10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to
Commission File No.  001-31332
LIQUIDMETAL TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)

Delaware	33-0264467
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

20321 Valencia Circle

Lake Forest, CA 92630

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (949) 635-2100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

Yes   ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes   ☐    No  ☒

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value per share	LQMT	OTCBB

The number of common shares outstanding as of May 10, 2019 was 914,359,124.

LIQUIDMETAL TECHNOLOGIES, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2019

FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q of Liquidmetal Technologies, Inc. contains “forward-looking statements” that may state our management’s plans, future events, objectives, current expectations, estimates, forecasts, assumptions or projections about the company and its business. Any statement in this report that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as “believes,” “estimates,” “projects,” “expects,” “intends,” “may,” “anticipates,” “plans,” “seeks,” and similar words or expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or results. These statements are not guarantees of future performance, and undue reliance should not be placed on these statements. It is important to note that our actual results could differ materially from what is expressed in our forward-looking statements due to the risk factors described in the section of our Annual Report on Form 10-K for the year ended December 31, 2018 entitled “Risk Factors,” as well as the following risks and uncertainties:

● Our ability to fund our operations in the long-term through financing transactions on terms acceptable to us, or at all;

● Our history of operating losses and the uncertainty surrounding our ability to achieve or sustain profitability;

● Our limited history of developing and selling products made from our bulk amorphous alloys;

● Our limited history of licensing our technology to third parties;

● Lengthy customer adoption cycles and unpredictable customer adoption practices;

● Our ability to identify, develop, and commercialize new product applications for our technology;

● Competition from current suppliers of incumbent materials or producers of competing products;

● Our ability to identify, consummate, and/or integrate strategic partnerships;

● The potential for manufacturing problems or delays; and

● Potential difficulties associated with protecting or expanding our intellectual property position.

We undertake no obligation, other than as required by applicable law, to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

2

TABLE OF CONTENTS

PART I - Financial Information
	Item 1 – Financial Statements	4
	Consolidated Balance Sheets
	Consolidated Statements of Operations and Comprehensive Loss
	Consolidated Statements of Cash Flows
	Notes to Consolidated Financial Statements
	Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3 – Quantitative and Qualitative Disclosures about Market Risk	21
	Item 4 – Controls and Procedures	21
PART II – Other Information
	Item 1 – Legal Proceedings	22
	Item 1A – Risk Factors	22
	Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 3 – Defaults Upon Senior Securities	22
	Item 4 – Mine Safety Disclosures	22
	Item 5 – Other Information	22
	Item 6 – Exhibits	22
Signatures		24

3

PART I

FINANCIAL INFORMATION

Item 1 – Financial Statements

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands, except par value and share data)

	March 31,			December 31,
	2019			2018
	(Unaudited)
ASSETS
Current assets:
Cash	$	33,871		$	35,229
Restricted cash		5			5
Trade accounts receivable		124			120
Inventory		63			31
Prepaid expenses and other current assets		311			363
Total current assets		34,374			35,748
Property and equipment, net		11,727			11,767
Patents and trademarks, net		301			322
Other assets		14			14
Total assets	$	46,416		$	47,851
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	150		$	253
Accrued liabilities		516			270
Deferred revenue		28			31
Total current liabilities		694			554
Long-term liabilities:
Other long term liabilities		856			856
Total liabilities	$	1,550		$	1,410
Shareholders' equity:
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	$	-		$	-
Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,316,624 and 914,206,832 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively		914			914
Warrants		18,179			18,179
Additional paid-in capital		286,469			286,276
Accumulated deficit		(260,622	)		(258,854	)
Non-controlling interest in subsidiary		(74	)		(74	)
Total shareholders' equity		44,866			46,441
Total liabilities and shareholders' equity	$	46,416		$	47,851

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

4

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS

($ in thousands, except share and per share data)

(unaudited)

	For the Three Months Ended March 31,
	2019			2018
Revenue
Products	$	223		$	80
Licensing and royalties		-			-
Total revenue		223			80
Cost of sales		179			81
Gross margin (loss)		44			(1	)
Operating expenses
Selling, marketing, general and administrative		1,433			1,585
Research and development		489			610
Total operating expenses		1,922			2,195
Operating loss		(1,878	)		(2,196	)
Interest income		110			33
Net loss and comprehensive loss		(1,768	)		(2,163	)
Net loss attributable to non-controlling interest		-			-
Net loss and comprehensive loss attributable to Liquidmetal Technologies shareholders	$	(1,768	)	$	(2,163	)
Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted	$	(0.00	)	$	(0.00	)
Number of weighted average shares - basic and diluted		914,280,027			908,912,441

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

5

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands, except per share data)

(unaudited)

	For the Three Months Ended March 31,
	2019			2018
Operating activities:
Net loss	$	(1,768	)	$	(2,163	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		279			252
Stock-based compensation		182			281
Changes in operating assets and liabilities:
Trade accounts receivable		(4	)		120
Inventory		(32	)		(76	)
Prepaid expenses and other current assets		52			94
Accounts payable and accrued liabilities		109			67
Deferred revenue		(3	)		(6	)
Net cash used in operating activities		(1,185	)		(1,431	)
Investing Activities:
Purchases of property and equipment		(184	)		(47	)
Net cash used in investing activities		(184	)		(47	)
Financing Activities:
Proceeds from exercise of stock options		11			42
Net cash provided by financing activities		11			42
Net decrease in cash and restricted cash		(1,358	)		(1,436	)
Cash and restricted cash at beginning of period		35,234			41,309
Cash and restricted cash at end of period	$	33,876		$	39,873
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Accrued capital expenditures		(36	)		-

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

7

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

1.  Description of Business

Liquidmetal Technologies, Inc. (the “Company”) is a materials technology and manufacturing 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 utilizes the advantages offered by amorphous alloys technology. The Company designs, develops, manufactures and sells products and custom parts from bulk amorphous alloys to customers in a wide range of industries. The Company also partners with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.

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’s alloys and the molding technologies it employs results in components 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 do not have to select specific alloys to achieve one 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 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.

2.  Basis of Presentation and Recent Accounting Pronouncements

The accompanying unaudited interim consolidated financial statements as of and for the three months ended March 31, 2019 and March 31, 2018 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 Form 10-Q. Accordingly, they do not 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 the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for any future periods or the year ending December 31, 2019. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 5, 2019.

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update which modifies the accounting for leasing arrangements, particularly those arrangements classified as operating leases. This update will require entities to recognize the assets and liabilities arising from operating leases on the balance sheet. The Company adopted the requirements of this guidance as of January 1, 2019, utilizing the modified retrospective approach. Due to the Company not having any qualifying lease obligations, the adoption of this guidance did not have any impact on the Company’s consolidated financial statements.

8

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

Liability Classified Warrants

In July 2017, the FASB issued an accounting standards update which modifies the requirements for the classification of certain financial instruments with down round features as equity versus liabilities. The guidance will allow for financial instruments previously required to be presented as liabilities due to the presence of down round features to be presented as equity upon meeting other criteria. The Company adopted the requirements of this update effective as of January 1, 2019, utilizing the full retrospective transition option. Accordingly, the Company reclassified the warrant liability to additional paid in capital on its December 31, 2018 consolidated balance sheets, which increased additional paid-in capital by $6,970, increased accumulated deficit by $4,778, and decreased warrant liability by $2,192. In addition, because of the retrospective adoption, the Company credited change in fair value of warrant liability on its consolidated statements of operations by $1,267 for year ended December 31, 2018. The change in fair value of the warrant liability was offset by a $1,267 credit to accumulated deficit on the consolidated balance sheets. Similarly, the Company credited change in fair value of warrant liability on its consolidated statements of operations by $275 for three months ended March 31, 2018. The adoption of this guidance had no impact on the Company’s consolidated statement of cash flows in the current or previous interim and annual reporting periods. The following table provides a reconciliation of warrant liability, additional paid-in capital, accumulated deficit, and change in fair value of warrant liability on the consolidated balance sheets for the year ended December 31, 2018 and the three-months ended March 31, 2018 (in thousands):

	Balance Sheet
	Warrant Liability			Additional Paid-in Capital		Accumulated Deficit
Balance as of 12/31/2018 (Prior to Adoption of ASU 2017-11)	$	925		$	279,306	$	(252,809	)
Reverse beginning balance as of January 1, 2018		(2,192	)		6,970		(4,778	)
Change in fair value of warrant liability		1,267			-		(1,267	)
Balance as of 12/31/2018 (After Adoption of ASU 2017-11)	$	-		$	286,276	$	(258,854	)

	Statement of Operations
	Change in Value of Warrant Liability			Net Loss and Comprehensive Loss
Balance as of 3/31/2018 (Prior to Adoption of ASU 2017-11)	$	(275	)	$	(2,438	)
Reverse beginning balance as of January 1, 2018		-			-
Change in fair value of warrant liability		275			275
Balance as of 3/31/2018 (After Adoption of ASU 2017-11)	$	-		$	(2,163	)

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 Level 1 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:

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; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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.

