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Item 9A. Controls and Procedures

2024-03-12 compared with 2023-03-14 · 279 added, 359 removed, 754 unchanged (46% of the section changed)

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Evaluation of Disclosure Controls and Procedures.

  Under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive/Financial Officer), we conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

Based on this evaluation, our Chief Executive Officer (Principal Executive/Financial Officer) concluded that our disclosure controls and procedures were effective as of December 31, 2023 (the end of the period covered by this report).

Changes in Internal Controls.

There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management ’

s Report on Internal Control over Financial Reporting.

  The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and the related rule of the SEC, management assessed the effectiveness of the Company’s internal control over financial reporting using the Internal Control-Integrated Framework (2013) developed by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2022.

Management has not identified any material weaknesses in the Company’s internal control over financial reporting as of December 31, 2022.

There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management ’ s Report on Internal Control over Financial Reporting.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

As required by Section 404 of the Sarbanes-Oxley Act of 2002 and the related rule of the SEC, management assessed the effectiveness of the Company’s internal control over financial reporting using the Internal Control-Integrated Framework (2013) developed by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that the company’s internal control over financial reporting was effective as of December 31, 2023.

Management has not identified any material weaknesses in the Company’s internal control over financial reporting as of December 31, 2023.

Other Information

During the three months ended December 31, 2023, none of the Company's directors or officers adopted, modified or terminated a Rule 10b5 - 1 trading arrangement or a non-Rule 10b5 - 1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Exchange Act).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

Set forth below is a table identifying our directors and executive officers as of March 10, 2023:

Lugee Li 

Chairman of the Board 

Set forth below is a table identifying our directors and executive officers as of December 31, 2023:

Chairman of the Board

Chief Executive Officer, Director

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Vincent Carrubba

Professor Lugee Li ( “

Professor Li ”

) was elected by our board of directors to serve as our Chief Executive Officer in December 2016.

Professor Lugee Li ( “ Professor Li ” ) was elected by our board of directors to serve as our Chief Executive Officer in December 2016.

Pursuant to the terms of the 2016 Purchase Agreement, Professor Li was appointed as a member of our board of directors in March 2016 and became Chairman of our board of directors in October 2016.

Professor Li is the founder, Chairman, and shareholder of DongGuan Eontec Co.

(“Eontec”), a Hong Kong company listed on the Shenzen Stock Exchange engaged in the production of precision die-cast products and the research and development of new materials.

Professor Li founded Eontec in 1993 and has served as its Chairman since that date.

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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.

Chung had previously served as the Company’s Chief Financial Officer from December 2008 to August 2017.

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

Chung had previously served as the Company’s Chief Financial Officer from December 2008 to August 2017.

Prior to re-joining the Company as an executive, he was the Chief Financial Officer of Solarcity, currently a division of Tesla Inc., that provides advanced solar technology solutions.

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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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Carrubba has served as the CEO of Admiral Composite Technologies Inc.

(“Admiral”).

During his time at Admiral, Mr.

Carrubba has helped to develop new technologies for environmentally responsible and innovative building materials which represent Admiral’s product lines.

Carrubba has also served as Admiral’s Chairman since its inception in 2009.

Carrubba has helped to develop new technologies for environmentally responsible and innovative building materials which represent Admiral’s product lines.

Carrubba has also served as Admiral’s Chairman since its inception in 2009.

From September 2014 through the present, Mr.

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Carrubba has held engineering and executive positions with Xerox, General Electric, Bristol-Meyers Squibb and AT&T and he is the inventor of several patents related to telecommunications, professional tools and consumer products.

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.

We believe Mr.

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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.

Such persons also are required to furnish the Company with copies of all Section 16(a) reports they file.

Based solely on its review of the copies of such reports received by it with respect to fiscal year 2022 or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors and officers and persons who own more than 10% of a registered class of the Company’s equity securities have been complied with, on a timely basis, for fiscal year 2022.

Based solely on its review of the copies of such reports received by it with respect to fiscal year 2023 or written representations from certain reporting persons, the Company believes that all filing requirements applicable to its directors and officers and persons who own more than 10% of a registered class of the Company’s equity securities have been complied with, on a timely basis, for fiscal year 2023.

Code of Ethics

Our board of directors has adopted a written Code of Ethics for Chief Executive Officer and Senior Financial and Accounting Officers that applies to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, or persons performing similar functions.

A current copy of the code is filed as an exhibit to this report on Form 10-K and is also available on our website, www.liquidmetal.com, in the “Investors”

A current copy of the code is filed as an exhibit to this report on Form 10-K and is also available on our website, www.liquidmetal.com, in the “Investors” section.

In addition, we intend to post on our website, www.liquidmetal.com, all disclosures that are required by law concerning any amendments to, or waivers from, any provision of the Code of Ethics for Chief Executive Officer and Senior Financial and Accounting Officers.

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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, 2023:

(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.”

The identification of such named executive officers is determined based on the individual’s total compensation for the year ended December 31, 2022, as reported below in the Summary Compensation Table.

(i) Tony Chung, our Chief Executive Officer and Principal Financial Officer, and (ii) Isaac Bresnick, our President.

These persons are hereafter referred to as our “named executive officers.” The identification of such named executive officers is determined based on the individual’s total compensation for the year ended December 31, 2023, as reported below in the Summary Compensation Table.

