UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No.
LIQUIDMETAL TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
| | |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices, zip code)
Registrant’s telephone number, including area code: (
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
Securities registered pursuant to Section 12(b) of the Exchange Act: None
The number of common shares outstanding as of May 13, 2025 was
LIQUIDMETAL TECHNOLOGIES, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2025
FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q of Liquidmetal Technologies, Inc. contains “forward-looking statements” that may state our management’s plans, future events, objectives, current expectations, estimates, forecasts, assumptions or projections about the company and its business. Any statement in this report that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as “believes,” “estimates,” “projects,” “expects,” “intends,” “may,” “anticipates,” “plans,” “seeks,” and similar words or expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or results. These statements are not guarantees of future performance, and undue reliance should not be placed on these statements. It is important to note that our actual results could differ materially from what is expressed in our forward-looking statements due to the risk factors described in the section of our Annual Report on Form 10-K for the year ended December 31, 2024 entitled “Risk Factors,” as well as the following risks and uncertainties:
| ● |
Our history of operating losses and the uncertainty surrounding our ability to achieve or sustain profitability; |
| ● |
Our limited history of developing and selling products made from our bulk amorphous alloys; |
| ● |
Challenges associated with having products manufactured from our alloys and the use of third parties for manufacturing; |
| ● |
Our limited history of licensing our technology to third parties; |
| ● |
Lengthy customer adoption cycles and unpredictable customer adoption practices; |
| ● |
Our ability to identify, develop, and commercialize new product applications for our technology; |
| ● |
Competition from current suppliers of incumbent materials or producers of competing products; |
| ● |
Our ability to identify, consummate, and/or integrate strategic partnerships; |
| ● |
The potential for manufacturing problems or delays; |
| ● |
Potential difficulties associated with protecting or expanding our intellectual property position; and |
We undertake no obligation, other than as required by applicable law, to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
FINANCIAL INFORMATION
Item 1 – Financial Statements
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
($ in thousands, except par value and share data)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Investments in debt securities- short term | ||||||||
| Trade accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Investments in debt securities- long term | ||||||||
| Property and equipment, net | ||||||||
| Patents and trademarks, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders' equity: | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | ||||||||
| Warrants | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Non-controlling interest in subsidiary | ( | ) | ( | ) | ||||
| Total shareholders' equity | ||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except share and per share data)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2025 |
2024 |
|||||||
| Revenue: |
||||||||
| Products |
$ | $ | ||||||
| Licensing and royalties | ||||||||
| Total revenue |
||||||||
| Cost of sales |
||||||||
| Gross profit |
||||||||
| Operating expenses: |
||||||||
| Selling, marketing, general and administrative |
||||||||
| Research and development |
||||||||
| Operating loss |
( |
) | ( |
) | ||||
| Other income (expense): |
||||||||
| Lease income |
||||||||
| Other income |
||||||||
| Investment income |
||||||||
| Interest income |
||||||||
| Loss from operations |
( |
) | ( |
) | ||||
| Income taxes |
||||||||
| Net loss |
( |
) | ( |
) | ||||
| Net loss attributable to non-controlling interest |
||||||||
| Net loss attributable to Liquidmetal Technologies shareholders |
$ | ( |
) | $ | ( |
) | ||
| Per common share basic and diluted: |
||||||||
| Net loss per common share attributable to Liquidmetal Technologies shareholders, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
| Number of weighted average shares - basic and diluted |
||||||||
The accompanying notes are an integral part of the consolidated financial statements.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
($ in thousands, except share and per share data)
(unaudited)
| Warrants |
Accumulated |
|||||||||||||||||||||||||||||||||||
| part of |
Additional |
other |
Non- |
|||||||||||||||||||||||||||||||||
| Preferred |
Common |
Common |
Additional |
Paid-in |
Accumulated |
comprehensive |
controlling |
|||||||||||||||||||||||||||||
| Shares |
Shares |
Stock |
Paid-in Capital |
Capital |
Deficit |
income |
Interest |
Total |
||||||||||||||||||||||||||||
| Balance - December 31, 2024 |
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
| Stock-based compensation |
- | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss |
- | - | - | - | - | ( |
) | - | - | ( |
) | |||||||||||||||||||||||||
| Other comprehensive loss |
- | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Balance - March 31, 2025 |
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
| Balance - December 31, 2023 |
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
| Stock-based compensation |
- | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss |
- | - | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||||||
| Other comprehensive loss |
- | - | - | - | - | - | 8 | |||||||||||||||||||||||||||||
| Balance - March 31, 2024 |
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
($ in thousands, except share and per share data)
(unaudited)
| Three months ended March 31, |
||||||||
| 2025 |
2024 |
|||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Other comprehensive income, net of tax |
||||||||
| Net unrealized gains on available-for-sale securities |
||||||||
| Other comprehensive income, net of tax |
||||||||
| Comprehensive loss |
( |
) | ( |
) | ||||
| Less: Comprehensive loss attributable to noncontrolling interests |
||||||||
| Comprehensive loss attributable to Liquidmetal Technologies shareholders |
$ | ( |
) | $ | ( |
) | ||
The accompanying notes are an integral part of the consolidated financial statements.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands, except per share data)
(unaudited)
| Three Months Ended March 31, |
||||||||
| 2025 |
2024 |
|||||||
| Operating activities: |
||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation and amortization |
||||||||
