What changed in this filing

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Item 9A. Controls and Procedures

2023-03-14 compared with 2022-03-29 · 119 added, 348 removed, 994 unchanged (32% of the section changed)

13 unchanged sentences

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

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President, Director

Abdi Mahamedi

Vice Chairman of the Board

Vincent Carrubba

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Professor Li owns Liquidmetal Technology Limited, a Hong Kong company and the Investor in our 2016 Purchase Agreement.

Due to his decades of experience in our industry, as well as his academic credentials, we believe Professor Li is qualified to serve as one of our directors.

Tony Chung was appointed as the Company’s Chief Executive Officer on July 6, 2021 and has served as a Director since August 2017.

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Degree from PCU Law School.

We believe that Mr.

Chung’s business and financial experience, including within the technology industry and the Company specifically, qualifies him to serve as one of our directors.

Isaac Bresnick began serving as a Director in October 2016 and was appointed to the role of President on July 6, 2021.

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Bresnick worked as Senior Arrangements Designer for Electric Boat Corporation, a subsidiary of General Dynamics, from June 2008 to December 2012.

Abdi Mahamedi has served as a director since May 2009 and served as Chairman of the board of directors from March 2010 through October 2016 and is currently the Vice-Chairman.

Since 1987, Mr.

Mahamedi has served as the President and Chief Executive Officer of Carlyle Development Group of Companies (“CDG”), which develops and manages residential and commercial properties in the United States on behalf of investors worldwide.

In his role as President and Chief Executive Officer, Mr.

Mahamedi evaluates and supervises all of the investment activities and management personnel of CDG.

Prior to joining CDG, Mr.

Mahamedi founded Emanuel Land Company, a subsidiary of Emanuel & Company, a Wall Street investment banking firm, and served as a managing director for Emanuel Land Company from 1986 to 1987.

Mahamedi received his B.S.E.

degree in Civil and Structural Engineering from the University of Pennsylvania, and in 1984 he received his M.S.E.

degree in Civil and Structural Engineering from the University of Pennsylvania.

Due to his executive management experience, we believe Mr.

Bresnick is qualified to serve as one of our directors.

Vincent Carrubba began serving on our board of directors in October 2016.

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Carrubba received a Bachelor of Arts degree in Engineering Science and a Bachelor of Science Degree in Mechanical Engineering from Columbia University’s School of Engineering and Applied Science (SEAS) in 1982.

Section 16(a) Beneficial Ownership Reporting Compliance

We believe Mr.

Carrubba is qualified to serve as one of our directors because of his extensive experience in the technology industry, including his experience with major telecommunications companies.

Delinquent Section 16(a) Reports

Section 16(a) of Exchange Act requires the Company’s directors and officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC.

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Set forth below is information regarding compensation earned by or paid or awarded to the following executive officers of the Company during the year ended December 31, 2022:

(i) Professor Li, our Chairman and Former CEO / President (ii) Tony Chung, our Chief Executive Officer and Principal Financial Officer;

(iii) Isaac Bresnick, our President;

(iv) Bruce Bromage, our Former Chief Operating Officer, and (v) Bryce Van, our Former Vice President of Finance.

(i) Professor Li, our Chairman and Former CEO / President (ii) Tony Chung, our Chief Executive Officer and Principal Financial Officer, and (iii) Isaac Bresnick, our President.

These persons are hereafter referred to as our “named executive officers.”

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Name and Principal Position

Option Awards

Chairman, Former Chief Executive Officer, Former President

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President and Former Executive Administrator

Bruce Bromage,

Former Chief Operating Officer

Former Vice President- Finance

Options to purchase 7,500,000 shares of our common stock were awarded to Mr.

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Bresnick on December 15, 2021.

On August 30, 2021, the Company and Bruce Bromage, the Company’s Former Chief Operating Officer, entered into a Separation Agreement and General Release pursuant to which Dr.

Bromage agreed to resign as an officer and employee of the Company and the Company and Dr.

Bromage agreed to terminate Dr.

Bromage’s employment agreement with Dr.

Bromage’s employment which was previously set to end on September 30, 2021 (the “Bromage Separation Agreement”).

The Bromage Separation Agreement provided for the payment of severance compensation to Dr.

Bromage in the form of a lump sum equal to $316,285.00 (subject to tax withholdings).

In addition, it provided for the accelerated vesting of the remaining 2,430,000 unvested stock options held by Dr.

Bromage as of the termination date and the extension of the exercise period of his options until the earlier of the second anniversary of the termination date outlined in the Bromage Separation Agreement or the date on which such options would otherwise expire and terminate in accordance with its terms if Dr.

Bromage had not resigned.

This resulted in a total of 10,329,692 stock options being exercisable by Dr.

Bromage as of the termination date.

In connection with the Bromage Separation Agreement, Dr.

Bromage granted the Company general releases subject to customary exceptions.