Summary Compensation Table

The following table sets forth for each of the named executive officers:

(i) the dollar value of base salary and bonus earned during the years ended December 31, 2022 and 2021 (ii) the aggregate grant date fair value of stock and option awards granted during 2022 and 2021, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (R);

(i) the dollar value of base salary and bonus earned during the years ended December 31, 2023 and 2022 (ii) the aggregate grant date fair value of stock and option awards granted during 2023 and 2022, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (R);

(iii) the dollar value of earnings for services pursuant to awards granted during 2023 and 2022 under non-equity incentive plans;

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Name and Principal Position

Chairman, Former Chief Executive Officer, Former President

Chief Executive Officer and Chief Financial Officer

Chief Executive Officer and

Chief Financial Officer

Isaac Bresnick,

President and Former Executive Administrator

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

Chung on July 7, 2021.

Options to purchase 900,000 shares of our common stock were awarded to Mr.

Bresnick on December 15, 2021.

Outstanding Equity Awards at 2023 Fiscal Year-End

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Option Awards

Number of Securities Underlying Unexercised Options Exercisable

Number of Securities Underlying Unexercised Options Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options

Unexercisable

Equity Incentive

Isaac Bresnick

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 are subject to a combination of market-price based and time-based lock-up provisions.

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No named executive has an employment agreement or change of control agreement with the Company as of December 31, 2023, except as follows.

On July 6, 2021, the Board appointed Tony Chung, a director of the Company, as the Company’s Chief Executive Officer.

Pursuant to an offer letter agreement dated July 6, 2021, Mr.

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Additionally on July 7, 2021, Mr.

Chung received an option grant under the Company’s 2015 Equity Incentive Plan to purchase up to 7,500,000 shares of Company common stock.

The option has an exercise price of $0.07 per share and will expire 10 years from the date of grant unless it terminates earlier upon a termination of service.

The shares covered by the option will vest in three tranches (“Tranche 1”, “Tranche 2”, and “Tranche 3”).

Under Tranche 1, 2,500,000 shares covered by the option will vest after ninety days of employment, although thereafter any shares received from option exercises will be subject to time-based lock-up provisions.

Under Tranche 2, 2,500,000 shares covered by the option will vest at the first anniversary of employment.

Under Tranche 3, 2,500,000 covered by the option will vest at the second anniversary of employment.

Shares received from option exercises under Tranche 2 and Tranche 3 will be subject to a combination of market-price based and time-based lock-up provisions.

The shares covered by the option vested in three tranches (“Tranche 1”, “Tranche 2”, and “Tranche 3”).

Under Tranche 1, 2,500,000 shares covered by the option vested after ninety days of employment, although thereafter any shares received from option exercises will be subject to time-based lock-up provisions.

Under Tranche 2, 2,500,000 shares covered by the option vested at the first anniversary of employment.

Under Tranche 3, 2,500,000 covered by the option vested at the second anniversary of employment.

Shares received from option exercises under Tranche 2 and Tranche 3 are subject to a combination of market-price based and time-based lock-up provisions.

The terms of the option are subject to the provisions of the 2015 Equity Incentive Plan.

Chung will serve on an “at-will”

Chung will serve on an “at-will” basis.

Potential Payments Upon Termination or Change in Control

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.

Except as otherwise indicated, the table assumes that the triggering event occurred on December 31, 2023.

without Cause

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Change of Control ($)

Equity Acceleration

Benefits Continuation

Tony Chung (1)

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Benefits Continuation

Professor Li does not have an employment or change of control agreement.

If there is a Change of Control (as defined under the 2015 Equity Incentive Plan) during Mr.

Chung’s employment with the Company, all of his 7,500,000 stock options shall vest immediately, and Mr.

Chung may exercise and sell all his option shares relating to such options without lockup or restrictions.

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

Each non-employee directors may be entitled to receive options on a case by case basis, in an amount determined by our board of directors or its compensation committee in its respective discretion, to purchase shares of common stock upon initial election to the board of directors.

Each non-employee director may be entitled to receive options on a case by case basis, in an amount determined by our board of directors or its compensation committee in its respective discretion, to purchase shares of common stock upon initial election to the board of directors.

In determining the number of options granted to a director upon initial election, the compensation committee uses its judgment and, consistent with our compensation objectives, maintains the flexibility necessary to recruit qualified and experienced directors.

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Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 1, 2023 by:

The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2023 by:

each person known by us to be a beneficial owner of more than 5.0% of our outstanding common stock;

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

A total of 917,285,149 shares of our common stock were issued and outstanding as of March 10, 2023.

A total of 917,285,149 shares of our common stock were issued and outstanding as of December 31, 2023.

Unless otherwise indicated, the address of all directors and named executive officers is 20321 Valencia Circle, Lake Forest, California 92630.

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Directors and Named Executive Officers

      (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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*Less than one percent

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 December 31, 2023, or securities convertible into common stock within 60 days of December 31, 2023, 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.

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7,815,000 shares issuable pursuant to outstanding stock options which are exercisable currently or within 60 days of December 31, 2023.

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 1,540,000 shares issuable pursuant to outstanding stock options, held of record by Mr.

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Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants, and rights

Weighted-average exercise price of outstanding options, warrants, and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column [a])

Number of securities to be

issued upon exercise of

outstanding options,

warrants, and rights

Weighted-average exercise

price of outstanding options,

warrants, and rights

Number of securities

remaining available for

future issuance under equity

compensation plans

(excluding securities

reflected in column [a])

Equity compensation plans approved by stockholders

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2012 Equity Incentive Plan

On June 28, 2012, the Company adopted the 2012 Equity Incentive Plan (“2012 Plan”), with the approval of the shareholders, which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries.

The purpose of the 2012 Plan is to advance the interests of our shareholders by enhancing our ability to attract, retain, and motivate persons who make or are expected to make important contributions to the Company and its subsidiaries by providing such persons with equity ownership opportunities and performance-based incentives, thereby better aligning their interests with those of our shareholders.

