LIQTECH INTERNATIONAL INC (Form: 8-K, Received: 08/01/2014 16:53:30)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2014

LiqTech International, Inc.

(Exact name of registrant as specified in charter)

Nevada

000-53769

20-1431677

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

Industriparken 22C, 2750 Ballerup,

Denmark

(Address of principal executive offices)

(Zip Code)

+4544986000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On the July 28, 2014, LiqTech International, Inc., a Nevada corporation (the “ Company ”), through its subsidiary, LiqTech International A/S, a Danish company (“ Sub ”), completed the acquisition of all of the issued and outstanding capital stock (the “ Target Shares ”) of Provital Solutions A/S, a Danish company (“ Provital ”) from Masu A/S, a Danish company (the “ Seller ”). In consideration for the Target Shares, the Seller received cash consideration in the sum of DKK12,600,000, that is, approximately USD$2,300,000, and 4,044,782 shares of the Company’s common stock (the “ Payment Shares ”). One-third (1/3) of the Payment Shares shall be subject to a lock-up period of six (6) months. The remaining two-thirds (2/3) of the Payment Shares shall be held in escrow and one-third of the Payment Shares will be released from escrow contingent upon Provital, for the year ending December 31, 2014, achieving (i) gross revenues of not less than DKK65,000,000 and EBITDA of DKK6,500,000, or (ii) EBITDA of not less than DKK10,000,000 and gross revenues of not less than DKK50,000,000. Another one-third (1/3) of the Payment Shares will be released from escrow contingent upon Provital, for the year ending December 31, 2015, achieving (i) gross revenues of not less than DKK120,000,000 and EBITDA of DKK12,000,000, or (ii) EBITDA of not less than DKK16,000,000 and gross revenues of not less than DKK80,000,000.

The purchase agreement includes “catch up” provisions that provide that the Payment Shares placed in escrow will be released from escrow if Provital (1) for the years ending December 31, 2014 and December 31, 2015, achieves accumulated gross revenues (i) exceeding DKK185,000,000 and EBITDA of DKK18,500,000, or (ii) EBITDA of not less than DKK26,000,000 and gross revenues of not less than DKK130,000,000 or (2) for the year ending December 31, 2016, achieves gross revenues exceeding DKK105,000,000 and EBITDA of not less than DKK21,000,000.

T he foregoing description of the purchase agreement and acquisition does not purport to be complete and is qualified in its entirety by reference to such document, which is incorporated by reference as Exhibit 10.1.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

Effective July 29, 2014, the board of directors (the “ Board ”) of the Company, accepted the amicable resignation of Finn Helmer from his position as Chief Executive Officer of the Company.

The Board appointed Sune Mathiesen to serve as Chief Executive Officer and as a member of the Board commencing on July 30, 2014 until his successor is duly elected, qualified and seated or until his earlier resignation or removal.

On July 29, 2014, LiqTech International A/S and Mr. Mathiesen entered into an Employment Agreement pursuant to which Mr. Mathiesen shall also serve as Director and Chief Executive Officer of the Company. In consideration for Mr. Mathiesen’s services to the Company, Mr. Mathiesen shall receive an annual base salary initially set at DKK 1,500,000. Mr. Mathiesen’s Employment Agreement also provides that he shall receive a yearly bonus of five percent (5%) of the average gross profit for LiqTech International A/S and Provital Solutions A/S for any sales (revenue) greater than or equal to DKK130,000,000 per year. The calculation in connection with the bonus is described in the Employment Agreement. In addition, Mr. Mathiesen shall be entitled to five weeks’ vacation, a Company mobile phone, broadband connection in his residence, a Company laptop and reimbursement of Company-related travel expenses. The Company may terminate Mr. Mathiesen’s employment upon not less than 12 months’ notice and Mr. Mathiesen may terminate with 12 months’ notice to the end of the month. The contract is irredeemable from both parties until December 31, 2016.

Mr. Mathiesen has served as CEO and as a Director of Masu A/S, a Danish company since February, 2013. He has served as CEO and Director of the Board of Provital Solutions A/S since March, 2012. Before that he served as Country Manager of Broen Lab Group since August, 2010 and before that as Country Manager of GPA Flowsystem since February, 2000. Mr. Mathiesen has a solid background in executive management, sales and turn-arounds. Mr. Mathiesen has been working hands-on with technical products within the valves and fittings industry for the past 16 years. He has a degree in commercial science from Via College in Randers.

