BALLERUP, Denmark - LiqTech International, Inc. (NASDAQ: NASDAQ:LIQT), a leader in advanced filtration technologies, has announced a private placement transaction with current institutional investors, securing $10 million in funding. The agreement involves the sale of common stock shares, pre-funded warrants, and additional warrants to purchase shares.
The private placement is structured in two tranches, with the initial tranche comprising 29,277 shares of common stock, 555,302 pre-funded warrants, and 584,529 warrants. This tranche is limited to a 19.99% cap of the company's shares outstanding before the transaction. The subsequent tranche, pending shareholder approval, will include 3,600,902 shares, 814,569 pre-funded warrants, and 4,415,471 warrants.
Each share of common stock and accompanying warrant is priced at $2.00, while each pre-funded warrant and accompanying warrant is priced at $1.999. The warrants have an exercise price of $2.00 per share and are valid for a term of five years.
LiqTech plans to allocate the proceeds to support commercial development in the U.S. oil & gas sector, expand commercial efforts in the European and U.S. swimming pool sector, and develop new initiatives targeting marine exhaust gas recirculation (EGR) water treatment. These areas are deemed vital for the company's growth strategy and profitability path.
Fei Chen, CEO of LiqTech, expressed gratitude towards the investors for their ongoing support and belief in the company's management and future prospects. Chen emphasized the company's commitment to capitalizing on LiqTech's filtration technology in growing end markets.
The announcement clarifies that this press release does not constitute an offer to sell or a solicitation of an offer to buy securities. The sale of securities is subject to registration or qualification under the securities laws of any relevant jurisdiction.
LiqTech International specializes in ceramic silicon carbide filtration technologies for gas and liquid purification. Its proprietary nanotechnology-based silicon carbide technology is used in a variety of filtration applications, including diesel exhaust soot emissions control.
This news is based on a press release statement from LiqTech International, Inc. and does not promote the company or its products.
In other recent news, LiqTech International, a clean technology company specializing in filtration technology, has seen a series of developments. Lake Street Capital Markets adjusted its price target for LiqTech, reducing it from $10.00 to $9.00. Despite this, they maintained a Buy rating on the stock, citing the company's potential for future earnings growth in key markets such as oil & gas produced water, marine, industrial, and pools.
LiqTech's Q2 earnings revealed a 10% decrease in revenue compared to the same period last year. However, the company anticipates growth in upcoming quarters, driven by increased activities in oil and gas, marine scrubber, and swimming pool markets. Q3 2024 revenue is expected to be between $4 million and $5 million, with significant growth projected for Q4.
The company also reported receiving a significant order for a pilot water treatment system in the US and establishing partnerships to expand its market presence. LiqTech is shifting its focus to the US market due to geopolitical instability in the Middle East and is actively building partnerships to become more competitive in the Korean ship market. Finally, the company is developing new channels and opportunities to expand its system aftermarket solutions. These are among the recent developments for LiqTech International.
InvestingPro Insights
LiqTech International's recent $10 million private placement comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of just $17.69 million, this funding represents a significant capital injection relative to the company's size.
The company's financial health presents a mixed picture. While LiqTech's liquid assets exceed its short-term obligations, indicating some financial stability, an InvestingPro Tip highlights that the company is quickly burning through cash. This context underscores the importance of the new funding for supporting the company's growth initiatives in the U.S. oil & gas sector and European and U.S. swimming pool markets.
Despite a strong return over the last three months, with a 29.09% price total return, LiqTech faces profitability challenges. An InvestingPro Tip notes that analysts do not anticipate the company will be profitable this year, aligning with the reported operating income margin of -45.91% for the last twelve months as of Q2 2023. This emphasizes the urgency of LiqTech's efforts to capitalize on its filtration technology in growing end markets, as outlined in the funding announcement.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for LiqTech International, providing deeper insights into the company's financial position and market performance.
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