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2015 Equity Incentive Plan

On January 27, 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 Plan”), which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries.

The purpose of the 2015 Plan is to advance the interests of our shareholders by enhancing our ability to attract, retain, and motivate persons who make or are expected to make important contributions to the Company and its subsidiaries by providing such persons with equity ownership opportunities and performance-based incentives, thereby better aligning their interests with those of our shareholders.

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Transactions with Related Persons

On March 10, 2016, the Company entered into the 2016 Purchase Agreement with Liquidmetal Technology Limited, providing for the purchase of 405,000,000 shares of the Company’s common stock for an aggregate purchase price of $63,400.

Liquidmetal Technology Limited was a newly formed company owned by Professor Li.

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Eontec is also an affiliate of Yihao.

Yihao is currently the Company’s primary contract manufacturer.

As of December 31, 2022, Professor Li is a greater-than 5% beneficial owner of the Company and serves as the Company’s Chairman.

Yihao is currently the Company’s primary contract manufacturer.

As of December 31, 2023, Professor Li is a greater-than 5% beneficial owner of the Company and serves as the Company’s Chairman.

Equipment and services procured from Eontec, and their affiliates, were $302 and $215 during the years ended December 31, 2023 and 2022, respectively.

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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’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.

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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.

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 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- 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. 

Review, Approval or Ratification of Transactions with Related Persons

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Director Independence

Our board of directors currently has four members –

Lugee Li, Isaac Bresnick, 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.

Carrubba is an “independent director”

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

Carrubba is an “independent director” as such term is defined by the rules of the NASDAQ Stock Market, Inc.

Principal Accountant Fees and Services

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(1) Audit Fees.

Fees for audit services billed in 2022 consisted of:

Progress billings for the audits of the Company’s financial statements for 2021 and 2022;

Review of the Company’s quarterly financial statements for 2022.

Fees for audit services billed in 2021 consisted of:

Progress billings for the audits of the Company’s financial statements for 2020 and 2021;

Review of the Company’s quarterly financial statements for 2021.

Fees for audit services billed in 2023 and 2022 consisted of:

Progress billings for the audits of the Company’s financial statements for 2022 and 2023;

Review of the Company’s quarterly financial statements for 2023.

Board of Director Pre-Approval Policies

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Financial Statements .

See the Index to Consolidated Financial Statements on page ‐45.

See Item 15(b) below.

See the Index to Consolidated Financial Statements on page 45.

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.

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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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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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and Amorphous Technologies Japan, Inc.

( 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.

and Bruce Bromage ( incorporated by reference from Exhibit 10.1 to the Form 8-K filed on August 30, 2021 ).

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

and Bryce Van ( incorporated by reference from Exhibit 10.2 to the Form 8-K filed on August 30, 2021 ).

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

Subsidiaries of the Registrant (incorporated by reference from Exhibit 21.1 to the Registration Statement on S-1 filed July 18, 2012).

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Section 1350.

The following financial statements from Liquidmetal Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Other Comprehensive Loss, (iv) Consolidated Statements of Shareholder’s Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

The following financial statements from Liquidmetal Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language):

(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Other Comprehensive Loss, (iv) Consolidated Statements of Shareholder’s Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) information set forth under Part II, Item 9B, tagged as blocks of text.

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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Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Liquidmetal Technologies, Inc.

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March 12, 2024

KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Tony Chung and each of them, jointly and severally, his attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Tony Chung and each of them, jointly and severally, his attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

/s/ Tony Chung

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm  ( PCAOB ID 5041 )

Report of Independent Registered Public Accounting Firm ( PCAOB ID 5041 )

Consolidated Financial Statements:

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Consolidated Statements of Comprehensive Loss

Consolidated Statements of Shareholders ’

Consolidated Statements of Shareholders ’ Equity

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, 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”).

(the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income (loss), shareholders’ equity, and cash flow for the year ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flow for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States.

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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.

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Cash and cash equivalents

$ 2,269  

$ 4,091  

$ 8,837 $ 2,269

Restricted cash

Investments in debt securities- short term

16,435  

13,852  

13,292 16,435

Trade accounts receivable, net of allowance for doubtful accounts

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Total current assets

$ 19,283  

$ 18,635  

22,795 19,283

Investments in debt securities- long term

1 unchanged sentence

Patents and trademarks, net

$ 33,335  

$ 35,605  

$ 31,836 $ 33,335

LIABILITIES AND SHAREHOLDERS' EQUITY

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Total current liabilities

Long-term liabilities

Other long-term liabilities

Total liabilities

$ 1,296  

$ 1,313  

Shareholders' equity:

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917,285,149 and 917,285,149 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

18,179  

18,179 18,179

Additional paid-in capital

288,013  

287,641  

288,126 288,013

Accumulated deficit

( 274,696 )  

( 276,743 ) ( 274,696 )

Accumulated other comprehensive income

( 296 )  

Non-controlling interest in subsidiary

( 78 )  

( 79 ) ( 78 )

Total shareholders' equity

$ 32,039  

$ 34,292  

30,590 32,039

Total liabilities and shareholders' equity

$ 33,335  

$ 35,605  

$ 31,836 $ 33,335

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

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Research and development

Total operating expenses

Operating loss

( 3,085 ) ( 3,052 )

Other income (expense):

Interest and investment income

Loss before income taxes

Loss from operations

( 2,048 ) ( 2,394 )

Net loss attributable to non-controlling interest

Net loss attributable to Liquidmetal Technologies shareholders

$ ( 2,047 ) $ ( 2,393 )

Per common share basic and diluted:

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

$ ( 0.00 ) $ ( 0.00 )

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

$ ( 0.00 ) $ ( 0.00 )

