LAKE FOREST, Calif.--(BUSINESS WIRE)--Aug. 9, 2005--Liquidmetal(R) Technologies Inc. (OTC:LQMT) announced the completion of a private placement of new 7% Convertible Secured Promissory Notes due August 2007 in the aggregate amount of approximately $10.0 million. The Private Placement allowed the company to raise additional funding for the working capital of the company, provided for the exchange of previously issued promissory notes, and for the redemption of Convertible Notes due July 29th, 2005 and satisfaction of all interest and penalties under the terms of those notes.

The Notes were issued in consideration of aggregate cash in the amount of $5.1 million, the exchange of $3.0 million in principal amount of previously issued 10% Convertible Unsecured Notes Due June 2006, the exchange of $1.9 million in principal amount of previously issued 10% senior Secured Notes due July 29th, 2005. $2.6 million of the gross proceeds of the offering were used to satisfy the redemption of remainder of the 10% Senior Secured Notes due July 29th, 2005 and part of 10% Convertible Unsecured Note Due June 2006 and for the satisfaction of all of the interest and penalties under the terms of those notes.

The Notes issued by the Company in the Private Placement will become due on the second (2nd) anniversary of the issue date of the Notes. Prior to maturity, the Notes will bear interest at 7% per annum with interest being paid quarterly on the first day of each calendar quarter beginning October 1, 2005. The Notes are convertible into shares of the Company's common stock at $2.00 per share, subject to certain anti-dilution rights. As a part of the Private Placement, the Company issued Warrants to the purchasers of the Notes giving them the right to purchase a number of shares of Company common stock equal to 50% of the principal amount of the purchaser's Notes divided by the $2.00 conversion price of the Note. The Warrants will expire on August 2, 2010.

Commenting on the completion of the funding, John Kang, President and CEO, stated, "We are excited to be able to have completed this funding and the redemption of the 2005 notes that were due. This was a major step in the restructuring of the company that has been in the works since 2004. With the additional working capital provided by this transaction and the related improvement to our debt structure, we look forward to being able to focus on the execution of our strategy to accelerate the commercial adoption of Liquidmetal alloys."

This press release may contain "forward-looking statements" that involve risks and uncertainties, including statements regarding our plans, future events, objectives, expectations, forecasts, or assumptions. Any statement in this press release that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as "believe," "estimate," "project," "expect," "intend," "may," "anticipate," "plans," "seeks," and similar expressions identify forward-looking statements. These statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or result, and undue reliance should not be placed on these statements. These risks and uncertainties may include: our limited operating history in developing and manufacturing products from bulk amorphous alloys; the adoption of our alloys by customers; the commercial success of our customer's products; our ability to identify, develop, and commercialize new applications for our alloys; competition with suppliers of incumbent materials; the development of new materials that render our alloys obsolete; the ability to manage our anticipated growth; our limited direct experience in manufacturing bulk alloy products; scaling-up our manufacturing facilities; protecting our intellectual property; problems associated with manufacturing and selling our alloys outside of the United States; and other risks and uncertainties discussed in filings made with the Securities and Exchange Commission (including risks described in subsequent reports on Form 10-Q, Form 10-K, Form 8-K, and other filings). Liquidmetal Technologies disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.