On August 30, 2021, the Company and Bryce Van, the Company’s Vice President of Finance, entered into a Separation Agreement and General Release pursuant to which Mr.

Van agreed to resign as an officer and employee of the Company and the Company and Mr.

Van agreed to terminate Mr.

Van’s employment agreement with Mr.

Van’s employment which was previously set to end on October 15, 2021 (the “Van Separation Agreement”).

The Van Separation Agreement provided for the payment of severance compensation to Mr.

Van in the form of a lump sum equal to $252,889.69 (subject to tax withholdings).

In addition, it provided for the extension of the exercise period of his options until the earlier of the second anniversary of the termination date outlined in the Van Separation Agreement or the date on which such options would otherwise expire and terminate in accordance with its terms if Mr.

Van had not resigned.

This resulted in a total of 2,046,500 stock options being exercisable by Mr.

Van as of the termination date.

Under the Van Separation Agreement, Mr.

Van agreed to be available to provide assistance to the Company by telephone with no additional consideration for sixty days following the termination date.

In connection with the Van Separation Agreement, Mr.

Van granted the Company general releases subject to customary exceptions.

Outstanding Equity Awards at 2022 Fiscal Year-End

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The shares underlying these grants vest 33% following the first anniversary of the grant date of December 15, 2021, and on a monthly basis following such date for the remaining two years thereof.

The shares underlying these grants vest 2,500,000 following the first anniversary of the grant date of July 6, 2021, and 2,500,000 following the second anniversary of the grand date of July 6, 2021.

The shares underlying these grants are subject to a combination of market-price based and time-based lock-up provisions.

The shares underlying these grants vest 33% following the first anniversary of the grant date of December 15, 2021, and on a monthly basis following such date for the remaining two years thereof.

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The following table and summary set forth estimated potential payments the Company would be required to make to our named executive officers upon termination of employment or change in control of the Company, pursuant to each executive’s employment agreement or change of control agreement in effect at year end.  Except as otherwise indicated, the table assumes that the triggering event occurred on December 31, 2022.

Termination without Cause ($)

Termination Following Change of Control ($)

without Cause

Termination Following

Change of Control ($)

Equity Acceleration

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Incentive Plan

Abdi Mahamedi

Vincent Carrubba

Options to purchase 200,000 shares of our common stock were awarded to Mr.

Li on December 15, 2021 respectively.

Options to purchase 200,000 shares of our common stock were awarded to Mr.

Mahamedi on December 15, 2021 respectively.

Options to purchase 200,000 shares of our common stock were awarded to Mr.

Carrubba on December 15, 2021 respectively.

Our non-employee directors receive certain compensation for their services and are reimbursed for expenses incurred in attending board and committee meetings, as determined by the board of directors.

Currubba received a base fee of $30,000 during 2022.

Mahamedi and Mr.

Chung each received an annual base fee of $18,750 and $11,250 during 2021, respectively.

All fees are paid quarterly in arrears.

Mahamedi, and Mr.

Carrubba received option awards of $10,894 during 2021.

We have a 2012 Equity Incentive Plan and a 2015 Equity Incentive Plan pursuant to which our non-employee directors may receive stock options.

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The number and percentage of shares beneficially owned is determined under the rules of the SEC and is not necessarily indicative of beneficial ownership for any other purpose.

Under such rules, beneficial ownership for each individual includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire beneficial ownership of within 60 days of March 29, 2022 through the exercise of any stock option or other right.

Under such rules, beneficial ownership for each individual includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire beneficial ownership of within 60 days of December 31, 2022 through the exercise of any stock option or other right.

Unless otherwise indicated in the footnotes, each person has sole voting and investment power with respect to the shares shown as beneficially owned.

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Directors and Named Executive Officers

Abdi Mahamedi

      (2)

Vincent Carrubba

      (3)

      (4)

Isaac Bresnick

      (5)

All directors and executive officers as a group (4 persons)

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Liquidmetal Technology Limited

      (6)

Room 906, Tai Tung Building, 8 Fleming Rd

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Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise or conversion of all options, warrants and other securities convertible into common stock, beneficially owned by such person or entity currently exercisable or exercisable within 60 days of March 10, 2023.

Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days of March 29, 2022, or securities convertible into common stock within 60 days of March 29, 2022, are deemed outstanding and held by the holder of such shares of common stock, options, warrants, or other convertible securities, for purposes of computing the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.

The percentage of common stock beneficially owned is based on 917,285,149 shares of common stock outstanding as of March 29, 2022.

Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days of December 31, 2022, or securities convertible into common stock within 60 days of December 31, 2022, are deemed outstanding and held by the holder of such shares of common stock, options, warrants, or other convertible securities, for purposes of computing the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.

The percentage of common stock beneficially owned is based on 917,285,149 shares of common stock outstanding as of December 31, 2022.

