LQMT is a highly promoted penny stock with a market cap that exceeds $125 million, and highly speculative business prospects. However, a little due diligence reveals a company with a troubled past, as highlighted in an earlier article written by StreetSweeper in 2010, a convoluted capital structure, and a virtually insolvent business.

The sexy story comes from the association of their technology with Apple (AAPL). On August 5, 2010, LQMT entered into a license transaction with Apple Inc. pursuant to which, for a one-time licensing fee of $20 million, they granted to Apple a perpetual, worldwide, fully-paid, exclusive license to commercialize all of the company’s intellectual property in the field of consumer electronic products. (See page 7 of the 10-k linked above.) As a result, they will not be able to pursue applications of their bulk Liquidmetal alloys in the consumer electronics field with other companies.

The current rumors propelling the stock are that Apple may use the Liquidmetal technology in the iPhone 5. While this is certainly nice to hear, it will have no material impact on LQMT’s financials going forward since they received a one-time payment almost 2 years ago, and will receive no ongoing royalties.