LIQUIDMETAL TECHNOLOGIES INC

Previous wording

On January 12, 2022, Liquidmetal Technologies entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co. Ltd. (“Yihao”) to become the primary outsourced manufacturer of our 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 us at prices determined on a “cost-plus” basis. Yihao is an affiliate of Dongguan Eontec Co. Ltd. and Professor Lugee Li, our Chairman and largest beneficial owner of our capital stock.

Current wording

On January 12, 2022, Liquidmetal Technologies entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co. Ltd. (“Yihao”) to become the primary contract manufacturer of our 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 us at prices determined on a “cost-plus” basis. Yihao is an affiliate of Dongguan Eontec Co. Ltd. and Professor Lugee Li, our Chairman and largest beneficial owner of our capital stock.

Previous wording

On January 23, 2020, 20321 Valencia, LLC, a Delaware limited liability company and our wholly owned subsidiary, entered into a lease agreement pursuant to which we leased to MatterHackers, Inc., a Delaware corporation (“Tenant”), an approximately 32,534 square foot portion of the Facility. The lease term was for 5 years and 2 months and is scheduled to expire on April 30, 2025.

Current wording

On January 23, 2020, 20321 Valencia, LLC, a Delaware limited liability company and our wholly owned subsidiary, entered into a lease agreement pursuant to which we leased to MatterHackers, Inc., a Delaware corporation (“Tenant”), an approximately 32,534 square foot portion of the Facility. The lease term was for 5 years and 2 months and expired on April 30, 2025.

Previous wording

In addition to the shares issuable under the 2016 Purchase Agreement, we issued to the Investor a warrant to acquire 10,066,809 shares of common stock (of which the right to exercise 2,609,913 of the warrant shares vested on March 10, 2016 and the right to exercise the remaining 7,456,896 warrant shares vested on October 26, 2016, all at an exercise price of $0.07 per share). The warrant will expire on the tenth anniversary of its issuance date.

Current wording

In addition to the shares issuable under the 2016 Purchase Agreement, we issued to the Investor a warrant to acquire 10,066,809 shares of common stock at an exercise price of $0.07 per share. The warrant will expire on the tenth anniversary of its issuance date.

Previous wording

On January 13, 2022, our Liquidmetal Golf subsidiary (“Liquidmetal Golf” or “LMG”) 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 ATJ a nonexclusive worldwide sublicense to our amorphous alloy technology and related trademarks to manufacture and sell golf clubs and golf related products. The original term of three years as extended to have automatic, annual renewals and provided for the payment of a running royalty to LMG of 3% of the net sales price of licensed products.

Current wording

On January 13, 2022, our Liquidmetal Golf subsidiary (“Liquidmetal Golf” or “LMG”) 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 ATJ a nonexclusive worldwide sublicense to our amorphous alloy technology and related trademarks to manufacture and sell golf clubs and golf related products. The original term of three years was extended to have automatic, annual renewals and provided for the payment of a running royalty to LMG of 3% of the net sales price of licensed products.

Previous wording

Revenue*.* Total revenue increased by $109 to $282 for the three months ended March 31, 2025 from $173 for the three months ended March 31, 2024. The increase was attributable to increase in product shipments primarily related to recurring customer orders and medical device orders.

Current wording

Revenue*.* Total revenue increased by $47 to $289 for the three months ended June 30, 2025 from $242 for the three months ended June 30, 2024. The increase was attributable to increase in product shipments primarily related to recurring customer orders and medical device orders.

Previous wording

Cost of Sales*.* Cost of sales was $204, or 72.3% of total revenue, for the three months ended March 31, 2025, as compared to $134, or 77.5% of total revenue, for the three months ended March 31, 2024. The increase in our cost of sales was primarily driven by lower product revenues during Q1 2024 compared to Q1 2025. Once we are able to sustain and increase shipments of routine, commercial products and parts through our contract manufacturers, we expect our cost of sales percentages to decrease, stabilize, and be more predictable.

Current wording

Cost of Sales*.* Cost of sales was $212, or 73.4% of total revenue, for the three months ended June 30, 2025, as compared to $187, or 77.3% of total revenue, for the three months ended June 30, 2024. The increase in our cost of sales was primarily driven by lower product revenues during Q2 2024 compared to Q2 2025. Once we are able to sustain and increase shipments of routine, commercial products and parts through our contract manufacturers, we expect our cost of sales percentages to decrease, stabilize, and be more predictable.

Previous wording

Gross Profit*.* Our gross profit increased by $39 from $39 for the three months ended March 31, 2024 to $78 for the three months ended March 31, 2025. Our gross margin percentage increased slightly from Q1 2024 to Q1 2025. Our gross profit percentages have fluctuated and may continue to fluctuate based on production volumes and quoted production prices per unit and may not be representative of our future business. If we are able to sustain and increase shipments of routine, commercial products and parts through future orders to third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable.

Current wording

Gross Profit*.* Our gross profit increased by $22 from $55 for the three months ended June 30, 2024 to $77 for the three months ended June 30, 2025. Our gross margin percentage increased slightly from Q2 2024 to Q2 2025. Our gross profit percentages have fluctuated and may continue to fluctuate based on production volumes and quoted production prices per unit and may not be representative of our future business. If we are able to sustain and increase shipments of routine, commercial products and parts through future orders to third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable.

