Investment Thesis
LiqTech is a fundamentally distressed business with severe profitability challenges that are structural, not cyclical. Despite 13% revenue growth, the company burns cash operationally (-$1.9M), maintains a grossly inadequate 9.5% gross margin, and cannot cover interest expenses from operations. With only 2.7 years of cash runway at current burn rates and no clear path to profitability, the company faces acute financial strain.
Strengths
- Revenue growing 13% year-over-year showing continued demand
- Current ratio of 2.50x provides near-term liquidity cushion
- Moderate leverage with 0.52x debt-to-equity ratio
Risks
- Catastrophic profitability: -65.5% net margin and -55.1% operating margin indicate structural business model failure
- Negative operating cash flow of -$1.9M with limited cash runway given only $2.7M cash on hand
- Inability to service debt from operations with -56.3x interest coverage ratio
- Extremely low 9.5% gross margin suggests severe cost structure or pricing power problems
- Zero insider buying activity in 90 days indicates lack of management confidence
Key Metrics to Watch
- Operating cash flow trend and path to positive quarterly OCF
- Gross margin expansion initiatives and competitive positioning
- Cash balance and quarterly burn rate sustainability
- Debt refinancing capacity and covenant compliance
Financial Metrics
Revenue
4.1M
Net Income
-2.7M
EPS (Diluted)
$-0.11
Free Cash Flow
-2.2M
Total Assets
24.9M
Cash
2.7M
Profitability Ratios
Gross Margin
9.5%
Operating Margin
-55.1%
Net Margin
-65.5%
ROE
-35.5%
ROA
-10.9%
FCF Margin
-53.5%
Balance Sheet & Liquidity
Current Ratio
2.50x
Quick Ratio
1.35x
Debt/Equity
0.52x
Debt/Assets
69.7%
Interest Coverage
-56.34x
Long-term Debt
4.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-15T09:42:32.380760 |
Data as of: 2026-03-31 |
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