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An Update On Liquidmetal Technologies Inc (OTCMKTS:LQMT)

An Update On Liquidmetal Technologies Inc (OTCMKTS:LQMT)
Written by
Alex Carlson
Published on
September 1, 2016
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Liquidmetal Technologies Inc (OTCMKTS:LQMT) has been a favorite of ours at Insider Financial since March when we said that the company was making big moves. Shares were trading under $.10 a share at the time and heated up real fast after the company announced a $63 million deal back in March. Shares are now trading just under $.18 and there's a double top on the charts at $.19 a share. Is a breakout in the cards for LQMT?First up, a little background on the company. Liquidmetal Technologies, Inc. is the leading developer of amorphous alloys that utilize the performance advantages offered by amorphous alloy technology. Amorphous alloys are unique materials that are distinguished by their ability to retain a random structure when they solidify, in contrast to the crystalline atomic structure that forms in ordinary metals and alloys. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries.

On March 10, Liquidmetal Technologies entered into a Securities Purchase Agreement for $63.4 million with Liquidmetal Technology Limited, a Hong Kong company, which is a newly formed company owned by Mr. Yeung Tak Lugee Li. Also on March 10, 2016, the company and DongGuan Eontec Co., Ltd. entered into a parallel License Agreement to cross-license their respective technologies. Eontec is a publicly held Hong Kong corporation listed on the Shenzhen Exchange, of which, Mr. Li is the Chairman and majority stockholder.

Under the Agreement, Mr. Li initially purchased 105,000,000 shares for an aggregate purchase price of $8.4 million. On May 19, 2016, the Company’s shareholders approved a charter amendment increasing the company’s authorized shares to 1.1 billion shares, thereby obligating the Investor to purchase the remaining 300,000,000 shares of the Company’s common stock for the purchase price of $55 million.

On August 18, the company agreed to extend to December 31, 2016 the deadline for the purchase by Liquidmetal Technology Limited of the remaining 300,000,000 shares under the Securities Purchase Agreement. The original deadline for the follow-on investment was August 17, 2016, and the amendment will enable Professor Li to complete the international funds transfer process required for the remaining investment. Other than the extension of the closing date, the amendment did not materially modify the terms of the original Securities Purchase Agreement.We would have liked to have seen the remaining shares purchased by the original due date of August 17. However, we do understand that there can be delays with such a large transaction. We think there are some investors standing on the sidelines waiting to see the transaction close and then we'll definitely see the breakout we're looking for. The good news is that this appears to be just a delay on the part of Mr. Li in regards to his personal finances and nothing to do with the deal. Mr. Li said this month:

“I have worked closely with the Liquidmetal management team to shape a vision and a tactical plan for the future that would not have been possible for either company on its own. I look forward to furthering our relationship and am excited about the possibilities for 2017 and beyond.”

Currently trading with a market cap of $101 million, we see Professor Li completing the transaction by the end of the year. Once that happens, LQMT will be able to apply for a NASDAQ listing and move on to bigger and better things once the full $63.4 million is sitting in its treasury. We're also looking to hear more from Apple Inc (NASDAQ:AAPL), which renewed its exclusive rights to use Liquidmetal Technologies’ unique metal alloys in its line of products last June. Liquidmetal’s alloys are of interest to Apple due to their unique properties including high strength, corrosion resistance, light weight, and malleability. Apple has used Liquidmetal’s technology to develop the SIM removal tool for the iPhone and the company has been rumored to be considering Liquidmetal for iOS device home buttons, touch sensors, and tamper-resistant screws. We will be updating our subscribers as soon as we know more. For the latest updates on LQMT, sign up below!Disclosure: We have NO position in LQMT and have NOT been compensated for this article.

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