Number of weighted average shares - basic

917,285,149 917,048,883

Number of weighted average shares - diluted

917,285,149 917,048,883

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

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Years Ended December 31,

Other comprehensive income (loss), net of tax

$ ( 2,048 ) $ ( 2,394 )

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

Other comprehensive income (loss), net of tax

Comprehensive loss

( 1,562 ) ( 2,628 )

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to Liquidmetal Technologies shareholders

$ ( 1,561 ) $ ( 2,627 )

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

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(in thousands, except share and per share data)

Paid-in Capital

comprehensive

Preferred Common Common Paid-in Paid-in Accumulated comprehensive controlling

Balance, December 31, 2021

- 914,449,957 $ 914 $ 18,179 $ 287,641 $ ( 272,303 ) $ ( 62 ) $ ( 77 ) $ 34,292

Common Stock Issuance

- 2,835,192 3 - 209 - - - 212

Stock-based compensation

- - - - 163 - - - 163

- - - - - ( 2,393 ) - ( 1 ) ( 2,394 )

Other comprehensive loss

- - - - - - ( 234 ) - ( 234 )

Balance, December 31, 2022

Common Stock Issuance

- 917,285,149 917 18,179 288,013 ( 274,696 ) ( 296 ) ( 78 ) 32,039

Stock-based compensation

- - - - 113 - - - 113

- - - - - ( 2,047 ) - ( 1 ) ( 2,048 )

Other comprehensive loss

- - - - - - 486 - 486

Balance, December 31, 2023

- 917,285,149 $ 917 $ 18,179 $ 288,126 $ ( 276,743 ) $ 190 $ ( 79 ) $ 30,590

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

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Operating activities:

$ ( 2,048 ) $ ( 2,394 )

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

Depreciation and amortization

Realized investment gains (loss)

Realized investment gains (loss), net

Unrealized investment gain (loss), net

Stock-based compensation

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Deferred revenue

( 35 ) ( 15 )

Net cash used in operating activities

( 1,313 ) ( 1,776 )

Investing Activities:

Purchases of debt securities

( 11,340 ) ( 21,709 )

Proceeds from sales of debt securities

19,221 21,451

Net cash provided by (used in) investing activities

7,881 ( 258 )

Financing Activities:

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

6,568 ( 1,822 )

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

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

$ 8,842 $ 2,274

Supplemental disclosures of cash flow information

Cash paid during the years for:

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

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Liquidmetal Technologies, Inc.

(the “Company”) is a materials technology company that develops and commercializes products made from amorphous alloys.

The Company’s family of alloys consists of a variety of bulk alloys and composites that utilize the advantages offered by amorphous alloys technology.

(the “Company”) is a materials technology company that works with manufacturing and commercial partners to develop and commercialize products made from proprietary amorphous alloys.

The Company’s family of alloys consists of a variety of bulk alloys and composites that utilize the advantages offered by amorphous alloys technology.

The Company designs, develops, and sells products and custom parts from bulk amorphous alloys to customers in a wide range of industries.

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Moreover, the Company believes these advantages could enable the introduction of entirely new products and applications that are not possible or commercially viable with other materials.

The Company’s revenues are derived from i) selling bulk Liquidmetal alloy products to customers who produce medical devices, automotive assemblies, sports and leisure goods, and non-consumer electronic devices, ii) selling tooling and prototype parts such as demonstration parts and test samples for customers with products in development, iii) product licensing and royalty revenue, and iv) research and development revenue.

The Company expects that these sources of revenue will continue to significantly change the character of the Company’s revenue mix.

Summary of Significant Accounting Policies

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Non-Controlling Interest.

The results of operations attributable to the non-controlling interest of Liquidmetal Golf are presented within equity and are shown separately from the Company’s equity.

Revenue Recognition .

Revenue is recognized pursuant to applicable accounting standards including FASB ASC Topic 606 (“ASC 605”

), Revenue from Contracts with Customers.

Revenue is recognized pursuant to applicable accounting standards including FASB ASC Topic 606 (“ASC 605” ), Revenue from Contracts with Customers.

ASC 606 summarizes certain points in applying generally accepted accounting principles to revenue recognition in financial statements and provides guidance on revenue recognition issues in the absence of authoritative literature addressing a specific arrangement or a specific industry.

The Company’s revenue recognition policy complies with the requirements of ASC 606.

As a majority of the Company’s sales revenue continues to be recognized when products are shipped, and there was no change in the recognition model historically applied to active license and royalty contracts under the new revenue standard, there was no adjustment to the opening balance of retained earnings.

The impact to the Company’s results of operations is not material, on an on-going basis, because the analysis of the Company’s contracts under the new revenue standard supports a recognition model consistent with the Company’s previous revenue recognition model.

Revenue on the majority of the Company’s contracts will continue to be recognized over time because of the continuous transfer of control to the customer.

The Company’s revenue recognition policy complies with the requirements of ASC 606.

Revenue on the majority of the Company’s contracts will continue to be recognized over time because of the continuous transfer of control to the customer.

Product revenues are primarily generated from the sale and prototyping of molds and bulk alloy products.

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

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

As of December 31, 2023, two customers represented 96 %, or $ 178 , of the total outstanding trade accounts receivable.

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

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

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

During 2023, there were three major customers, who together accounted for 86 % of our revenue.

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

The allowance for doubtful accounts reflects management's best estimate of probable losses inherent in the trade accounts receivable. 

Management primarily determines the allowance based on the aging of accounts receivable balances, historical write-off experience, customer concentrations, customer creditworthiness and current industry and economic trends. 

The allowance for doubtful accounts reflects management's best estimate of probable losses inherent in the trade accounts receivable.

