lease in order to exercise this option.
|
4)
|
Lessee shall have a second Option to Renew this
LEASE AGREEMENT
for a period of three (3) years. The base rent for the first year shall be $27,708.00 per month. The base rent for the second year shall be $28,262.00 per month. The base rent for the third year shall be $28,827.00 per month. Lessor must receive from Lessee written notice 150 days prior to the end of the lease in order to exercise this option.
|
5)
|
Lessor agrees to construct the following improvements to the Premises at the Lessor's expense:
|
|
·
|
Construct one 10' x 10' opening between 1810 and 1812 spaces and install a steel double-door
|
Agreed,
|
||||||
LESSOR:
|
LESSEE:
|
|||||
Roberts Commercial Properties, LLC
|
LiqTech NA, Inc.
|
|||||
By:
|
By:
|
|||||
Date:
|
November 8, 2011 |
|
Date:
|
11/08/2011 |
As security
for the performance of any and all obligations concerning the debts described below which
|
|
Debtor
|
Liqtech A/S
|
Grusbakken 12
|
|
2820 Gentofte
|
|
Time
|
has or may later acquire with respect to
|
Creditor
|
Sydbank A/S
(hereinafter referred to as “the Bank”)
|
Guarantors
|
We agree to hold ourselves
primary liable as guarantors
:
|
Cometas A/S c/o Liqtech A/S, Industriparken 22 C, DK-2750 Ballerup
|
|
Liqtech NA 1804 Buerkle Road, White Bear lake, MN 55110
|
|
Notification
|
On behalf of all guarantors all notifications, including notifications in accordance with section 47 of the Danish Financial Business Act, must be sent to:
|
Cometas A/S c/o Liqtech A/S, Industriparken 22 C, DK-2750 Ballerup
|
|
Liqtech NA 1804 Buerkle Road, White Bear lake, MN 55110
|
|
Debts
|
Any outstanding balances with the Bank.
|
Recourse
|
The guarantors hereby acknowledge and accept that the Bank reserves the right to realise or release any other items of collateral and to write off the proceeds at the Bank’s discretion.
|
Consequently the guarantors will have no right of recourse against any other items of collateral.
|
|
Terms and conditions
|
In addition to the general terms and conditions overleaf, the Bank’s Terms and Conditions
will apply.
|
I/We the guarantors have received a copy of these presents and a copy of the debt agreement between the Bank and the debtor as well as a copy of the Bank’s Terms and Conditions.
|
Signature
|
As guarantor assuming primary liability:
|
||
|
|
||
Place and date
|
Cometas A/S
|
Signed in
|
Name:
|
Name:
|
|
the presence of
|
Address:
|
Address:
|
|
Postal code/Town:
|
Postal code/Town:
|
Signature
|
As guarantor assuming primary liability:
|
||
Place and date
|
Liqtech NA
|
Signed in
|
Name:
|
Name:
|
|
the presence of
|
Address:
|
Address:
|
|
Postal code/Town:
|
Postal code/Town:
|
|
1.
|
The guarantee serves as security for all debts owing to the Bank at any time in respect of the debts described herein.
|
|
2.
|
The Bank’s failure to file its claim against the estate of the debtor or a guarantor will not affect the Bank’s claim against the guarantors or the co-guarantors, respectively.
|
|
3.
|
The guarantor(s) will waive any reciprocal right of recourse against collateral provided by the guarantors to the Bank.
|
|
4.
|
Claims as regards guarantee provided under these presents may be asserted with respect to the obligations of the debtor(s) to the Bank, including any and all of the Bank’s branches and departments, domestic as well as foreign, and the Bank’s subsidiaries.
|
|
5.
|
The release of any guarantors will become effective only when they have received written notice thereof from the Bank. If payments made are invalidated at a later date, the obligations of the guarantor(s) will nevertheless remain effective irrespective of such notice having been given. However, if the guarantee has been provided outside a commercial relationship, the guarantee obligation will terminate on expiry of the guarantee agreement, unless the Bank has asserted a claim to the guarantor(s) before such time or the guarantee agreement has been extended.
|
|
6.
|
The Bank may grant the debtor a respite without the permission of the guarantor(s) and co-debtor(s). Respite may be granted with respect to instalments, interest and commission.
|
|
7.
|
If the debtor(s) and/or guarantor(s) are subjected to administration procedures, the Bank will be entitled to claim dividend until it has been fully covered, including dividend on claims which may accrue to the guarantor(s) through their right of recourse, irrespective of whether the recourse claim has come into effect before or after the commencement of such administration procedures.
|
Translation: Kautionserklæring |
Exhibit 10.14
|
Guarantee
|
Translation:
Kautionserklæring
|
Guarantee
|
Place and date
|
Liqtech NA
|
||
Signed in
|
Name:
|
Name:
|
|
the presence of
|
Address:
|
Address:
|
|
Postal code/Town:
|
Postal code/Town:
|
Translation:
Kautionserklæring
|
Guarantee
|
|
1.
|
The guarantee serves as security for all debts owing to the Bank at any time in respect of the debts described herein.
|
|
2.
|
The Bank’s failure to file its claim against the estate of the debtor or a guarantor will not affect the Bank’s claim against the guarantors or the co-guarantors, respectively.
|
|
3.
|
The guarantor(s) will waive any reciprocal right of recourse against collateral provided by the guarantors to the Bank.
|
|
4.
