Liquidmetal gets default notice from some holders of 8% convertibles

By Devika Patel

Knoxville, Tenn., Oct. 7 - Liquidmetal Technologies Inc. is in default on its $18.64 million in outstanding 8% convertible subordinated notes due January 2010, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The company said in the filing that it was required to make a $582,603 payment on Sept. 30 but did not have sufficient funds to make this payment, resulting in the default, which occurred on Oct. 4.

It said holders may accelerate all principal and interest payments due under the notes, which would equal $19.08 million as of Oct. 4.

To date, holders of $2.26 million in notes have delivered default notices to the company, accelerating the notes.

Liquidmetal said in the filing it intends to respond to this situation by seeking to amend the terms of certain notes and trying to sell certain of its assets in order to fund payments.

It also noted that there is no assurance that it will be able to sell sufficient assets or negotiate the amendments that are necessary to cure the default.

Liquidmetal, based in Lake Forest, Calif., develops and sells products made from amorphous bulk alloys.

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