The Company's provisions for uncollectible receivables are included in selling, marketing, general and administrative expense in the consolidated statements of operations.

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Intangible assets are reported at cost, net of accumulated amortization.

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

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

Impairment of Long-lived Assets .

The Company reviews long-lived assets to be held and used in operations for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may be impaired.

These evaluations may result from significant decreases in the overall market outlook for the Company’s technology or the market price of an asset, a significant adverse change in the extent or manner in which an asset is being used in its physical condition, a significant adverse change in legal factors or in the business climate that could affect the value of an asset, as well as economic or operational analyses.

If the Company concludes that the carrying value of certain assets will not be recovered based on expected undiscounted future cash flows, an impairment write-down is recorded to reduce the assets to their estimated fair value.

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Entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value based upon the following fair value hierarchy:

Level 1 —

Quoted prices in active markets for identical assets or liabilities;

Level 2 —

Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

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or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 3 —

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of December 31, 2022, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

As of December 31, 2023, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

Investments in debt securities (short-term)

16,436  

13,661  

13,292 10,681 2,611 -

Investments in debt securities (long-term)

As of December 31, 2021, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

1,098 449 649 -

As of December 31, 2022, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

Investments in debt securities (short-term)

13,852  

10,138  

16,436 13,661 2,775 -

Investments in debt securities (long-term)

5,645 1,555 4,090 -

Non-recurring fair value measurements.

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Income taxes are provided under the asset and liability method as required by FASB ASC Topic 740, Accounting for Income Taxes .

Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences”

by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.

Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.

The effect of a tax rate change on deferred taxes is recognized in operations in the period that the change in the rate is enacted.

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Earnings Per Share.

Basic earnings per share (“EPS”) is computed by dividing earnings (losses) attributable to common shareholders by the weighted average number of common shares outstanding for the periods.

Basic earnings per share (“EPS”) is computed by dividing earnings (losses) attributable to common shareholders by the weighted average number of common shares outstanding for the periods.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

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The standard update, and its related amendments, will become effective for the fiscal year beginning on January 1, 2023.

The Company is in the process of assessing the impact this standard update, and its related amendments, on its consolidated financial statements, but is not expecting it will have a material impact on its consolidated financial statements.

This did not have a material impact on its consolidated financial statements as of and for the year ended December 31, 2023.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

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Yihao Manufacturing Agreement

On January 12, 2022, the Company entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co.

(“Yihao”) to become the primary contract manufacturer of the Company’s products.

Under the Manufacturing Agreement, which has a term of five years, Yihao has agreed to serve as a non-exclusive contract manufacturer for amorphous alloy parts offered and sold by the Company at prices determined on a “cost-plus”

On January 12, 2022, the Company entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co.

(“Yihao”) to become the primary contract manufacturer of the Company’s products.

Yihao is an affiliate of Dongguan Eontec Co.

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 .

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.

The lease term is for 5 years and 2 months and is scheduled to expire on April 30, 2025.

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2016 Purchase Agreement

On March 10, 2016, the Company entered into a Securities Purchase Agreement (the “2016 Purchase Agreement”) with Liquidmetal Technology Limited, a Hong Kong company (the “Investor”), which is controlled by the Company’s Chairman, Professor Li.

The 2016 Purchase Agreement provided for the purchase by the Investor of a total of 405,000,000 shares of the Company’s common stock for an aggregate purchase price of $ 63,400 .

The transaction occurred in multiple closings, with the Investor having purchased 105,000,000 shares at a purchase price of $ 8,400 (or $ 0.08 per share) at the initial closing on March 10, 2016 and the remaining 200,000,000 shares at $ 0.15 per share and 100,000,000 shares at $ 0.25 per share for an aggregate purchase price of $ 55,000 on October 26, 2016.

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Eontec License Agreement

On March 10, 2016, in connection with the 2016 Purchase Agreement, the Company and DongGuan Eontec Co., Ltd., a Hong Kong corporation (“Eontec”), entered into a Parallel License Agreement (the “License Agreement”) pursuant to which the Company and Eontec agreed to cross-license their respective technologies.

The Company’s Chairman, Professor Li, is also the Chairman of Eontec.

The License Agreement provides for the cross-license of certain patents, technical information, and trademarks between the Company and Eontec.

In particular, the Company granted to Eontec a paid-up, royalty-free, perpetual license to the Company’s patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of North America and Europe.

In turn, Eontec granted to the Company a paid-up, royalty-free, perpetual license to Eontec’s patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of specified countries in Asia.

The license granted by the Company to Eontec is exclusive (including to the exclusion of the Company) in the countries of Brunei, Cambodia, China (P.R.C and R.O.C.), East Timor, Indonesia, Japan, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Thailand, and Vietnam.

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Eutectix Business Development Agreement

On January 31, 2020, the Company entered into a Business Development Agreement (the “Agreement”) with Eutectix, LLC, a Delaware limited liability company (“Eutectix”), which provides for collaboration, joint development efforts, and the manufacturing of products based on the Company’s proprietary amorphous metal alloys.

Under the Agreement, the Company licensed to Eutectix specified equipment owned by the Company, including two injection molding machines, two diecasting machines, and other machines and equipment, all of which will be used to make product for Company customers and Eutectix customers.

The licensed machines and equipment represented substantially all of the machinery and equipment then held by the Company.

The Company has also licensed to Eutectix various patents and technical information related to the Company’s proprietary technology.

Under the Agreement, Eutectix agreed to pay the Company a royalty of six percent ( 6 %) of the net sales price of licensed products sold by Eutectix, and Eutectix will also manufacture for the Company product ordered by the Company.

