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Case Status:    SETTLED
On or around 10/19/2006 (Date of order of final judgment)

Filing Date: April 26, 2004

According to a press release dated October 20, 2006, Liquidmetal(R) Technologies, Inc. (OTCBB:LQMT) announced that the federal judge presiding over the consolidated class action entitled Primavera Investors v. Liquidmetal Technologies, Inc., et al., which was pending in the United States District Court for the Middle District of Florida, has approved the previously-disclosed settlement of the class action. In connection with the settlement, Liquidmetal's directors' and officers' liability insurers contributed $7,025,000 to a settlement fund, from which claims of eligible class members will be paid in accordance with a Court-approved plan of allocation. The consolidated class action arose from a number of lawsuits filed in 2004 under the federal securities laws against Liquidmetal and certain of its former and current directors and officers. The class action settlement is part of a previously-disclosed agreement to settle the class action and two pending derivative actions, which were also filed in 2004 based upon the same facts and circumstances underlying the class action, for a total of $7.5 million: $7,025,000 for the consolidated class action, and $475,000 for the two derivative actions. In addition, Liquidmetal will commit to maintain or implement various corporate governance measures in connection with the settlement of the derivative actions. Final documentation and approval of the settlement of the derivative actions remains outstanding.

As summarized by the Company’s FORM 10-K/A for the fiscal year ended December 31, 2005, the Company and certain of its present and former officers and directors were named as defendants in nine purported class action complaints filed in the United States District Court for the Middle District of Florida, Tampa Division, and the Central District of California, Southern Division, alleging violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In August 2004, four complaints were consolidated in the Middle District of Florida under the caption Primavera Investors v. Liquidmetal Technologies, Inc., et al., Case No. 8:04-CV-919-T-23EAJ. John Lee, Chris Cowley, Dwight Mamanteo, Scott Purcell and Mark Rabold were appointed co-lead plaintiffs (the “Lead Plaintiffs”), but Mr. Mamanteo later withdrew. In September 2004, the five complaints filed in the Central District of California were transferred to the Middle District of Florida for consolidation with the Primavera Investors action. The Lead Plaintiffs served their Consolidated Amended Class Action Complaint on January 12, 2005. The Amended Complaint alleges that the Prospectus issued in connection with the Company’s initial public offering in May 2002 contained material misrepresentations and omissions regarding its historical financial condition and regarding a personal stock transaction by the Company’s former chief executive officer. The Lead Plaintiffs further generally allege that during the proposed Class Period of May 21, 2002, through May 13, 2004, the defendants engaged in improper revenue recognition with respect to certain of the Company’s business transactions, failed to maintain adequate internal controls, and knowingly disclosed unrealistic but favorable information about market demand for and commercial viability of Company’s products to artificially inflate the value of Company’s stock. The Amended Complaint seeks unspecified compensatory damages and other relief. The Company, along with other defendants, filed a Motion to Dismiss Plaintiffs’ Consolidated Amended Class Action Complaint in March 2005. The Motion to Dismiss was denied in December 2005, and the defendants served their Answer and Affirmative Defenses to the Consolidated Amended Class Action Complaint on December 16, 2005.

The original complaint charges that LQMT and certain individuals violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between June 11, 2001 through March 23, 2004, about its financial results. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to the defendants or recklessly disregarded by them; (1) that LQMT failed to make its product commercially feasible due to its high manufacturing cost; (2) that LQMT, struggling with the lack of market acceptance for the product, attempted to boost revenues through fraudulent means via a deal with a South Korean metals processing company; (3) that LQMT’s improving financial results were only made possible though improper revenue recognition practices in violation of Generally Accepted Accounting Principles (“GAAP”).

Further, on February 20, 2004, the Company disclosed that it would have to restate revenues for the third and fourth quarters o f2002 and the first quarter of 2003 due to improper revenue recognition. On March 30, 2004, defendants revealed that he Company’s 10-K has been indefinitely delayed due to its inability to complete the audit of prior years’ financial results. On April 29, 2004, LMQT announced that it received a Nasdaq Staff Determination indicating that because the company has not timely filed a Form 10-K with the SEC for the period ended December 31, 2003, LQMT faces delisting from NASDAQ. In response to the news, the price of LQMT stock declined during the class period to close at slightly over $3 per share on March 30, 2004, a drop of over 80% from the stock’s Class Period high.

COMPANY INFORMATION:

Sector: Basic Materials
Industry: Misc. Fabricated Products
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: LQMTE
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


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COURT: M.D. Florida
DOCKET #: 04-CV-919
JUDGE: Hon. James S. Moody Jr.
DATE FILED: 04/26/2004
CLASS PERIOD START: 05/22/2002
CLASS PERIOD END: 03/30/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  2. Geller Rudman, PLLC.
    197 South Federal Highway, Suite 200, Geller Rudman, PLLC., FL 33432
    561.750.3000 888.262.3131 · info@geller-rudman.com
  3. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  4. Law Offices of Marc S. Henzel (Lawrence)
    335 Central Avenue, Law Offices of Marc S. Henzel (Lawrence), NY 11559
    516.374.0707 516.295.3473 · securitiesfraud@comcast.net
  5. Milberg Weiss Bershad Hynes & Lerach LLP (Boca Raton)
    The Plaza, Suite 900, 5355 Town Center Road, Milberg Weiss Bershad Hynes & Lerach LLP (Boca Raton), FL 33486
    561.361.5000 ·
  6. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  7. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  8. The Brualdi Law Firm (New York)
    29 Broadway - Suite 1515, The Brualdi Law Firm (New York), NY 10006
    877.495.1187 212.952.0608 ·
  9. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: M.D. Florida
DOCKET #: 04-CV-919
JUDGE: Hon. James S. Moody Jr.
DATE FILED: 01/12/2005
CLASS PERIOD START: 05/21/2002
CLASS PERIOD END: 05/13/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
  2. Milberg Weiss Bershad & Schulman LLP (Boca Raton)
    5355 Town Center Road, Suite 900, Milberg Weiss Bershad & Schulman LLP (Boca Raton), FL 33486
    561.361.5000 561.367.8400 · info@milbergweiss.com
No Document Title Filing Date
No Document Title Filing Date