LIQUIDMETAL TECHNOLOGIES INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2026and2025**

(numbers in thousands, except percentages, share and per share data)

1. DESCRIPTION OF BUSINESS

Liquidmetal Technologies, Inc. (the “Company”) is a materials technology and manufacturing company focused on the development and commercialization of products made from proprietary amorphous alloys and/or utilizing proprietary amorphous alloy manufacturing technologies. In addition to developing the Company’s manufacturing facility through our subsidiary in China, the Company works withthird-party manufacturing and commercial partners to develop and commercial products made from proprietary amorphous alloys.

Amorphous alloys are, in general, unique materials that are distinguished by their ability to retain a random atomic structure when they solidify, in contrast to the crystalline atomic structure that forms in other metals and alloys when they solidify. Liquidmetal alloys are proprietary amorphous alloys that possess a combination of performance, processing, and potential cost advantages that the Company believes will make them preferable to other materials in a variety of applications. The amorphous atomic structure of bulk alloys enables them to overcome certain performance limitations caused by inherent weaknesses in crystalline atomic structures, thus facilitating performance and processing characteristics superior in many ways to those of their crystalline counterparts. The Company believes that the alloys and the molding technologies it employs* mayresult in components, for many applications, that exhibit: exceptional dimensional control and repeatability that rivals precision machining, excellent corrosion resistance, brilliant surface finish, high strength, high hardness, high elastic limit, alloys that are non-magnetic, and the ability to form complex shapes common to the injection molding of plastics. Interestingly, all of these characteristics are achievable from the molding process, so design engineers often donot* have to select specific alloys to achieveone or more of the characteristics as is the case with crystalline materials. The Company believes these advantages could result in Liquidmetal alloys supplanting high-performance alloys, such as titanium and stainless steel, and other incumbent materials in a wide variety of applications. Moreover, the Company believes these advantages could enable the introduction of entirely new products and applications that arenot 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.

2. BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

The accompanying unaudited interim consolidated financial statements as of and for thethree months ended* March 31, 2026and2025* have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form10-Q. Accordingly, they donot include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. Operating results for thethree months ended* March 31, 2026arenot* necessarily indicative of the results that* maybe expected for any future periods or the year ending December 31, 2026.The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's2025* Annual Report on Form10-K filed with the Securities and Exchange Commission (“SEC”) on* March 12, 2026.*

Investments in Debt Securities

The Company will invest excess funds to maximize investment yield, while maintaining liquidity and minimizing credit risk. Debt securities are carried at fair value and consist primarily of investments in obligations of the United States Treasury, various U.S. and foreign corporations, and certificates of deposits. The Company classifies its investments in debt securities as available-for-sale with all unrealized gains or losses included as part of other comprehensive income. The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value. As a result of this assessment, the Company didnot recognize any other-than-temporary impairment losses considered to be credit related for thethree months ended* March 31, 2026and2025.*

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Fair Value Measurements

The estimated fair values of financial instruments reported in the consolidated financial statements have been determined using available market information and valuation methodologies, as applicable. The fair value of cash and restricted cash approximate their carrying value due to their short maturities and are classified as Level1 instruments within the fair value hierarchy.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. 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:

As of* March 31, 2026,*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, 2025,*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:

Operating Leases

The Company adopted FASB Accounting Standards Codification, or ASC, Topic842, Leases (“ASC842”) which requires the recognition of the right-of-use assets and relating operating and finance lease liabilities on the balance sheet. Under ASC842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. The lease classification affects the expense recognition in the income statement. Operating lease charges are recorded entirely in operating expenses. Finance lease charges are split, where amortization of the right-of-use asset is recorded in operating expenses and an implied interest component is recorded in interest expense.

Foreign Currency Translation

The Company has operations in China. Accounting records in foreign operations are maintained in local currencies and remeasured to the US dollars during the consolidation. Nonmonetary assets and liabilities are translated at historical rates, and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Income statement accounts are translated at average rates for the year. Gains or losses from remeasurement of foreign currency financial statements into the US dollars are included in current results of comprehensive income.

Other Recent Pronouncements

In* June 2016,the FASB issued an accounting standards update which changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This update replaces the existing incurred loss impairment model with an expected loss model (referred to as the Current Expected Credit Loss model, or "CECL"). The standard update, and its related amendments, will become effective for the fiscal year beginning on January 1, 2023.This didnot* have a material impact on its consolidated financial statements as of and for the year ended* December 31, 2025.*

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA and the SEC didnot or arenot believed by management to have a material impact on the Company's present or future consolidated financial statements.