Other recent pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants 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.

9

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

3.   Significant Transactions

Manufacturing Facility Purchase

On February 16, 2017, the Company purchased a 41,000 square foot manufacturing facility located in Lake Forest, CA, where operations commenced during July 2017. The purchase price for the property was $7,818.

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 and CEO, Professor Lugee Li (“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.

In addition to the shares issuable under the 2016 Purchase Agreement, the Company 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 at an exercise price of $0.07 per share). The warrant will expire on the tenth anniversary of its issuance date.

Further, the 2016 Purchase Agreement provided that the Investor would have the right to designate three members of the Company’s board of directors, with one such member serving as Chairman. The 2016 Purchase Agreement also provided that, with certain limited exceptions, if the Company issues any shares of common stock at any time through the fifth anniversary of the 2016 Purchase Agreement, the Investor will have a preemptive right to subscribe for and to purchase at the same price per share (or at market price, in the case of issuance of shares pursuant to stock options) the number of shares necessary to maintain its ownership percentage of Company-issued shares of common stock.

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 and CEO, Professor Li, is also a major shareholder and 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.

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

During March 2017, the Company signed contracts with Eontec to purchase two hot-crucible amorphous metal molding machines (“Machines”) at a total purchase price of $780. The Machines were delivered to the Company’s new manufacturing facility located in Lake Forest, CA in April 2017 and were operational during the fourth quarter of 2017.

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, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a 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.

10

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

Other License Transactions

On January 31, 2012, the Company entered into a Supply and License Agreement for a five year term with Engel Austria Gmbh (“Engel”) whereby Engel was granted a non-exclusive license to manufacture and sell injection molding machines to the Company’s licensees. Since that time, the Company and Engel have agreed on an injection molding machine configuration that can be commercially supplied and supported by Engel.  On December 6, 2013, the companies entered into an Exclusivity Agreement for a 10 year term whereby the Company agreed, with certain exceptions and limitations, that the Company and its licensees would purchase amorphous alloy injection molding machines exclusively from Engel in exchange for certain royalties to be paid by Engel to the Company based on a percentage of the net sales price of such injection molding machines.

The Company’s majority-owned Liquidmetal Golf subsidiary has the exclusive right and license to utilize the Company’s Liquidmetal alloy technology for purposes of golf equipment applications. This right and license is set forth in an intercompany license agreement 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 parts and other products used in the sport of golf. The Company owns 79% of the outstanding common stock of Liquidmetal Golf.

In June 2003, the Company entered into an exclusive license agreement with LLPG, Inc. (“LLPG”).  Under the terms of the agreement, LLPG has the exclusive right to commercialize Liquidmetal alloys, particularly precious-metal based compositions, in jewelry and high-end luxury product markets.  The Company, in turn, will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by LLPG. The exclusive license agreement with LLPG expires on December 31, 2021.

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, but non-exclusive as to Apple, and the Company’s license agreement with LLPG was simultaneously amended to exclude watches from LLPG’s rights. 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 licensed patent.

4.   Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets totaled $311 and $363 as of March 31, 2019 and December 31, 2018, respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Prepaid service invoices	$	91	$	79
Prepaid manufacturing and mold costs		95		91
Prepaid insurance premiums		125		193
Total	$	311	$	363

11

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

5.   Inventory

Inventory totaled $63 and $31 as of March 31, 2019 and December 31, 2018, respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Raw materials	$	-	$	-
Work in progress		63		31
Total	$	63	$	31

6.   Property and Equipment, net

Property and equipment consist of the following:

	March 31, 2019			December 31, 2018
Land, building, and improvements	$	9,093		$	9,039
Machinery and equipment		5,892			5,745
Computer equipment		300			282
Office equipment, furnishings, and improvements		181			181
Total		15,466			15,247
Accumulated depreciation		(3,739	)		(3,480	)
Total property and equipment, net	$	11,727		$	11,767

Depreciation expense for the three months ended March 31, 2019 and 2018 was $258 and $231, respectively. For the three months ended March 31, 2019 and 2018, $23 and $13 of depreciation expense, respectively, was included in cost of sales and $235 and $218 was included in selling, marketing, general, and administrative expenses, respectively.

The Company’s manufacturing activities and efforts have historically focused on the identification, design, and successful prototyping of customer applications, including, but not limited to, medical and automotive components. Experience has shown that customers will perform numerous tests and extensively evaluate components and products before incorporating them into their finished products. The time required for testing, evaluating, and designing the Company’s components and products for use in a customer’s products, and in some cases, obtaining regulatory approval, can be significant, with an additional period of time before a customer commences volume production of products incorporating Liquidmetal components and products, if ever. The time it takes to transition a customer from limited production to full-scale production runs will depend upon the nature of the processes and products into which Liquidmetal alloys are integrated.

Investments in the Company’s manufacturing capabilities and infrastructure have been historically made based on certain assumptions and expectations regarding the time and investment required to reach minimum volume manufacturing levels, to scale and generate sustainable revenues, and to ultimately reach profitability. As a result of the Company’s inability to gain traction in receiving and fulfilling orders for the volume production of parts, the Company has commenced a comprehensive review of the options available in the context of its current strategy. While no decisions have been made, any change to the current strategy, depending on its nature, may result in future impairments of the Company’s manufacturing assets, inclusive of patents and trademarks.

7.   Patents and Trademarks, net

Net patents and trademarks totaled $301 and $322 as of March 31, 2019 and December 31, 2018, respectively, and primarily consisted of purchased patent rights and 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 agreement.

12

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

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 $21 and $21 for the three months ended March 31, 2019 and 2018, respectively.

8.   Other Assets

Other assets totaled $14 and $14 as of March 31, 2019 and December 31, 2018, respectively, and consisted of long-term deposits.

9.   Accrued Liabilities

Accrued liabilities totaled $516 and $270 as of March 31, 2019 and December 31, 2018, respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Accrued payroll, vacation, and bonuses	$	206	$	178
Accrued severance		284		10
Accrued audit fees		26		82
Total	$	516	$	270

10.   Other Long-Term Liabilities

Other long-term liabilities were $856 as of March 31, 2019 and December 31, 2018, and consisted of long-term, aged payables to vendors, individuals, and other third parties that have been outstanding for more than 5 years. The Company is in the process of researching and resolving the balances for settlement and/or escheatment in accordance with applicable state law.

11.   Stock Compensation Plans

On April 4, 2002, our shareholders and Board of Directors adopted the 2002 Equity Incentive Plan (“2002 Plan”). The 2002 Plan provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries. A total of 10,000,000 shares of our common stock were available to be granted under the 2002 Plan. The 2002 Plan expired by its terms in April 2012, and remains in effect only with respect to the equity awards that have been granted prior to its expiration. As of March 31, 2019 and December 31, 2018, there were 169,000 and 169,000 options, respectively, outstanding under the 2002 Plan.

On June 28, 2012, the Company adopted the 2012 Equity Incentive Plan (“2012 Plan”), with the approval of the shareholders, which provides 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 Plan, and all options granted under the 2012 Plan had exercise prices that were equal to the fair market value on the date of grant. During the three months ended March 31, 2019, the Company granted no options to purchase shares of common stock. Under this plan, the Company had outstanding grants of options to purchase 10,455,665 and 11,755,503 shares of the Company’s common stock as of March 31, 2019 and December 31, 2018, 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. All options granted under the 2015 Plan had exercise prices that were equal to the fair market value on the dates of grant. During the three months ended March 31, 2019, the Company granted no options to purchase shares of common stock. Under this plan, the Company had outstanding grants of options to purchase 16,906,667 and 16,906,667 shares of the Company’s common stock as of March 31, 2019 and December 31, 2018, respectively.

13

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2019 and 2018

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

(unaudited)

Stock based compensation expense attributable to these plans was $182 and $281 for the three months ended March 31, 2019 and 2018, respectively.

In connection with the separation of former executives and directors, 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. The Company incurred incremental stock-based compensation expense of $0 and $56 during the three months ended March 31, 2019 and 2018, respectively.