Previous wording

Selling, marketing, general, and administrative expenses. Selling, marketing, general, and administrative expenses increased by $212 to $975, or 345.7% of revenue, for the three months ended March 31, 2025 from $763, or 441.0% of revenue, for the three months ended March 31, 2024. The increase in expenses was primarily attributable to increase in payroll expenses, a one-time severance payment to an administrative staff, and stock compensation in Q1 2025 compared to Q1 2024.

Current wording

Selling, marketing, general, and administrative expenses. Selling, marketing, general, and administrative expenses increased by $70 to $927, or 320.8% of revenue, for the three months ended June 30, 2025 from $857, or 354.1% of revenue, for the three months ended June 30, 2024. The increase in expenses was primarily attributable to increase in payroll expenses, a one-time severance payment to an administrative staff, and stock compensation in Q2 2025 compared to Q2 2024.

Previous wording

Research and development expenses*.* Research and development expenses remained unchanged at $4, or 1.4% of revenue, for the three months ended March 31, 2025, and $4, or 2.3% of revenue, for the three months ended March 31, 2024. This was primarily due to continuing efforts to perform research and development on new Liquidmetal alloys and related processing capabilities, albeit on a reduced basis.

Current wording

Research and development expenses*.* Research and development expenses remained unchanged at $3, or 1.0% of revenue, for the three months ended June 30, 2025, and $5, or 2.1% of revenue, for the three months ended June 30, 2024. This was primarily due to continuing efforts to perform research and development on new Liquidmetal alloys and related processing capabilities, albeit on a reduced basis.

Previous wording

Investment income*.* Investment income relates to realized gains earned from our investments in debt securities for the respective periods. Investment income was $63 and $54 for the three months ended March 31, 2025 and 2024, respectively. The increase during the three months ended March 31, 2025 is primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government and holding onto debt securities until maturity.

Current wording

Investment income*.* Investment income relates to realized gains earned from our investments in debt securities for the respective periods. Investment income was $5 and $34 for the three months ended June 30, 2025 and 2024, respectively. The decrease during the three months ended June 30, 2025 is primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government and holding onto debt securities until maturity.

Previous wording

Net loss*.* Our annual net losses of $568 for the three months ended March 31, 2025 and $314 for the three months ended March 31, 2024 are primarily reflective of operating expenses associated with our on-going business as well as non-operational income, discussed above.

Current wording

Net loss*.* Our annual net losses of $525 for the three months ended June 30, 2025 and $260 for the three months ended June 30, 2024 are primarily reflective of operating expenses associated with our on-going business as well as non-operational income, discussed above.

Previous wording

Interest income*.* Interest income relates to interest earned from our cash deposits and investments in debt securities for the respective periods. Interest income was $179 and $189 for the years ended December 31, 2024 and 2023, respectively. The decrease during the three months ended March 31, 2025 is primarily due to lower overall yields on debt securities as a result of an increase in overall interest rate decreases by the government during the three months ended March 31, 2025.

Current wording

Investment income*.* Investment income relates to realized gains earned from our investments in debt securities for the respective periods. Investment income was $68 and $86 for the six months ended June 30, 2025 and 2024, respectively. The decrease during the six months ended June 30, 2025 is primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government and holding onto debt securities until maturity.

Previous wording

Lease income*.* Lease income relates to straight-line rental income received under the Facility Lease. Such amounts were $89 and $89 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Lease income*.* Lease income relates to straight-line rental income received under the Facility Lease. Such amounts were $249 and $179 for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Cash used in operating activities totaled $299 and $196 for the three months ended March 31, 2025 and 2024, respectively. The cash was primarily used to fund operating expenses related to our business and product development efforts.

Current wording

Cash used in operating activities totaled $579 and $143 for the six months ended June 30, 2025 and 2024, respectively. The cash was primarily used to fund operating expenses related to our business and product development efforts.

Previous wording

Cash used in investing activities totaled $812 and cash provided by $757 for the three months ended March 31, 2025 and 2024, respectively. Investing inflows primarily consist of proceeds from the sale of debt securities. Investing outflows primarily consist of purchases of debt securities.

Current wording

Cash provided by investing activities totaled $186 and cash used in investing activities totaled $1,327 for the six months ended June 30, 2025 and 2024, respectively. Investing inflows primarily consist of proceeds from the sale of debt securities. Investing outflows primarily consist of purchases of debt securities.

Previous wording

However, as of March 31, 2025, we had $4,900 in cash and restricted cash, as well as $17,205 in investments in debt securities. We view this total of $22,105 as readily available sources of liquidity in the event needed to advance our existing strategy, and/or pursue an alternative strategy. As such, we anticipate that our current capital resources, when considering expected losses from operations, will be sufficient to fund our operations for the foreseeable future.

Current wording

However, as of June 30, 2025, we had $5,618 in cash, as well as $16,212 in investments in debt securities. We view this total of $21,830 as readily available sources of liquidity in the event needed to advance our existing strategy, and/or pursue an alternative strategy. As such, we anticipate that our current capital resources, when considering expected losses from operations, will be sufficient to fund our operations for the foreseeable future.