| Realized investment gains (loss), net |
( |
) | ( |
) | ||||
| Unrealized investment gain, net |
||||||||
| Stock-based compensation |
||||||||
| Changes in operating assets and liabilities: |
||||||||
| Trade accounts receivable |
( |
) | ||||||
| Inventories |
||||||||
| Prepaid expenses and other current assets |
||||||||
| Other assets and liabilities |
||||||||
| Accounts payable and accrued liabilities |
( |
) | ||||||
| Deferred revenue |
( |
) | ||||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| Investing Activities: |
||||||||
| Purchases of debt securities |
( |
) | ( |
) | ||||
| Proceeds from sales of debt securities |
||||||||
| Net cash provided by (used in) investing activities |
( |
) | ||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash |
( |
) | ||||||
| Cash, cash equivalents, and restricted cash at beginning of period |
||||||||
| Cash, cash equivalents, and restricted cash at end of period |
$ | $ | ||||||
| Supplemental disclosures of cash flow information |
||||||||
| Cash paid during the period for: |
||||||||
| Interest |
$ | $ | ||||||
| Income taxes |
$ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2025 and 2024
(numbers in thousands, except percentages, share and per share data)
(unaudited)
1. DESCRIPTION OF BUSINESS
Liquidmetal Technologies, Inc. (the “Company”) is a materials technology company that works with manufacturing and commercial partners to develop and commercialize products made from proprietary amorphous alloys. The Company’s family of alloys consists of a variety of bulk alloys and composites that utilize the advantages offered by amorphous alloys technology. The Company designs, develops, and sells products and custom parts from bulk amorphous alloys to customers in a wide range of industries. The Company also partners with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.
Amorphous alloys are, in general, unique materials that are distinguished by their ability to retain a random atomic structure when they solidify, in contrast to the crystalline atomic structure that forms in other metals and alloys when they solidify. Liquidmetal alloys are proprietary amorphous alloys that possess a combination of performance, processing, and potential cost advantages that the Company believes will make them preferable to other materials in a variety of applications. The amorphous atomic structure of bulk alloys enables them to overcome certain performance limitations caused by inherent weaknesses in crystalline atomic structures, thus facilitating performance and processing characteristics superior in many ways to those of their crystalline counterparts. The Company believes that the alloys and the molding technologies it employs may result in components, for many applications, that exhibit: exceptional dimensional control and repeatability that rivals precision machining, excellent corrosion resistance, brilliant surface finish, high strength, high hardness, high elastic limit, alloys that are non-magnetic, and the ability to form complex shapes common to the injection molding of plastics. Interestingly, all of these characteristics are achievable from the molding process, so design engineers often do not have to select specific alloys to achieve one or more of the characteristics as is the case with crystalline materials. The Company believes these advantages could result in Liquidmetal alloys supplanting high-performance alloys, such as titanium and stainless steel, and other incumbent materials in a wide variety of applications. Moreover, the Company believes these advantages could enable the introduction of entirely new products and applications that are not possible or commercially viable with other materials.
The Company’s revenues are derived from i) selling bulk Liquidmetal alloy products to customers who produce medical devices, automotive assemblies, sports and leisure goods, and non-consumer electronic devices, ii) selling tooling and prototype parts such as demonstration parts and test samples for customers with products in development, iii) product licensing and royalty revenue, and iv) research and development revenue. The Company expects that these sources of revenue will continue to significantly change the character of the Company’s revenue mix.
2. BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS
The accompanying unaudited interim consolidated financial statements as of and for the three months ended March 31, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for any future periods or the year ending December 31, 2025. The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 13, 2025.
Investments in Debt Securities
The Company will invest excess funds to maximize investment yield, while maintaining liquidity and minimizing credit risk. Debt securities are carried at fair value and consist primarily of investments in obligations of the United States Treasury, various U.S. and foreign corporations, and certificates of deposits. The Company classifies its investments in debt securities as available-for-sale with all unrealized gains or losses included as part of other comprehensive income. The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value. As a result of this assessment, the Company did recognize any other-than-temporary impairment losses considered to be credit related for the three months ended March 31, 2025 and 2024.
Investments in Debt Securities
The Company will invest excess funds to maximize investment yield, while maintaining liquidity and minimizing credit risk. Debt securities are carried at fair value and consist primarily of investments in obligations of the United States Treasury, various U.S. and foreign corporations, and certificates of deposits. The Company classifies its investments in debt securities as available-for-sale with all unrealized gains or losses included as part of other comprehensive income. The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value. As a result of this assessment, the Company did not recognize any other-than-temporary impairment losses considered to be credit related for the three months ended March 31, 2025 and 2024.
The Company will invest excess funds to maximize investment yield, while maintaining liquidity and minimizing credit risk. Debt securities are carried at fair value and consist primarily of investments in obligations of the United States Treasury, various U.S. and foreign corporations, and certificates of deposits. The Company classifies its investments in debt securities as available-for-sale with all unrealized gains or losses included as part of other comprehensive income. The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value. As a result of this assessment, the Company did not recognize any other-than-temporary impairment losses considered to be credit related for the three months ended March 31, 2025 and 2024.
