Liquidmetal Technologies Reports Second Quarter 2020 Results

Liquidmetal® Technologies, Inc. (OTCQB: LQMT), a leading authority on commercial applications of amorphous alloys, reported results for its second quarter ended June 30, 2020.

Management Commentary

Our second quarter results reflect our continued shifting of manufacturing operations to trusted suppliers, refinement of our operating cost structure, and active management of the Company’s assets to maximize value. During the second quarter, we have continued to engage with our primary supplier, Yihao, to advance product development and design efforts, improve manufacturing throughput, and deliver bulk metallic glass parts into key markets. This has resulted in securing our first orders for recurring, volume, deliveries of functional parts utilizing our technology. Monthly shipments began in July and will result in regular supply into a targeted market, along with providing market participants with needed benchmarks on the advantages of our technology.

Q2 2020 Financial Summary

During the second quarter of 2020, the Company generated $33 thousand in revenue through initial part deliveries on development projects, as the Company continues to shift production to outsourced suppliers.

Cost of goods sold was $35 thousand in Q2 2020 and $103 thousand in Q2 2019. This decrease was primarily attributable to lower production part deliveries 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 $0.9 million in Q2 2020 and $1.3 million in Q2 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 $27 thousand in Q2 2020, from $406 thousand in Q2 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 $20.5 million at June 30, 2020, as compared to $19.5 million at December 31, 2019. The change is primarily associated with movements within investments in debt securities, off-set by cash outflows to fund operations.

For a more detailed and complete analysis of the Company’s financial results, please refer to the Company’s June 30, 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)

June 30,

 

December 31,

2020

 

2019

(Unaudited)

 

(Audited)

ASSETS
 
Current assets:
Cash and cash equivalents

$

20,526

 

$

19,543

 

Restricted cash

 

5

 

 

5

 

Investments in debt securities- short term

 

4,225

 

 

4,415

 

Trade accounts receivable, net of allowance for doubtful accounts

 

291

 

 

303

 

Inventory

 

23

 

 

12

 

Prepaid expenses and other current assets

 

359

 

 

322

 

Total current assets

$

25,429

 

$

24,600

 

Investments in debt securities- long term

 

5,071

 

 

7,074

 

Property and equipment, net

 

8,774

 

 

8,819

 

Patents and trademarks, net

 

197

 

 

239

 

Equipment held for sale

 

-

 

 

585

 

Other assets

 

219

 

 

14

 

Total assets

$

39,690

 

$

41,331

 

 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities:
Accounts payable

 

103

 

 

132

 

Accrued liabilities

 

248

 

 

775

 

Total current liabilities

$

351

 

$

907

 

 
Long-term liabilities
Other long-term liabilities

 

899

 

 

856

 

Total liabilities

$

1,250

 

$

1,763

 

 
Shareholders' equity:
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at June 30, 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 June 30, 2020 and December 31, 2019, respectively

 

914

 

 

914

 

Warrants

 

18,179

 

 

18,179

 

Additional paid-in capital

 

287,005

 

 

286,832

 

Accumulated deficit

 

(267,673

)

 

(266,284

)

Accumulated other comprehensive income

 

90

 

 

2

 

Non-controlling interest in subsidiary

 

(75

)

 

(75

)

Total shareholders' equity

$

38,440

 

$

39,568

 

 
Total liabilities and shareholders' equity

$

39,690

 

$

41,331

 {

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 June 30,

For the Six Months
Ended June 30,

2020

 

2019

 

2020

 

2019

 
Revenue
Products

$

33

 

$

132

 

$

79

 

$

355

 

Licensing and royalties

 

-

 

 

-

 

 

25

 

 

-

 

Total revenue

 

33

 

 

132

 

 

104

 

 

355

 

 
Cost of sales

 

35

 

 

103

 

 

71

 

 

282

 

Gross profit (loss)

 

(2

)

 

29

 

 

33

 

 

73

 

 
Operating expenses
Selling, marketing, general and administrative

 

870

 

 

1,275

 

 

1,857

 

 

2,708

 

Research and development

 

27

 

 

406

 

 

56

 

 

895

 

Impairment of long-lived assets

 

-

 

 

1,676

 

 

-

 

 

1,676

 

(Gain) loss on disposal of long-lived assets

 

(15

)

 

5

 

 

(35

)

 

5

 

Total operating expenses

 

882

 

 

3,362

 

 

1,878

 

 

5,284

 

Operating loss

 

(884

)

 

(3,333

)

 

(1,845

)

 

(5,211

)

 
Lease income

 

132

 

 

-

 

 

220

 

 

-

 

Interest and investment income

 

109

 

 

109

 

 

236

 

 

219

 

 
Loss before income taxes

 

(643

)

 

(3,224

)

 

(1,389

)

 

(4,992

)

 
Income taxes

 

-

 

 

-

 

 

-

 

 

-

 

 
Net loss

 

(643

)

 

(3,224

)

 

(1,389

)

 

(4,992

)

 
Net loss attributable to non-controlling interest

 

-

 

 

1

 

 

-

 

 

1

 

Net loss attributable to Liquidmetal Technologies shareholders

$

(643

)

$

(3,223

)

$

(1,389

)

$

(4,991

)

 
 
Per common share basic and diluted:
 
Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted

$

(0.00

)

$

(0.00

)

$

(0.00

)

$

(0.01

)

 
Number of weighted average shares - basic and diluted

 

914,449,957

 

 

914,359,124

 

 

914,449,957

 

 

914,319,575