12. Consolidated Statements of Changes in Equity

The following table provides the Company’s changes in equity for the three months ended March 31, 2019:

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2018		-		914,206,832	$	914	$	18,179	$	286,276	$	(258,854	)	$	(74	)	$	46,441
Stock option exercises				109,792		-				11								11
Stock-based compensation				-		-				182								182
Net loss												(1,768	)					(1,768	)
Balance, March 31, 2019		-		914,316,624	$	914	$	18,179	$	286,469	$	(260,622	)	$	(74	)	$	44,866

The following table provides the Company’s changes in equity for the three months ended March 31, 2018:

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2017		-		908,768,116	$	909	$	18,179	$	284,894	$	(250,154	)	$	(73	)	$	53,755
Stock option exercises				415,476		-				42								42
Stock-based compensation										281								281
Net loss												(2,163	)		-			(2,163	)
Balance, March 31, 2018		-		909,183,592	$	909	$	18,179	$	285,217	$	(252,317)	)	$	(73	)	$	51,915

14

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

Options to purchase 27,531,332 shares of common stock, at prices ranging from $0.07 to $0.38 per share, were outstanding at March 31, 2019, 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, with a price of $0.07 per share, outstanding at March 31, 2019, 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 33,334,035 shares of common stock, at prices ranging from $0.07 to $0.47 per share, were outstanding at March 31, 2018, 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, with a price of $0.07 per share, outstanding at March 31, 2018, 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.

14.  Commitments and Contingencies

Legal Contingencies

During October 2018, the Company received a notice of intent to sue from a former employee. The Claims raised in the notice included accusations of pay discrimination, employment misclassification, and unfair labor practices. In April 2019, the Company reached a confidential settlement of the matter in the amount of $250. The Company has accrued this amount as of March 31, 2019, as a component of general and administrative expenses.

15.  Related Party Transactions

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. In connection with the 2016 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 a publicly held Hong Kong corporation of which Professor Li is the Chairman and major shareholder. As of March 31, 2019, Professor Li is a greater-than 5% beneficial owner of the Company and serves as the Company’s Chairman, President, and Chief Executive Officer. Equipment and services procured from Eontec were $0 and $5 during the three months ended March 31, 2019 and 2018, respectively.

15

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis should be read in conjunction with the consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. All amounts described in this section are in thousands, except percentages, periods of time, and share and per share data.

This management’s discussion and analysis, as well as other sections of this Quarterly Report on Form 10-Q, may contain “forward-looking statements” that involve risks and uncertainties, including statements regarding our plans, future events, objectives, expectations, estimates, forecasts, assumptions, or projections. Any statement that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as “believe,” “estimate,” “project,” “expect,” “intend,” “may,” “anticipate,” “plan,” “seek,” and similar words or expressions identify forward-looking statements. These statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or results, and undue reliance should not be placed on these statements. These risks and uncertainties include, but are not limited to, the matters discussed under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and other risks and uncertainties discussed in other filings made with the Securities and Exchange Commission (including risks described in subsequent reports on Form 10-Q and Form 8-K and other filings). We disclaim any intention or obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

We are a materials technology company that develops and commercializes products made from amorphous alloys. Our Liquidmetal® family of alloys consists of a variety of proprietary bulk alloys and composites that utilize the advantages offered by amorphous alloy technology. We design, develop and sell custom products and parts from bulk amorphous alloys to customers in various industries. We also partner with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.

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 we believe 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. Our alloys and the molding technologies we employ result in components 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. All of these characteristics are achievable from the molding process, so design engineers do not have to select specific alloys to achieve one or more of the characteristics as is the case with crystalline materials. We believe 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, we believe these advantages could enable the introduction of entirely new products and applications that are not possible or commercially viable with other materials.

Our revenues are derived from i) selling our bulk amorphous alloy custom products and parts for applications which include, but are not limited to, non-consumer electronic devices, medical products, automotive components, and sports and leisure goods; ii) selling tooling and prototype parts such as demonstration parts and test samples for customers with products in development; and iii) product licensing and royalty revenue. We expect that these sources of revenue will continue to significantly change the character of our revenue mix as operations are scaled.

Our cost of sales consists primarily of the costs of manufacturing, which include raw alloy and internal labor required to operate our on-site production cells. Selling, general, and administrative expenses currently consist primarily of salaries and related benefits, travel, consulting and professional fees, depreciation and amortization, insurance, office and administrative expenses, and other expenses related to our operations.

Research and development expenses represent salaries, related benefits expenses, consulting and contract services, expenses incurred for the design and testing of new processing methods, expenses for the development of sample and prototype products, and other expenses related to the research and development of Liquidmetal bulk alloys. Costs associated with research and development activities are expensed as incurred. We plan to enhance our competitive position by improving our existing technologies and developing advances in amorphous alloy technologies. We believe that our research and development efforts will focus on the discovery of new alloy compositions, the development of improved processing technology, and the identification of new applications for our alloys.

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Licensing Transactions

Eontec License Agreement

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

The License Agreement provides for the cross-license of certain patents, technical information, and trademarks between us and Eontec. In particular, we granted to Eontec a paid-up, royalty-free, perpetual license to our 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, and Eontec granted to us 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 us to Eontec is exclusive (including to the exclusion of us) 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 us 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.

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

During March 2017, we signed contracts with Eontec to purchase two hot-crucible amorphous metal molding machines (“Machines”) at a total purchase price of $780,000. The Machines were delivered to our new manufacturing facility located in Lake Forest, CA in April 2017 and were operational during the fourth quarter of 2017.

Apple License Transaction

On August 5, 2010, we entered into a license transaction with Apple Inc. (“Apple”) pursuant to which (i) we contributed substantially all of our 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, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a license fee, and (iii) CIP granted back to us 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, we were obligated to contribute, to CIP, all intellectual property that we developed through February 2012. Subsequently, this obligation was extended to apply to all intellectual property developed through February 2016. We are also obligated to maintain certain limited liability company formalities with respect to CIP at all times after the closing of the license transaction.

Visser Precision Cast, LLC License Agreement

On June 1, 2012, we entered into a Master Transaction Agreement (the “Visser MTA”) with Visser Precision Cast, LLC (“Visser”) relating to a strategic transaction for manufacturing services and financing. On May 20, 2014, we and Visser entered into a settlement agreement significantly amending the Visser MTA, whereby we granted to Visser a fully paid-up, royalty-free, irrevocable, perpetual, worldwide, non-transferable, nonexclusive sublicense to all of our intellectual property developed on or prior to May 20, 2014 (the “Effective Date”). Visser does not have any rights, now or in the future, to our intellectual property developed after the Effective Date. The license to our intellectual property developed on or prior to the Effective Date does not include the right to use the “Liquidmetal” trademark or any of our other trademarks, except in certain defined situations, as set forth in the amended and restated agreement.

Other License Transactions

On January 31, 2012, we entered into a Supply and License Agreement for a five year term with Engel Austria Gmbh (“Engel”) whereby Engel was granted a non-exclusive license to manufacture and sell injection molding machines to our licensees. Since that time, we and Engel have agreed on an injection molding machine configuration that can be commercially supplied and supported by Engel.  On December 6, 2013, the companies entered into an Exclusivity Agreement for a ten year term whereby we agreed, with certain exceptions and limitations, that we and our licensees would purchase amorphous alloy injection molding machines exclusively from Engel in exchange for certain royalties to be paid by Engel to us based on a percentage of the net sales price of such injection molding machines.

Our Liquidmetal Golf subsidiary 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 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. We own 79% of the outstanding common stock of Liquidmetal Golf.

17

In June 2003, we entered into an exclusive license agreement with LLPG, Inc. (“LLPG”).  Under the terms of the agreement, LLPG has the exclusive right to commercialize Liquidmetal alloys, particularly precious-metal based compositions, in jewelry and high-end luxury product markets.  We, in turn, will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by LLPG. The exclusive license agreement with LLPG expires on December 31, 2021.

In March 2009, we entered into a license agreement with Swatch Group, Ltd. (“Swatch”) under which Swatch was granted a non-exclusive license to our 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 and all third parties (including us), but non-exclusive as to Apple, and our license agreement with LLPG was simultaneously amended to exclude watches from LLPG’s rights. We 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 licensed patent.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.

We believe that the following accounting policies are the most critical to our consolidated financial statements since these policies require significant judgment or involve complex estimates that are important to the portrayal of our financial condition and operating results:

• Revenue recognition

• Impairment of long-lived assets and definite-lived intangibles

• Deferred tax assets

• Valuation of liability classified warrants and options and embedded derivatives

• Valuation of inventory

• Share based compensation

Our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”) contains further discussions on our critical accounting policies and estimates.

18

Results of Operations  

Comparison of the three months ended March 31, 2019 and 2018

	For the three months ended March 31,
	2019				2018
	(unaudited)				(unaudited)
	in 000's			% of Products Revenue	in 000's			% of Products Revenue
Revenue:
Products	$	223			$	80
Licensing and royalties		-				-
Total revenue		223				80
Cost of sales	$	179		80%	$	81		101%
Gross margin (loss)		44		20%		(1	)	-1%
Selling, marketing, general and administrative		1,433		643%		1,585		1981%
Research and development		489		219%		610		763%
Operating loss		(1,878	)			(2,196	)
Interest income		110				33
Net loss	$	(1,768	)		$	(2,163	)

Revenue and operating expenses

Revenue. Total revenue increased to $223 thousand for the three months ended March 31, 2019 from $80 thousand for the three months ended March 31, 2018. The increase was attributable to a continued focus on small scale early-production orders in an effort to build a significant, recurring, funnel of production business during the 2019 period and prospectively.

