LiqTech International, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a substantial decline in revenue, with total revenue for the three months amounting to $2.5 million, a decrease of 51.1% from $5.1 million in the same period of 2023. For the nine months ended September 30, 2024, revenue was $11.2 million, down 20.4% from $14.1 million in the prior year. This decline was primarily attributed to reduced deliveries of ceramic membranes, diesel particulate filters (DPFs), and liquid filtration systems, alongside a drop in aftermarket sales.

The company's gross profit turned into a loss of $209,533 for Q3 2024, compared to a gross profit of $948,565 in Q3 2023. For the nine-month period, gross profit also fell to $778,780 from $2.5 million, reflecting a gross profit margin decrease from 17.8% to 7%. Operating losses increased, with a loss from operations of $2.6 million for Q3 2024, compared to $1.7 million in Q3 2023. The net loss for the quarter was $2.8 million, up from $1.4 million in the previous year, marking a 100.9% increase in losses.

Total assets decreased to $28.7 million as of September 30, 2024, down from $36.0 million at the end of 2023. Current assets also fell significantly, with cash and restricted cash dropping to $4.5 million from $10.4 million. The company reported an accumulated deficit of $83.3 million, which increased from $75.9 million at the end of 2023.

In terms of strategic developments, LiqTech entered into a securities purchase agreement on September 27, 2024, to issue common stock and warrants for gross proceeds of up to $10 million, with the first tranche yielding approximately $1.2 million and the second tranche closing on November 12, 2024, generating about $8.8 million. The company also reported a new lease agreement for office and warehouse space in Hobro, Denmark, which commenced in the current quarter.

Despite these efforts, the company faces ongoing market uncertainty and reduced order intake due to global macroeconomic conditions, raising concerns about its ability to continue as a going concern. The management has acknowledged material weaknesses in internal controls over financial reporting and is actively working to enhance these controls.