LiqTech International, Inc. Reports 2013 First Quarter

BALLERUP, DENMARK--(Marketwired - May 14, 2013) - 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 March 31,			As of 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 March 31,				As of 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			$	6,341,721
Cost 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	)			433,578
Income Tax Expense (Benefit)					(296,864	)			110,977
Net Income (Loss)					(681,419	)			322,601
Less Net Income (Loss) Attributable To
Non-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 Outstanding
Assuming 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	)			322,601
Currency Translation, Net of Taxes			(106,447	)			217,575
Other Comprehensive Income (Loss)		$	(787,866	)		$	540,176
Comprehensive Income (Loss) Attributable To
Non-controlling Interest in Subsidiaries			(11,608	)			(244	)
Comprehensive Income (Loss) Attributable
To 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.