Cost of sales. Cost of sales was $179 thousand, or 80% of products revenue, for the three months ended March 31, 2019, an increase from $81 thousand, or 101% of products revenue, for the three months ended March 31, 2018. The decrease in our cost of sales as a percentage of products revenue for the three months ended March 31, 2019 was primarily attributable to lower raw material costs as a result of market adjustments taken during the third quarter of 2018 and improvements in production throughput. The cost to manufacture products and parts from our bulk amorphous alloys is variable and differs based on the unique design of each product. Given the continued development and refinement of our manufacturing efforts during the three months ended March 31, 2019, our cost of sales as a percentage of products revenue continues to be volatile and is expected to show continued improvement over time with increases in volume and continuous refinements to our internal processes. When we begin increasing our products revenues with shipments of routine, commercial products and parts through our manufacturing facility and/or third party contract manufacturers, we expect our cost of sales percentages to decrease, stabilize and be more predictable.

Gross Profit. Our gross profit increased to $44 thousand from $(1) thousand for the three month periods ended March 31, 2019 and 2018, respectively. Our gross profit, as a percentage of products revenue, increased to 20% from (1)% for the three month periods ended March 31, 2019 and 2018, respectively. Early prototype and pre-production orders generally result in a higher cost mix, relative to revenue, than would otherwise be incurred in an on-site production environment, with higher volumes and more established operating processes, or through contract manufacturers. As such, our gross profit percentages have fluctuated and may continue to fluctuate based on volume and quoted production prices per unit and may not be representative of our future business. When we begin increasing our products revenues with shipments of routine, commercial products and parts through future orders to our manufacturing facility and/or third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable.

Selling, marketing, general and administrative. Selling, marketing, general, and administrative expenses were $1,433 thousand and $1,585 thousand for the three months ended March 31, 2019 and 2018, respectively. The decrease in expenses was due to overall lower costs associated with employee compensation as a result of prior period headcount reductions and reductions in stock-based compensation. These decreases were partially offset by $250 thousand in legal accruals to settle employment matters.

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Research and development. Research and development expenses decreased to $489 thousand for the three months ended March 31, 2019, from $610 thousand for the three months ended March 31, 2018. The decrease in expense was mainly due to reduction in mold, tools, and alloy development initiatives. We continue to (i) perform research and development of new Liquidmetal alloys and related processing capabilities, (ii) develop new manufacturing techniques, and (iii) contract with consultants to advance the development of Liquidmetal alloys and related production processes.  

Operating loss. Operating loss was $1,878 thousand and $2,196 thousand for the three months ended March 31, 2019 and 2018, respectively. Fluctuations in our operating loss are primarily attributable to variations in operating expenses, as discussed above.

We continue to invest in our technology infrastructure to expedite the adoption of our technology, but we have experienced long sales lead times for customer adoption of our technology. Until that time when we can either (i) increase our revenues with shipments of routine, commercial products and parts through a combination of our manufacturing center or third party contract manufacturers or (ii) obtain significant licensing revenues, we expect to continue to have operating losses for the foreseeable future.

Other income and expenses

Interest income. Interest income relates to interest earned from our cash deposits for the respective periods. Such amounts were $110 thousand and $33 thousand for the three months ended March 31, 2019 and 2018, respectively.

Liquidity and Capital Resources 

Cash used in operating activities

Cash used in operating activities totaled $1,185 thousand and $1,431 thousand for the three months ended March 31, 2019 and 2018, respectively. The cash was primarily used to fund operating expenses related to our business and product development efforts.

Cash used in investing activities

Cash used in investing activities totaled $184 thousand and $47 thousand for the three months ended March 31, 2019 and 2018, respectively. Investing outflows primarily consist of capital expenditures to support our manufacturing efforts including the purchase of our new manufacturing facility and additional production equipment.

Cash provided by financing activities

Cash provided by financing activities totaled $11 thousand and $42 thousand for the three months ended March 31, 2019 and 2018, respectively. Cash provided by financing activities is comprised of cash received for the issuance of shares following the exercise of stock options during the three months ended March 31, 2019 and 2018, respectively.

Financing arrangements and outlook

During 2016, we raised a total of $62.7 million through the issuance of 405,000,000 shares of our common stock in multiple closings under the 2016 Purchase Agreement. The Company has a relatively limited history of producing bulk amorphous alloy products and components on a mass-production scale. Furthermore, the ability of future contract manufacturers to produce the Company’s products in desired quantities and at commercially reasonable prices is uncertain and is dependent on a variety of factors that are outside of the Company’s control, including the nature and design of the component, the customer’s specifications, and required delivery timelines. These factors have previously required that the Company engage in equity sales under various stock purchase agreements to support its operations and strategic initiatives. As a result of the funding under the 2016 Purchase Agreement, the Company anticipates that its current capital resources, when considering expected losses from operations, will be sufficient to fund the Company’s operations for the foreseeable future.

Our current manufacturing efforts are focused on the identification, design, and successful prototyping of customer applications, including, but not limited to, medical and automotive components. Experience has shown that customers will perform numerous tests and extensively evaluate components and products before incorporating them into their finished products. The time required for testing, evaluating, and designing our components and products for use in a customer’s products, and in some cases, obtaining regulatory approval, can be significant, with an additional period of time before a customer commences volume production of products incorporating Liquidmetal components and products, if ever. The time it takes to transition a customer from limited production to full-scale production runs will depend upon the nature of the processes and products into which Liquidmetal alloys are integrated.

Investments in the commercialization of our technology are made with the goal of reaching volume manufacturing levels, scaling and generating sustainable revenues, and ultimately reaching profitability. As part of our regular review of available markets, the pace at which development projects are being converted into production contracts, and our manufacturing costs, we have determined that current results, inclusive of opportunities in the development pipeline, are unsatisfactory and untenable. As such, we have commenced a comprehensive review of the options available to us in the context of our current strategy. While no decisions have been made, any change to the current strategy, depending on its nature, may result in fundamental changes to our marketing and sales approach, cost structure and/or manufacturing outlook.

Off Balance Sheet Arrangements 

As of March 31, 2019, we did not have any off-balance sheet arrangements.

20

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

None.

Item 4 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures. 

Under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and Vice President of Finance (Principal Financial Officer), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2019. Based on their evaluation, our Chief Executive Officer and Vice President of Finance have concluded that our disclosure controls and procedures were effective as of March 31, 2019.

Changes in Internal Control over Financial Reporting.

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 quarter ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1 – Legal Proceedings

None.

Item 1A – Risk Factors

For a detailed discussion of the risk factors that should be understood by any investor contemplating an investment in our stock, please refer to Part I, Item 1A “Risk Factors” in the 2018 Annual Report. There have been no material changes from the risk factors previously disclosed in Part I, Item 1A “Risk Factors” in the 2018 Annual Report.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

During the period covered by this Quarterly Report on Form 10-Q, we did not issue or sell any unregistered equity securities.

Item 3 – Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 – Other Information

None.

22

Item 6 – Exhibits

The following documents are filed as exhibits to this Report:

Exhibit Number	Description of Document
31.1	Certification of Principal Executive Officer, Lugee Li, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer, Bryce Van, as required by Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer, Lugee Li, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Vice President of Finance, Bryce Van, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	The following financial statements from Liquidmetal Technologies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (unaudited), formatted in XBRL: (i) Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018, (ii) Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2019 and 2018, (iii) Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2019, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018, and (v) Notes to Consolidated Financial Statements.

