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KRIS HUNDLEYThe company's founder is under scrutiny; before its IPO, he sold personal stock in it to a former supplier.
John Kang, founder, chief executive and president of LiquidMetal Technologies Inc., will step down temporarily from his management positions amid an investigation of his sale of stock to one of the company's former suppliers.
LiquidMetal, which develops, manufactures and markets products from superhard alloys, moved its headquarters from Tampa to Lake Forest, Calif., at the beginning of the year. The company, which went public in May 2002, has been struggling with higher than anticipated costs and lagging demand for its products.
In addition, the investigation into Kang's stock sale to Growell Metal Co. of South Korea in February 2002 has delayed restatement of LiquidMetal's financial results for the first quarter and 2003; the company may be delisted from the Nasdaq Stock Market as a result.
In a release Monday, the company said it will begin a search for an interim president and chief executive immediately. Kang will remain chairman.
The management change accompanies the appointment of Stonefield Josephson of California as LiquidMetal's new independent auditors. Deloitte & Touche resigned as LiquidMetal's auditor this month, saying it was "unwilling to rely" on Kang's statements.
Deloitte also cited "material weaknesses" in the company's internal accounting controls. The company said it is taking steps to improve its controls.
Kang sold personal stock to Growell before LiquidMetal's initial public offering, promising the stock would be at a 30 percent discount to the public offering price.
Announcing the appointment of new auditors, Kang said he looks forward to completing the restatement process and 2003 audit. He repeated earlier projections that revenues for the first quarter of 2004, ended March 31, would be $3.5-million to $4-million, before including an expected $2.5-million revenue benefit related to the restatement.
LiquidMetal also announced that Vincent Addonisio has joined the board as independent director, replacing David Browne, who resigned at the end of his term. Addonisio is president and chief executive of Regency Strategic Advisors. He was previously chief administrative officer for IMRGlobal Corp. in Clearwater.
Shares in LiquidMetal, which went public two years ago at $15 a share, have swung from a year-ago high of $6.69 to a low of 55 cents this month. The company's stock closed Monday at $1.25 a share, up 9 cents.
- Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.