Here is what Josh posted a while ago....same language....highlighted in red.
"Li was in contact and signed agreements with lqmt since March 2011...interesting.
I have highlighted the area of concern...
In terms of amorphous alloy (liquid metal), the main products of the issuer are structural components such as mobile phone trays and mobile phone middle frames, and the products are concentrated in the fields of consumer electronics and automobiles. LQMT is mainly engaged in the research and development and sales of amorphous alloy (liquid metal) products. LQMT currently produces products in small batches of molds, medical device housings and clamps, and does not have the capability of mass production. In summary, due to the characteristics of product specificity and customization-oriented production mode, there are obvious differences between the issuer and LQMT. 2) Both parties serve target customers in different industries Different product types determine that the issuer has different customers from LQMT. The issuer's customers are mainly concentrated in the consumer electronics industry and the automotive industry. In the field of amorphous alloys (liquid metal), the company has entered such well-known customers as Jinli, NVIDIA, Moto, Geli, Huawei, Qiku 360, Haienmai Electronics. Supply chain, and close cooperation with well-known new energy auto manufacturers such as BYD, will develop more consumer electronics, automotive customers in the future; and LQMT's target customers are mainly concentrated in small medical appliances and other industries, providing related spare parts. . Therefore, there is a significant difference between the target customers of the two. The comparison between LQMT and the issuer's main amorphous alloy (liquid metal) products is shown in the following table: Company name Main amorphous alloy (liquid metal) products LQMT Medical clamps, medical device housings, etc. Yi'an Technology USB decorative parts, SIM card tray 3) The cover holder has independent procurement and sales channel resource procurement. The issuer has standardized procurement channels and processes, and has established a complete qualified supplier management system. The company's raw materials are directly sourced from domestic suppliers and there is no sharing of procurement resources with LQMT. In terms of sales, the issuer relies mainly on the technological advantages of the company and adopts a marketing method that provides a separate solution for each customer. Due to the essential difference between product use and marketing methods, there is no sharing of sales channel resources between the company and LQMT. Through the verification of LQMT's major customers and suppliers in the past two years, it has not found that the company has a coincidence with LQMT's major customers and suppliers. LQMT and the issuer's 2015 and 2016 amorphous alloy customers and suppliers comparison table see question 1 reply (1) 2, Liquidmetal Technologies, Inc. in terms of customers, suppliers, technology, equipment, production sites, manpower, etc. Applicant's relationship. 4) The company's core technology has independent intellectual property rights. 13 From the company's patent list, most of its core technologies are independent research and development, and other parts are jointly developed with non-related parties such as the Institute of Metal Research of the Chinese Academy of Sciences and Jiamusi University. The technology has independent intellectual property rights and there is no patent ownership with LQMT. The company's list of authorized patents can be found in Question 1 (1) 2. Liquidmetal Technologies, Inc.'s relationship with the applicant in terms of customers, suppliers, technology, equipment, production sites, and manpower. 5) The company has independent R&D resources. The company has independent R&D team and reserve talents in the field of amorphous alloy (liquid metal). Through independent innovation, the company has mastered a number of core technologies and has independent patents, and established a sound technology research and development. The transformation and engineering research system, the company's entire research and development resources are the main business services, there is no research and development resources relying on LQMT, talents for research and development. 6) There is a big gap between the two business scales. There is a big gap between LQMT and the issuer's operating scale. The comparison between the issuer's and LQMT's operating income is as follows: Unit: 10,000 yuan 2016 Annual 2015 Project Yi'an Technology LQMT Yi'an Technology LQMT Operating income 56,302.53 332.98 55,522.61 81.17 Operating profit 2,875.80 -50.64 5,104.57 -145.46 Note: Data from both parties The annual report of the announcement, LQMT financial data is converted according to the central parity of the US dollar against the RMB exchange rate announced by the People's Bank of China at the end of each year. The central parity of the US dollar against the RMB exchange rate at the end of 2016 is 6.9370. At the end of 2015, the central parity of the US dollar against the RMB exchange rate was 6.4936 LQMT and the issuer. The business scale of the company is huge. Compared with the issuer, LQMT's 2015 and 2016 operating revenues are 0.15% and 0.59% of the issuer's operating income, respectively. Even in comparison with the revenue of the issuer's amorphous alloy (liquid metal) products, LQMT's 2015 and 2016 revenues were only 2.45% and 10.57% of the issuer's amorphous alloy (liquid metal) product revenue. Therefore, it can be seen that there is a large gap between the two scales. 