|
Claims as regards guarantee provided under these presents may be asserted with respect to the obligations of the debtor(s) to the Bank, including any and all of the Bank’s branches and departments, domestic as well as foreign, and the Bank’s subsidiaries.
|
|
5.
|
The release of any guarantors will become effective only when they have received written notice thereof from the Bank. If payments made are invalidated at a later date, the obligations of the guarantor(s) will nevertheless remain effective irrespective of such notice having been given. However, if the guarantee has been provided outside a commercial relationship, the guarantee obligation will terminate on expiry of the guarantee agreement, unless the Bank has asserted a claim to the guarantor(s) before such time or the guarantee agreement has been extended.
|
|
6.
|
The Bank may grant the debtor a respite without the permission of the guarantor(s) and co-debtor(s). Respite may be granted with respect to instalments, interest and commission.
|
|
7.
|
If the debtor(s) and/or guarantor(s) are subjected to administration procedures, the Bank will be entitled to claim dividend until it has been fully covered, including dividend on claims which may accrue to the guarantor(s) through their right of recourse, irrespective of whether the recourse claim has come into effect before or after the commencement of such administration procedures.
|
____________________________
|
_________________________________
|
|
Place and date
|
Cometas A/S
|
Signed in
|
Name:
|
Name:
|
the presence of
|
Address:
|
Address:
|
Postal code/Town:
|
Postal code/Town:
|
Signature
|
As guarantor assuming primary liability:
|
|
|
||
Place and date
|
Liqtech NA
|
||
Signed in
|
Name:
|
Name:
|
|
the presence of
|
Address:
|
Address:
|
|
Postal code/Town:
|
Postal code/Town:
|
|
1.
|
The guarantee serves as security for all debts owing to the Bank at any time in respect of the debts described herein.
|
|
2.
|
The Bank’s failure to file its claim against the estate of the debtor or a guarantor will not affect the Bank’s claim against the guarantors or the co-guarantors, respectively.
|
|
3.
|
The guarantor(s) will waive any reciprocal right of recourse against collateral provided by the guarantors to the Bank.
|
|
4.
|
Claims as regards guarantee provided under these presents may be asserted with respect to the obligations of the debtor(s) to the Bank, including any and all of the Bank’s branches and departments, domestic as well as foreign, and the Bank’s subsidiaries.
|
|
5.
|
The release of any guarantors will become effective only when they have received written notice thereof from the Bank. If payments made are invalidated at a later date, the obligations of the guarantor(s) will nevertheless remain effective irrespective of such notice having been given. However, if the guarantee has been provided outside a commercial relationship, the guarantee obligation will terminate on expiry of the guarantee agreement, unless the Bank has asserted a claim to the guarantor(s) before such time or the guarantee agreement has been extended.
|
|
6.
|
The Bank may grant the debtor a respite without the permission of the guarantor(s) and co-debtor(s). Respite may be granted with respect to instalments, interest and commission.
|
|
7.
|
If the debtor(s) and/or guarantor(s) are subjected to administration procedures, the Bank will be entitled to claim dividend until it has been fully covered, including dividend on claims which may accrue to the guarantor(s) through their right of recourse, irrespective of whether the recourse claim has come into effect before or after the commencement of such administration procedures.
|
DKK ____________
|
______________, 2011
|
LIQTECH USA, INC.
|
||
By:
|
Reviewer
|
|
Sydbank
|
|
Nytorv 11 A
|
|
4200 Slagelse
|
|
Telephone 74 37 94 00
|
Debtor:
|
The undersigned
|
CVR.nr.
|
21503649
|
Name:
|
Liqtech A/S
|
Adr.:
|
Grusbakken 12, 2820 Gentofte
|
Vendor:
|
DK – 12626509
|
Sydbank
|
|
Nytorv 11 A
|
|
4200 Slagelse
|
|
Phone 74 37 94 00
|
Amount
|
DKK 1.500.000,00
|
Writes
|
DKK onemillionfivehundred 00/100
|
Date:
|
||
debtor's signature
|
Liqtech A/S
|
Reviewer
|
|
Sydbank
|
|
Storegade 18
|
|
6200 Aabenraa
|
|
Telephone 74 37 30 00
|
Debtor:
|
The undersigned
|
CVR.nr.
|
25121031
|
Name:
|
Cometas A/S
|
Adr.:
|
Lerhøj 10, 2880 Bagsværd
|
Vendor:
|
DK – 12626509
|
Sydbank
|
|
Storegade 18
|
|
6200 Aabenraa
|
|
Phone 74 27 30 00
|
Amount
|
DKK 3.000.000,00
|
Writes
|
DKK three million 00/100
|
Date:
|
||
debtor's signature
|
Cometas A/S
|
Date: March 29, 2012
|
By:
|
/s/ Lasse Andreassen | |
Name: | Lasse Andreassen | ||
Title: | Chief Executive Officer, Principal Executive Officer and | ||
Director |
Date: March 29, 2012
|
By:
|
/s/ Soren Degn | |
Name: | Soren Degn | ||
Title: | Chief Financial Officer and Principal Financial and | ||
Accounting Officer |
Date: March 29, 2012
|
By:
|
/s/ Lasse Andreassen | |
Name: | Lasse Andreassen | ||
Title: | Chief Executive Officer, Principal Executive | ||
Officer and Director |
Date: March 29, 2012
|
By:
|
/s/ Soren Degn | |
Name: | Soren Degn | ||
Title: | Chief Financial Officer and Principal Financial | ||
and Accounting Officer |