ITEM 7.01 REGULATION FD

On July 29,2014, the Company conducted a conference call utilizing the presentation attached hereto as Exhibit 99.4 which discussed the recent public stock ofering and the acquisition of Provital.

ITEM 8.01 OTHER EVENTS

On July 29, 2014, the Company issued a press release announcing the appointment of Sune Mathiesen, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 .

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements of Business Acquired.

The Provital Solutions A/S audited financial statements for the years ended December 31, 2013 and 2012 are are incorporated by reference into this Form 8-K as Exhibit 99.2 .

The consent of BDO Statsautoriseret revisionsaktieselskab, Provital Solution A/S's independent auditors, is incorporated by reference as Exhibit 23.1 to this Form 8-K.

(b)	Pro Forma Financial Information.

The following unaudited proforma condensed combined financial information related to the acquisition by Sub of

Provital Solutions A/S are incorporated by reference into this Form 8-K as Exhibit 99.3 :

(i)

Unaudited pro forma condensed combined Balance Sheet as of March 31, 2014;

(ii)

Unaudited pro forma condensed combined Statement of Operations as of March 31, 2014; and

(iii)

Notes to Unaudited pro forma condensed combined financial statements.

(c)	Not applicable.

(d)

Exhibits:

EXHIBIT	DESCRIPTION	LOCATION
Exhibit 10.1	Securities Purchase Agreement, dated July 15, 2014 by and among LiqTech International A/S, a Danish company, Provital Solutions A/S, a Danish company and Masu A/S, a Danish company	Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the SEC on July 16, 2014

Exhibit 10.2	Employment Contract (Sune Mathiesen)	Provided herewith

Exhibit 23.1	Consent of BDO Statsautoriseret revisionsaktieselskab	Incorporated by reference to Exhibit 23.1 to the Company's Current Report on Form 8-K as filed with the SEC on July 16, 2014

Exhibit 99.1	Press Release Regarding Appointment of Sune Mathiesen as Chief Executive officer and Member of the Board	Provided herewith

Exhibit 99.2	Provital Solutions A/S Financial Statements	Incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K as filed with the SEC on July 16, 2014

Exhibit 99.3	Unaudited Pro Forma Condensed Combined Financial Information	Incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K as filed with the SEC on July 16, 2014

Exhibit 99.4	Investor Presentation	Provided herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

		LIQTECH INTERNATIONAL, INC.
Date: August 1, 2014		/s/ Soren Degn
		Soren Degn
		Chief Financial Officer

Exhibit 10.2

DIRECTOR CONTRACT

Between the undersigned

Sune Mathiesen

Søren Møllers Gade 4A

8900 Randers

CPR no.: 300974-2769

(Hereinafter called the Director)

and

LiqTech International A / S

lndustriparken 22C

2750 Ballerup

CVR no.: 2512 1031

(Hereinafter called the Company)

has today signed the following Executive Contract:

1.	RECRUITMENT

1.1

The Director/CEO will start his employment in the company at July 29, 2014 and the directors employment contract with Provital will end at the same time without any liabilities for either Provital or the Company.

2.	EMPLOYMENT AND RESPONSIBILITIES

2.1

The Director is under subject to statutory rules and the liability to the Board liability to perform the Company’s total business. The Director has the daily management of the Company and references in relating hereto to the Chairman of LiqTech International Inc. Place of employment are Hobro.

2.2

The Director shall appoint and dismiss the Company’s staff and provides staff with working areas and provide them with working authority.

2.3

The Director is reported as a director to the Danish Commerce and Companies Agency.

2.4

The Director will also serve as a director for the company LiqTech International Inc.

3.	SALARY, BONUS, PENSION AND WAGES REGULATORY

3.1

The Director’s annual salary is by accession DKK 1,500,000 per year, paid monthly on the last business day of the month with 1/12.

