Liquidmetal Technologies (LQMT): To A Dollar Or Bust

Ever since Liquidmetal Technologies Inc. (OTC: LQMT) signed that $20 million agreement  with Apple Inc. (Nasdaq: AAPL), shareholders have been cursed. LQMT stock price gained one cent on Monday to close at $0.29 on volume of just a tad over a million shares. Then the dream warriors arose after the company filed an 8-K at 4:10pm stating that Apple has extended their previous agreement with Liquidmetal until February 5, 2014. Even worse is that it states:  The foregoing does not purport to be a complete description of Master Transaction Agreement and is qualified by reference to the full text of such agreement, which will be filed with the Company’s Quarterly Report on Form 10-Q.

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LQMT Stock Chart Since August 5, 2010

As you can see from the chart above, LQMT stock price spiked from the exact same price it closed at Monday, 0.29, to 1.76 3 days after the original $20 million agreement was announced. 37 million shares traded on August 12, 2010 and LQMT stock price has done two consistent things since: drop and dilute. Yes, there have been a few rallies in the penny shares, but overall, LQMT has been a money pit for long investors.

The Newest 8-K compared to the Original

8-K from August 9, 2010 (here)
10-Q for Q3, 2010, describing agreement with Apple (bottom pg. 8) (here)
8-K from yesterday, June 18, 2012 (here)

It seems reasonable, since AAPL requested the extension of a FULLY paid up agreement, that they will be paying some consideration for the ammended agreement. However, LQMT notes on their Q3, 2010 10-Q that the company used the $20 million to pay off noteholders and other indebtedness and to fund operations. Liquidmetal’s CEO Tom Steipp has been bashed for “giving away the farm” on the original agreement, (i.e. no future royalties) even though Larry Buffington was the President and CEO at the time of the original agreement.

Bottom Line: Grand Slams are hit every year in Baseball, sometimes even by a pitcher. However, one of Al Pacino’s line from Devil’s Advocate was “you’re diluting yourself!” LQMT is one of those penny stocks that could go one way or the other based on this news but one thing holds certain: LQMT may have the technology to make an ultra-lite, ultra-strong metal, but gravity has a stronger force with this penny stock.

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