405,000,000 shares of common stock held of record by Liquidmetal Technology Limited.

Professor Li is the majority owner, officer, and director of Liquidmetal Technology Limited and has the power to direct the voting and disposition of such shares;

10,066,809 shares issuable pursuant to a Warrant held by Liquidmetal Technology Limited which is exercisable currently or within 60 days of March 29, 2022.

10,066,809 shares issuable pursuant to a Warrant held by Liquidmetal Technology Limited which is exercisable currently or within 60 days of December 31, 2022.

Professor Li is the majority owner, officer, and director of Liquidmetal Technology Limited and has the power to direct the voting and disposition of such shares;

1,360,150 shares of common stock held of record by Professor Li;

700,000 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of March 29, 2022.

Does not include 200,000 shares that are issuable pursuant to outstanding stock options, held by Professor Li, that are not exercisable currently or within 60 days of March 29, 2022.

13,858,908 shares of common stock held of record by Carlyle Holdings, LLC.

Mr. Mahamedi has the power to direct the voting and disposition of such shares as the president and sole shareholder of Carlyle Development Group, Inc., which is a managing member of Carlyle Holdings, LLC;

759,428 shares of common stock held of record by Mr.

1,670,000 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of March 29, 2022.

Does not include 200,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of March 29, 2022.

766,667 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of December 31, 2022.

Does not include 133,333 shares that are issuable pursuant to outstanding stock options, held by Professor Li, that are not exercisable currently or within 60 days of December 31, 2022.

Includes 1,273,334 shares issuable pursuant to outstanding stock options, held of record by Mr.

Carrubba, which are exercisable currently or within 60 days of March 29, 2022.

Does not include 200,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of March 29, 2022.

Carrubba, which are exercisable currently or within 60 days of December 31, 2022.

Does not include 133,333 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of December 31, 2022.

85,250 shares of common stock held of record by Mr.

2,815,000 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of March 29, 2022.

Does not include 5,000,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of March 29, 2022.

5,315,000 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of December 31, 2022.

Does not include 2,500,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of December 31, 2022.

Includes 1,240,000 shares issuable pursuant to outstanding stock options, held of record by Mr.

Bresnick, which are exercisable currently or within 60 days of March 29, 2022.

Does not include 900,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of March 29, 2022.

 405,000,000 shares of common stock held of record by Liquidmetal Technology Limited;

 10,066,809 shares issuable pursuant to a Warrant held by Liquidmetal Technology Limited which is exercisable currently or within 60 days of March 29, 2022.

Bresnick, which are exercisable currently or within 60 days of December 31, 2022.

Does not include 600,000 shares that are issuable pursuant to outstanding stock options that are not exercisable currently or within 60 days of December 31, 2022.

405,000,000 shares of common stock held of record by Liquidmetal Technology Limited;

10,066,809 shares issuable pursuant to a Warrant held by Liquidmetal Technology Limited which is exercisable currently or within 60 days of December 31, 2022.

Equity Compensation Plan Information

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In addition, it permits the granting of stock appreciation rights, or SARs, with or independently of options, as well as stock bonuses and rights to purchase restricted stock.

A total of 30 million shares of our common stock may be granted under the 2012 Plan, and all options granted under this plan had exercise prices that were equal to the fair market value on the date of grant.

A total of 30 million shares of our common stock were authorized to be granted under the 2012 Plan, and all options granted under this plan had exercise prices that were equal to the fair market value on the date of grant.

However, the 2012 Plan expired in June 2022.

There were 5,674,000 outstanding options or stock awards at a weighted average price of $0.20 under the 2012 Plan as of December 31, 2022.

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Equipment and services procured from Eontec, and their affiliates, were $215 and $477 during the years ended December 31, 2022 and 2021, respectively.

On May 10, 2022, Mr.

Abdi Mahamedi resigned as a director of the Company.

In connection with Mr.

Mahamedi’s resignation, the Board of Directors of the Company approved an amendment to Mr.

Mahamedi’s previously granted options to purchase an aggregate of 1,870,000 shares of Company common stock to provide for the extension of the exercise period of the options through May 10, 2025.

Mahamedi’s resignation as a director, the Company entered into a Consulting Agreement, dated May 10, 2022, with Rosewood LLC pursuant to which Mr.

Mahamedi as the owner of Rosewood LLC will assess and present business opportunities for the licensing and sublicensing of the Company’s technology.

Mahamedi will also provide business development services and perform other special projects as requested by the Company.

The Consulting Agreement has a term of 5 years, subject to the right of the Company or Mr.

Mahamedi to terminate the agreement at any time after December 1, 2022 and subject to certain other early-termination rights.

As sole consideration for the Consulting Agreement, the Company granted to Mr.

Mahamedi an option to purchase up to 2.0 million shares of Company common stock at an exercise price of the closing market price of the Company’s common stock on May 10, 2022 that will vest 33% on the first anniversary of the grant date and the remainder vesting monthly over the ensuing two years, provided that Mr.