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On August 5, 2010, the Company entered into a license transaction with Apple Inc.

(“Apple”) pursuant to which (i) the Company contributed substantially all of its intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary, called Crucible Intellectual Property, LLC (“CIP”), (ii) CIP granted to Apple a perpetual, worldwide, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a one -time, upfront license fee, and (iii) CIP granted back to the Company a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.

(“Apple”) pursuant to which (i) the Company contributed substantially all of its intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary, called Crucible Intellectual Property, LLC (“CIP”), (ii) CIP granted to Apple a perpetual, worldwide, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a one -time, upfront license fee, and (iii) CIP granted back to the Company a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.

Under the agreements relating to the license transaction with Apple, the Company was obligated to contribute, to CIP, all intellectual property developed through February 2016.

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Liquidmetal Golf Inc.

(“Liquidmetal Golf”

or “LMG”) is a majority-owned subsidiary which has the exclusive right and license to utilize our Liquidmetal alloy technology for purposes of golf equipment applications.

(“Liquidmetal Golf” or “LMG”) is a majority-owned subsidiary which has the exclusive right and license to utilize our Liquidmetal alloy technology for purposes of golf equipment applications.

This right and license is set forth in an intercompany license agreement dated January 1, 2002 between Liquidmetal Technologies and Liquidmetal Golf.

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The Company owns 79 % of the outstanding common stock in Liquidmetal Golf.

On January 13, 2022, Liquidmetal Golf entered into a sublicense agreement (“LMG Sublicense Agreement”) with Amorphous Technologies Japan, Inc.

(“ATJ”), a newly formed Japanese entity that was established by Twins Corporation, a sporting goods company operating in Japan.

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.

On January 13, 2022, Liquidmetal Golf entered into a sublicense agreement (“LMG Sublicense Agreement”) with Amorphous Technologies Japan, Inc.

(“ATJ”), a newly formed Japanese entity that was established by Twins Corporation, a sporting goods company operating in Japan.

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.

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In March 2009, the Company entered into a license agreement with Swatch Group, Ltd.

(“Swatch”) under which Swatch was granted a non-exclusive license to the Company’s technology to produce and market watches and certain other luxury products.

In March 2011, this license agreement was amended to grant Swatch exclusive rights as to watches as against all third parties (including the Company), but non-exclusive as to Apple.

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Amortized Cost

Longest Maturity Date

Maturity Date 2023

government and agency securities

$ 9,733 $ 11,964 $ 9,838 $ 11,922

Corporate bonds

Certificates of deposit

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.

Based on the Company’s review of its debt securities in an unrealized loss position at December 31, 2022, it determined that the losses were primarily the result of current economic factors, impacting all global debt and equity markets, that are the result of the global COVID- 19 pandemic.

The impact to the Company’s investment portfolio is considered to be temporary, rather than a deterioration of overall credit quality.

4,605 10,421 4,552 10,159

$ 14,338 $ 22,385 $ 14,390 $ 22,081

Income from these investments totaled $ 616 and $ 128 during the years ended December 31, 2023 and 2022, respectively, and was included as a portion of interest and investment income on the Company’s consolidated statements of operations.

Based on the Company’s review of its debt securities in an unrealized loss position at December 31, 2023, it determined that the losses were primarily the result of current economic factors, impacting all global debt and equity markets, that are the result of the global COVID- 19 pandemic.

The impact to the Company’s investment portfolio is considered to be temporary, rather than a deterioration of overall credit quality.

The Company does not intend to sell and it is not more likely than not that the Company will be required to sell these securities prior to recovering their amortized cost.

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Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets totaled $ 525 and $ 505 as of December 31, 2022 and December 31, 2021, respectively.

Included within these totals are the following:

Prepaid expenses and other current assets consisted of the following:

Prepaid service invoices

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Interest and other receivables

As of December 31, 2022, prepaid lease costs and receivables- short term are comprised of $ 17 in prepaid broker commissions that are expected to be amortized within the next twelve months and $ 6 in receivables for allocated utility costs.

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

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

Included within these totals are the following:

Inventories consisted of the following:

Work in progress

1 unchanged sentence

Property and Equipment

Property and equipment consist of the following:

Property and equipment consisted of the following:

Land, building, and improvements

$ 9,610 $ 9,610

Machinery and equipment

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Office equipment, furnishings, and improvements

11,237 11,237

Accumulated depreciation

( 3,269 ) ( 3,257 )

Total property and equipment, net

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

For the year ended December 31, 2022, $ 315 was included in selling, marketing, general and administrative expenses.

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

$ 7,668 $ 7,980

Depreciation expense for the years ended December 31, 2023 and 2022 was $ 335 and $ 315 , respectively, and is included in selling, marketing, general and administrative expenses.

Patents and Trademarks, net

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Total intangible assets

Purchased and licensed patent rights

Internally developed patents

Total accumulated amortization

Accumulated amortization

( 2,348 ) ( 2,327 )

Total intangible assets, net

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Aggregate Amortization Expense

The weighted average amortization periods for the years ended December 31, 2022 and 2021 are as follows:

The weighted average amortization are as follows:

Purchased and licensed patent rights

Internally developed patents

Purchased patent rights represent the exclusive right to commercialize the bulk amorphous alloy and other amorphous alloy technology acquired from California Institute of Technology (“Caltech”), through a license agreement with Caltech and other institutions.

All fees and other amounts payable by the Company for these rights and licenses have been paid or accrued in full, and no further royalties, license fees or other amounts will be payable in the future under the license agreements.

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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.

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

Included within these totals are the following:

Other assets consisted of the following:

Utility deposits

Prepaid lease costs and receivables- long term

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.

