**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM10-K/A**

 

**Amendment No.1**

 

**ý****                                ****ANNUAL REPORT PURSUANT TO SECTION 13OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the fiscal year ended December 31,2004**

 

**o****                                ****TRANSITION REPORT PURSUANT TO SECTION 13OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from                  to                  **

 

**CommissionFile No**. **000-31332**

 

----

 

**LIQUIDMETAL TECHNOLOGIES, INC.**

(Exactname of Registrant as specified in its charter)

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

 

**25800Commercentre Drive, Suite 100Lake Forest, California 92630**(address of principal executiveoffice, zip code)

 

Registrant’s telephonenumber, including area code: **(949) 206-8000**

 

Securities registered pursuant to Section 12(b) of the Act: **None**

 

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

 
| ** ** | **Title of each Class**       | ** ** |
|------------|-------------------------------|------------|
|       | Common  Stock, .001 par value |       |

 

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 (orfor such shorter period that the registrant was required to file such reports),and (2) has been subject to such filing requirements for at least the past90 days.    Yes   ý   No   o

 

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to thisForm 10-K   o

 

Indicate by check mark whether the registrant isan accelerated filer (as defined in Exchange ActRule 12b-2).    Yes   ý   No   o

 

The aggregate market value of the registrant’sCommon Stock held by non-affiliates of the registrant as of June 30, 2004was approximately $34,793,699. For purposes of this calculation only, (i) sharesof Common Stock are deemed to have a market value of $1.42 per share, theclosing price of the Common Stock as reported on the Nasdaq National Market on June 30,2004, and (ii) each of the executive officers, directors and persons holdingmore than 10% of the outstanding Common Stock as of June 30, 2004 isdeemed to be an affiliate.

 

 

----

 

**LIQUIDMETAL TECHNOLOGIES, INC.**

**Amendment No. 1 to the Annual Report of Form10-K**

## **For the Fiscal Year ended December 31, 2004**

## ** **

## **EXPLANATORY NOTE**

## ** **

We are filing this AmendmentNo. 1 to our Annual Report on Form 10-K for the fiscal year ended December 31,2004, as filed with the U.S. Securities and Exchange Commission on March 30,2005 to include “Management’s report on internal control over financialreporting” and the related “Attestation report of the registered publicaccounting firm”, required by Item 308(b) of Regulation S-K as permittedby paragraph (b) of the conditions of the Order Under Section 36 of theSecurities Exchange Act of 1934 Granting an Exemption from Specified Provisionsof Exchange Act Rules 13a-1 and 15d-1 (Release No. 34-50754, November 30,2004).

 

This Amendment does notaffect the original financial statements or footnotes as originally filed. Thisamendment does not reflect events occurring after the original filing of theForm 10-K, and does not modify or update the disclosures therein in anyway other than as required to reflect the amendment as described above and setforth below. Accordingly, this Form 10-K/A should be read in conjunctionwith our other filings made with the Securities and Exchange Commissionsubsequent to the filing of the original Annual Report on Form 10-K,including any amendments to those filings.

 

2

----

 

**LIQUIDMETAL TECHNOLOGIES, INC.**

 

**PART II**

 

**Item 9A. Controls andProcedures**

 

Evaluation of disclosure controls and procedures.  During the course of the audit of ourfinancial statements for the fiscal years ended December 31, 2001, 2002,and 2003, it was determined that revenues from certain equipment salesmade by the Company to Growell Metal Co., Ltd. in the third andfourth quarters of 2002 and the first quarter of 2003 should not have beenrecognized in those periods****.  It was also**** determinedthat certain amounts relating to sales made to Samsung in December 2002,to JS Technologies in September 2002, and AM Corporation in December 2002should not have been recognized.  It also****was determined thatcompensation expense related to certain stock options granted in 2001 and 2002were not calculated in accordance with generally accepted accounting principlesunder APB Opinion No. 25, SFAS No. 123, and EITF 00-23.** **These determinations and the associated restatement of previouslyissued financial statements, as described more fully elsewhere in the Form 10-Kfor the year ended December 31, 2003, filed on November 10, 2004,suggest that, at the time of the subject transactions and the preparation ofour financial statements for the relevant periods, the Company’s disclosurecontrols and procedures (as defined in Rule 13a-15 under the SecuritiesExchange Act of 1934) were ineffective as of the period covered by theForm 10-K filed on November 10, 2004 for purposes of ensuring that allinformation required to be disclosed by the Company was adequatelyaccumulated and communicated to the Company’s management at suchtime.