Mahamedi continues to be engaged as a consultant on each such vesting date.

The options have a term of 5 years.

On August 30, 2021, the Company and Bruce Bromage, the Company’s Chief Operating Officer, entered into a Separation Agreement and General Release pursuant to which Dr.

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In connection with the Van Separation Agreement, Mr.

Van granted the Company general releases subject to customary exceptions.

Review, Approval or Ratification of Transactions with Related Persons

4 unchanged sentences

Director Independence

Our board of directors currently has five members –

Lugee Li, Isaac Bresnick, Abdi Mahamedi, Vincent Carrubba, and Tony Chung.

Our board of directors currently has four members –

Lugee Li, Isaac Bresnick, Vincent Carrubba, and Tony Chung.

Our board of directors has determined that Mr.

Mahamedi and Mr.

Carrubba are “independent directors”

Carrubba is an “independent director”

as such term is defined by the rules of the NASDAQ Stock Market, Inc.

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Audit Fees for 2022 and 2021

The following table summarizes the aggregate fees billed to us by SingerLewak LLP, our former principal accountants, and BF Borgers CPA, PC, our principal accounts, for professional services during the years ended December 31, 2021 and December 31, 2020:

The following table summarizes the aggregate fees billed to us by BF Borgers CPA, PC, our principal accounts, for professional services during the years ended December 31, 2022 and December 31, 2021:

Audit Fees (1)

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Our board of directors pre-approves all audit and permissible non-audit services provided by our independent public accountants on a case-by-case basis.

Our board of directors approved 100% of the services performed by and BF Borgers CPA, PC and SingerLewak LLP in 2021 and 2020 and no non-audit related services were provided by SingerLewak LLP in either of 2021 or 2020.

Our board of directors approved 100% of the services performed by and BF Borgers CPA, PC in 2022 and 2021 and no non-audit related services were provided by BF Borgers CPA, PC in either of 2022 or 2021.

Exhibits, Financial Statement Schedules

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See Item 15(b) below.

The exhibits listed on the Exhibit Index, which appears at the end of this Item 15, are filed as part of, or are incorporated by reference into, this report.

The exhibits listed on the Exhibit Index, which appears at the end of this Item 15, are filed as part of, or are incorporated by reference into, this report.

EXHIBIT INDEX

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( incorporated by reference to Exhibit 3.1 to the Form 8-K filed on October 5, 2015).

Reference is made to Exhibits 3.1 and 3.2 .

Reference is made to Exhibits 3.1  and 3.2 .

Form of Common Stock Certificate (incorporated by reference to Exhibit 4.2 to the Form 10-Q filed on August 14, 2003).

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( incorporated by reference from Exhibit 10.40 to the Registration Statement on Form S-1 filed July 18, 2012 )

Amendment Number One to Master Transaction Agreement and Other Transaction Documents, dated June 15, 2012, among Apple Inc., Liquidmetal Technologies, Inc., Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC.

Amendment Number One to Master Transaction Agreement and Other Transaction Documents, dated June 15, 2012, among Apple Inc., Liquidmetal Technologies, Inc.,  

Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC.

( incorporated by reference from Exhibit 10.41 to the Registration Statement on Form S-1 (Amendment No.

1) filed on August 3, 2012 ).

Amendment Number Two to Master Transaction Agreement and Other Transaction Documents, dated May 19, 2014, among Apple Inc., Liquidmetal Technologies, Inc., Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC.

Amendment Number Two to Master Transaction Agreement and Other Transaction Documents, dated May 19, 2014, among Apple Inc., Liquidmetal Technologies, Inc.,  

Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC.

( incorporated by reference from Exhibit 10.1 on the Form 10-Q filed on August 12, 2014).

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( incorporated by reference from Exhibit 10.4 to the Form 8-K filed on May 20, 2014).

Amended and Restated Common Stock Purchase Warrant, dated May 20, 2014, issued to Visser Precision Cast, LLC. ( incorporated by reference from Exhibit 10.5 to the Form 8-K filed on May 20, 2014).

Amended and Restated Common Stock Purchase Warrant, dated May 20, 2014, issued to Visser Precision Cast, LLC.

( incorporated by reference from Exhibit 10.5 to the Form 8-K filed on May 20, 2014).

Liquidmetal Technologies, Inc.

2015 Equity Incentive Plan ( incorporated by reference from Exhibit 10.1 to the Form 8-K filed on February 9, 2015).

Amendment Number Three to Master Transaction Agreement and Other Transaction Documents, dated June 17, 2015, among Apple Inc., Liquidmetal Technologies, Inc., Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC ( incorporated by reference from Exhibit 10.1 on the Form 10-Q filed on August 6, 2015).