Fair Value Measurements
The estimated fair values of financial instruments reported in the consolidated financial statements have been determined using available market information and valuation methodologies, as applicable. The fair value of cash and restricted cash approximate their carrying value due to their short maturities and are classified as Level 1 instruments within the fair value hierarchy.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value based upon the following fair value hierarchy:
| Level 1 — | Quoted prices in active markets for identical assets or liabilities; |
| Level 2 — | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
| Level 3 — | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
As of March 31, 2025, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
| Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
| Investments in debt securities (short-term) | $ | $ | $ | $ | ||||||||||||
| Investments in debt securities (long-term) | ||||||||||||||||
As of December 31, 2024, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:
| Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||
| Investments in debt securities (short-term) | ||||||||||||||||
| Investments in debt securities (long-term) | ||||||||||||||||
Leases
The Company leases its manufacturing facility under a long-term contract, which is accounted for as an operating lease. The lease provides for a fixed base rent and variable payments comprised of reimbursements for property taxes, insurance, utilities, and common area maintenance. The lease has a term of
Other Recent Pronouncements
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.
3. SIGNIFICANT TRANSACTIONS
Yihao Manufacturing Agreement
On January 12, 2022, the Company entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co. Ltd. (“Yihao”) to become the primary contract manufacturer of the Company’s products. Under the Manufacturing Agreement, which has a term of five years, Yihao has agreed to serve as a non-exclusive contract manufacturer for amorphous alloy parts offered and sold by the Company at prices determined on a “cost-plus” basis. Yihao is an affiliate of Dongguan Eontec Co. Ltd. and Professor Lugee Li, our Chairman and largest beneficial owner of the Company’s capital stock.
Corporate Facility Purchase and Lease
On February 16, 2017, the Company purchased a
On January 23, 2020, 20321 Valencia, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a lease agreement pursuant to which the Company leased to MatterHackers, Inc., a Delaware corporation (“Tenant”), an approximately
On March 26, 2025, the Company entered into a new lease agreement (the “Facility Lease”) for a
2016 Purchase Agreement
On March 10, 2016, the Company entered into a Securities Purchase Agreement (the “2016 Purchase Agreement”) with Liquidmetal Technology Limited, a Hong Kong company (the “Investor”), which is controlled by the Company’s Chairman, Professor Li. The 2016 Purchase Agreement provided for the purchase by the Investor of a total of
In addition to the shares issuable under the 2016 Purchase Agreement, the Company issued to the Investor a warrant to acquire
Eontec License Agreement
On March 10, 2016, in connection with the 2016 Purchase Agreement, the Company and DongGuan Eontec Co., Ltd., a Hong Kong corporation (“Eontec”), entered into a Parallel License Agreement (the “License Agreement”) pursuant to which the Company and Eontec agreed to perpetually cross-license their respective technologies.
The License Agreement provides for the cross-license of certain patents, technical information, and trademarks between the Company and Eontec. In particular, the Company granted to Eontec a paid-up, royalty-free, perpetual license to the Company’s patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of North America and Europe. In turn, Eontec granted to the Company a paid-up, royalty-free, perpetual license to Eontec’s patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of specified countries in Asia. The license granted by the Company to Eontec is exclusive (including to the exclusion of the Company) in the countries of Brunei, Cambodia, China (P.R.C and R.O.C.), East Timor, Indonesia, Japan, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Thailand, and Vietnam. The license granted by Eontec to the Company is exclusive (including to the exclusion of Eontec) in North America and Europe. The cross-licenses are non-exclusive in geographic areas outside of the foregoing exclusive territories.
Eutectix Business Development Agreement
On January 31, 2020, the Company entered into a Business Development Agreement (the “Agreement”) with Eutectix, LLC, a Delaware limited liability company (“Eutectix”), which provided for collaboration, joint development efforts, and the manufacturing of products based on the Company’s proprietary amorphous metal alloys. Under the Agreement, the Company licensed to Eutectix specified equipment owned by the Company and also licensed various patents and technical information related to the Company’s proprietary technology. The Agreement expired on January 31, 2025.
Apple License Transaction
On August 5, 2010, the Company entered into a license transaction with Apple Inc. (“Apple”) pursuant to which (i) the Company contributed substantially all of its intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary, called Crucible Intellectual Property, LLC (“CIP”), (ii) CIP granted to Apple a perpetual, worldwide, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a one-time, upfront license fee, and (iii) CIP granted back to the Company a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.
Liquidmetal Golf Sublicense Agreement
Liquidmetal Golf Inc. (“Liquidmetal Golf” or “LMG”) is a majority-owned subsidiary which has the exclusive right and license to utilize our Liquidmetal alloy technology for purposes of golf equipment applications. This right and license is set forth in an intercompany license agreement dated January 1, 2002 between Liquidmetal Technologies and Liquidmetal Golf. This license agreement provides that Liquidmetal Golf has a perpetual and exclusive license to use Liquidmetal alloy technology for the purpose of manufacturing, marketing, and selling golf club components and other products used in the sport of golf. The Company owns
On January 13, 2022, Liquidmetal Golf entered into a sublicense agreement (“LMG Sublicense Agreement”) with Amorphous Technologies Japan, Inc. (“ATJ”), a newly formed Japanese entity that was established by Twins Corporation, a sporting goods company operating in Japan. Under the agreement, LMG granted ATJ a nonexclusive worldwide sublicense to the Company’s amorphous alloy technology and related trademarks to manufacture and sell golf clubs and golf related products. The original term of years was extended to have automatic, annual renewals and provided for the payment of a running royalty to LMG of
Swatch Group License
In March 2009, the Company entered into a license agreement with Swatch Group, Ltd. (“Swatch”) under which Swatch was granted a non-exclusive license to the Company’s technology to produce and market watches and certain other luxury products. In March 2011, this license agreement was amended to grant Swatch exclusive rights as to watches as against all third parties (including the Company), but non-exclusive as to Apple. The Company will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by Swatch. The license agreement with Swatch will expire on the expiration date of the last licensed patent.
