Liquidmetal® Technologies, Inc. (OTCQB: LQMT), a leading authority on commercial applications of amorphous alloys, reported results for its first quarter ended March 31, 2020.
Management Commentary
Our Q1 results reflect the completion of our 2019 Restructuring Plan, with a continued downward shift in operating costs and increases in cash flows from our invested capital and the lease of our previous manufacturing facility. Additionally, during the first quarter we completed successful delivery of the first production parts from our manufacturing partner in China.
Despite the seemingly total shutdown of the domestic economy amidst the COVID-19 pandemic, we have managed to keep key initiatives moving forward through a revised sales and marketing push, progress on application development, and continued engagement with customers. Additionally, our Chinese manufacturing partner, Yihao, is continuing to have market development success in Asia, opening up sales opportunities in industries and corporations we are otherwise unable to access. To the extent these efforts are successful, and/or we are able to add value to such efforts, we expect to see direct and indirect benefits in future periods. These will be realized through either future royalties and licensing fees and through a more general market acceptance of amorphous alloys as a viable manufacturing solution.
Q1 2020 Financial Summary
During the first quarter of 2020, the Company generated $71 thousand in revenue through a combination of initial part deliveries from contract manufacturers and new licenses of intellectual property.
Cost of goods sold was $36 thousand in Q1 2020 and $179 thousand in Q1 2019. This decrease was primarily attributable to lower production part deliveries under outsourced manufacturing due to the recent transition in the Company’s manufacturing strategy and a build-up of existing customer inventories in the latter part of 2019.
Selling, marketing, general and administrative expense was $1.0 million in Q1 2020 and $1.4 million in Q1 2019. The decrease is primarily due to lower costs associated with employee compensation, inclusive of non-cash stock-based compensation.
Research and development decreased to $29 thousand from $489 thousand in Q1 2019. The decrease is mainly due to headcount and internal project reductions as a result of the recently completed restructuring plan.
Cash and restricted cash totaled $19.7 million at March 31, 2020, as compared to $19.5 million at December 31, 2019. The change is primarily associated with movements within investments in debt securities, which have resulted in an increase in interest and investment income to $127 thousand during Q1 2020 from $110 thousand during Q1 2019.
For a more detailed and complete analysis of the Company’s financial results, please refer to the Company’s March 31, 2020 Form 10Q, which was filed earlier today.
About Liquidmetal Technologies
Lake Forest, California-based Liquidmetal Technologies, Inc. is a leading authority and 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 2019 Annual Report on Form 10-K.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
|
|
|
March 31,
|
|
December 31,
|
|
|
2020
|
|
2019
|
|
|
(unaudited)
|
|
(audited)
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
| Cash and cash equivalents |
|
$
|
19,664
|
|
|
$
|
19,543
|
|
| Restricted cash |
|
|
5
|
|
|
|
5
|
|
| Investments in debt securities- short term |
|
|
4,970
|
|
|
|
4,415
|
|
| Trade accounts receivable, net of allowance for doubtful accounts |
|
|
273
|
|
|
|
303
|
|
| Inventory |
|
|
-
|
|
|
|
12
|
|
| Prepaid expenses and other current assets |
|
|
293
|
|
|
|
322
|
|
| Total current assets |
|
$
|
25,205
|
|
|
$
|
24,600
|
|
| Investments in debt securities- long term |
|
|
5,533
|
|
|
|
7,074
|
|
| Property and equipment, net |
|
|
8,832
|
|
|
|
8,819
|
|
| Patents and trademarks, net |
|
|
218
|
|
|
|
239
|
|
| Equipment held for sale |
|
|
585
|
|
|
|
585
|
|
| Other assets |
|
|
137
|
|
|
|
14
|
|
| Total assets |
|
$
|
40,510
|
|
|
$
|
41,331
|
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
|
|
81
|
|
|
|
132
|
|
| Accrued liabilities |
|
|
712
|
|
|
|
775
|
|
| Total current liabilities |
|
$
|
793
|
|
|
$
|
907
|
|
|
|
|
|
|
| Long-term liabilities |
|
|
|
|
| Other long-term liabilities |
|
|
899
|
|
|
|
856
|
|
| Total liabilities |
|
$
|
1,692
|
|
|
$
|
1,763
|
|
|
|
|
|
|
| Shareholders' equity: |
|
|
|
|
| Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively |
|
|
-
|
|
|
|
-
|
|
| Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,449,957 and 914,449,957 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively |
|
|
914
|
|
|
|
914
|
|
| Warrants |
|
|
18,179
|
|
|
|
18,179
|
|
| Additional paid-in capital |
|
|
286,924
|
|
|
|
286,832
|
|
| Accumulated deficit |
|
|
(267,030
|
)
|
|
|
(266,284
|
)
|
| Accumulated other comprehensive income (loss) |
|
|
(94
|
)
|
|
|
2
|
|
| Non-controlling interest in subsidiary |
|
|
(75
|
)
|
|
|
(75
|
)
|
| Total shareholders' equity |
|
$
|
38,818
|
|
|
$
|
39,568
|
|
|
|
|
|
|
| Total liabilities and shareholders' equity |
|
$
|
40,510
|
|
|
$
|
41,331
|
|
|
|
|
|
|
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
|
|
|
|
For the Three Months
Ended March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
| Revenue |
|
|
|
|
|
| Products |
|
$
|
46
|
|
|
$
|
223
|
|
|
| Licensing and royalties |
|
|
25
|
|
|
|
-
|
|
|
| Total revenue |
|
|
71
|
|
|
|
223
|
|
|
|
|
|
|
|
|
| Cost of sales |
|
|
36
|
|
|
|
179
|
|
|
| Gross profit |
|
|
35
|
|
|
|
44
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
| Selling, marketing, general and administrative |
|
|
987
|
|
|
|
1,433
|
|
|
| Research and development |
|
|
29
|
|
|
|
489
|
|
|
| Gain on disposal of long-lived assets |
|
|
(20
|
)
|
|
|
-
|
|
|
| Total operating expenses |
|
|
996
|
|
|
|
1,922
|
|
|
| Operating loss |
|
|
(961
|
)
|
|
|
(1,878
|
)
|
|
|
|
|
|
|
|
| Lease income |
|
|
88
|
|
|
|
-
|
|
|
| Interest and investment income |
|
|
127
|
|
|
|
110
|
|
|
|
|
|
|
|
|
| Loss before income taxes |
|
|
(746
|
)
|
|
|
(1,768
|
)
|
|
|
|
|
|
|
|
| Income taxes |
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(746
|
)
|
|
|
(1,768
|
)
|
|
|
|
|
|
|
|
| Net loss attributable to non-controlling interest |
|
-
|
|
|
|
-
|
|
|
| Net loss attributable to Liquidmetal Technologies shareholders |
|
|
(746
|
)
|
|
|
(1,768
|
)
|
|
|
|
|
|
|
|
| Per common share basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
| Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted |
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
| Number of weighted average shares - basic and diluted |
|
|
914,449,957
|
|
|
|
914,280,027
|
|
|
|
|
|
|
|
|
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