Liquidmetal Technologies Inc (LQMT)

[PatentGuy1]

The 405 million LQMT shares are held indirectly by Li on behalf of Eontec, so any profit for LQMT is a profit for Eontec.

I have no idea of what it means for Li to hold the shares indirectly on behalf of Eontec, but it doesn't change my underlying thesis. Li has to walk a very narrow tightrope to satisfy both Eontec and LQMT shareholders if/when royalty payments are made.

Also, assuming there may be some truth to your assertion that profit for LQMT is a profit for Eontec, that alone may not be enough to satisfy Eontec share holders. Consider the following (extreme, but useful for illustration purposes) scenarios. Assume there is $100 profit to be made from the manufacture of a unit and the royalty rate are as follows:

(a) LQMT receives a royalty of $99.99, which leaves Eontec with $0.01 profit per unit. Under your theory, Eontec shareholders should be happy because they "indirectly" have about 45% of LQMT.

Also, consider what would happen LQMT decided to pay a dividend, because the royalty one is just rolling in. Even if Li decided to pay out 100% of the royalty payment of $99.99 to LQMT shareholders, Li (or "indirectly" the Eontec shareholders) would get only .45*$99.99 = $45.15.

(b) LQMT receives a royalty of $0.01, which leaves Eontec with a $99.99 profit per unit. Clearly, Eontec's share price will go up much greater under scenario "b" rather than "a."

The above scenarios were not intended to be realistic. They were merely provided to illustrate that Li's problems with satisfying Eontec and LQMT shareholders won't be whitewashed away by "The 405 million LQMT shares are held indirectly by Li on behalf of Eontec."