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LiqTech International, Inc. Reports 2013 First Quarter Financial and Operational Results

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BALLERUP, DENMARK -- (Marketwired) -- 05/14/13 -- LiqTech International, Inc. (OTCQX: LIQT) a clean technology company that manufactures and markets highly specialized filtration technologies, announced today its financial and operational results for first quarter 2013.

Financial highlights for the three months ended March 31, 2013

•Net sales for the three month period ended March 31, 2013 were $3,399,148 compared to $6,341,721 for the same period in 2012, representing a decrease of $2,942,573, or 46.4%. •Diesel Particulate Filters ("DPF filters") sales decreased $3,405,261 or 63.8%, Liquid filters sales increased $301,026 or 33.4% and Kiln furniture sales increased $161,662 or 158.1% compared to the same period in 2012. •Gross profit for the three month period ended March 31, 2013 was $562,023 compared to $2,089,684 for the same period in 2012 representing a decrease of $1,527,661 or 73.1%. •The net loss for the three month period ended March 31, 2013 was $669,811 compared to net income of $322,601 for the same period in 2012, representing a decrease of $992,412. •Cash on hand for the three month period ended March 31, 2013 was $3,115,618 compared to $3,873,338 for the year ended December 31, 2012, representing a decrease of $757,720. •Working capital for the three month period ended March 31, 2013 was $7,437,217 compared to $8,069,595 for the year ended December 31, 2012, a decrease of $632,378.

2013 operational highlights to date

•Signed an exclusive agreement in China for soy bean protein recovery (bio tech) and soy bean waste water treatment to supply SiC membranes for Fan Run Si (Shanghai) Fluid Technology Co., Ltd. totaling over $6 million over three-years. •Announced an order of SiC membranes for public pool installations in the U.S. valued at $500,000, by Provital Solutions, based in Denmark. •Appointment of Mr. Finn Helmer as LiqTech's new Chief Executive Officer and comes to LiqTech with more than 40 years experience. •Entered into an agreement with a global leader in oilfield equipment and services, FMC Technologies, Inc., for the use of LiqTech's state-of-the-art disruptive silicon carbide membrane technology for oil/gas applications. •Launched a new state-of-the-art Silicon Carbide (SiC) Flat Sheet Membrane (FSM) disc for Membrane Bioreactors (MBR) and Moving Bed Bioreactors (MBBR) for wastewater treatment. •Appointment of Mr. Mark Vernon, Group Chief Executive Officer of Spirax-Sarco Engineering plc to our Board of Directors. •Announced the SiC membrane discs to the Company's product portfolio. •Announced that LiqTech SiC membranes are currently being used in the recovery of protein in a foodstuff application in China. •Announced that the Company's ultra-filtration Silicon Carbide (SiC) membrane product has been approved for liquid sterilization according to the recognized ASTM standard F838-05 for liquid filtration.

Management Commentary

In discussing the results, Mr. Finn Helmer, CEO, stated, "The first quarter financial results continued to reflect limited orders for our Diesel Particulate Filters ('DPF filters') as only a relatively small fraction of that amount were actually installed. Despite this lull that we've experienced in the DPF marketplace, we were able to control our costs and limit the cash burn in the quarter. As expressed by the company in the past, we continue to focus our energies on our disruptive Silicon Carbide membrane technology for liquids which represents a vast market opportunity to LiqTech, much larger and more dependable than the DPF market."

"The Company continues to meet requests to sample and test our filtration devices and we expect to add more verticals and customers in the coming quarters. Specifically, the Company recently announced an order for our products for commercial pool applications in North America. We believe that this area could be highly lucrative not only in the commercial pool space, but for also water parks as well, which require water cleansing, but also contain high flux requirements.

"While some orders are filled quickly, many have had a lengthy testing period, but the end result is worth the time. The best example of this is the announcement of our exclusive agreement with FMC Technologies for the use of our Silicon Carbide membranes in unconventional shale oil/gas applications. The engagement with FMC entailed over a year of discussions and testing, but is just one example of the benefits of our patience and sales efforts.

"To conclude, the first quarter results are, of course, disappointing, but I believe they are not reflective of the opportunities that we have in front of us. We continue to receive more inquiries and have consistently been adding more customers that have begun testing our membranes. Over the past couple of years more than 150 customers have tested our products, but we now see a growing number of second and third time buyers and this is a good indicator for growth and market acceptance. We are extremely excited about the revenue opportunities that abound and expect the revenue potential from membrane sales to ramp up rapidly going forward. I am glad to be on board with LiqTech and highly optimistic that we'll be able to monetize many of these testing opportunities into larger, multi-year contracts in the coming quarters."

Conference Call Details

Interested parties may participate in the call by dialing (888) 674-0217 or (201) 604-0485. It is recommended to dial in approximately 10 to 15 minutes prior to the scheduled start time. The conference call will also be available on replay starting at 3 p.m. ET on May 14, 2013 and ending on May 28, 2013. To access the replay, please dial 888-632-8973 and enter the replay code 92292#. The access number for the replay for international callers is 585-295-6791 (replay code 92292#).