Amendment Number Three to Master Transaction Agreement and Other Transaction Documents, dated June 17, 2015, among Apple Inc., Liquidmetal Technologies, Inc.,  

Liquidmetal Coatings, LLC and Crucible Intellectual Property, LLC ( incorporated by reference from Exhibit 10.1 on the Form 10-Q filed on August 6, 2015).

Form of Director and Officer Indemnification Agreement (incorporated by reference from Exhibit 10.1 to the Form 8-K filed on October 5, 2015).

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and Liquidmetal Technology Limited ( incorporated by reference from Exhibit 10.1 to the Form 8-K filed on August 17, 2016 ).

Standard Industrial/Commercial Multi-Tenant Lease – Net, dated January 23, 2020, between 20321 Valencia, LLC and MatterHackers, Inc.

Standard Industrial/Commercial Multi-Tenant Lease –

Net, dated January 23, 2020, between 20321 Valencia, LLC and MatterHackers, Inc.

( incorporated by reference from Exhibit 10.1 to the Form 8-K filed on January 29, 2020 ).

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( incorporated by reference from Exhibit 10.1 to the Form 8-K filed on February 5, 2020 ).

Manufacture Supply Agreement dated January 12, 2022, between the Company’s majority-owned Liquidmetal Golf subsidiary and Dongguan Yihao Metal Materials Technology Co.

Manufacture Supply Agreement dated January 12, 2022, between Liquidmetal Technologies, Inc.

and Dongguan Yihao Metal Materials Technology Co.

(incorporated by reference from Exhibit 10.36 to the Form 8-K filed on January 19, 2022).

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and Amorphous Technologies Japan, Inc.

( incorporated by reference from Exhibit 10.37 to the Form 8-K filed on January 19, 2022 ).

( incorporated by reference from Exhibit 10.32 to the Form 8-K filed on January 19, 2022 ).

Separation Agreement and General Release, dated August 30, 2021, between Liquidmetal Technologies, Inc.

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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Denotes a management contract or compensatory plan or arrangement.

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Isaac Bresnick

/s/ Abdi Mahamedi

March 29, 2022

Abdi Mahamedi

/s/ Vincent Carrubba

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Shareholders ’

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheet of LIQUIDMETAL TECHNOLOGIES INC.

(the "Company") as of December 31, 2021, the related consolidated statements of operations and comprehensive income (loss), shareholders' equity, and cash flow for the year ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flow for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States.

(the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income (loss), shareholders’

equity, and cash flow for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flow for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

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March 14, 2023

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Liquidmetal Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Liquidmetal Technologies, Inc.

and its subsidiaries (collectively, the “Company”) as of December 31, 2020, the related consolidated statements of operations, comprehensive loss, stockholders’

equity and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provide a reasonable basis for our opinion.

/s/ SingerLewak LLP

We served as the Company's auditor from 2011 to 2021.

Los Angeles, California

March 9, 2021

LIQUIDMETAL TECHNOLOGIES, INC.

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Investments in debt securities- long term

12,768  

Property and equipment, net

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Shareholders' equity:

Preferred Stock, $ 0.001 par value;

10,000,000 shares authorized;

0 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value;

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Research and development

Gain on disposal of long-lived assets

Total operating expenses

Operating loss

( 4,061 )  

Interest and investment income

Loss before income taxes

( 3,378 )  

Net loss attributable to non-controlling interest

Net loss attributable to Liquidmetal Technologies shareholders

( 3,377 )  

Per common share basic and diluted:

Net loss per common share attributable to Liquidmetal Technologies shareholders, basic

$ ( 0.00 )  

Net loss per common share attributable to Liquidmetal Technologies shareholders, diluted

$ ( 0.00 )  

Number of weighted average shares - basic

914,449,957  

Number of weighted average shares - diluted

914,449,957  

The accompanying notes are an integral part of the consolidated financial statements.

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Years Ended December 31,

$ ( 3,378 )  

Other comprehensive income (loss), net of tax

Net unrealized gains (losses) on available-for-sale securities

( 178 )  

Other comprehensive income (loss), net of tax

( 178 )  

Comprehensive loss

$ ( 3,556 )  

Comprehensive loss attributable to noncontrolling interests

Comprehenisve loss attributable to Liquidmetal Technologies shareholders

$ ( 3,555 )  

Comprehensive loss attributable to Liquidmetal Technologies shareholders

The accompanying notes are an integral part of the consolidated financial statements.

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(in thousands, except share and per share data)

Preferred Shares

Warrants part of Additional Paid-in Capital

Accumulated other comprehensive income

Non- controlling Interest

Paid-in Capital

comprehensive

Balance, December 31, 2020

914,449,957  

$ 18,179  

$ 286,832  

$ ( 266,284 )  

$ ( 75 )  

$ 39,568  

Stock-based compensation

( 2,642 )  

Other comprehensive income

Other comprehensive loss

Balance, December 31, 2021

914,449,957  

18,179  

287,183  

( 268,926 )  

( 76 )  

37,390  

Common Stock Issuance

Stock-based compensation

( 3,377 )  

Other comprehensive income

( 178 )  

Other comprehensive loss

Balance, December 31, 2022

914,449,957  

18,179  

287,641  

( 272,303 )  

( 62 )  

( 77 )  

34,292  

The accompanying notes are an integral part of the consolidated financial statements.