3.2

The Director shall receive a yearly bonus of 5% of the average gross profit for the Company and Provital Solution for any sales (revenue) > 130,000,000 DKK pr. year. The gross margin is fixed at 40% without depreciations. The calculation will be as follow: If the revenue for the Company and Provital Solution should be DKK 200,000,000 in a year and the gross profit DKK 80,000,000 (40%) the bonus would be the following: 80.000.000 less 130.000.000 * 0,4 = 52.000.000 DKK = 28.000.000 * 0,05 = DKK 1.400.000 DKK. For the first period from July 1, 2014 to 31 December, 2014 a bonus of DKK 700,000 will be paid if Provital Solution will generate a revenue of DKK 32,500,000 for the period with a gross margin of not less than 40%.

3.3

The Company shall pay 10% of monthly salary, see § 3.1 as pension for director.

3.4

Director’s fees negotiated each year in August, beginning in August 2015.

4.	OTHER BENEFITS

4.1

The Company provides a broadband connection available in the Director’s residence and pays at the same time all installation and operating costs for this.

4.2

The Company provides a mobile telephone available to the Director and pay phone charges connected thereto.

4.3

The Company provides a laptop available to the Director.

4.4

The tax consequences for the Director of the private disposal facilities listed above are treated by the Company according to applicable law.

5.	TRAVEL AND ENTERTAINMENT

5.1

Director’s travel expenses for travel and representation in the Company’s interest will be refunded by the Company after the bill or according to agreement. Travel in own car will be reimbursed according to current rules.

6.	CONTINUING EDUCATION

6.1

The Director is entitled to one, compared to its position, proper training, paid by the Company. The director is planning its own continuing education and shall notify the chairman thereof.

7.	HOLIDAY

7.1

Holidays are earned and held in accordance with the rules of the Holidays Act equivalent to 5 weeks annually. The special holiday allowance under the Holidays Act is paid by 1.5% and includes with the same percentage in the calculation of holiday pay on resignation

7.2

The Director will plan the holiday himself but is obligated to take the Company’s best interests into account. The director must notify the chairman of the planned holiday.

7.3

Upon resignation is the Director obligated to a 12.5% holiday allowance. The holiday allowance is paid in cash upon resignation along with the last salary payment.

8.	TERMINATION

8.1

This current CEO contract may be terminated by the Company with 12 months’ notice and by the director with 12 months’ notice to the end of a month. This contract is irredeemable from both parties until December 31, 2016.

8.2

If the Director within a period of 12 consecutive months has collected salary for a total of 120 days while the Director has been sick (including Sundays and holidays) this contract may be terminated within 1 month notice. Notice shall be given immediately on the expiry of the 120 sick days, and while the Director still is reported sick.

8.3

On resignation the Director is required to return all materials, including copies as well as effects belonging to the Company, and is in possession of the Director. This also applies to credit cards, keys, etc. The Director cannot exercise the lien in any of this material.

8.4

Termination is otherwise subject to the Employers’ and Salaried Employees’ Act.

9.	CONFIDENTIALITY

9.1

The Director has duty of confidentiality regarding everything that he discover in connection with his employment as Director, unless they are facts that within the nature of things must be brought forward to a third party. This duty of confidentiality is also valid after the Directors resignation.

9.2

Where the Director resigns his position- regardless the reason whatsoever any substances belonging to the Company, which is in the Directors possession, shall be returned immediately.

10.

COPIES OF CONTRACT, VENUE ETC

10.1

Any dispute between the Company and the Director on the occasion of this contract of employment must, if agreement between the parties cannot be reach by negotiations, be decided by the ordinary courts in Denmark.

10.2

This contract is drawn up into 2 equal sounding signed copies, one of which remains with the Company, while the other handed to the Director.

Signature

Copenhagen, July 29, 2014		Copenhagen, July 29, 2014


/s/ Sune Mathiesen		/s/ Soren Degn
Sune Mathiesen		LiqTech International A/S

Exhibit 99.1

CONTACT:	FOR IMMEDIATE RELEASE

Wolfe Axelrod Weinberger Associates LLC Stephen D. Axelrod, CFA/Donald C. Weinberger steve@wolfeaxelrod.com , don@wolfeaxelrod.com (212) 370-4500, (212) 370-4505 fax

LiqTech International, Inc. Announces the Appointment of
Sune Mathiesen as Chief Executive Officer and Director of LiqTech

BALLERUP, Denmark, July 29, 2014-- LiqTech International, Inc. (NYSE MKT:LIQT) (“LiqTech”) announces that effective today, Mr. Finn Helmer will be stepping down as Chief Executive Officer of LiqTech. The Board is pleased to announce that Mr. Sune Mathiesen, currently Chief Executive Officer of Provital Solutions A/S (“Provital”), has been appointed Chief Executive Officer and a Director of LiqTech. Mr. Mathiesen will assume these positions on July 30, 2014.

