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Liquidmetal Technologies Reports Results for Fiscal Year 2018

LQMT | March 5, 2019

Liquidmetal Technologies Reports Results for Fiscal Year 2018

Liquidmetal® Technologies, Inc. (OTCQB: LQMT), the leading developer of amorphous alloys and composites, reported results for the fiscal year ended December 31, 2018.

Management Commentary

“During 2018, we validated our first multi-cavity production molds for our amorphous and metal injection molding operations, resulting in production orders,” said Bruce Bromage, the Company’s Chief Operating Officer. “In addition, we have recently received our first amorphous production tooling order for a higher volume medical device application with validation and acceptance protocols in process. We are also working with our customer to develop the next generation of this application, demonstrating their commitment to our technology and to Liquidmetal as a trusted supplier. We are focused on bringing more applications into our production pipeline.”

Dr. Bromage continued, “Our building power upgrade is near completion, allowing us to further expand our manufacturing footprint. On the research and development front, we continue to learn more about the unique capabilities of our materials and production methods, especially for consumer and medical applications.”

2018 Financial Summary

In 2018, the Company generated $532 thousand in revenue through completion of prototyping, small scale production runs, and the production tooling portion of orders for both our AMM and MIM platforms. During 2018, we finished validation procedures, and began producing routine volume part runs, for the Company’s first eight-cavity mold, highlighting our development efforts and continued emergence as a volume manufacturer.

Cost of goods sold was $1,164 thousand in 2018 and $696 thousand in 2017. This increase was primarily attributable to an increase in book markdowns of raw materials inventory, which was slightly offset by improved production throughput.

Selling, marketing, general and administrative expense was $5.9 million in 2018 and $6.3 million in 2017. The decrease is primarily due slightly lower costs associated with employee compensation, inclusive of non-cash stock-based compensation.

Research and development increased to $2.4 million in 2018, from $2.0 million in 2017. The increase is mainly due to increases in internal projects related alloy and molding machine development.

Cash and restricted cash totaled $35.2 million at December 31, 2018, as compared to $41.3 million at December 31, 2017.

For a more detailed and complete analysis of the Company’s financial results, please refer to the Company’s December 31, 2018 Form 10K, which was filed earlier today.

About Liquidmetal Technologies

Lake Forest, California-based Liquidmetal Technologies, Inc. is the leading producer of parts made with amorphous alloys, also known scientifically as Bulk Metallic Glasses or BMGs. The non-crystalline atomic structure of these materials imparts unique performance properties, including the ability to injection-mold with micron-level precision, lustrous finishes, high strength, hardness and corrosion resistance, and remarkable elasticity. Liquidmetal Technologies is the first company to produce amorphous alloy parts commercially, enabling significant improvements in products across a wide array of industries. For more information, go to www.liquidmetal.com.

Forward-Looking Statement

This press release contains "forward-looking statements," including but not limited to statements regarding the advantages of Liquidmetal's amorphous alloy technology, scheduled manufacturing of customer parts and other statements associated with Liquidmetal's technology and operations. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Liquidmetal's expectations and projections. Risks and uncertainties include, among other things; customer adoption of Liquidmetal's technologies and successful integration of those technologies into customer products; potential difficulties or delays in manufacturing products incorporating Liquidmetal's technologies; Liquidmetal's ability to fund its current and anticipated operations; the ability of third party suppliers and manufacturers to meet customer product requirements; general industry conditions; general economic conditions; and governmental laws and regulations affecting Liquidmetal's operations. Additional information concerning these and other risk factors can be found in Liquidmetal's public periodic filings with the U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Liquidmetal's 2018 Annual Report on Form 10-K.

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data)

	December 31,			December 31,
		2018			2017

ASSETS

Current assets:
Cash and cash equivalents	$	35,229		$	41,309
Restricted cash		5			5
Trade accounts receivable, net of allowance for doubtful accounts		120			157
Inventory		31			391
Prepaid expenses and other current assets		363			326
Total current assets	$	35,748		$	42,188
Property and equipment, net		11,767			12,465
Patents and trademarks, net		322			408
Other assets		14			14
Total assets	$	47,851		$	55,075

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Short-term debt		-			-
Accounts payable		253			92
Accrued liabilities		270			365
Deferred revenue		31			7
Warrant liabilities, current		-			-
Option liabilities		-			-
Total current liabilities	$	554		$	464

Long-term liabilities
Warrant liabilities, long-term		925			2,192
Other long-term liabilities		856			856
Total liabilities	$	2,335		$	3,512

Shareholders' equity:
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2018 and December 31, 2017, respective		-			-
Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,206,832 and 908,768,116 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively		914			909
Warrants		18,179			18,179
Additional paid-in capital		279,306			277,924
Accumulated deficit		(252,809	)		(245,376	)
Non-controlling interest in subsidiary		(74	)		(73	)
Total shareholders' equity	$	45,516		$	51,563

Total liabilities and shareholders' equity	$	47,851		$	55,075


LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data)

	Years Ended December 31,

		2018			2017			2016

Revenue
Products	$	484		$	255		$	453
Licensing and royalties		48			66			27
Total revenue		532			321			480

Cost of sales		1,164			696			553

Gross loss		(632	)		(375	)		(73	)

Operating expenses
Selling, marketing, general and administrative		5,899			6,265			7,472
Research and development		2,429			1,962			2,342
Total operating expenses		8,328			8,227			9,814
Operating loss		(8,960	)		(8,602	)		(9,887	)

Change in value of warrants, gain (loss)		1,267			(143	)		(4,117	)
Change in value of option liabilities, loss		-			-			(2,613	)
Loss on contract modification		-			-			(2,126	)
Interest expense		-			-			(9	)
Interest income		259			55			-

Loss before income taxes		(7,434	)		(8,690	)		(18,752	)

Income taxes		-			-			-

Net loss and comprehensive loss		(7,434	)		(8,690	)		(18,752	)

Net loss attributable to non-controlling interest		1			3			8

Net loss and comprehensive loss attributable to Liquidmetal Technologies shareholders		(7,433	)		(8,687	)		(18,744	)

Per common share basic and diluted:

Net loss per common share attributable to Liquidmetal Technologies shareholders, basic	$	(0.01	)	$	(0.01	)	$	(0.03	)

Net loss per common share attributable to Liquidmetal Technologies shareholders, diluted	$	(0.01	)	$	(0.01	)	$	(0.03	)

Number of weighted average shares - basic		910,546,059			897,273,890			640,157,919
Number of weighted average shares - diluted		910,546,059			897,273,890			640,157,919