Accrued Liabilities

Accrued liabilities totaled $ 265 and $ 246 as of December 31, 2022 and December 31, 2021, respectively.

Included within these totals are the following:

Accrued liabilities consisted of the following:

Accrued payroll, vacation, and bonuses

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Other Long-Term Liabilities

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.

Other long-term liabilities was $ 902 as of December 31, 2023 and 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, 2023 and 2022 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

On June 28, 2012, the Company adopted the 2012 Equity Incentive Plan ( “2012 Plan”), with the approval of the shareholders, which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries.

The 2012 Plan provides for the granting to employees of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, and for the granting to employees and consultants of non-statutory stock options.

In addition, the Plan 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 30,000,000 shares of the Company’s common stock may be granted under the 2012 Equity Incentive Plan, and all options granted under this plan had exercise prices that were equal to the fair market value on the date of grant.

On December 16, 2021, the Company granted option grants under the Company’s 2012 Equity Incentive Plan, as approved to by the Board, for employees up to 1,400,000 shares of the Company’s common stock in total.

During the year ended December 31, 2021, the Company granted 1,400,000 options to purchase shares of the Company’s common stock.

Under this plan, the Company had outstanding grants of options to purchase 5,674,000 and 7,009,192 shares of the Company’s common stock as of December 31, 2022 and December 31, 2021, respectively.

On January 27, 2015, the Company adopted its 2015 Equity Incentive Plan ( “2015 Plan”), which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries.

A total of 40,000,000 shares of the Company’s common stock are available for issuance under the 2015 Plan.

Under this plan, the Company had outstanding grants of options to purchase 2,993,000 and 5,674,000 shares of the Company’s common stock as of December 31, 2023 and December 31, 2022, respectively.

A total of 40,000,000 shares of the Company’s common stock are available for issuance under the 2015 Plan.

All options granted under the 2015 Plan had exercise prices that were equal to the fair market value on the dates of grant.

On July 7, 2021, the Company granted Mr.

Chung an option grant under the Company’s 2015 Equity Incentive Plan, as approved by the Board, to purchase up to 7,500,000 shares of Company stock.

On December 16, 2021, the Company granted option grants under the Company’s 2015 Equity Incentive Plan, as approved to by the Board, for directors up to 600,000 shares of the Company’s common stock in total.

During the year ended December 31, 2021, the Company granted 8,100,000 options to purchase shares of the Company’s common stock.

Chung an option grant under the Company’s 2015 Equity Incentive Plan, as approved by the Board, to purchase up to 7,500,000 shares of Company stock.

Under this plan, the Company had outstanding grants of options to purchase 14,261,667 and 20,941,667 as of December 31, 2023 and December 31, 2022, respectively.

FASB ASC 718, Compensation –

Stock Compensation , requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

FASB ASC 718, Compensation – Stock Compensation , requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values.

Under ASC 718, the Company is required to measure the cost of employee services received in exchange for stock options and similar awards based on the grant-date fair value of the award and recognize this cost in the income statement over the period during which an employee is required to provide service in exchange for the award.

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The total compensation costs related to non-vested awards not yet recognized were $ 61 and $ 115 for the years ended December 31, 2023 and 2022, respectively.

In connection with the separation of former executives, the Company has modified previously granted equity awards to allow for the acceleration of vesting of equity awards, and the extension of the timing to exercise vested awards, following the respective separation dates.

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.

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

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Treasury rates in effect at the time of grant.

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

The following table summarizes the Company’s stock option transactions:

Exercise Price

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Options outstanding at December 31, 2021

27,450,859 $ 0.17

2,000,000 0.09

( 2,835,192 ) 0.07

Options outstanding at December 31, 2022

26,615,667 $ 0.14 4.90 $ 35

( 7,111,000 ) 0.20

( 2,450,000 ) 0.14

Options outstanding at December 31, 2023

17,254,667 $ 0.11 5.19 $ -

Options exercisable at December 31, 2023

15,576,888 $ 0.12 5.32 $ -

Options unvested at December 31, 2023

15,576,888 $ 0.12 5.32 $ -

Options vested or expected to vest at December 31, 2023

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

16,933,486 $ 0.11 5.22 $ -

The following table provides supplemental data on stock options:

Weighted average grant date fair value per option granted

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Intrinsic value of options exercised

The following table summarizes the Company’s stock options outstanding and exercisable by ranges of option prices as of December 31, 2022:

The following table summarizes the Company’s stock options outstanding and exercisable by ranges of option prices as of December 31, 2023 and 2022:

December 31, 2023

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Exercise Price

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.

$0.00 - 0.10 12,447,500 6.13 $ 0.08 10,769,721 6.47 $ 0.07

0.11 - 0.383 4,807,167 2.75 0.21 4,807,167 2.75 0.21

17,254,667 15,576,888

December 31, 2022

Options Outstanding

Options Exercisable

Exercise Prices

Weighted Average

Remaining Contractual

Exercise Price

Weighted Average

Remaining Contractual

Exercise Price

$0.00 - 0.10 12,509,000 7.01 $ 0.08 6,675,668 7.59 $ 0.07

0.11 - 0.38 14,106,667 3.02 0.19 14,106,667 3.02 0.19

26,615,667 20,782,335

The Company’s non-vested options at the beginning and ending of fiscal year 2023 had weighted-average grant-date fair values of $ 0.05 and $ 0.05 per option, respectively.

Facility Lease

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Loss carry forwards

$ 30,899  

$ 44,690  

$ 41,242 $ 30,899

Tax credits and other

Total deferred tax asset

$ 32,527  

$ 46,903  

$ 43,963 $ 32,527

Valuation allowance

( 43,936 ) ( 32,527 )

Total deferred tax asset, net

The valuation allowance decreased $ 11,409 and increased $ 14,376 in 2023 and 2022, 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.