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3. SIGNIFICANT TRANSACTIONS

Hangzhou Feifeng Liquidmetal Co., Ltd. Joint Venture

On* July 4, 2025,Liquidmetal Asia Holdings Limited (“Liquidmetal Asia”), a Hong Kong based, wholly owned subsidiary of the Company, entered into a shareholders agreement with Mr. Chong Liu, an individual investor to form a new joint venture company named Hangzhou Feifeng Liquidmetal Co. Ltd., a limited liability company formed under the Peoples Republic of China (the “Joint Venture Company”). The Joint Venture Company was formed for the principal purpose of developing a manufacturing facility in Hangzhou, China for the manufacture of amorphous metal products. The Joint Venture Company is owned 70% by Liquidmetal Asia and 30% by Mr. Liu and has been capitalized with $6.0 million USD of initial capital, of which $4.2 million has been contributed by Liquidmetal Asia, and $1.8 million will be contributed by Mr. Liu on or before May 25, 2028.*

Yihao Manufacturing Agreement

On* January 12, 2022,the Company entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co. Ltd. (“Yihao”) to become an outsourced contract manufacturer of the Company’s products. Under the Manufacturing Agreement, which has a term offive* 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” basis. Yihao is an affiliate of Dongguan Eontec Co. Ltd. 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 for $7,818.

On* January 23, 2020,20321 Valencia, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company that owns the Facility, entered into a lease agreement 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 was for 5 years and2 months and expired on April 30, 2025.*The base rent payable under the lease was $32,534 per month initially and was subject to periodic increases up to a maximum of approximately $54,000 per month. Tenant paid approximately 79% of common operating expenses.

On* March 26, 2025,the Company entered into a new lease agreement (the “Facility Lease”) for a 5 year term commencing on May 1, 2025and expanded the leased square footage to 40,090 square feet. The base rent payable under the Facility Lease is $51,716 per month initially and is subject to periodic increases up to a maximum of approximately $58,000 per month. Tenant will pay approximately 98% of building operating expenses. The Facility Lease grants the Company or Tenant the right to terminate the Facility Lease aftertwo* and a half years into the lease term and has other customary provisions, including provisions relating to default and usage restrictions.

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. The2016 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, 2016and 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.On October 10, 2024,the Investor sold 179,787,888 to various buyers leaving 225,212,112 shares of our common stock owned by the Investor as of March 31, 2026.*

In addition to the shares issuable under the2016 Purchase Agreement, the Company issued to the Investor a warrant to acquire 10,066,809 shares of common stock. The warrant expired* March 10, 2026.*

Eontec License Agreement

On* March 10, 2016,in connection with the2016* 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. The license granted by Eontec to the Company is exclusive (including to the exclusion of Eontec) in North America and Europe. The cross-licenses are non-exclusive in geographic areas outside of the foregoing exclusive territories.

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Apple License Transaction

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 aone*-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.*The Company is also obligated to maintain certain limited liability company formalities with respect to CIP at all times after the closing of the license transaction.

Liquidmetal Golf Sublicense Agreement

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. This right and license is set forth in an intercompany license agreement dated* January 1, 2002*between Liquidmetal Technologies and Liquidmetal Golf. This license agreement provides that Liquidmetal Golf has a perpetual and exclusive license to use Liquidmetal alloy technology for the purpose of manufacturing, marketing, and selling golf club components and other products used in the sport of golf. 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. The LMG Sublicense Agreement had an initial term ofthree years and has been extended for another three year term that provides for the payment of a running royalty to LMG of 3% of the net sales price of licensed products.

Swatch Group License

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 allthird* parties (including the Company), but non-exclusive as to Apple. The Company will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by Swatch. The license agreement with Swatch will expire on the expiration date of the last-to-expire licensed patent.

4. INVESTMENTS IN DEBT SECURITIES

The following table sets forth amortized cost fair value, and unrealized gains (losses) of investments in debt securities (short-term and long-term):

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Income from these investments totaled $129 and $242 during thethree months ended* March 31, 2026and2025,* respectively. Such amounts are 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 that are individually in an unrealized loss position at* March 31, 2026,it was determined that the losses were primarily the result current economic factors, impacting all global debt and equity markets, that are the result of global macro events. The impact of the Company’s investment portfolio is considered to be temporary, rather than a deterioration of overall credit quality. As of March 31, 2026,all investments are current on their scheduled interest and dividend payments. The Company doesnot* intend to sell and it isnot likely that the Company will be required to sell these securities prior to recovering their amortized cost. As such, the Company doesnot consider these securities to be other-than-temporarily impaired as of* March 31, 2026.*

Investment in debt securities activities consisted of the following:

5. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable were comprised of the following:

6. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets were comprised of the following:

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7. INVENTORIES

Inventories were comprised of the following:

8. PROPERTY AND EQUIPMENT

Property and equipment were comprised of the following:

Depreciation expense forthree months ended* March 31, 2026and2025* were $93 and $78, respectively. Such amounts were included in selling, marketing, general, and administrative expenses within Company’s consolidated statements of operations.