- Financial charts follow -


LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of As of March 31, December 31, -------------- -------------- 2013 2012 -------------- --------------Current Assets: UNAUDITED Cash $ 3,115,618 $ 3,873,338 Accounts receivable, net 2,782,493 2,855,184 Other receivables 286,566 371,001 Cost in excess of billing 217,842 217,586 Inventories 4,249,632 4,111,815 Prepaid expenses 72,955 130,560 Current deferred tax asset 267,332 267,332 -------------- -------------- Total Current Assets 10,992,438 11,826,816 -------------- --------------Property and Equipment, net accumulated depreciation 6,298,222 6,649,817 -------------- --------------Other Assets: Long term receivable - 118,258 Other investments 162,389 158,141 Long term tax asset 362,505 75,947 Other intangible assets 26,919 29,150 Deposits 177,087 182,020 -------------- -------------- Total Other Assets 728,900 563,516 -------------- -------------- Total Assets $ 18,019,560 $ 19,040,149 ============== ============== LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of As of March 31, December 31, -------------- -------------- 2013 2012 -------------- --------------Current Liabilities: UNAUDITED Current portion of capital lease obligations $ 200,241 $ 203,503 Accounts payable 2,295,537 2,289,231 Accrued expenses 590,948 760,881 Billing in excess of cost 236,923 237,063 Accrued income taxes payable 1,000 1,000 Deferred revenue 230,572 265,543 -------------- -------------- Total Current Liabilities 3,555,221 3,757,221 -------------- -------------- Long-term capital lease obligations, less current portion 656,141 729,567 -------------- -------------- Total Long-Term Liabilities 656,141 729,567 -------------- -------------- Total Liabilities 4,211,362 4,486,788 -------------- --------------Stockholders' Equity: Common stock; par value $0,001, 100,000,000 shares authorized, 24,111,500 and 24,111,500 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively 24,112 24,112 Additional paid-in capital 12,658,405 12,658,405 Retained earnings 1,840,881 2,510,693 Deferred compensation (94,108) (125,477) Other comprehensive loss, net (649,253) (542,806) Non-controlled interest in subsidiaries 28,161 28,434 -------------- -------------- Total Stockholders' Equity 13,808,198 14,553,361 -------------- -------------- Total Liabilities and Stockholders' Equity $ 18,019,560 $ 19,040,149 ============== ============== LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 2013 2012 ------------ ------------Net Sales $ 3,399,148 $ 6,341,721Cost of Goods Sold 2,837,125 4,252,037 ------------ ------------Gross Profit 562,023 2,089,684 ------------ ------------Operating Expenses: Selling expenses 573,925 659,918 General and administrative expenses 693,674 722,512 Research and development expenses 146,985 226,674 ------------ ------------ Total Operating Expenses 1,414,584 1,609,104 ------------ ------------Income (Loss) from Operations (852,561) 480,580 ------------ ------------Other Income (Expense) Interest and other income 156 38,963 Interest (expense) (11,705) (84,516) Gain (loss) on currency transactions (114,173) (1,449) ------------ ------------ Total Other Income (Expense) (125,722) (47,002) ------------ ------------Income Before Income Taxes (978,283) 433,578Income Tax Expense (Benefit) (296,864) 110,977Net Income (Loss) (681,419) 322,601Less Net Income (Loss) Attributable ToNon-Controlled Interests in Subsidiaries (11,608) - ------------ ------------Net Income (Loss) Attributable To LiqTech $ (669,811) $ 322,601 ------------ ------------Basic Earnings Per Share $ (0.03) $ 0.01 ------------ ------------Weighted Average Common Shares Outstanding 24,111,500 22,234,775 ------------ ------------Diluted Earnings Per Share $ (0.03) $ 0.01 ------------ ------------Weighted Average Common Shares OutstandingAssuming Dilution 24,111,500 27,415,788 ------------ ------------




The accompanying notes are an integral part of these financial statements.


LIQTECH INTERNATIONAL, INC. AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME For the Three Months Ended March 31, ------------------------ 2013 2012 ----------- -----------Net Income (Loss) (681,419) 322,601Currency Translation, Net of Taxes (106,447) 217,575 ----------- -----------Other Comprehensive Income (Loss) $ (787,866) $ 540,176Comprehensive Income (Loss) Attributable ToNon-controlling Interest in Subsidiaries (11,608) (244) ----------- -----------Comprehensive Income (Loss) AttributableTo LiqTech International Inc. $ (776,258) $ 540,420 ----------- -----------




ABOUT LIQTECH INTERNATIONAL, INC. - (OTCQX: LIQT)

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. It also manufactures kiln furniture. Using nanotechnology, LiqTech develops products using proprietary silicon carbide technology. LiqTech'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.

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.



CONTACT:

Wolfe Axelrod Weinberger Associates, LLC
Stephen D. Axelrod, CFA
(212) 370-4500
steve@wolfeaxelrod.com

Adam Lowensteiner
(212) 370-4505
adam@wolfeaxelrod.com