4. INVESTMENTS IN DEBT SECURITIES
The following table sets forth amortized cost fair value, and unrealized gains (losses) of investments in debt securities (short-term and long-term):
| Amortized Cost | Fair Value | ||||||||||||||||
| March 31, | December 31, | March 31, | December 31, | ||||||||||||||
| Longest Maturity Date | 2025 | 2024 | 2025 | 2024 | |||||||||||||
| U.S. government and agency securities | 2029 | $ | $ | $ | $ | ||||||||||||
| Corporate bonds | 2031 | $ | $ | $ | $ | ||||||||||||
| $ | $ | $ | $ | ||||||||||||||
Income from these investments totaled $
Based on the Company’s review of its debt securities that are individually in an unrealized loss position at March 31, 2025, it was determined that the losses were primarily the result current economic factors, impacting all global debt and equity markets, that are the result of global macro events. The impact of the Company’s investment portfolio is considered to be temporary, rather than a deterioration of overall credit quality. As of March 31, 2025, all investments are current on their scheduled interest and dividend payments. The Company does not intend to sell and it is not likely that the Company will be required to sell these securities prior to recovering their amortized cost. As such, the Company does not consider these securities to be other-than-temporarily impaired as of March 31, 2025.
Investment in debt securities activities consisted of the following:
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Investment in debt securities – beginning balance | $ | $ | ||||||
| Purchases | ||||||||
| Sales at cost | ( | ) | ( | ) | ||||
| Realized gain from sale of investment in debt securities | ||||||||
| Interest and dividend income | ||||||||
| Unrealized gain | ||||||||
| Professional management fees and other fees | ( | ) | ( | ) | ||||
| Withdrawals from debt securities | ( | ) | ( | ) | ||||
| Investment in debt securities – ending balance | ||||||||
| Less – current portion | ( | ) | ( | ) | ||||
| Investment in debt securities – non-current | $ | $ | ||||||
5. TRADE ACCOUNTS RECEIVABLE
Trade accounts receivable were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts receivables | $ | $ | ||||||
| AR Allowance | ||||||||
| Total | $ | $ | ||||||
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepaid service invoices | $ | $ | ||||||
| Prepaid insurance premiums | ||||||||
| Prepaid lease costs and receivables- short term | ||||||||
| Interest and other receivables | ||||||||
| Total | $ | $ | ||||||
7. INVENTORIES
Inventories were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Work in progress | $ | $ | ||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
8. PROPERTY AND EQUIPMENT
Property and equipment were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Land, building, and improvements | $ | $ | ||||||
| Machinery and equipment | ||||||||
| Computer equipment | ||||||||
| Office equipment, furnishings, and improvements | ||||||||
| Total | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Depreciation expense for three months ended March 31, 2025 and 2024 were $
9. PATENTS AND TRADEMARKS, NET
Patents and trademarks were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Purchased and licensed patent rights | $ | $ | ||||||
| Internally developed patents | ||||||||
| Trademarks | ||||||||
| Total | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Purchased patent rights represent the exclusive right to commercialize the bulk amorphous alloy and other amorphous alloy technology acquired from California Institute of Technology (“Caltech”), through a license agreement with Caltech and other institutions. All fees and other amounts payable by the Company for these rights and licenses have been paid or accrued in full, and no further royalties, license fees, or other amounts will be payable in the future under the license agreement. In addition to the purchased and licensed patents, the Company has internally developed patents. Internally developed patents include legal and registration costs incurred to obtain the respective patents. The Company currently holds various patents and numerous pending patent applications in the United States, as well as numerous foreign counterparts to these patents outside of the United States.
The Company amortizes capitalized patents and trademarks over an average of
10. OTHER ASSETS
Other assets were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Utility deposits | $ | $ | ||||||
| Prepaid lease costs and receivables- long term | ||||||||
| Total | $ | $ | ||||||
11. ACCRUED LIABILITIES
Accrued liabilities were comprised of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued payroll, vacation, and bonuses | $ | $ | ||||||
| Other accrued liabilities | ||||||||
| Accrued audit fees | ||||||||
| $ | $ | |||||||
12. OTHER CURRENT LIABILITIES
Other long-term liabilities was $
13. STOCK COMPENSATION PLANS
On June 28, 2012, the Company adopted the 2012 Equity Incentive Plan (“2012 Plan”), with the approval of the shareholders, which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries. Under this plan, the Company had outstanding grants of options to purchase
On January 27, 2015, the Company adopted its 2015 Equity Incentive Plan (“2015 Plan”), which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries. A total of
FASB ASC 718, Compensation – Stock Compensation, requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under ASC 718, the Company is required to measure the cost of employee services received in exchange for stock options and similar awards based on the grant-date fair value of the award and recognize this cost in the income statement over the period during which an employee is required to provide service in exchange for the award.
