1141240--3/16/2007--LIQUIDMETAL_TECHNOLOGIES

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We have incurred significant operating losses in the past and may not be able to achieve or sustain profitability in the future. We may require additional funding, which may not be available on favorable terms or at all. We have a limited history of developing, manufacturing, and selling products made from our bulk amorphous alloys. We rely on assumptions about the markets for our products and components that, if incorrect, may adversely affect our profitability. If we cannot establish and maintain relationships with customers that incorporate our components and products into their finished goods, we will not be able to increase our revenue and commercialize our products. It may take significant time and cost for us to develop new customer relationships, which may delay our ability to generate additional revenue or achieve profitability. After we develop a customer relationship, it may take a significant amount of time for that customer to develop, manufacture, and sell finished goods that incorporate our components and products. A limited number of our customers generate a significant portion of our revenue. We expect to rely on our customers to market and sell finished goods that incorporate our products and components, a process over which we will have little control. Our growth depends on our ability to identify, develop, and commercialize new applications for our technology. We may not be able to effectively compete with current suppliers of incumbent materials or producers of competing products. Our bulk amorphous alloy technology is still at an early stage of commercialization relative to many other materials. Future advances in materials science could render Liquidmetal alloys obsolete. Our growth depends upon our ability to retain and attract a sufficient number of qualified employees. We may not be able to successfully identify, consummate, or integrate strategic partnerships. We may encounter manufacturing problems or delays or may be unable to produce high-quality products at acceptable costs. We expect to derive a substantial portion of our revenue from sales outside the United States, and problems associated with international business operations could affect our ability to manufacture and sell our products. A substantial increase in the price or interruption in the supply of raw materials for our alloys could have an adverse effect on our profitability. Our business is subject to the potential adverse consequences of exchange rate fluctuations. Our inability to protect our licenses, patents, and proprietary rights in the United States and foreign countries could harm our business because third parties may take advantage of our research and development efforts. Other companies may claim that we infringe their intellectual property rights, which could cause us to incur significant expenses or prevent us from selling our products. Our level of indebtedness reduces our financial flexibility and could impede our ability to operate. We are currently in breach under convertible notes that we have issued, and the noteholders may therefore accelerate the amounts due under such notes. Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. The time and cost associated with complying with government regulations to which we could become subject could have a material adverse effect on our business. The existence of minority stockholders in our Liquidmetal Golf subsidiary creates potential for conflicts of interest. Our stock price has experienced volatility and may continue to experience volatility. Our convertible notes and warrants contain anti-dilution provisions that, if triggered, could cause substantial dilution to our then-existing stockholders. We have never paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. Anti-takeover provisions of our certificate of incorporation and bylaws and provisions of applicable corporate law could delay or prevent a change of control that you may favor. An ongoing investigation by the Department of Justice could have a material adverse impact on our company.

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1141240--3/16/2007--LIQUIDMETAL_TECHNOLOGIES_INC