Mr. Mathiesen comes to the Company through LigTech’s recent acquisition of Provital; his long experience in executive management, technical sales and turnarounds will greatly benefit LiqTech. The Board seeks to shift the emphasis of the Company towards strategically marketing its products and filtration solutions in order to accelerate revenue growth of the combined LiqTech/Provital business.

Mr. Mathiesen acquired the Provital business several years ago, taking it from the product development stage to a profitable and fast growing business. Sune’s leadership helped Provital develop and successfully market a unique range of small footprint, cost-effective filtration solutions to the swimming pool and large water park markets. Prior to Provital, Mr. Mathiesen worked as a country manager for Broen A/S, a Danish industrial flow control business.

Aldo Petersen, Chairman of LiqTech, noted, “The Board wishes to extend its appreciation to Finn for the important contributions he made to the Company during his tenure, particularly the notable improvements in our production processes. Under his leadership, the Company made great strides in developing the highest quality silicon carbide membranes and driving the development of a 4-nanometer silicon carbide membrane that could result in direct desalination. The Board and I wish Finn continued future success as he takes his considerable talents to the next opportunity.”

Commenting further, Mr. Petersen stated, “The Board welcomes Sune and his employees to the LiqTech family and we are confident that this acquisition will provide important applications technology and marketing leadership to the Company. LiqTech must now shift its focus to improving our sales and marketing success; areas where Sune has demonstrated considerable ability. We intend to expand the combined LiqTech/Provital sales force to meaningfully improve our ability to close more sales opportunities.”

Remarking on the acquisition of Provital and becoming Chief Executive Officer of LiqTech, Mr. Mathiesen stated, “I am very excited to accept this challenge of leading the growth of the combined LiqTech/Provital business. I am very familiar with LiqTech and its products, as my company, Provital Solutions A/S, has worked with LiqTech for the past five years and has used its silicon carbide membranes as the core technology in our integrated filtration systems. We know first-hand the intrinsic value of its disruptive silicon carbide membrane technology, particularly its potential in solving many water-related problems.”

In commenting further, Mr. Mathiesen noted, “My confidence in achieving the benefits of combining LiqTech and Provital, and the belief that we are on the cusp of significant growth were major reasons why I asked for no cash compensation in the sale of Provital but agreed instead to exchanging my shareholding in Provital for shares in LiqTech. Further, I willingly accepted aggressive future sales and EBITDA targets for Provital in order to achieve full value for the sale of Provital.”

ABOUT LIQTECH INTERNATIONAL, INC.

LiqTech International, Inc., a Nevada corporation, is a clean technology company that for more than a decade has developed and provided state-of-the-art technologies for gas and liquid purification using ceramic silicon carbide filters, particularly highly specialized filters for the control of soot exhaust particles from diesel engines and for liquid filtration. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LigTech’s products are based on unique silicon carbide membranes which facilitate new applications and improve existing technologies. For more information, please visit www.liqtech.com.

Follow LiqTech on LinkedIn: http://www.linkedin.com/company/liqtech-international

Follow LiqTech on Twitter: https://twitter.com/LigTech

ABOUT PRO VITAL SOLUTIONS A/S

Provital Solutions A/S is a Danish company headquartered in Hobro, Denmark. Provital has developed the “Provital Filtration System,” a new standard of water filtration technology to meet the increasing demand for higher water quality. The employees of Provital are highly experienced within the field of water filtration. Provital’s filtration systems are designed for local public swimming pools or large water parks and achieve a higher standard for water treatment technology by incorporating advanced LiqTech silicon carbide liquid filtration membranes that offer significantly higher flux as compared to other filter types. The Provital System focuses on the reduction of water use in back washing and reduced energy consumption, chlorine use, and maintenance expense. For more information, please visit www.provital.dk/

Forward-Looking Statements: This press release contains “forward-looking statements.” Although the forward-looking statements in this release reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in the our reports filed with the Securities and Exchange Commission, including the risk factors that attempt to advise interested parties of the risks that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release.

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Exhibit 99.4