23

SIGNATURES

Pursuant to the requirements 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.
	(Registrant)
Date: May 14, 2019	/s/ Lugee Li
	Lugee Li
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: May 14, 2019	/s/ Bryce Van
	Bryce Van
	Vice President of Finance
	(Principal Financial and Accounting Officer)

24

EX-31.1

Exhibit 31.1

certificationS

I, Lugee Li, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Liquidmetal Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 14, 2019	/s/ Lugee Li
	Lugee Li
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Bryce Van, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Liquidmetal Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 14, 2019	/s/ Bryce Van
	Bryce Van
	Vice President of Finance
	(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

WRITTEN STATEMENT OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. 1350

Solely for the purposes of complying with 18 U.S.C. 1350, I, the undersigned Chief Executive Officer of Liquidmetal Technologies, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lugee Li               

Lugee Li, President and Chief Executive Officer

May 14, 2019

EX-32.2

Exhibit 32.2

WRITTEN STATEMENT OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. 1350

Solely for the purposes of complying with 18 U.S.C. 1350, I, the undersigned Vice President of Finance of Liquidmetal Technologies, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Bryce Van                    

Bryce Van, Vice President of Finance

May 14, 2019

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 10, 2019
Document Information [Line Items]
Entity Registrant Name	LIQUIDMETAL TECHNOLOGIES INC
Entity Central Index Key	0001141240
Trading Symbol	lqmt
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		914,359,124
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash	$ 33,871	$ 35,229
Restricted cash	5	5
Trade accounts receivable	124	120
Inventory	63	31
Prepaid expenses and other current assets	311	363
Total current assets	34,374	35,748
Property and equipment, net	11,727	11,767
Patents and trademarks, net	301	322
Other assets	14	14
Total assets	46,416	47,851
Current liabilities:
Accounts payable	150	253
Accrued liabilities	516	270
Deferred revenue	28	31
Total current liabilities	694	554
Long-term liabilities:
Other long term liabilities	856	856
Total liabilities	1,550	1,410
Shareholders' equity:
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,316,624 and 914,206,832 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively	914	914
Warrants	18,179	18,179
Additional paid-in capital	286,469	286,276
Accumulated deficit	(260,622)	(258,854)
Non-controlling interest in subsidiary	(74)	(74)
Total shareholders' equity	44,866	46,441
Total liabilities and shareholders' equity	$ 46,416	$ 47,851

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,100,000,000	1,100,000,000
Common stock, shares issued (in shares)	914,316,624	914,206,832
Common stock, shares outstanding (in shares)	914,316,624	914,206,832

XML

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue
Revenues	$ 223	$ 80
Cost of sales	179	81
Gross margin (loss)	44	(1)
Operating expenses
Selling, marketing, general and administrative	1,433	1,585
Research and development	489	610
Total operating expenses	1,922	2,195
Operating loss	(1,878)	(2,196)
Interest income	110	33
Net loss and comprehensive loss	(1,768)	(2,163)
Net loss attributable to non-controlling interest
Net loss and comprehensive loss attributable to Liquidmetal Technologies shareholders	$ (1,768)	$ (2,163)
Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted (in dollars per share)	$ 0	$ 0
Number of weighted average shares - basic and diluted (in shares)	914,280,027	908,912,441
Product [Member]
Revenue
Revenues	$ 223	$ 80
License [Member]
Revenue
Revenues

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities:
Net loss	$ (1,768)	$ (2,163)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	279	252
Stock-based compensation	182	281
Changes in operating assets and liabilities:
Trade accounts receivable	(4)	120
Inventory	(32)	(76)
Prepaid expenses and other current assets	52	94
Accounts payable and accrued liabilities	109	67
Deferred revenue	(3)	(6)
Net cash used in operating activities	(1,185)	(1,431)
Investing Activities:
Purchases of property and equipment	(184)	(47)
Net cash used in investing activities	(184)	(47)
Financing Activities:
Proceeds from exercise of stock options	11	42
Net cash provided by financing activities	11	42
Net decrease in cash and restricted cash	(1,358)	(1,436)
Cash and restricted cash at beginning of period	35,234	41,309
Cash and restricted cash at end of period	33,876	39,873
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Accrued capital expenditures	$ (36)

XML

Note 1 - Description of Business

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1.   Description of Business

Liquidmetal Technologies, Inc. (the “Company”) is a materials technology and manufacturing 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 utilizes the advantages offered by amorphous alloys technology. The Company designs, develops, manufactures and sells products and custom parts from bulk amorphous alloys to customers in a wide range of industries. The Company also partners with

third

-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.

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’s alloys and the molding technologies it employs results in components 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 do

not

have to select specific alloys to achieve

one

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 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.

XML

Note 2 - Basis of Presentation and Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

2 .  Basis of Presentation and Recent Accounting Pronouncements

The accompanying unaudited interim consolidated financial statements as of and for the

three

months ended

March 31, 2019

and

March 31, 2018

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 Form

10

-Q. Accordingly, they do

not

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 the

three

months ended

March 31, 2019

are

not

necessarily indicative of the results that

may

be expected for any future periods or the year ending

December 31, 2019.

The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's

2018

Annual Report on Form

10

-K filed with the Securities and Exchange Commission (“SEC”) on

March 5, 2019.

Leases

In

February 2016,

the Financial Accounting Standards Board (“FASB”) issued an accounting standards update which modifies the accounting for leasing arrangements, particularly those arrangements classified as operating leases. This update will require entities to recognize the assets and liabilities arising from operating leases on the balance sheet. The Company adopted the requirements of this guidance as of

January 1, 2019,

utilizing the modified retrospective approach. Due to the Company

not

having any qualifying lease obligations, the adoption of this guidance did

not

have any impact on the Company’s consolidated financial statements.

Liability Classified Warrants

In

July 2017,

the FASB issued an accounting standards update which modifies the requirements for the classification of certain financial instruments with down round features as equity versus liabilities. The guidance will allow for financial instruments previously required to be presented as liabilities due to the presence of down round features to be presented as equity upon meeting other criteria. The Company adopted the requirements of this update effective as of

January 1, 2019,

utilizing the full retrospective transition option. Accordingly, the Company reclassified the warrant liability to additional paid in capital on its

December 31, 2018

consolidated balance sheets, which increased additional paid-in capital by

$6,970,

increased accumulated deficit by

$4,778,

and decreased warrant liability by

$2,192.

In addition, because of the retrospective adoption, the Company credited change in fair value of warrant liability on its consolidated statements of operations by

$1,267

for year ended

December 31, 2018.

The change in fair value of the warrant liability was offset by a

$1,267

credit to accumulated deficit on the consolidated balance sheets. Similarly, the Company credited change in fair value of warrant liability on its consolidated statements of operations by

$275

for

three

months ended

March 31, 2018.

The adoption of this guidance had

no

impact on the Company’s consolidated statement of cash flows in the current or previous interim and annual reporting periods. The following table provides a reconciliation of warrant liability, additional paid-in capital, accumulated deficit, and change in fair value of warrant liability on the consolidated balance sheets for the year ended

December 31, 2018

and the

three

-months ended

March 31, 2018 (

in thousands):

	Balance Sheet
	Warrant Liability			Additional Paid-in Capital		Accumulated Deficit
Balance as of 12/31/2018 (Prior to Adoption of ASU 2017-11)	$	925		$	279,306	$	(252,809	)
Reverse beginning balance as of January 1, 2018		(2,192	)		6,970		(4,778	)
Change in fair value of warrant liability		1,267			-		(1,267	)
Balance as of 12/31/2018 (After Adoption of ASU 2017-11)	$	-		$	286,276	$	(258,854	)

	Statement of Operations
	Change in Value of Warrant Liability			Net Loss and Comprehensive Loss
Balance as of 3/31/2018 (Prior to Adoption of ASU 2017-11)	$	(275	)	$	(2,438	)
Reverse beginning balance as of January 1, 2018		-			-
Change in fair value of warrant liability		275			275
Balance as of 3/31/2018 (After Adoption of ASU 2017-11)	$	-		$	(2,163	)

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 Level

1

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:

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; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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.

Other recent pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants 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.

XML

Note 3 - Significant Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Significant Transactions [Text Block]

3.    Significant Transactions

Manufacturing Facility Purchase

On

February 16, 2017,

the Company purchased a

41,000

square foot manufacturing facility located in Lake Forest, CA, where operations commenced during

July 2017.

The purchase price for the property was

$7,818.

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 and CEO, Professor Lugee Li (“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.

In addition to the shares issuable under the

2016

Purchase Agreement, the Company 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

at an exercise price of

$0.07

per share). The warrant will expire on the

tenth

anniversary of its issuance date.

Further, the

2016

Purchase Agreement provided that the Investor would have the right to designate

three

members of the Company’s board of directors, with

one

such member serving as Chairman. The

2016

Purchase Agreement also provided that, with certain limited exceptions, if the Company issues any shares of common stock at any time through the

fifth

anniversary of the

2016

Purchase Agreement, the Investor will have a preemptive right to subscribe for and to purchase at the same price per share (or at market price, in the case of issuance of shares pursuant to stock options) the number of shares necessary to maintain its ownership percentage of Company-issued shares of common stock.

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 and CEO, Professor Li, is also a major shareholder and 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.

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

not

limited to developing technologies to reduce the cost of amorphous alloys, working on die cast machine technology platforms to pursue broader markets, sharing knowledge to broaden our intellectual property portfolio, and utilizing Eontec’s volume production capabilities as a

third

party contract manufacturer.