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Operating activities:

$ ( 3,378 )  

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Realized investment gains

( 116 )  

Realized investment gains (loss)

Stock-based compensation

Bad debt expense

Impairment of long-lived assets

Gain on disposal of long-lived assets

Changes in operating assets and liabilities:

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Prepaid expenses and other current assets

( 40 )  

Other assets and liabilities

( 55 )  

Accounts payable and accrued liabilities

( 162 )  

Deferred revenue

Net cash used in operating activities

( 2,730 )  

Investing Activities:

Purchases of property and equipment

Proceeds from disposal of fixed assets

Purchases of debt securities

( 19,310 )  

Proceeds from sales of debt securities

24,617  

10,836  

Net cash provided by (used in) investing activities

Financing Activities:

Common stock issuance

Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at beginning of period

19,548  

Cash, cash equivalents, and restricted cash at end of period

$ 4,096  

$ 1,519  

Supplemental Schedule of Non-Cash Investing Activities:

Settlement of contract liability from disposal of fixed assets

The accompanying notes are an integral part of the consolidated financial statements.

37 unchanged sentences

Such amounts are not expected to be material on an ongoing basis.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Licensing and royalties .

23 unchanged sentences

The creditworthiness of customers is evaluated prior to signing a contract with the customer.

As of December 31, 2021, two customers represented 89 %, or $ 130 , of the total outstanding trade accounts receivable.

As of December 31, 2022, one customer represented 100 %, or $ 24 , of the total outstanding trade accounts receivable.

As of December 31, 2021, two customers represented 89 %, or $ 130 , of the total outstanding trade accounts receivable.

During 2022, there were three major customers, who together accounted for 74 % of total revenue.

During 2020, there were four major customers, who together accounted for 93 % of total revenue.

During 2021, there were three major customers, who together accounted for 82 % of total revenue.

In the future, the Company expects that a significant portion of the revenue may continue to be concentrated in a limited number of customers, even if the bulk alloys business grows.

18 unchanged sentences

Patents and trademarks are amortized using the straight-line method over a period based on their contractual lives ranging from ten to seventeen  years.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Impairment of Long-lived Assets .

26 unchanged sentences

13,852  

Investments in debt securities (long-term)

10,138  

12,768  

Investments in debt securities (long-term)

Non-recurring fair value measurements.

9 unchanged sentences

Legal costs are expensed as incurred.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Stock-Based Compensation .

35 unchanged sentences

Yihao is an affiliate of Dongguan Eontec Co.

and Professor Lugee Li, our Chairman and largest beneficial owner of the Company’s capital stock (See Footnote 21 Subsequent Events).

2019 Restructuring Plan

In July 2019, the Company adopted a restructuring plan pursuant to which the Company elected to wind down its prior manufacturing operations at the Company’s Lake Forest, CA facility and proceeded to outsource the manufacture of parts utilizing the Company’s technology through its domestic and international manufacturing partners (the “2019 Restructuring Plan”).

In connection with the 2019 Restructuring Plan, the Company reduced its management staff and shifted its business strategy from internal manufacture of parts and products for customers toward the use and reliance of outsourced manufacturers, which will initially be Dongguan Yihao Metals Materials Technology Co., Ltd.

(“Yihao”), a China-based company that is an affiliate of our largest beneficial stockholder, CEO and Chairman, Professor Lugee Li.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Manufacturing Facility Purchase and Lease

On February 16, 2017, the Company purchased a 41,000 square foot manufacturing facility (the “Facility”) located in Lake Forest, CA, where operations commenced during July 2017.

and Professor Lugee Li, our Chairman and largest beneficial owner of the Company’s capital stock.

Corporate Facility Purchase and Lease

On February 16, 2017, the Company purchased a 41,000 square foot facility (the “Facility”) located in Lake Forest, CA, where operations commenced during July 2017.

The purchase price for the Facility was $ 7,818 .

As a result of the 2019 Restructuring Plan, the Company has discontinued manufacturing operations in the Facility.

On January 23, 2020, 20321 Valencia, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a lease agreement (the “Facility Lease”) pursuant to which the Company leased to MatterHackers, Inc., a Delaware corporation (“Tenant”), an approximately 32,534 square foot portion of the Facility.

20 unchanged sentences

The cross-licenses are non-exclusive in geographic areas outside of the foregoing exclusive territories.

Beyond the License Agreement, the Company collaborates with Eontec to accelerate the commercialization of amorphous alloy technology.