Stock based compensation expense attributable to these plans was $
Expected volatilities are based on historical volatility expected over the expected life of the options. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. Expected forfeiture rates are determined based on historical forfeitures over a five-year period. The risk-free rate used for the period within the expected life of the options is based on U.S. Treasury rates in effect at the time of grant.
14. FACILITY LEASES
Amounts collected under the Facility Lease are comprised of base rents and reimbursements for direct facility expenses (property taxes and insurance), common area maintenance, and utilities. Amounts recorded to lease income are comprised of base rents and direct facility expenses, recorded on a straight-line basis over the lease term. Reimbursements for common area maintenance and utility expense are recorded as reductions to like expenses within sales, general, and administrative costs.
The future minimum rents due to the Company under the Facility Lease are as follows:
| Year | Base Rents | |||
| 2025 (remaining nine months) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| $ | ||||
15. Loss Per Common Share
Basic earnings per share (“EPS”) is computed by dividing earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the periods. Diluted EPS reflects the potential dilution of securities that could share in the earnings.
Options to purchase
Warrants to purchase
16. Related Party Transactions
On March 10, 2016, the Company entered into the 2016 Purchase Agreement with Liquidmetal Technology Limited, providing for the purchase of
On May 10, 2022, Mr. Abdi Mahamedi resigned as a director of the Company. In connection with Mr. Mahamedi’s resignation, the Board of Directors of the Company approved an amendment to Mr. Mahamedi’s previously granted options to purchase an aggregate of
17. Subsequent Events
The Company follows the guidance in FASB ASC Topic 855, Subsequent Events (“ASC 855”), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. ASC 855 sets forth (i) the period after the balance sheet date during which management of a reporting entity evaluates events or transactions that may occur for potential recognition or disclosure in the consolidated financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its consolidated financial statements, and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Accordingly, the Company did not have any subsequent events that require disclosure.
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
This management’s discussion and analysis should be read in conjunction with the consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. All amounts described in this section are in thousands, except percentages, periods of time, and share and per share data.
This management’s discussion and analysis, as well as other sections of this Quarterly Report on Form 10-Q, may contain “forward-looking statements” that involve risks and uncertainties, including statements regarding our plans, future events, objectives, expectations, estimates, forecasts, assumptions, or projections. Any statement that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as “believe,” “estimate,” “project,” “expect,” “intend,” “may,” “anticipate,” “plan,” “seek,” and similar words or expressions identify forward-looking statements. These statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or results, and undue reliance should not be placed on these statements. These risks and uncertainties include, but are not limited to, the matters discussed in Part II herein, under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and other risks and uncertainties discussed in other filings made with the Securities and Exchange Commission (including risks described in subsequent reports on Form 10-Q and Form 8-K and other filings). We disclaim any intention or obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Overview
We are a materials technology company that works with manufacturing and commercial partners to develop and commercialize products made from our proprietary amorphous alloys. Our Liquidmetal® family of alloys consists of a variety of proprietary bulk alloys and composites that utilize the advantages offered by amorphous alloy technology. We design, develop, and sell custom products and parts from bulk amorphous alloys to customers in various industries. We also partner with third-party manufacturers and licensees to develop and commercialize Liquidmetal alloy products.
Amorphous alloys are, in general, unique materials that are distinguished by their ability to retain a random atomic structure when they solidify, in contrast to the crystalline atomic structure that forms in other metals and alloys when they solidify. Liquidmetal alloys are proprietary amorphous alloys that possess a combination of performance, processing, and potential cost advantages that we believe will make them preferable to other materials in a variety of applications. The amorphous atomic structure of bulk alloys enables them to overcome certain performance limitations caused by inherent weaknesses in crystalline atomic structures, thus facilitating performance and processing characteristics superior in many ways to those of their crystalline counterparts. We believe the alloys and the molding technologies we employ can result in components for many applications that exhibit exceptional dimensional control and repeatability that rivals precision machining, excellent corrosion resistance, brilliant surface finish, high strength, high hardness, high elastic limit, alloys that are non-magnetic, and the ability to form complex shapes common to the injection molding of plastics. All of these characteristics are achievable from the molding process, so design engineers often do not have to select specific alloys to achieve one or more of the characteristics as is the case with crystalline materials. We believe these advantages could result in Liquidmetal alloys supplanting high-performance alloys, such as titanium and stainless steel, and other incumbent materials in a wide variety of applications. Moreover, we believe these advantages could enable the introduction of entirely new products and applications that are not possible or commercially viable with other materials.
Our revenues are derived from i) selling our bulk amorphous alloy custom products and parts for applications which include, but are not limited to, non-consumer electronic devices, medical products, automotive components, and sports and leisure goods; ii) selling tooling and prototype parts such as demonstration parts and test samples for customers with products in development; and iii) product licensing and royalty revenue.
Our cost of sales consists primarily of the costs of manufacturing, which include raw alloy and direct labor costs. Selling, general, and administrative expenses currently consist primarily of salaries and related benefits, travel, consulting and professional fees, depreciation and amortization, insurance, office and administrative expenses, and other expenses related to our operations.
