8-K: Liquidmetal Technologies Amends License Agreement with Amorphology, Expanding Scope and Granting Equipment Purchase Option

Liquidmetal Technologies has amended its licensing agreement with Amorphology, expanding the scope of the license and granting Amorphology an option to purchase an Engel injection molding machine.

Summary

• Liquidmetal Technologies has entered into a First Amendment to its License Agreement with Amorphology, modifying the original agreement from November 22, 2019.
• The amended agreement grants Amorphology a non-exclusive, royalty-bearing license to use Liquidmetal's patents and technical information for amorphous metal parts and components, excluding certain consumer electronics, jewelry, and luxury products.
• The license now includes the use of Engel injection molding machines and extends to all territories worldwide except for specific countries in Asia.
• Amorphology will pay a royalty based on a percentage of sales of licensed products, including sales to customers referred by Liquidmetal.
• The agreement also provides Amorphology with a right of first refusal to purchase an Engel injection molding machine and associated equipment from Liquidmetal for $[****], exercisable no earlier than February 1, 2025.
• The term of the agreement is five years with automatic one-year extensions unless terminated with six months' notice.

Sentiment

Score: 7

Explanation: The document indicates a positive development for both companies, with expanded licensing and potential equipment purchase. However, the non-exclusive nature of the license and the 'AS IS' sale of equipment introduce some risks.

Positives

• The expanded license agreement allows Amorphology to access a broader market for amorphous metal parts and components.
• The inclusion of Engel injection molding machines in the license provides Amorphology with access to key manufacturing technology.
• The right of first refusal to purchase the Engel machine gives Amorphology an opportunity to acquire valuable equipment.
• The agreement includes a referral royalty rate, incentivizing Amorphology to pursue new customers introduced by Liquidmetal.
• The agreement includes a clause that allows Amorphology to continue to operate for 180 days after termination of the agreement.

Negatives

• The license is non-exclusive, meaning Liquidmetal can grant similar licenses to other companies.
• The license is territory-restricted, excluding certain Asian countries without prior consent.
• The purchase of the Engel machine is subject to Eutectix's rights, potentially delaying or preventing the sale.
• The equipment is sold 'AS IS, WHERE IS, and WITH ALL FAULTS', placing all risk on Amorphology.
• The agreement includes a clause that allows either party to terminate the agreement with six months notice.

Risks

• The non-exclusive nature of the license could lead to increased competition for Amorphology.
• The territory restrictions could limit Amorphology's market reach.
• The purchase of the Engel machine is not guaranteed and is subject to Eutectix's rights.
• The 'AS IS' sale of the equipment could result in unexpected costs for Amorphology.
• The agreement can be terminated by either party with six months notice, creating uncertainty.

Future Outlook

The amended agreement is expected to strengthen the relationship between Liquidmetal and Amorphology, allowing Amorphology to expand its operations and market reach in the amorphous metal parts and components industry. The potential purchase of the Engel machine could further enhance Amorphology's manufacturing capabilities.

Management Comments

• The document does not contain any direct quotes from management, but the agreement was signed by Tony Chung, Chief Executive Officer of Liquidmetal Technologies, and Isaac Bresnick, President of Liquidmetal Technologies.

Industry Context

This agreement reflects a continued interest in the application of amorphous metals in various industries. The expansion of the license to include a broader range of parts and components suggests a growing market for these materials. The inclusion of Engel injection molding machines indicates a focus on advanced manufacturing techniques.

Comparison to Industry Standards

• The licensing agreement is similar to other technology transfer agreements in the materials science and manufacturing sectors, where companies license their intellectual property to partners for commercialization.
• The royalty rates are within the typical range for technology licenses, although the specific percentages are not disclosed.
• The right of first refusal for equipment purchase is a common practice in such agreements, providing the licensee with an opportunity to acquire necessary assets.
• The territory restrictions are not uncommon in licensing agreements, especially when third-party rights are involved.
• The 'AS IS' sale of equipment is a standard practice in transactions involving used machinery.

Stakeholder Impact

• Shareholders of Liquidmetal Technologies may view this agreement positively as it expands the potential revenue stream from its intellectual property.
• Amorphology will benefit from access to Liquidmetal's technology and the potential to expand its manufacturing capabilities.
• Customers of Amorphology may benefit from the availability of new products made with amorphous metals.

Next Steps

• Amorphology will need to decide whether to exercise its right of first refusal to purchase the Engel injection molding machine.
• Liquidmetal will need to ensure the delivery of the equipment by August 1, 2025, if Amorphology exercises its option.
• Both companies will need to monitor the performance of the agreement and ensure compliance with its terms.

Key Dates

Keywords

Amorphous Metals, License Agreement, Injection Molding, Patents, Technology, Royalties, Manufacturing, Equipment, Amorphology, Liquidmetal