This includes but is not limited to developing technologies to reduce the cost of amorphous alloys, working on die cast machine technology platforms to pursue broader markets, sharing knowledge to broaden our intellectual property portfolio, and utilizing Eontec’s volume production capabilities as a third party contract manufacturer.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Eutectix Business Development Agreement

20 unchanged sentences

Under the agreement, LMG granted to ATJ a nonexclusive worldwide sublicense to the Company’s amorphous alloy technology and related trademarks to manufacture and sell golf clubs and golf related products.

The LMG Sublicense Agreement has a term of three years and provides for the payment of a running royalty to LMG of 3 % of the net sales price of licensed products (See Footnote 21 Subsequent Events).

The LMG Sublicense Agreement has a term of three years and provides for the payment of a running royalty to LMG of 3 % of the net sales price of licensed products.

Swatch Group License

4 unchanged sentences

The license agreement with Swatch will expire on the expiration date of the last licensed patent.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Investments in Debt Securities

1 unchanged sentence

Amortized Cost

Maturity Date

Longest Maturity Date

government and agency securities

Corporate bonds

11,635  

26,222  

11,576  

26,338  

Certificates of deposit

18,962  

27,372  

18,899  

27,488  

Income from these investments totaled $ 128 and $ 155 during the years ended December 31, 2022 and 2021, respectively, and was included as a portion of interest and investment income on the Company’s consolidated statements of operations.

8 unchanged sentences

Trade accounts receivable

During the year ended December 31, 2020, the Company recorded an additional allowance for doubtful accounts of $ 226 for receivables related to products delivered to a customer at the end of 2019.

The allowance is a result of financial uncertainties affecting the customer’s ability to make payments on outstanding invoices.

The allowance was recorded as bad debt expense as a portion of selling, marketing, general and administrative expenses.

During the year ended December 31, 2021, there was none.

During the year ended December 31, 2022 and 2021, there was no allowance for doubtful accounts..

Prepaid Expenses and Other Current Assets

7 unchanged sentences

As of December 31, 2022 and 2021, interest and other receivables are comprised entirely of interest receivable from investments in debt.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Inventory totaled $ 25 and $ 35 as of December 31, 2022 and December 31, 2021, respectively.

5 unchanged sentences

Land, building, and improvements

$ 9,610  

Machinery and equipment

1 unchanged sentence

Office equipment, furnishings, and improvements

11,237  

Accumulated depreciation

( 2,942 )  

Total property and equipment, net

$ 8,295  

$ 8,614  

Depreciation expense for the years ended December 31, 2022 and 2021 was $ 315 and $ 319 , respectively.

1 unchanged sentence

For the year ended December 31, 2021, $ 319 was included in selling, marketing, general and administrative expenses.

During the year ended December 31, 2020, the Company disposed of certain equipment that it was not expecting to utilize prospectively, as originally contemplated in the 2019 Restructuring Plan, for gross proceeds of $ 200 .

This resulted in a gain on disposal of $ 35 during the year ended December 31, 2020.

There was no such disposal during the year ended December 31, 2021.

Patents and Trademarks, net

4 unchanged sentences

Purchased and licensed patent rights

$ ( 566 )  

Internally developed patents

( 1,588 )  

( 144 )  

Total accumulated amortization

( 2,298 )  

Total intangible assets, net

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Amortization expense was $ 29 and $ 56 for the years ended December 31, 2022 and 2021, respectively, and is included in research and development expense in the consolidated statements of operations and comprehensive loss.

8 unchanged sentences

The Company currently holds various patents and numerous pending patent applications in the United States, as well as numerous foreign counterparts to these patents outside of the United States.

Equipment Held for Sale

The Company previously reclassified $ 585 in equipment, planned to be disposed of under the 2019 Restructuring Plan, from property and equipment to equipment held for sale on its consolidated balance sheet.

The Company has executed a purchase agreement for the equipment, with a negotiated sales price of $ 600 .

The sale was finalized during the year ended December 31, 2020, title transfer of the equipment to the buyer and receipt of all amounts due under the purchase agreement for the equipment.

Other assets totaled $ 353 and $ 306 as of December 31, 2022 and December 31, 2021, respectively.

3 unchanged sentences

As of December 31, 2022, prepaid lease costs and receivables- long term are comprised of $ 29 in unamortized prepaid broker commissions that are not expected to be amortized within the next twelve months and $ 310 in straight-line rent accruals.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Accrued Liabilities

4 unchanged sentences

Accrued audit fees

Contract liability

In connection with the 2019 Restructuring Plan, the Company recorded severance expenses related to employees whose positions would be eliminated.

The elements and impact of the 2019 Restructuring Plan, including details regarding the severance elements that the Company had adopted, were communicated to all impacted employees in July 2019.

As of December 31, 2021, payments totaling $ 217 had been made, resulting in a remaining liability under the 2019 Restructuring Plan of $ 56 as of December 31, 2021.

