Liquidmetal Technologies Inc (LQMT)

[AsiaT]

A little history on LQMT issuing stocks
I'm wondering if insiders are paying themselves with these 200 million shares. Is the 200 million shares used to build the Golf Company back up?

LQMT began selling products made from bulk amorphous alloys in 1997. From
1997 to 2001 , LQMT was a company burning through cash, losing over $50.7 million. By
March 31 , 2002, LQMT had an accumulated deficit of approximately $ 63.6 million . Of this
accumulated deficit, a staggering $44.8 million was attributable to losses generated by the
Company's now discontinued retail golf business.2
4. In order to fund the Company's continuing operations, corporate officers and
directors (including Defendant John Kang) loaned millions of dollars to the Company. Because
the Company's business prior to its initial public offering (`APO ) focused almost exclusively on
the admittedly failed retail golf business, Defendants knew their only chance at recouping this
significant personal investment was through a public offering.
5. That said, LQMT commenced an IPO of 5,000,000 shares of common stock on
May 21, 2002 at a price of $15. 00 per share . The IPO was a success , raising cash proceeds of
$78.4 million . Among other things, LQMT used these cash proceeds as follows : (1) $7.8
million to repay outstanding promissory notes and accrued interest to corporate insiders
(including Defendant John Kang); (2) $11.1 million to fund the construction of a 166,000 square
foot manufacturing facility in Pyongtaek, South Korea; (3) $14.3 million to purchase
manufacturing equipment; (4) $0.3 million to purchase a 51% ownership interest in Dongyang
Yudoro ("Dongyang - - a South Korean furnace company that manufactured the casting
equipment that LQMT installed at its South Korea manufacturing facility); and (5) $2.0 million
to acquire 5% (891,100 shares) of the common stock of Growell. As detailed below, the IPO
Prospectus materially distorted the Company's historical financial condition by admittedly
underreporting losses . See IT 41-58.