Liqtech International (LIQT) risk factors, FY2024 10-K

RISKS RELATED TO OUR BUSINESS AND OPERATIONS

1. 01The adverse effect to our business operations from armed conflicts (such as Ukraine/Russia and Hamas/Israel) or similar political, social, regulatory, or economic tension may challenge our operational flexibility and financial performance
2. 02Global trade restrictions and geopolitical tensions could adversely impact our business and supply chain
3. 03Prolonged period of energy market volatility and supply disruptions could negatively impact our business
4. 04Health crises, pandemics, and other public health emergencies could adversely affect our business, financial condition, and results of operations
5. 05If we fail to restore financial stability through improved profitability and access to adequate liquidity, our business options and financial condition would be impacted
6. 06The potential interruption or failure to obtain raw materials and components at affordable prices caused by continued global and regional supply chain constraints could negatively affect our ability to supply products to our customers and negatively affect our profit and delay revenue
7. 07If we are unable to manage our expected growth, our business may be materially and adversely affected
8. 08Our success will depend, to a large degree, on the expertise and experience of the members of our management team, the loss of whom could have a material adverse effect on our business
9. 09Adverse conditions, regulatory challenges, or lack of funding for emission control programs, may delay or negatively affect our future growth and market potential within the transportation and marine industries
10. 10We face changes in governmental standards by which our products are evaluated, and if we cannot meet any such changes, some of our products could become obsolete, which could have a material adverse effect on our business
11. 11Our international operations are exposed to potential adverse tax consequence
12. 12Our business could face adverse impacts due to increased interest rates, tightening debt capital markets, and market volatility
13. 13Foreign currency fluctuations could adversely impact financial performance
14. 14Our inability to protect our intellectual property rights could negatively affect our business and results of operations
15. 15Our contracts with third parties could negatively affect our intellectual property rights
16. 16We could become subject to intellectual property litigation that could be costly, limit or cancel our intellectual property rights, divert time and efforts away from business operations, require us to pay damages, and/or otherwise have an adverse material impact on our business
17. 17We face competition and technological advances by competitors, which could adversely affect the sales of our products
18. 18Any liability for environmental harm or damages resulting from technical faults or failures of our products could be substantial and could materially adversely affect our business and results of operations
19. 19We could become liable for damages resulting from our manufacturing activities, which could have a material adverse effect on our business or cause us to cease operations
20. 20Our actual or perceived failure to adequately protect personal data could adversely affect our business, financial condition, and results of operations
21. 21Some of our officers and directors are located outside of the United States; therefore, it may be difficult for an investor to enforce within the United States any judgments obtained against us or such officers and directors
22. 22We have signed partnership, distribution, and joint venture agreements and may engage in additional collaborations, joint ventures, or strategic alliances in the future, and we may not realize the benefits of such arrangements
23. 23If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results, and current and potential stockholders may lose confidence in our financial reporting
24. 24In Item 9A, we disclose that, with respect to the standards of Sarbanes-Oxley Section 404 and the internal controls standard to which we are subjected, we reported material weaknesses in our internal controls over financial reporting. For additional information on this item, please see Item 9A, Controls and Procedures
25. 25We may have risks associated with security of our information technology systems

RISKS RELATED TO OUR COMMON STOCK

1. 26Future equity financings or convertible debt issuances would dilute your ownership and could adversely affect your common stock ownership rights in comparison with those of other security holders
2. 27We will not receive a significant amount, or potentially any, additional funds upon the exercise of our pre-funded warrants; however, any exercise would increase the number of shares eligible for future resale in the public market and result in substantial dilution to our stockholders
3. 28Provisions in our articles of incorporation and bylaws could discourage a change in control or an acquisition of us by a third party, even if the acquisition would be favorable to you, thereby adversely affecting existing stockholders
4. 29Since April 16, 2019, our common stock has been traded on Nasdaq Capital Market under the ticker LIQT. Because there is limited volume in our common stock, investors may not be able to liquidate their investments when they desire to do so
5. 30The market price of our common stock has been and may continue to be volatile
6. 31the effect of macroeconomic uncertainty, global supply chain disruptions, or public health crises
7. 32If securities analysts do not publish research or reports about our business or if they downgrade us or our sector, the price of our common stock could decline
8. 33Future sales of our common stock, or the perception that future sales may occur, may cause the market price of our common stock to decline
9. 34The Company is considered a “smaller reporting company” and is exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors
10. 35We have no current plan to pay dividends on our common stock, and investors may lose the entire amount of their investment
11. 36We will continue to incur significant costs from operating as a public company, and our management may be required to devote substantial time to compliance initiatives that ultimately could have a material adverse effect on our financial condition and results of operations
12. 37Changes in U.S. Generally Accepted Accounting Principles (“GAAP”) could adversely affect our financial results and may require significant changes to our internal accounting systems and processes
13. 38In preparing our financial statements, we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results