Item 1.01 Unregistered Sales of Equity Securities.
On August 17, 2021, LiqTech International, Inc. (the "Company") entered into two
exchange agreements (each, an "Exchange Agreement"), with two of the Company's
shareholders (each, a "Shareholder", and collectively, the "Shareholders").
Under the terms of the Exchange Agreements, the Shareholders agreed to exchange
an aggregate of 500,000 shares of common stock of the Company, $0.001 par value
per share (the "Common Stock"), for prefunded warrants (each, a "Prefunded
Warrant"). The Prefunded Warrants will be exercisable at an exercise price of
$0.001 per share, subject to adjustments as provided under the terms of the
Prefunded Warrants. The Prefunded Warrants will be exercisable at any time on or
after the closing date. The Exchange Agreements contain additional terms typical
of exchange agreements including representations and warranties of the parties.
The terms and conditions of the Exchange Agreement for each Shareholder are
essentially the same, except for the number of shares of Common Stock exchanged
and the corresponding number of shares of Common Stock purchasable under each
The issuances of Prefunded Warrants under the Exchange Agreements were made in
reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended and Regulation D promulgated thereunder,
because, among other things, the transaction did not involve a public offering,
the Seller is an accredited investor, the Purchaser acquired the securities for
investment and not resale, and the Company took appropriate measures to restrict
the transfer of the securities.
The above description of the Exchange Agreements does not purport to be complete
and is qualified in its entirety by the form of Exchange Agreement, which is
incorporated herein and attached hereto as Exhibit 10.1.
In connection with the Exchange Agreement, as of the date of the Exchange
Agreement, the Company issued the Prefunded Warrants to the Shareholders. The
exercise price of each Prefunded Warrant is equal to $0.001 per share, and the
Prefunded Warrants are exercisable on or after August 17, 2021, subject to the
limitations on exercise and conditions set forth by the Prefunded Warrants. The
Prefunded Warrants are subject to customary adjustments in the event of stock
splits and dividends, fundamental transactions, and subsequent offerings of
rights to purchase stock.
The above description of the Prefunded Warrants does not purport to be complete
and is qualified in its entirety by the form of Prefunded Warrant, which is
incorporated herein and attached hereto as Exhibit 4.1.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained above under Item 1.01 is hereby incorporated by
reference in response to this Item 3.02 of Form 8-K.
Item 9.01. Financial Statements and Exhibits.
No. Exhibit Title or Description
4.1 Form of Pre-Funded Common Stock Purchase Warrant
10.1 Form of Exchange Agreement
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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