During thethree months ended* March 31, 2026,*the Company disposed of equipment with a cost and accumulated depreciation of $90. As the net book value of the assets waszero, the company recognized a gain on disposal of $5.

9. PATENTS AND TRADEMARKS, NET

Patents and trademarks were comprised of the following:

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, andno further royalties, license fees, or other amounts will be payable in the future under the license agreement. In addition to the purchased and licensed patents, the Company has internally developed patents. Internally developed patents include legal and registration costs incurred to obtain the respective patents. 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.

The Company amortizes capitalized patents and trademarks over an average of 10-to-17-year periods. Amortization expense for patents and trademarks was $3 and $4 for thethree months ended* March 31, 2026and2025,* respectively.

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10. OTHER ASSETS

Other assets were comprised of the following:

11. ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

12. OTHER CURRENT LIABILITIES

Other current liabilities was $902 as of* March 31, 2026and December 31, 2025,and consisted of $859 of long-term, aged payables to vendors, individuals, and otherthird* parties that have been outstanding for more than 5 years. Also included in the balance is $43 in tenant deposits under the Facility Lease.

13. STOCK COMPENSATION PLANS

On* June 28, 2012,the Company adopted the2012* 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. Under this plan, the Company had outstanding grants of options to purchase 2,380,000 and 2,432,500 shares of the Company’s common stock as of* March 31, 2026and December 31, 2025,respectively. The2012* Plan expired in* June 2022.*

On* January 27, 2015,the Company adopted its2015* 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 were available for issuance under the2015 Plan. All options granted under the2015 Plan had exercise prices that were equal to the fair market value on the dates of grant. Under this plan, the Company had outstanding grants of options to purchase 22,461,667 and 22,861,667 as of* March 31, 2026and December 31, 2025,respectively. The2015* Plan expired in* January 2025.*

FASB ASC718, 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 ASC718, 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.

Stock based compensation expense attributable to these plans was $38 and $54 for thethree months ended* March 31, 2026and2025,* respectively.

Expected volatilities are based on historical volatility expected over the expected life of the options. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. Expected forfeiture rates are determined based on historical forfeitures over afive-year period. The risk-free rate used for the period within the expected life of the options is based on U.S. Treasury rates in effect at the time of grant.

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14. FACILITY LEASES

Amounts collected under the Facility Lease are comprised of base rents and reimbursements for direct facility expenses (property taxes and insurance), common area maintenance, and utilities. Amounts recorded to lease income are comprised of base rents and direct facility expenses, recorded on a straight-line basis over the lease term. Reimbursements for common area maintenance and utility expense are recorded as reductions to like expenses within sales, general, and administrative costs.

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

15. OPERATING LEASE

On* July 4, 2025,the Company entered into a non-cancelable facility lease commencing and expiring on July 3, 2028,for approximately 6,600 square meters of industrial space in Hangzhou, China. The lease term is 36 months and includes athree*-month rent-free period from* July 4, 2025through October 3, 2025,during which only property management fees and utilities are payable. Base rent is $27 per month. The lease is denominated in Renminbi (“RMB” or “yuan”), and the lease liability and right-of-use asset are initially measured in RMB and translated into U.S. dollars for consolidated financial reporting purposes in accordance withASC830.*

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

Options to purchase 39,841,667 shares of common stock at prices ranging from $0.05 to $0.38 per share were outstanding at* March 31, 2026,but werenot* 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 40,892,992 shares of common stock at prices ranging from $0.05 to $0.38 per share were outstanding at* March 31, 2025,but werenot* included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

17. RELATED PARTY TRANSACTIONS

On* March 10, 2016,the Company entered into the2016* 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 is owned by our Chairman, Professor Li. In connection with the2016 Purchase Agreement and also on* March 10, 2016,the Company and Eontec entered into a license agreement, pursuant to which the Company and Eontec entered into a cross-license of their respective technologies. Eontec is an affiliate of Yihao which is currently the Company’s primary contract manufacturer. As of March 31, 2026and December 31, 2025,Professor Li is a greater-than 5% beneficial owner of the Company and serves as the Company’s Chairman. Equipment and services procured from Yihao were $105 and $117 during thethree* months ended* March 31, 2026and2025,* respectively. As of* March 31, 2026and December 31, 2025,*the Company has outstanding payables to Yihao of $0 and $47, respectively.

18. SUBSEQUENT EVENTS

The Company follows the guidance in FASB ASC Topic855, Subsequent Events (“ASC855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that* mayoccur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Accordingly, the Company didnot* have any subsequent events that require disclosure.

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