Business Wire | Nov 10, 2020 05:30PM EST

Liquidmetal Technologies Reports Third Quarter 2020 Results

Nov. 10, 2020

LAKE FOREST, Calif.--(BUSINESS WIRE)--Nov. 10, 2020--Liquidmetal(r) Technologies, Inc. (OTCQB: LQMT), a leading authority on commercial applications of amorphous alloys, reported results for its third quarter ended September 30, 2020.

Management Commentary

Our third quarter results reflect the completion of initial volume production orders under our outsourced manufacturing model. Since July, we have delivered 10,000 parts per month to fill a customer pipeline for a dental application. We expect continued deliveries, at similar volumes, to continue into the middle of 2021. This has allowed us to further validate Yihao as a trusted supplier and technology partner. These successful initial volume production runs are expected to further drive customer confidence in our technology, identify areas of improvement in our operating model, and increase market confidence in the viability of our breakthrough technology in critical fielded products. Concurrently, we continue to execute aggressive sales and marketing programs to add new projects to our pipeline and are developing opportunities for additional licensed manufacturers with domestic operations.

Q3 2020 Financial Summary

During the third quarter of 2020, the Company generated $327 thousand in revenue through monthly part deliveries under production orders. Existing purchase orders will run through the first half of 2021.

Cost of goods sold was $171 thousand in Q3 2020 and $284 thousand in Q3 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. However, the Company did see an improvement in gross margin percentages following refinement of supply chains from the Company's third party contract manufacturer.

Selling, marketing, general and administrative expense was $1.1 million in Q3 2020 and $1.4 million in Q3 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 $30 thousand in Q3 2020, from $284 thousand in Q3 2019. The decrease is mainly due to headcount and internal project reductions as a result of the recently completed restructuring plan.

Cash and cash equivalents, restricted cash, and investments in debt securities totaled $29.3 million at September 30, 2020, as compared to $31.0 million at December 31, 2019.

For a more detailed and complete analysis of the Company's financial results, please refer to the Company's September 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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except par value and share data) September December 31, 30,

2020 2019

(Unaudited) (Audited)

ASSETS Current assets:Cash and cash equivalents $ 5,438 $ 19,543

Restricted cash 5 5

Investments in debt securities- short term 11,566 4,415

Trade accounts receivable, net of allowance for 182 303 doubtful accountsInventory 47 12

Prepaid expenses and other current assets 600 322

Total current assets $ 17,838 $ 24,600

Investments in debt securities- long term 12,279 7,074

Property and equipment, net 8,694 8,819

Patents and trademarks, net 177 239

Equipment held for sale - 585

Other assets 235 14

Total assets $ 39,223 $ 41,331

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:Accounts payable 316 132

Accrued liabilities 310 775

Total current liabilities $ 626 $ 907

Long-term liabilitiesOther long-term liabilities 899 856

Total liabilities $ 1,525 $ 1,763

Shareholders' equity:Preferred Stock, $0.001 par value; 10,000,000shares authorized; 0 shares issued and outstanding - - at September 30, 2020 and December 31, 2019,respectivelyCommon stock, $0.001 par value; 1,100,000,000shares authorized; 914,449,957 and 914,449,957 914 914 shares issued and outstanding at September 30,2020 and December 31, 2019, respectivelyWarrants 18,179 18,179

Additional paid-in capital 287,088 286,832

Accumulated deficit (268,449 ) (266,284 )

Accumulated other comprehensive income 42 2

Non-controlling interest in subsidiary (76 ) (75 )

Total shareholders' equity $ 37,698 $ 39,568

Total liabilities and shareholders' equity $ 39,223 $ 41,331

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(in thousands, except share and per share data)(unaudited)For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2020

2019

2020

2019

RevenueProducts$

288

$

373

$

367

$

728

Licensing and royalties39

48

64

48

Total revenue327

421

431

776

Cost of sales171

284

242

566

Gross profit (loss)156

137

189

210

Operating expensesSelling, marketing, general and administrative1,096

1,380

2,953

4,088

Research and development30

284

86

1,179

Impairment of long-lived assets-

-

-

1,676

(Gain) on disposal of long-lived assets-

(7

)

(35

)

(2

)

Total operating expenses1,126

1,657

3,004

6,941

Operating loss(970

)

(1,520

)

(2,815

)

(6,731

)

Lease income132

-

352

-

Interest and investment income61

125

297

344

Loss before income taxes(777

)

(1,395

)

(2,166

)

(6,387

)

Income taxes-

-

-

-

Net loss(777

)

(1,395

)

(2,166

)

(6,387

)

Net loss attributable to non-controlling interest1

-

1

1

Net loss attributable to Liquidmetal Technologies shareholders$(776)$(1,395)$(2,165)$(6,386)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 diluted914,449,957

914,359,124

914,449,957

914,332,758

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CONTACT: Bryce Van Media Relations Liquidmetal Technologies, Inc. 949-635-2107 bryce.van@liquidmetal.com