During

March 2017,

the Company signed contracts with Eontec to purchase

two

hot-crucible amorphous metal molding machines (“Machines”) at a total purchase price of

$780.

The Machines were delivered to the Company’s new manufacturing facility located in Lake Forest, CA in

April 2017

and were operational during the

fourth

quarter of

2017.

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, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a 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.

Other License Transactions

On

January 31, 2012,

the Company entered into a Supply and License Agreement for a

five

year term with Engel Austria Gmbh (“Engel”) whereby Engel was granted a non-exclusive license to manufacture and sell injection molding machines to the Company’s licensees. Since that time, the Company and Engel have agreed on an injection molding machine configuration that can be commercially supplied and supported by Engel.  On

December 6, 2013,

the companies entered into an Exclusivity Agreement for a

10

year term whereby the Company agreed, with certain exceptions and limitations, that the Company and its licensees would purchase amorphous alloy injection molding machines exclusively from Engel in exchange for certain royalties to be paid by Engel to the Company based on a percentage of the net sales price of such injection molding machines.

The Company’s majority-owned Liquidmetal Golf subsidiary has the exclusive right and license to utilize the Company’s Liquidmetal alloy technology for purposes of golf equipment applications. This right and license is set forth in an intercompany license agreement 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 parts and other products used in the sport of golf. The Company owns

79%

of the outstanding common stock of Liquidmetal Golf.

In

June 2003,

the Company entered into an exclusive license agreement with LLPG, Inc. (“LLPG”).  Under the terms of the agreement, LLPG has the exclusive right to commercialize Liquidmetal alloys, particularly precious-metal based compositions, in jewelry and high-end luxury product markets.  The Company, in turn, will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by LLPG. The exclusive license agreement with LLPG expires on

December 31, 2021.

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, but non-exclusive as to Apple, and the Company’s license agreement with LLPG was simultaneously amended to exclude watches from LLPG’s rights. 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 licensed patent.

XML

Note 4 - Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Prepaid Expenses and Other Current Assets [Text Block]

4 .   P repaid Expenses and Other Current Assets

Prepaid expenses and other current assets totaled

$311

and

$363

as of

March 31, 2019

and

December 31, 2018,

respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Prepaid service invoices	$	91	$	79
Prepaid manufacturing and mold costs		95		91
Prepaid insurance premiums		125		193
Total	$	311	$	363

XML

Note 5 - Inventory

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Inventory Disclosure [Text Block]

5.    Inventory

Inventory totaled

$63

and

$31

as of

March 31, 2019

and

December 31, 2018,

respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Raw materials	$	-	$	-
Work in progress		63		31
Total	$	63	$	31

XML

Note 6 - Property and Equipment, Net

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

6.    Property and Equipment, net

Property and equipment consist of the following:

	March 31, 2019			December 31, 2018
Land, building, and improvements	$	9,093		$	9,039
Machinery and equipment		5,892			5,745
Computer equipment		300			282
Office equipment, furnishings, and improvements		181			181
Total		15,466			15,247
Accumulated depreciation		(3,739	)		(3,480	)
Total property and equipment, net	$	11,727		$	11,767

Depreciation expense for the

three

months ended

March 31, 2019

and

2018

was

$258

and

$231,

respectively. For the

three

months ended

March 31, 2019

and

2018,

$23

and

$13

of depreciation expense, respectively, was included in cost of sales and

$235

and

$218

was included in selling, marketing, general, and administrative expenses, respectively.

The Company’s manufacturing activities and efforts have historically focused on the identification, design, and successful prototyping of customer applications, including, but

not

limited to, medical and automotive components. Experience has shown that customers will perform numerous tests and extensively evaluate components and products before incorporating them into their finished products. The time required for testing, evaluating, and designing the Company’s components and products for use in a customer’s products, and in some cases, obtaining regulatory approval, can be significant, with an additional period of time before a customer commences volume production of products incorporating Liquidmetal components and products, if ever. The time it takes to transition a customer from limited production to full-scale production runs will depend upon the nature of the processes and products into which Liquidmetal alloys are integrated.

Investments in the Company’s manufacturing capabilities and infrastructure have been historically made based on certain assumptions and expectations regarding the time and investment required to reach minimum volume manufacturing levels, to scale and generate sustainable revenues, and to ultimately reach profitability. As a result of the Company’s inability to gain traction in receiving and fulfilling orders for the volume production of parts, the Company has commenced a comprehensive review of the options available in the context of its current strategy. While

no

decisions have been made, any change to the current strategy, depending on its nature,

may

result in future impairments of the Company’s manufacturing assets, inclusive of patents and trademarks.

XML

Note 7 - Patents and Trademarks, Net

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

7 .   Patents and T rademarks, net

Net patents and trademarks totaled

$301

and

$322

as of

March 31, 2019

and

December 31, 2018,

respectively, and primarily consisted of purchased patent rights and 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 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

$21

and

$21

for the

three

months ended

March 31, 2019

and

2018,

respectively.

XML

Note 8 - Other Assets

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Other Assets Disclosure [Text Block]

8.    Other Assets

Other assets totaled

$14

and

$14

as of

March 31, 2019

and

December 31, 2018,

respectively, and consisted of long-term deposits.

XML

Note 9 - Accrued Liabilities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

9.    Accrued Liabilities

Accrued liabilities totaled

$516

and

$270

as of

March 31, 2019

and

December 31, 2018,

respectively. Included within these totals are the following:

	March 31, 2019		December 31, 2018
Accrued payroll, vacation, and bonuses	$	206	$	178
Accrued severance		284		10
Accrued audit fees		26		82
Total	$	516	$	270

XML

Note 10 - Other Long-term Liabilities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

1 0 .   Other Long- T erm L iabilities

Other long-term liabilities were

$

856

as of

March 31, 2019

and

December 31, 2018,

and consisted of long-term, aged payables to vendors, individuals, and other

third

parties that have been outstanding for more than

5

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

XML

Note 11 - Stock Compensation Plans

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

1 1 .   Stock Compensation Plan s

On

April 

4,

2002,

our shareholders and Board of Directors adopted the

2002

Equity Incentive Plan (

“2002

Plan”). The

2002

Plan provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries. A total of

10,000,000

shares of our common stock were available to be granted under the

2002

Plan. The

2002

Plan expired by its terms in

April 2012,

and remains in effect only with respect to the equity awards that have been granted prior to its expiration. As of

March 31, 2019

and

December 31, 2018,

there were

169,000

and

169,000

options, respectively, outstanding under the

2002

Plan.

On

June 28, 2012,

the Company adopted the

2012

Equity Incentive Plan (

“2012

Plan”), with the approval of the shareholders, which provides 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

Plan, and all options granted under the

2012

Plan had exercise prices that were equal to the fair market value on the date of grant. During the

three

months ended

March 31, 2019,

the Company granted

no

options to purchase shares of common stock. Under this plan, the Company had outstanding grants of options to purchase

10,455,665

and

11,755,503

shares of the Company’s common stock as of

March 31, 2019

and

December 31, 2018,

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. All options granted under the

2015

Plan had exercise prices that were equal to the fair market value on the dates of grant. During the

three

months ended

March 31, 2019,

the Company granted

no

options to purchase shares of common stock. Under this plan, the Company had outstanding grants of options to purchase

16,906,667

and

16,906,667

shares of the Company’s common stock as of

March 31, 2019

and

December 31, 2018,

respectively.

Stock based compensation expense attributable to these plans was

$182

and

$281

for the

three

months ended

March 31, 2019

and

2018,

respectively.

In connection with the separation of former executives and directors, 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. The Company incurred incremental stock-based compensation expense of

$0

and

$56

during the

three

months ended

March 31, 2019

and

2018,

respectively.

XML

Note 12 - Consolidated Statements of Changes in Equity

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

12. Consolidated Statements of Changes in Equity

The following table provides the Company’s changes in equity for the 

three

months ended

March 31, 2019:

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2018		-		914,206,832	$	914	$	18,179	$	286,276	$	(258,854	)	$	(74	)	$	46,441
Stock option exercises				109,792		-				11								11
Stock-based compensation				-		-				182								182
Net loss												(1,768	)					(1,768	)
Balance, March 31, 2019		-		914,316,624	$	914	$	18,179	$	286,469	$	(260,622	)	$	(74	)	$	44,866

The following table provides the Company’s changes in equity for the 

three

months ended

March 31, 2018:

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2017		-		908,768,116	$	909	$	18,179	$	284,894	$	(250,154	)	$	(73	)	$	53,755
Stock option exercises				415,476		-				42								42
Stock-based compensation										281								281
Net loss												(2,163	)		-			(2,163	)
Balance, March 31, 2018		-		909,183,592	$	909	$	18,179	$	285,217	$	(252,317)	)	$	(73	)	$	51,915

XML

Note 13 - Loss Per Common Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

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

Options to purchase

27,531,332

shares of common stock, at prices ranging from

$0.07

to

$0.38

per share, were outstanding at

March 31, 2019,

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, with a price of

$0.07

per share, outstanding at

March 31, 2019,

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

33,334,035

shares of common stock, at prices ranging from

$0.07

to

$0.47

per share, were outstanding at

March 31, 2018,

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, with a price of

$0.07

per share, outstanding at

March 31, 2018,

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.