Other Long-Term Liabilities

Other long-term liabilities were $ 899 as of December 31, 2021 and $ 899 as of December 31, 2020, and consisted of $ 856 of long-term, aged payables to vendors, individuals, and other third parties that have been outstanding for more than 5 years.

The Company is in the process of researching and resolving the balances for settlement and/or escheatment in accordance with applicable state law.

Other long-term liabilities was $ 902 as of December 31, 2022, and consisted of $ 859 of long-term, aged payables to vendors, individuals, and other third parties that have been outstanding for more than 5 years.

Also included in the balance as of December 31, 2022 is $ 43 in tenant deposits under the Facility Lease.

Other long-term liabilities was $ 899 as of December 31, 2021, and consisted of $ 856 of long-term, aged payables to vendors, individuals, and other third parties that have been outstanding for more than 5 years.

Also included in the balance as of December 31, 2021 is $ 43 in tenant deposits under the Facility Lease.

The Company is in the process of researching and resolving the balances for settlement and/or escheatment in accordance with applicable state law.

Stock Compensation Plan

21 unchanged sentences

Of the $ 458 stock compensation expense for the year ended December 31, 2021, the Company incurred incremental stock-based compensation expense for the modifications of the awards of $ 132 during the year ended December 31, 2021.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Expected volatilities are based on historical volatility expected over the expected life of the options.

5 unchanged sentences

The following table summarizes the Company’s stock option transactions for the years ended December 31, 2022 and 2021:

Weighted Average

Exercise Price

Aggregate Intrinsic Value

(in thousands)

Options outstanding at December 31, 2020

19,341,112  

$ 0.17  

( 1,275,586 )  

( 114,667 )  

Options outstanding at December 31, 2021

17,950,859  

$ 0.17  

11,930,000  

( 2,430,000 )  

Options outstanding at December 31, 2022

27,450,859  

$ 0.14  

Options exercisable at December 31, 2022

20,450,859  

$ 0.16  

Options unvested at December 31, 2022

20,450,859  

$ 0.16  

Options vested or expected to vest at December 31, 2022

25,089,675  

$ 0.14  

The following table provides supplemental data on stock options for the years ended December 31, 2022 and 2021:

14 unchanged sentences

Exercise Price

$ 0.00 - 0.10  

13,344,192  

$ 0.07  

6,344,192  

$ 0.07  

0.11 - 0.38  

14,106,667  

27,450,859  

20,450,859  

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

The Company’s non-vested options at the beginning and ending of fiscal year 2022 had weighted-average grant-date fair values of $ 0.04 and $ 0.04 per option, respectively.

4 unchanged sentences

The future minimum rents due to the Company under the Facility Lease are as follows:

$ 2,073  

Significant components of deferred tax assets are as follows:

3 unchanged sentences

$ 44,690  

Allowance for bad debts

Tax credits and other

( 22 )  

Total deferred tax asset

2 unchanged sentences

Valuation allowance

( 46,903 )  

Total deferred tax asset, net

The valuation allowance increased $ 7,893 and $ 741 in 2021 and 2020, respectively.

The valuation allowance decreased $ 14,376 and increased $ 7,893 in 2022 and 2021, respectively.

Changes in the valuation allowance are impacted by the expiration of net operating loss (“NOL”) carryforwards, current year net operating losses, and changes to future tax deductions resulting from the terms of stock compensation plans and accrued liabilities.

6 unchanged sentences

Increase in valuation allowance and others

20.1 %  

Effective tax rate

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

As of December 31, 2022, the Company had approximately $ 152.6 million of NOL carryforwards for U.S.

federal income tax purposes expiring in 2023 through 2043.

As of December 31, 2021, the Company had approximately $ 106.5 million of NOL carryforwards for California income tax purposes expiring in 2022 through 2042, respectively.

As of December 31, 2022, the Company had approximately $ 108.6 million of NOL carryforwards for California income tax purposes expiring in 2023 through 2043.

The Company and Liquidmetal Golf, Inc.

21 unchanged sentences

As of December 31, 2022, the tax years 2015 through 2022, and 2014 through 2022 are subject to examination by the federal and California taxing authorities, respectively.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

Accumulated Other Comprehensive Income ( “

28 unchanged sentences

As of December 31, 2022 and 2021, the Company has outstanding payables to Eontec, and their affiliates, of $ 15 and $ 68 , respectively.

LIQUIDMETAL TECHNOLOGIES, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

On July 6, 2021, Professor Li resigned as Chief Executive Officer and President of the Company.

Professor Li will retain his role as Chairman of the Company’s Board of Directors (the “Board”).

On July 6, 2021, the Board appointed Tony Chung, a director of the Company, as the Company’s Chief Executive Officer, and in that capacity, he will serve as the Company’s principal executive officer.

Chung is a current member of the Board and will remain a director following the foregoing appointment.