 

Within the 90 days prior to the date of this annual report,Liquidmetal Technologies (the “Company”) carried out an evaluation, under thesupervision and with the participation of the Company’s management, includingthe Company’s Chief Executive Officer and Chief Financial Officer, of the effectivenessas of December 31, 2004 of the design and operation of the Company’sdisclosure controls and procedures pursuant to Rule 13a-15 under the SecuritiesExchange Act of 1934, as amended.  Basedon that evaluation, the Chief Executive Officer and Vice President Finance haveconcluded that these disclosure controls and procedures were ineffective byreason of the material weaknesses mentioned in more detail below in timelyalerting them to material information relating to the Company, including its consolidatedsubsidiaries, required to be included in this annual report on Form 10-K.

 

****Management’s Report on InternalControl Over Financial Reporting********. The time********andresources committed to the restatement of prior periods’ financial statementsas aforementioned delayed our internal timetable with respect to ourdocumentation, assessment and evaluation of internal control over financialreporting, which are required to be undertaken to comply with Section 404of the Sarbanes-Oxley Act of 2002 (“SOX 404”). Due in part to the issuesdescribed in the foregoing paragraph, management’s assessment of theeffectiveness of our internal control over financial reporting has beensubstantially delayed and is not complete, which in turn has prevented theCompany’s independent registered public accounting firm, Stonefield Josephson,from being able to satisfactorily complete an audit of the Company’s internalcontrol over financial reporting pursuant to SOX 404.  Based on the foregoing, Stonefield Josephsonhas disclaimed an opinion on the Company’s internal control over financialreporting.****

 

****In making our assessment of internal control over financialreporting, management used the criteria established in “Internal Control -Integrated Framework” issued by the Committee of Sponsoring Organizations ofthe Treadway Commission (COSO). Although our work was incomplete, managementhas identified several control deficiencies, some of which have been determinedto be material weaknesses in internal control over financial reporting.  As a result of the material weaknessesidentified below, management has concluded that it did not maintain effectiveinternal control over financial reporting as of December 31, 2004, basedon the criteria established in COSO.****

 

1.Lack of adequate segregation of duties in accounts payable and accountsreceivable involving cash receipts and deposits, bank reconciliations, cashdisbursements, purchasing, and accounts receivable reconciliations;

 

2.Lack of adequate controls and monitoring of payroll processing, currentlyoutsourced to a third party provider;

 

3.Lack of documentation to evidence reviews of certain reconciliations;

 

4.Lack of documentation of authorization of transactions;

 

5.Manual performance of numerous procedures that could be automated using currentreporting systems;

 

3

----

 

6.Material adjustments to the accountingrecords and financial statements as of and for the year ended December 31,2004 that were not initially identified by the Company’s internal control overfinancial reporting;

 

7.Management’s documentation of the evaluation of the significance of numerouscontrol deficiencies and significant deficiencies identified, which could riseto the level of a material weakness, has not been completed; and

 

8.The company had inadequate controls related to timely performance of itsassessment of internal control over financial reporting.

 

****9. Theindependent third party engaged to help document and assess the Company’sinternal controls, has identified numerous and significant deficiencies whichmanagement has not completed evaluating whether they would rise to the level ofa material weakness in accordance to the PCAOB Audit Standard No. 2.****

 

****Management believes that it is taking appropriate steps toaddress these material deficiencies subsequent to December 31, 2004,including hiring an independent consulting firm to identify and proposeremedial actions to address and mitigate the deficiencies.  We cannot assure you that we will notdiscover additional material weaknesses in the future; however management willcontinue to work with the independent consulting firm and work towardscompliance with SOX 404 as of December 31, 2005.****

 

4

----

 

**REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To the Board of Directors and Shareholders ofLiquidmetal Technologies, Inc.

 

We were engaged to auditmanagement’s assessment included in the accompanying Management’s Report onInternal Control Over Financial Reporting, that Liquidmetal Technologies, Inc.(the “Company”) maintained effective internal control over financial reportingas of December 31, 2004, based on criteriaestablished in**InternalControl—Integrated Framework**issuedby the Committee of Sponsoring Organizations of the Treadway Commission (COSO).** Liquidmetal Technologies, Inc.’s management isresponsible for maintaining effective internal control over financial reportingand for its assessment of the effectiveness of internal control over financial reporting.