XML

Note 14 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

14 .  Commitments and Contingencies

Legal Contingencies

During

October 2018,

the Company received a notice of intent to sue from a former employee. The Claims raised in the notice included accusations of pay discrimination, employment misclassification, and unfair labor practices. On

April 30, 2019

the Company reached a confidential settlement of the matter in the amount of

$

250

.

The Company has accrued this amount as of

March 31, 2019,

as a component of general and administrative expenses.

XML

Note 15 - Related Party Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

15 .  Related Party Transactions

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. In connection with the

2016

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 a publicly held Hong Kong corporation of which Professor Li is the Chairman and major shareholder. As of

March 31, 2019,

Professor Li is a greater-than

5%

beneficial owner of the Company and serves as the Company’s Chairman, President, and Chief Executive Officer. Equipment and services procured from Eontec were

$0

and

$5

during the

three

months ended

March 31, 2019

and

2018,

respectively.

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Lessee, Leases [Policy Text Block]

Leases

In

February 2016,

the Financial Accounting Standards Board (“FASB”) issued an accounting standards update which modifies the accounting for leasing arrangements, particularly those arrangements classified as operating leases. This update will require entities to recognize the assets and liabilities arising from operating leases on the balance sheet. The Company adopted the requirements of this guidance as of

January 1, 2019,

utilizing the modified retrospective approach. Due to the Company

not

having any qualifying lease obligations, the adoption of this guidance did

not

have any impact on the Company’s consolidated financial statements.

Adoption of New Accounting Pronouncements [Policy Text Block]

Liability Classified Warrants

In

July 2017,

the FASB issued an accounting standards update which modifies the requirements for the classification of certain financial instruments with down round features as equity versus liabilities. The guidance will allow for financial instruments previously required to be presented as liabilities due to the presence of down round features to be presented as equity upon meeting other criteria. The Company adopted the requirements of this update effective as of

January 1, 2019,

utilizing the full retrospective transition option. Accordingly, the Company reclassified the warrant liability to additional paid in capital on its

December 31, 2018

consolidated balance sheets, which increased additional paid-in capital by

$6,970,

increased accumulated deficit by

$4,778,

and decreased warrant liability by

$2,192.

In addition, because of the retrospective adoption, the Company credited change in fair value of warrant liability on its consolidated statements of operations by

$1,267

for year ended

December 31, 2018.

The change in fair value of the warrant liability was offset by a

$1,267

credit to accumulated deficit on the consolidated balance sheets. Similarly, the Company credited change in fair value of warrant liability on its consolidated statements of operations by

$275

for

three

months ended

March 31, 2018.

The adoption of this guidance had

no

impact on the Company’s consolidated statement of cash flows in the current or previous interim and annual reporting periods. The following table provides a reconciliation of warrant liability, additional paid-in capital, accumulated deficit, and change in fair value of warrant liability on the consolidated balance sheets for the year ended

December 31, 2018

and the

three

-months ended

March 31, 2018 (

in thousands):

	Balance Sheet
	Warrant Liability			APIC		Accum Def.
Balance as of 12/31/2018 (Prior to Adoption of ASU 2017-11)		925			279,306		(252,809	)
Reverse beginning balance as of January 1, 2018		(2,192	)		6,970		(4,778	)
Change in fair value of warrant liability		1,267			-		(1,267	)
Balance as of 12/31/2018 (After Adoption of ASU 2017-11)		-			286,276		(258,854	)

	Statement of Operations
	Change in Value of WL			Net Loss
Balance as of 3/31/2018 (Prior to Adoption of ASU 2017-11)		(275	)		(2,438	)
Reverse beginning balance as of January 1, 2018		-			-
Change in fair value of warrant liability		275			275
Balance as of 3/31/2018 (After Adoption of ASU 2017-11)		-			(2,163	)

Fair Value Measurement, Policy [Policy Text Block]

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 Level

1

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:

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; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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.

New Accounting Pronouncements, Policy [Policy Text Block]

Other recent pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants 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.

XML

Note 2 - Basis of Presentation and Recent Accounting Pronouncements (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

	Balance Sheet
	Warrant Liability			Additional Paid-in Capital		Accumulated Deficit
Balance as of 12/31/2018 (Prior to Adoption of ASU 2017-11)	$	925		$	279,306	$	(252,809	)
Reverse beginning balance as of January 1, 2018		(2,192	)		6,970		(4,778	)
Change in fair value of warrant liability		1,267			-		(1,267	)
Balance as of 12/31/2018 (After Adoption of ASU 2017-11)	$	-		$	286,276	$	(258,854	)

	Statement of Operations
	Change in Value of Warrant Liability			Net Loss and Comprehensive Loss
Balance as of 3/31/2018 (Prior to Adoption of ASU 2017-11)	$	(275	)	$	(2,438	)
Reverse beginning balance as of January 1, 2018		-			-
Change in fair value of warrant liability		275			275
Balance as of 3/31/2018 (After Adoption of ASU 2017-11)	$	-		$	(2,163	)

XML

Note 4 - Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Prepaid Expenses and Other Current Assets [Table Text Block]

	March 31, 2019		December 31, 2018
Prepaid service invoices	$	91	$	79
Prepaid manufacturing and mold costs		95		91
Prepaid insurance premiums		125		193
Total	$	311	$	363

XML

Note 5 - Inventory (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	March 31, 2019		December 31, 2018
Raw materials	$	-	$	-
Work in progress		63		31
Total	$	63	$	31

XML

Note 6 - Property and Equipment, Net (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 31, 2019			December 31, 2018
Land, building, and improvements	$	9,093		$	9,039
Machinery and equipment		5,892			5,745
Computer equipment		300			282
Office equipment, furnishings, and improvements		181			181
Total		15,466			15,247
Accumulated depreciation		(3,739	)		(3,480	)
Total property and equipment, net	$	11,727		$	11,767

XML

Note 9 - Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	March 31, 2019		December 31, 2018
Accrued payroll, vacation, and bonuses	$	206	$	178
Accrued severance		284		10
Accrued audit fees		26		82
Total	$	516	$	270

XML

Note 12 - Consolidated Statements of Changes in Equity (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Stockholders Equity [Table Text Block]

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2018		-		914,206,832	$	914	$	18,179	$	286,276	$	(258,854	)	$	(74	)	$	46,441
Stock option exercises				109,792		-				11								11
Stock-based compensation				-		-				182								182
Net loss												(1,768	)					(1,768	)
Balance, March 31, 2019		-		914,316,624	$	914	$	18,179	$	286,469	$	(260,622	)	$	(74	)	$	44,866

	Preferred Shares		Common Shares		Common Stock		Warrants part of Additional Paid-in Capital		Additional Paid-in Capital		Accumulated Deficit			Non- Controlling Interest			Total
Balance, December 31, 2017		-		908,768,116	$	909	$	18,179	$	284,894	$	(250,154	)	$	(73	)	$	53,755
Stock option exercises				415,476		-				42								42
Stock-based compensation										281								281
Net loss												(2,163	)		-			(2,163	)
Balance, March 31, 2018		-		909,183,592	$	909	$	18,179	$	285,217	$	(252,317)	)	$	(73	)	$	51,915

XML

Note 2 - Basis of Presentation and Recent Accounting Pronouncements (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2018	Jan. 01, 2019
Fair Value Adjustment of Warrants
Warrant [Member]
Derivative Liability, Total
Accounting Standards Update 2017-11 [Member] | Warrant [Member]
Derivative Liability, Total			$ (2,192)
Fair Value Adjustment of Warrants	$ (275)	(1,267)
Additional Paid-in Capital [Member] | Accounting Standards Update 2017-11 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption			6,970
Retained Earnings [Member] | Accounting Standards Update 2017-11 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption			$ (4,778)
Retained Earnings [Member] | Accounting Standards Update 2017-11 [Member] | Warrant [Member]
Fair Value Adjustment of Warrants		$ (1,267)

