Liquidmetal® Technologies, Inc. (OTCQB: LQMT), the foremost authority on commercial applications of amorphous alloys, reported results for its second quarter ended June 30, 2019.
Management Commentary
Our operating results for the second quarter reflect operations related to the development and manufacturing of amorphous products, prior to our announcement of our Restructuring Plan. Since then, we have received orders from all current customers to produce buffer inventories to sustain them through our transition to outsourced manufacturing. The majority of these buffer orders are scheduled to be completed by the end of the third quarter, with final shipments being made from our facility early in the fourth quarter. There is strong customer interest in new development projects with Dongguan Yihao Metal Materials Technology Co. Ltd. as our contract manufacturer, reflected in an increased volume of quotes.
In addition, we are executing the remaining aspects of the Restructuring Plan, including the sale or disposal of equipment and developing potential sources for domestic manufacturing. The major aspects of the Plan are on track to be completed on the same timeline as our remaining customer commitments from the facility. As manufacturing operations will continue in our Lake Forest facility through September 2019, cost reductions associated with the Plan will likely commence during the fourth quarter.
Q2 2019 Financial Summary
During the second quarter of 2019, the Company generated $132 thousand in revenue as it continued to focus on early production orders with medical and retail customers, as well as product development efforts with the goal of continued commercialization of the Company’s technology and generating sustained part deliveries.
Selling, marketing, general and administrative expense was $1.3 million in Q2 2019, as compared to $1.5 million in Q2 2018. The decrease was primarily due to overall lower costs associated with employee compensation as a result of prior period headcount reductions.
Research and development expense was $0.4 million in Q2 2019, as compared to $0.6 million in Q2 2018. The decrease from the prior year was mainly due to decreases in expenses associated with alloy and application development efforts.
Asset impairment charges of $1.7 million were recorded during Q2 2019 as a result of changed assumptions regarding the asset grouping and future use of the Company’s manufacturing assets.
Cash and restricted cash totaled $32.2 million at June 30, 2019, as compared to $35.2 million at December 31, 2018.
For a more detailed and complete analysis of the Company’s financial results, please refer to the Company’s June 30, 2019 Form 10Q, which was filed earlier today.
About Liquidmetal Technologies
Lake Forest, California-based Liquidmetal Technologies, Inc. is the leading developer 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)
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2019
|
|
2018
|
|
|
(Unaudited)
|
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
| Cash |
|
$
|
32,195
|
|
|
$
|
35,229
|
|
| Restricted cash |
|
|
5
|
|
|
|
5
|
|
| Trade accounts receivable |
|
|
80
|
|
|
|
120
|
|
| Inventory |
|
|
87
|
|
|
|
31
|
|
| Prepaid expenses and other current assets |
|
|
200
|
|
|
|
363
|
|
| Total current assets |
|
$
|
32,567
|
|
|
$
|
35,748
|
|
| Property and equipment, net |
|
|
10,158
|
|
|
|
11,767
|
|
| Patents and trademarks, net |
|
|
280
|
|
|
|
322
|
|
| Other assets |
|
|
14
|
|
|
|
14
|
|
| Total assets |
|
$
|
43,019
|
|
|
$
|
47,851
|
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
|
$
|
93
|
|
|
$
|
253
|
|
| Accrued liabilities |
|
|
228
|
|
|
|
270
|
|
| Deferred revenue |
|
|
37
|
|
|
|
31
|
|
| Total current liabilities |
|
$
|
358
|
|
|
$
|
554
|
|
|
|
|
|
|
| Long-term liabilities: |
|
|
|
|
| Other long-term liabilities |
|
|
856
|
|
|
|
856
|
|
| Total liabilities |
|
$
|
1,214
|
|
|
$
|
1,410
|
|
|
|
|
|
|
| Shareholders' equity: |
|
|
|
|
| Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively |
|
|
-
|
|
|
|
-
|
|
| Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,359,124 and 914,206,832 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively |
|
|
914
|
|
|
|
914
|
|
| Warrants |
|
|
18,179
|
|
|
|
18,179
|
|
| Additional paid-in capital |
|
|
286,632
|
|
|
|
286,276
|
|
| Accumulated deficit |
|
|
(263,845
|
)
|
|
|
(258,854
|
)
|
| Non-controlling interest in subsidiary |
|
|
(75
|
)
|
|
|
(74
|
)
|
|
|
|
|
|
| Total shareholders' equity |
|
$
|
41,805
|
|
|
$
|
46,441
|
|
|
|
|
|
|
| Total liabilities and shareholders' equity |
|
$
|
43,019
|
|
|
$
|
47,851
|
|
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
(unaudited)
|
| |
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
| Revenue |
|
|
|
|
|
|
|
|
| Products |
|
$
|
132
|
|
|
$
|
55
|
|
|
$
|
355
|
|
|
$
|
135
|
|
| Licensing and royalties |
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
| Total revenue |
|
|
132
|
|
|
|
55
|
|
|
|
355
|
|
|
|
135
|
|
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
103
|
|
|
|
61
|
|
|
|
282
|
|
|
|
142
|
|
| Gross profit (loss) |
|
|
29
|
|
|
|
(6
|
)
|
|
|
73
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
| Selling, marketing, general and administrative |
|
|
1,275
|
|
|
|
1,527
|
|
|
|
2,708
|
|
|
|
3,112
|
|
| Research and development |
|
|
406
|
|
|
|
644
|
|
|
|
895
|
|
|
|
1,254
|
|
| Impairment of long-lived assets |
|
|
1,676
|
|
|
|
-
|
|
|
|
1,676
|
|
|
|
-
|
|
| Loss on disposal of fixed assets |
|
|
5
|
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
| Total operating expenses |
|
|
3,362
|
|
|
|
2,171
|
|
|
|
5,284
|
|
|
|
4,366
|
|
| Operating loss |
|
|
(3,333
|
)
|
|
|
(2,177
|
)
|
|
|
(5,211
|
)
|
|
|
(4,373
|
)
|
|
|
|
|
|
|
|
|
|
| Interest income |
|
|
109
|
|
|
|
35
|
|
|
|
219
|
|
|
|
68
|
|
|
|
|
|
|
|
|
|
|
| Net loss and comprehensive loss |
|
|
(3,224
|
)
|
|
|
(2,142
|
)
|
|
|
(4,992
|
)
|
|
|
(4,305
|
)
|
|
|
|
|
|
|
|
|
|
| Net loss attributable to non-controlling interest |
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
| Net loss and comprehensive loss attributable to Liquidmetal Technologies shareholders |
|
$
|
(3,223
|
)
|
|
$
|
(2,142
|
)
|
|
$
|
(4,991
|
)
|
|
$
|
(4,305
|
)
|
|
|
|
|
|
|
|
|
|
| Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted |
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
| Number of weighted average shares - basic and diluted |
|
|
914,359,124
|
|
|
|
909,213,870
|
|
|
|
914,319,575
|
|
|
|
909,063,156
|
|
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