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Note 6 - Agreements and Commitments | 6 Months Ended
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Jun. 30, 2021
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE 6 - AGREEMENTS AND COMMITMENTS Agreements -- LiqTech Water Projects has entered into a joint venture agreement to supply and operate water treatment systems for oil and gas producers in the Middle East. The partner in the joint venture is a local company. LiqTech Water Projects expects to deliver technological know-how, design of water treatment systems and components to support potential projects in the Middle East. The joint venture will be established in the form of a jointly owned limited liability company, incorporated under the laws in the local country, and LiqTech Water Projects holds 49% of the shares. All profits of the company are to be allocated proportionally to the ownership share and none of the parties are liable for the company’s liabilities towards third parties. 401(K) Profit Sharing Plan -- LiqTech NA has a 401(k) profit sharing plan and trust covering certain eligible employees. The amount LiqTech NA contributes is discretionary. For the three-month periods ended June 30, 2021 and 2020, matching contributions expensed totaled $0 and $3,949 respectively. For the six months ended June 30, 2021 and 2020, matching contributions were expensed and totaled $718 and $6,984, respectively. Contingencies -- From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. On November 20, 2018, a former supplier to LiqTech Ceramics contacted the Company with a claim of DKK 448,500 ($68,800) alleging that an agreement from 2016 had not been respected. The Company contested the claim but in December 2020 the court ruled in favor of the supplier and LiqTech was ordered to pay an amount totaling DKK 587,000 ($96,900) which included interest and court fees that were expensed in 2020. The amount was paid in January 2021. On February 27, 2019, LiqTech Water was contacted by a former supplier alleging that the Company owed DKK 543,905 ($89,800) for services rendered in 2017. The claimant has previously filed a lawsuit to claim payment for the services, which was denied by the Company due to severe errors in the services rendered, and the claim was rejected by a court of law in 2018. Due to the nature of the claim and the previous ruling from the court of law, no provision has been made as of June 30, 2021. Product Warranties - The Company provides a standard warranty for its systems, generally for a period of one to three years after customer acceptance. The Company estimates the costs that may be incurred under its standard warranty programs and records a liability for such costs at the time product revenue is recognized. In addition, the Company sells an extended warranty for certain systems, which generally provides a warranty for up to four years from the date of commissioning. The specific terms and conditions of the warranties vary depending upon the product sold and the country in which the Company does business. Revenue received for the sale of extended warranty contracts is deferred and recognized in the same manner as the costs incurred to perform under the warranty contracts. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Factors that affect the warranty liability include the number of units sold, historical and anticipated rates of warranty claims and the cost per claim. Changes in the Company's current and long-term warranty obligations included in accrued expenses on the balance sheet, as of June 30, 2021 and December 31, 2020, were as follows:
|  | June 30, 2021 |  |  | December 31, 2020 |
Balance at January 1 |  | $ | 1,056,613 |  |  | $ | 813,288 |
Warranty costs charged to cost of goods sold |  |  | 51,552 |  |  |  | 348,241 |
Utilization charges against reserve |  |  | (102,455 | ) |  |  | (199,624 | )
Release of accrual related to expired warranties |  |  | - |  |  |  | - |
Foreign currency effect |  |  | (33,015 | ) |  |  | 94,708 |
Balance at the end of the period |  | $ | 972,695 |  |  | $ | 1,056,613 |

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