 

Amaterial weakness is a significant deficiency, or combination of significantdeficiencies, that results in more than a remote likelihood that a materialmisstatement of the annual or interim financial statements will not beprevented or detected.  Management hasnot completed its assessment of internal control over financial reporting,which has prevented us from being able to satisfactorily complete an audit ofthe Company’s internal control over financial reporting.   However, management has identified thefollowing material weaknesses during their assessment:  lack of adequate segregation of duties inaccounts payable and accounts receivable involving cash receipts and deposits,bank reconciliations, cash disbursements, purchasing, and accounts receivablereconciliations; lack of adequate controls and monitoring of payrollprocessing, currently outsourced to a third party provider; lack ofdocumentation to evidence reviews of certain reconciliations; lack ofdocumentation of authorization of transactions; manual performance of numerousprocedures that could be automated using current reporting systems; material adjustments to the accounting records andfinancial statements as of and for the year ended December 31, 2004 thatwere not initially identified by the Company’s internal control over financialreporting; management’s documentation of the evaluation of thesignificance of numerous control deficiencies and significant deficienciesidentified, which could rise to the level of a material weakness, has not beencompleted; and the Company had inadequate controls related to timelyperformance of its assessment of internal control over financial reporting.   Theexistence of one or more material weaknesses as of December 31, 2004 wouldpreclude a conclusion that the Company’s internal control over financialreporting was effective as of that date. These material weaknesses were considered in determining the nature,timing and extent of audit tests applied in our audit of the 2004 consolidatedfinancial statements, and our disclaimer of opinion regarding the effectivenessof the Company’s internal control over financial reporting does not affect ouropinion on those consolidated financial statements.

 

A company’s internal controlover financial reporting is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generallyaccepted accounting principles. A company’s internal control over financialreporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of thecompany are being made only in accordance with authorizations of management anddirectors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or dispositionof the company’s assets that could have a material effect on the financialstatements.

 

Because of its inherentlimitations, internal control over financial reporting may not prevent ordetect misstatements. Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

 

Since management has notcompleted all the steps necessary to enable us to satisfactorily complete anaudit of their internal control over financial reporting, and we were unable toapply other procedures to satisfy ourselves as to the effectiveness of thecompany’s internal control over financial reporting, the scope of our

 

5

----

 

work was not sufficient toenable us to express, and we do not express, an opinion either on management’sassessment or on the effectiveness of the company’s internal control overfinancial reporting.

 

We have also audited, inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the consolidated financial statements of LiquidmetalTechnologies, Inc. and our report dated March 3, 2005 expressed anunqualified opinion including an explanatory paragraph on the Company’s abilityto continue as a going concern.

 

We do not express an opinionor any other form of assurance on management’s statement referring to stepstaken to address material weaknesses subsequent to December 31, 2004 orcompliance with SOX 404 as of December 31, 2005.

 

 
| /s/ Stonefield Josephson,  Inc. |   |
|---------------------------------|--------|
| Irvine, California              |
| May 9, 2005                     |

 

6

----

 

**LIQUIDMETAL TECHNOLOGIES, INC.**

 

**PART IV**

 

**Item 15. Exhibits andFinancial Statement Schedules**

 

A listing of exhibits filed:

 

**EXHIBITINDEX**

 

 
| **Exhibit** | ** ** | ** ** | ** ** | ** **                                                |
|-------------|------------|------------|------------|-----------------------------------------------------------|
| **Number**  | ** ** | ** ** | ** ** | **Description  of Document**                              |
|        |       |       |       |                                                      |
| 23.1        |       | —     |       | Consent of  Registered Independent Public Accounting Firm |
| 31.3        |       | —     |       | Rule 13a – 14(a) Certification – CEO            |
| 31.4        |       | —     |       | Rule 13a – 14(a) Certification – CFO            |
| 32.1        |       | —     |       | Certification Pursuant to 18 U.S.C. Section 1350     |

 

7

----

 

**SIGNATURES**

 

Pursuant to the requirements of Section 13or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized. 

 
|              |   | Liquidmetal Technologies,  Inc.                 |
|-------------------|--------|-------------------------------------------------|
|              |   |                                            |
|              |   |                                            |
|              | By:    | /s/ John fKang                                  |
|              |   | John Kang                                       |
| Date: May 9, 2005 |   | Chairman, President and Chief Executive Officer |

 

8

----