The following table accounts for the differences between the expected federal tax benefit (based on the statutory 2022 U.S.

The following table accounts for the differences between the expected federal tax benefit (based on the statutory 2023 and 2022 U.S.

federal income tax rate of 21% ) and the actual tax provision:

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Expected federal tax benefit

- 21.0 % - 21.0 %

Permanent items

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Increase in valuation allowance and others

20.1 %  

21.0 % 20.1 %

Effective tax rate

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

As of December 31, 2023, the Company had approximately $ 149,677 of NOL carryforwards for U.S.

federal income tax purposes expiring in 2023 through 2043.

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.

As of December 31, 2023, the Company had approximately $ 110,970 of NOL carryforwards for California income tax purposes expiring in 2024 through 2044.

The Company and Liquidmetal Golf, Inc.

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Liquidmetal Golf, Inc.

had approximately $ 6.0 million in federal NOL carryforwards, expiring in 2023 through 2041.

We recognize excess tax benefits associated with the exercise of stock options directly to shareholders’

equity only when realized.

had approximately $ 979 in federal NOL carryforwards, expiring in 2023 through 2041.

We recognize excess tax benefits associated with the exercise of stock options directly to shareholders’ equity only when realized.

Accordingly, deferred tax assets are not recognized for NOL carryforwards resulting from excess tax benefits.

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Accordingly, additional paid-in capital will increase up to an additional $ 75 if and when such excess tax benefits are realized.

As of December 31, 2022, the Company had approximately $ 189 of Research & Development (“R&D”) credit carryforwards for U.S.

As of December 31, 2023, the Company had approximately $ 138 of Research & Development (“R&D”) credit carryforwards for U.S.

federal income tax purposes expiring in 2024 through 2033.

In addition, the Company has California R&D credit carryforwards of approximately $ 243 , which do not expire under current California law.

Section 382 of the Internal Revenue Code (“IRC”) imposes limitations on the use of NOL’s and credits following changes in ownership as defined in the IRC.

The limitation could reduce the amount of benefits that would be available to offset future taxable income each year, starting with the year of an ownership change.

As a result of the completion of the complex analysis required by the IRC to determine if an ownership change has occurred, the Company has determined that its annual NOL carryforward limitation under Section 382 of the IRC is $ 764 per year.

The ability to realize the tax benefits associated with deferred tax assets, which includes benefits related to NOL’s, is principally dependent upon the Company’s ability to generate future taxable income from operations.

The Company has provided a full valuation allowance for its net deferred tax assets due to the Company’s net operating losses.

The Company adopted the provisions of FASB ASC Topic 470 –

Income Taxes.

The Company has provided a full valuation allowance for its net deferred tax assets due to the Company’s net operating losses.

The Company adopted the provisions of FASB ASC Topic 470 – Income Taxes.

At the adoption date and as of December 31, 2020, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

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As of December 31, 2023, the tax years 2016 through 2023, and 2015 through 2023 are subject to examination by the federal and California taxing authorities, respectively.

Accumulated Other Comprehensive Income ( “

AOCI ”

The following table presents a summary of the changes in each component of AOCI for the years ended December 

2022 and 2021:

Unrealized gains on available-for-sale securities

Accumulated Other Comprehensive Income ( “ AOCI ” ):

The following table presents a summary of the changes in each component of AOCI for the years ended December 31, 2023 and 2022:

available-for-

sale securities

Accumulated other comprehensive income, net of tax, as of December 31, 2021

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income

Net increase in other comprehensive income

Other comprehensive – unrealized gain (loss) on investments

Accumulated other comprehensive income, net of tax, as of December 31, 2022

Other comprehensive loss before reclassifications

Amounts reclassified from accumulated other comprehensive income

Net increase in other comprehensive income

Other comprehensive – unrealized gain (loss) on investments

Accumulated other comprehensive loss, net of tax, as of December 31, 2023

Loss Per Common Share

Basic earnings per share (“EPS”) is computed by dividing earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the periods.

Basic earnings per share (“EPS”) is computed by dividing earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the periods.

Diluted EPS reflects the potential dilution of securities that could share in the earnings.

Options to purchase 26,615,667 shares of common stock at prices ranging from $ 0.07 to $ 0.38 per share were outstanding at December 31, 2022, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Options to purchase 27,450,859 shares of common stock at prices ranging from $ 0.07 to $ 0.38 per share were outstanding at December 31, 2021, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Warrants to purchase 10,066,809 shares of common stock, priced at $ 0.07 per share, outstanding at each of December 31, 2022 and 2021 were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Options to purchase 17,254,667 shares of common stock at prices ranging from $ 0.07 to $ 0.38 per share were outstanding at December 31, 2023, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Warrants to purchase 10,066,809 shares of common stock, priced at $ 0.07 per share, outstanding at each of December 31, 2023 and 2022 were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Related Party Transactions

Liquidmetal Technology Limited was a newly formed company owned by Professor Li.

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Eontec is also an affiliate of Yihao.

Yihao is currently the Company’s primary contract manufacturer.

As of December 31, 2021, Professor Li is a greater-than 5 % beneficial owner of the Company and serves as the Company’s Chairman.

Yihao is currently the Company’s primary contract manufacturer.

As of December 31, 2023, Professor Li is a greater-than 5 % beneficial owner of the Company and serves as the Company’s Chairman.

Equipment and services procured from Eontec, and their affiliates, were $ 301 and $ 215 during the years ended December 31, 2023 and 2022, respectively.