Research and development expenses represent salaries, related benefits expenses, consulting and contract services, expenses incurred for the design and testing of new processing methods, expenses for the development of sample and prototype products, and other expenses related to the research and development of Liquidmetal bulk alloys. Costs associated with research and development activities are expensed as incurred. We plan to enhance our competitive position by improving our existing technologies and developing advances in amorphous alloy technologies. We believe that our research and development efforts will focus on the discovery of new alloy compositions, the development of improved processing technology, and the identification of new applications for our alloys.
SIGNIFICANT TRANSACTIONS
Yihao Manufacturing Agreement
On January 12, 2022, Liquidmetal Technologies entered into a manufacturing agreement (“Manufacturing Agreement”) with Dongguan Yihao Metal Materials Technology Co. Ltd. (“Yihao”) to become the primary outsourced manufacturer of our products. Under the Manufacturing Agreement, which has a term of five years, Yihao has agreed to serve as a non-exclusive contract manufacturer for amorphous alloy parts offered and sold by the us at prices determined on a “cost-plus” basis. Yihao is an affiliate of Dongguan Eontec Co. Ltd. and Professor Lugee Li, our Chairman and largest beneficial owner of our capital stock.
Liquidmetal Golf License
On January 13, 2022, our Liquidmetal Golf subsidiary (“Liquidmetal Golf” or “LMG”) entered into a sublicense agreement (“LMG Sublicense Agreement”) with Amorphous Technologies Japan, Inc. (“ATJ”), a newly formed Japanese entity that was established by Twins Corporation, a sporting goods company operating in Japan. Under the agreement, LMG granted ATJ a nonexclusive worldwide sublicense to our amorphous alloy technology and related trademarks to manufacture and sell golf clubs and golf related products. The original term of three years as extended to have automatic, annual renewals and provided for the payment of a running royalty to LMG of 3% of the net sales price of licensed products.
Corporate Facility Purchase and Lease
On February 16, 2017, we purchased a 41,000 square foot facility (the “Facility”) located in Lake Forest, CA, where operations commenced during July 2017. The purchase price for the Facility was $7,818.
On January 23, 2020, 20321 Valencia, LLC, a Delaware limited liability company and our wholly owned subsidiary, entered into a lease agreement pursuant to which we leased to MatterHackers, Inc., a Delaware corporation (“Tenant”), an approximately 32,534 square foot portion of the Facility. The lease term was for 5 years and 2 months and is scheduled to expire on April 30, 2025.
On March 26, 2025, we entered into a new lease agreement (the “Facility Lease”) for a 5 year term commencing on May 1, 2025 and expanded the leased square footage to 40,090 square feet. The base rent payable under the Facility Lease is $51,716 per month initially and is subject to periodic increases up to a maximum of approximately $58,000 per month. Tenant will pay approximately 98% of building operating expenses. The Facility Lease grants us or Tenant the right to terminate the Facility Lease after two and a half years into the lease term and has other customary provisions, including provisions relating to default and usage restrictions.
2016 Purchase Agreement
On March 10, 2016, we entered into a Securities Purchase Agreement (the “2016 Purchase Agreement”) with Liquidmetal Technology Limited, a Hong Kong company (the “Investor”), which is controlled by our Chairman, Professor Lugee Li (“Professor Li”). The 2016 Purchase Agreement provided for the purchase by the Investor of a total of 405,000,000 shares of our common stock for an aggregate purchase price of $63,400. The transaction occurred in multiple closings, with the Investor having purchased 105,000,000 shares at a purchase price of $8,400 (or $0.08 per share) at the initial closing on March 10, 2016, and the remaining 200,000,000 shares at $0.15 per share and 100,000,000 shares at $0.25 per share for an aggregate purchase price of $55,000 on October 26, 2016. On October 10, 2024, the Investor sold 179,787,888 to various buyers leaving 225,212,112 shares of our common stock owned by the Investor as of December 31, 2024.
In addition to the shares issuable under the 2016 Purchase Agreement, we issued to the Investor a warrant to acquire 10,066,809 shares of common stock (of which the right to exercise 2,609,913 of the warrant shares vested on March 10, 2016 and the right to exercise the remaining 7,456,896 warrant shares vested on October 26, 2016, all at an exercise price of $0.07 per share). The warrant will expire on the tenth anniversary of its issuance date.
Eontec License Agreement
On March 10, 2016, in connection with the 2016 Purchase Agreement, we entered into a Parallel License Agreement (the “License Agreement”) with DongGuan Eontec Co., Ltd., a Hong Kong corporation (“Eontec”) pursuant to which we agreed to perpetually cross-license our respective technologies.
The License Agreement provides for the cross-license of certain patents, technical information, and trademarks between us and Eontec. In particular, we granted to Eontec a paid-up, royalty-free, perpetual license to our patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of North America and Europe. In turn, Eontec granted to us a paid-up, royalty-free, perpetual license to Eontec’s patents and related technical information to make, have made, use, offer to sell, sell, export, and import products in certain geographic areas outside of specified countries in Asia. The license granted by us to Eontec is exclusive (including to the exclusion of us) in the countries of Brunei, Cambodia, China (P.R.C and R.O.C.), East Timor, Indonesia, Japan, Laos, Malaysia, Myanmar, Philippines, Singapore, South Korea, Thailand, and Vietnam. The license granted by Eontec to us is exclusive (including to the exclusion of Eontec) in North America and Europe. The cross-licenses are non-exclusive in geographic areas outside of the foregoing exclusive territories.