XML

Note 2 - Basis of Presentation and Recent Accounting Pronouncements - Adoption of New Accounting Pronouncement (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Jan. 01, 2019
Additional paid-in capital	$ 286,469		$ 286,276
Accumulated deficit	(260,622)		(258,854)
Change in value of warrants, gain (loss)
Net loss	$ (1,768)	(2,163)
Warrant [Member]
Warrant liability
Warrant [Member] | Accounting Standards Update 2017-11 [Member]
Warrant liability				$ (2,192)
Change in value of warrants, gain (loss)		(275)	(1,267)
Warrant [Member] | Accounting Standards Update 2017-11 [Member] | Retained Earnings [Member]
Change in value of warrants, gain (loss)			(1,267)
Previously Reported [Member]
Additional paid-in capital			279,306
Accumulated deficit			(252,809)
Change in value of warrants, gain (loss)		(275)
Net loss		(2,438)
Previously Reported [Member] | Warrant [Member]
Warrant liability			925
Restatement Adjustment [Member] | Accounting Standards Update 2017-11 [Member]
Additional paid-in capital			6,970
Accumulated deficit			(4,778)
Change in value of warrants, gain (loss)		275
Net loss		$ 275
Restatement Adjustment [Member] | Accounting Standards Update 2017-11 [Member] | Retained Earnings [Member]
Change in value of warrants, gain (loss)			(1,267)
Restatement Adjustment [Member] | Warrant [Member] | Accounting Standards Update 2017-11 [Member]
Warrant liability			(2,192)
Change in value of warrants, gain (loss)			$ 1,267

XML

Note 3 - Significant Transactions (Details Textual) $ / shares in Units, $ in Thousands	Feb. 16, 2017 USD ($) ft²	Mar. 10, 2016 USD ($) $ / shares shares	Dec. 06, 2013	Jan. 31, 2012	Mar. 31, 2019	Mar. 31, 2017 USD ($)	Oct. 26, 2016 USD ($) $ / shares shares
Area of Land | ft²	41,000
Liquidmetal Golf [Member]
Noncontrolling Interest, Ownership Percentage by Parent					79.00%
Eontec [Member]
Purchase Price for Machinery and Equipment | $						$ 780
Warrants in Connection with the 2016 Purchase Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		10,066,809
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares							$ 0.07
Warrants and Rights Outstanding, Term							10 years
Warrants in Connection with the 2016 Purchase Agreement [Member] | Vest on March 10, 2016 [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		2,609,913
Warrants in Connection with the 2016 Purchase Agreement [Member] | Vest on October 26, 2016 [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights							7,456,896
The 2016 Purchase Agreement [Member]
Common Stock Purchase Agreement, Number of Shares Authorized to Issue and Sell to Investors		405,000,000
Common Stock Purchase Agreement, Value of Shares Authorized to Issue and Sell to Investors | $		$ 63,400
Stock Issued During Period, Shares, New Issues		105,000,000
Stock Issued During Period, Value, New Issues | $		$ 8,400
Sale of Stock, Price Per Share | $ / shares		$ 0.08
Common Stock Purchase Agreement, Purchase Price per Share, After Satisfaction of Certain Conditions | $ / shares							$ 0.15
Common Stock Purchase Agreement, the Other Purchase Price per Share, No Later than 90 Days after Satisfaction of Certain Conditions | $ / shares							$ 0.25
Common Stock Purchase Agreement, Value of Shares Authorized to Be Purchased No Later than 90 Days after Satisfaction of Certain Conditions | $							$ 55,000
The 2016 Purchase Agreement [Member] | Common Stock, Purchase Price per Share of $0.15 [Member]
Common Stock Purchase Agreement, Remaining Number of Shares to be Purchased, After the Satisfaction of Certain Conditions							200,000,000
The 2016 Purchase Agreement [Member] | Common Stock, Purchase Price per Share of $0.25 [ Member]
Common Stock Purchase Agreement, Remaining Number of Shares to be Purchased, After the Satisfaction of Certain Conditions							100,000,000
Valencia Circle, LLC [Member]
Payments to Acquire Buildings | $	$ 7,818
Engel [Member]
Supply and License Agreement, Term				5 years
Exclusive License Agreement, Term			10 years

XML

Note 4 - Prepaid Expenses and Other Current Assets (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Prepaid Expense and Other Assets, Current	$ 311	$ 363

XML

Note 4 - Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Prepaid service invoices	$ 91	$ 79
Prepaid manufacturing and mold costs	95	91
Prepaid insurance premiums	125	193
Total	$ 311	$ 363

XML

Note 5 - Inventory (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventory, Net, Total	$ 63	$ 31

XML

Note 5 - Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Raw materials
Work in progress	63	31
Total	$ 63	$ 31

XML

Note 6 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Depreciation, Total	$ 258	$ 231
Cost of Sales [Member]
Depreciation, Total	23	13
Selling, General and Administrative Expenses [Member]
Depreciation, Total	$ 235	$ 218

XML

Note 6 - Property and Equipment, Net - Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Property and equipment, gross	$ 15,466	$ 15,247
Accumulated depreciation	(3,739)	(3,480)
Total property and equipment, net	11,727	11,767
Land, Buildings and Improvements [Member]
Property and equipment, gross	9,093	9,039
Machinery and Equipment [Member]
Property and equipment, gross	5,892	5,745
Computer Equipment [Member]
Property and equipment, gross	300	282
Office Equipment, Furnishings and Improvements [Member]
Property and equipment, gross	$ 181	$ 181

XML

Note 7 - Patents and Trademarks, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Intangible Assets, Net (Excluding Goodwill), Total	$ 301		$ 322
Amortization of Intangible Assets, Total	$ 21	$ 21
Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	17 years

XML

Note 8 - Other Assets (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Other Assets, Total	$ 14	$ 14

XML

Note 9 - Accrued Liabilities (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Liabilities, Current, Total	$ 516	$ 270

XML

Note 9 - Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued payroll, vacation, and bonuses	$ 206	$ 178
Accrued severance	284	10
Accrued audit fees	26	82
Total	$ 516	$ 270

XML

Note 10 - Other Long-term Liabilities (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Other Liabilities, Noncurrent, Total	$ 856	$ 856
Period for Outstanding Liability	5 years

XML

Note 11 - Stock Compensation Plans (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Jan. 27, 2015	Apr. 04, 2002
Share-based Payment Arrangement, Expense	$ 182,000	$ 281,000
Share-based Payment Arrangement, Accelerated Cost	$ 0	$ 56,000
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					10,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	169,000		169,000
Equity Incentive Plan 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	30,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	10,455,665		11,755,503
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0
Equity Incentive Plan 2015 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				40,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	16,906,667		16,906,667
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0

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Note 12 - Consolidated Statements of Changes in Equity - Changes in Equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance	$ 46,441	$ 53,755
Stock option exercises	11	42
Stock-based compensation	182	281
Net loss	(1,768)	(2,163)
Balance	$ 44,866	$ 51,915
Preferred Stock [Member]
Balance (in shares)
Stock option exercises (in shares)
Balance (in shares)
Common Stock [Member]
Balance (in shares)	914,206,832	908,768,116
Balance	$ 914	$ 909
Stock option exercises (in shares)	109,792	415,476
Stock option exercises
Stock-based compensation
Net loss
Balance (in shares)	914,316,624	909,183,592
Balance	$ 914	$ 909
Warrant [Member]
Balance	18,179	18,179
Stock option exercises
Stock-based compensation
Net loss
Balance	18,179	18,179
Additional Paid-in Capital [Member]
Balance	286,276	284,894
Stock option exercises	11	42
Stock-based compensation	182	281
Net loss
Balance	286,469	285,217
AOCI Attributable to Parent [Member]
Balance	(258,854)	(250,154)
Stock option exercises
Stock-based compensation
Net loss	(1,768)	(2,163)
Balance	(260,622)	(252,317)
Noncontrolling Interest [Member]
Balance	(74)	(73)
Stock option exercises
Stock-based compensation
Net loss
Balance	$ (74)	$ (73)

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Note 13 - Loss Per Common Share (Details Textual) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	27,531,332
Share-based Payment Arrangement, Option [Member] | Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		33,334,035
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 0.07	$ 0.07
Share-based Payment Arrangement, Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance	$ 0.38	$ 0.47
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	10,066,809	10,066,809
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.07	$ 0.07

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Note 14 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	Apr. 30, 2019	Mar. 31, 2019
Loss Contingency Accrual, Ending Balance		$ 250
Subsequent Event [Member] | Settled Litigation [Member]
Loss Contingency, Damages Awarded, Value	$ 250

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Note 15 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 10, 2016
Chairman of Eontec [Member] | Minimum [Member]
Beneficial Ownership Percentage	5.00%
Eontec [Member] | License Agreement [Member]
Related Party Transaction, Amounts of Transaction	$ 0	$ 5,000
The 2016 Purchase Agreement [Member]
Common Stock Purchase Agreement, Number of Shares Authorized to Issue and Sell to Investors			405,000,000
Common Stock Purchase Agreement, Value of Shares Authorized to Issue and Sell to Investors			$ 63,400,000