7) The actual controller's commitment to avoid horizontal competition 14 Although the actual controller of the company and other companies controlled by it and the listed company do not constitute substantial horizontal competition, in order to avoid potential horizontal competition, and to further standardize actual control Mr. Li Yangde, the actual controller of the issuer, issued the “Commitment Letter on Avoiding Horizontal Competition” and “Commitment on Standardizing Related Transactions and Avoiding Horizontal Competition” on March 19, 2011 and March 10, 2016 respectively. Letter, Mr. Li Yangde made a commitment in the "Commitment Letter on Standardizing Related Transactions and Avoiding Horizontal Competition": Liquid Metal Technologies, lnc. will hold Liquidmetal Technologies, lnc. under the following conditions: Liquidmetal Technologies, lnc. All shares were transferred to Yi'an Technology: “(1) Liquidmetal Technologies, lnc. achieves a turnaround and eliminates major uncertainties in business operations and profitability, and can generate sustainable benefits. (2) Compliance with overseas Chinese companies Investment and supervision of acquisitions of companies outside China (3) To meet the relevant requirements of the regulatory authorities for the profitability and legal compliance of the underlying assets in the process of supervision of the listed company's (significant) assets acquisition.” The company's actual controller, Mr. Li Yangde, acquired Liquidmetal Technologies, Inc. It is conducive to promoting cooperation between issuers and LQMT, further strengthening the production technology of amorphous alloys (liquid metal), accelerating the commercial application of amorphous alloys (liquid metals), and improving the technological content of the company's amorphous alloy (liquid metal) products. Added value to create new profit growth points for the company. In summary, the issuer and LQMT are significantly different in terms of product type, target customer, business scale, etc., and the issuer has independent procurement and sales channels, independent intellectual property rights and R&D resources. There is substantial horizontal competition. (2) Whether there is any violation of the actual controller's relevant commitments. The actual controller of the issuer, Mr. Li Yangde made the following commitments on March 19, 2011 in the Commitment Letter on Avoiding Horizontal Competition: “1. I and I The holding company currently does not operate the same or similar business as the company and the company's controlling subsidiaries. 2. During the period when I have actual control of the company, I and my holding company will not engage in any form with the company or company within and outside China. A business activity in which the holding company's main business or main products compete or pose a competitive threat, including companies, enterprises or other companies that invest, acquire, merge or entrust management in China or abroad, which are the same or similar to the company's main business or major products. Economic organization; If the company and the company's holding subsidiaries develop new business areas in the future, the company has priority, and the companies and companies that I and the company invest in will no longer develop similar businesses.” March 10, 2016, the actual issuer Mr. Li Yangde, the controller, is in the regulation of related party transactions. And the Commitment Letter to Avoid Competition in the Same Industry: “1. In addition to investing in Liquidmetal Technologies, Inc., and integrating the research and development technical resources of Liquidmetal Technologies, Inc. with Yi'an Technology, I currently have no future. (As a direct or indirect shareholder, director, supervisor or senior executive of Yi'an Technology), it will not actively or indirectly engage in or participate in any business or activity that commercially competes with Yi'an Technology. The shareholder status of Liquid Metal Co., Ltd., in accordance with the relevant laws and regulations, prompted Liquid Metal Co., Ltd., Liquidmetal Technologies, Inc. to engage in R&D and production activities within the existing business scope, and not to create new horizontal competition with Yi'an Technology. I and my associates will put an end to all actions that take up the funds and assets of Yi'an Technology. Under no circumstances shall Yi'an Technology provide any form of guarantee or capital occupation to other enterprises and economic organizations that I invest or control. 4. I and my associates will do my best. We can avoid and reduce the related transactions with Yi'an Technology, and the related transactions that cannot be avoided or have reasonable reasons will follow the principles of fairness, fairness and openness in the market, and sign agreements and perform legal procedures according to law, in accordance with Yi'an Technology. The company's articles of association, relevant laws and regulations, etc. fulfill the information disclosure obligations and relevant approval procedures, and ensure that the legitimate rights and interests of Yi'an Technology and its minority shareholders are not damaged through related party transactions."