Eutectix Business Development Agreement
On January 31, 2020, we entered into a Business Development Agreement (the “Agreement”) with Eutectix LLC, a Delaware limited liability company (“Eutectix”), which provided for collaboration, joint development efforts, and the manufacturing of products based on the Company’s proprietary amorphous metal alloys. Under the Agreement, we licensed to Eutectix specified equipment owned by us and also licensed to Eutectix various patents and technical information related to our proprietary technology. The Agreement expired in January 2025.
Apple License Transaction
On August 5, 2010, we entered into a license transaction with Apple pursuant to which (i) we contributed substantially all of our intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary, Crucible Intellectual Property, LLC (“CIP”), (ii) CIP granted to Apple a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products, as defined in the license agreement, in exchange for a license fee, and (iii) CIP granted back to us a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.
Swatch Group License
In March 2009, we entered into a license agreement with Swatch Group, Ltd. (“Swatch”) under which Swatch was granted a non-exclusive license to our technology to produce and market watches and certain other luxury products. In March 2011, this license agreement was amended to grant Swatch exclusive rights as to watches, but non-exclusive as to Apple. We will receive royalty payments over the life of the contract on all Liquidmetal products produced and sold by Swatch. The license agreement with Swatch will expire on the expiration date of the last licensed patent.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.
We believe that the following accounting policies are the most critical to our consolidated financial statements since these policies require significant judgment or involve complex estimates that are important to the portrayal of our financial condition and operating results:
| • |
Revenue recognition |
|
| • |
Impairment of long-lived assets and definite-lived intangibles |
|
| • |
Deferred tax assets |
|
| • |
Share based compensation |
Our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2023 Annual Report”) contains further discussions on our critical accounting policies and estimates.
RESULTS OF OPERATIONS
Comparison of the three months ended March 31, 2025 and 2024
| Three Months Ended March 31, |
||||||||||||||||||||||||
| 2025 |
2024 |
Changes |
||||||||||||||||||||||
| Amount |
% of Revenue |
Amount |
% of Revenue |
Amount |
% of Change |
|||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||
| Products |
$ | 282 | 100.0 | % | $ | 173 | 100.0 | % | $ | 109 | 63.0 | % | ||||||||||||
| Licensing and royalties |
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||
| Total revenue |
282 | 100.0 | % | 173 | 100.0 | % | 109 | 63.0 | % | |||||||||||||||
| Cost of sales |
204 | 72.3 | % | 134 | 77.5 | % | 70 | 52.2 | % | |||||||||||||||
| Gross profit |
78 | 27.7 | % | 39 | 22.5 | % | 39 | 100.0 | % | |||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||
| Selling, marketing, general and administrative |
975 | 345.7 | % | 763 | 441.0 | % | 212 | 27.8 | % | |||||||||||||||
| Research and development |
4 | 1.4 | % | 4 | 2.3 | % | - | 0.0 | % | |||||||||||||||
| 979 | 347.2 | % | 767 | 443.4 | % | 212 | 27.6 | % | ||||||||||||||||
| Operating loss |
(901 | ) | -319.5 | % | (728 | ) | -420.8 | % | (173 | ) | 23.8 | % | ||||||||||||
| Other income (expense): |
||||||||||||||||||||||||
| Lease income |
89 | 31.6 | % | 89 | 51.4 | % | - | 0.0 | % | |||||||||||||||
| Other income |
2 | 0.7 | % | 82 | 47.4 | % | (80 | ) | -97.6 | % | ||||||||||||||
| Investment income |
63 | 22.3 | % | 54 | 31.2 | % | 9 | 16.7 | % | |||||||||||||||
| Interest income |
179 | 63.5 | % | 189 | 109.2 | % | (10 | ) | -5.3 | % | ||||||||||||||
| 333 | 118.1 | % | 414 | 239.3 | % | (81 | ) | -19.6 | % | |||||||||||||||
| Loss from operations |
(568 | ) | -201.4 | % | (314 | ) | -181.5 | % | (254 | ) | 80.9 | % | ||||||||||||
| Income taxes |
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||
| Net loss |
(568 | ) | -201.4 | % | (314 | ) | -181.5 | % | (254 | ) | 80.9 | % | ||||||||||||
| Net loss attributable to non-controlling interest |
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||
| Net loss attributable to Liquidmetal Technologies shareholders |
$ | (568 | ) | -201.4 | % | $ | (314 | ) | -181.5 | % | $ | (254 | ) | 80.9 | % | |||||||||
Revenue and operating expenses
Revenue. Total revenue increased by $109 to $282 for the three months ended March 31, 2025 from $173 for the three months ended March 31, 2024. The increase was attributable to increase in product shipments primarily related to recurring customer orders and medical device orders.
Cost of Sales. Cost of sales was $204, or 72.3% of total revenue, for the three months ended March 31, 2025, as compared to $134, or 77.5% of total revenue, for the three months ended March 31, 2024. The increase in our cost of sales was primarily driven by lower product revenues during Q1 2024 compared to Q1 2025. Once we are able to sustain and increase shipments of routine, commercial products and parts through our contract manufacturers, we expect our cost of sales percentages to decrease, stabilize, and be more predictable.
Gross Profit. Our gross profit increased by $39 from $39 for the three months ended March 31, 2024 to $78 for the three months ended March 31, 2025. Our gross margin percentage increased slightly from Q1 2024 to Q1 2025. Our gross profit percentages have fluctuated and may continue to fluctuate based on production volumes and quoted production prices per unit and may not be representative of our future business. If we are able to sustain and increase shipments of routine, commercial products and parts through future orders to third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable.
Selling, marketing, general, and administrative expenses. Selling, marketing, general, and administrative expenses increased by $212 to $975, or 345.7% of revenue, for the three months ended March 31, 2025 from $763, or 441.0% of revenue, for the three months ended March 31, 2024. The increase in expenses was primarily attributable to increase in payroll expenses, a one-time severance payment to an administrative staff, and stock compensation in Q1 2025 compared to Q1 2024.
Research and development expenses. Research and development expenses remained unchanged at $4, or 1.4% of revenue, for the three months ended March 31, 2025, and $4, or 2.3% of revenue, for the three months ended March 31, 2024. This was primarily due to continuing efforts to perform research and development on new Liquidmetal alloys and related processing capabilities, albeit on a reduced basis.
We continue to invest in our technology infrastructure to expedite the adoption of our technology, but we have experienced long sales lead times for customer adoption of our technology. Until that time when we can either (i) increase our revenues with shipments of routine, commercial products and parts through third party contract manufacturers or (ii) obtain significant licensing revenues, we expect to continue to have operating losses for the foreseeable future.
Non-operational income and expenses
Investment income. Investment income relates to realized gains earned from our investments in debt securities for the respective periods. Investment income was $63 and $54 for the three months ended March 31, 2025 and 2024, respectively. The increase during the three months ended March 31, 2025 is primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government and holding onto debt securities until maturity.
Interest income. Interest income relates to interest earned from our cash deposits and investments in debt securities for the respective periods. Interest income was $179 and $189 for the years ended December 31, 2024 and 2023, respectively. The decrease during the three months ended March 31, 2025 is primarily due to lower overall yields on debt securities as a result of an increase in overall interest rate decreases by the government during the three months ended March 31, 2025.
Lease income. Lease income relates to straight-line rental income received under the Facility Lease. Such amounts were $89 and $89 for the three months ended March 31, 2025 and 2024, respectively.
Net loss. Our annual net losses of $568 for the three months ended March 31, 2025 and $314 for the three months ended March 31, 2024 are primarily reflective of operating expenses associated with our on-going business as well as non-operational income, discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities
Cash used in operating activities totaled $299 and $196 for the three months ended March 31, 2025 and 2024, respectively. The cash was primarily used to fund operating expenses related to our business and product development efforts.
Cash provided by (used in) investing activities
Cash used in investing activities totaled $812 and cash provided by $757 for the three months ended March 31, 2025 and 2024, respectively. Investing inflows primarily consist of proceeds from the sale of debt securities. Investing outflows primarily consist of purchases of debt securities.
Financing arrangements and outlook
We have a relatively limited history of selling bulk amorphous alloy products and components on a mass-production scale. Furthermore, the ability of future contract manufacturers to produce our products in desired quantities and at commercially reasonable prices is uncertain and is dependent on a variety of factors that are outside of our control, including the nature and design of the component, the customer’s specifications, and required delivery timelines. These factors have previously required that we engage in equity sales under various stock purchase agreements to support its operations and strategic initiatives.
However, as of March 31, 2025, we had $4,900 in cash and restricted cash, as well as $17,205 in investments in debt securities. We view this total of $22,105 as readily available sources of liquidity in the event needed to advance our existing strategy, and/or pursue an alternative strategy. As such, we anticipate that our current capital resources, when considering expected losses from operations, will be sufficient to fund our operations for the foreseeable future.
Item 3 – Quantitative and Qualitative Disclosures about Market Risk
None.
Item 4 – Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer (our Principal Executive Officer and Principal Financial Officer), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2025. Based on their evaluation, our Chief Executive Officer has concluded that our disclosure controls and procedures were effective as of March 31, 2025.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
None.
For a detailed discussion of the risk factors that should be understood by any investor contemplating an investment in our stock, please refer to Part I, Item 1A “Risk Factors” in the 2023 Annual Report. There have been no material changes from the risk factors previously disclosed in Part I, Item 1A “Risk Factors” in the 2023 Annual Report.
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
During the period covered by this Quarterly Report on Form 10-Q, we did not issue or sell any unregistered equity securities.
Item 3 – Defaults Upon Senior Securities
None.
Item 4 – Mine Safety Disclosures
None.
The following documents are filed as exhibits to this Report:
| Exhibit Number |
Description of Document |
|
| 10.1 | Industrial/Commercial Multi-Tenant Lease dated March 26, 2025, between 20321 Valencia LLC (Lessor) and MatterHackers, Inc. (Lessee) | |
| 31.1 |
||
| 32.1 |
||
| 101.1 |
The following financial statements from Liquidmetal Technologies, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (unaudited), formatted in Inline XBRL: (i) Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, (ii) Consolidated Statements of Operations for the three months ended March 31, 2025 and 2023, (iii) Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2025 and 2023, (iv) Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025 and 2023, (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2023, and (vi) Notes to Consolidated Financial Statements. |
|
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LIQUIDMETAL TECHNOLOGIES, INC. |
||
| (Registrant) |
||
| Date: May 13, 2025 |
/s/ Tony Chung |
|
| Tony Chung |
||
| Chief Executive Officer |
||
| (Principal Executive Officer and Principal Financial Officer) |