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The statement I was responding to in my two posts was this one:
"CATL new cathode material is eontec/liquidmetal. Joint venture is proof. CATL supplies Tesla, VW, Toyota, etc."
While I believe it is Li's intention to bring his ideas to Liquidmetal, and that some of those might be related to the CATL joint venture, I am looking for a more detailed explanation as to why the CATL/Eon jv is proof that "the new cathode material" is something that is both near term and involves LQMT directly.
So...
1. How is the magnesium alloy manufacturing JV related to a new cathode material?
2. Does Tesla have a new cathode material in the works? Or is it an electrolyte? Or is it a solid state battery? Or a magnesium based battery for its Powerwall? Or is it going to start manufacturing itself?
3. What about the battery casing? Is that related to the JV or is it the new cathode material?
I do not doubt the bigger picture. I just seem to have missed the detail that connects Tesla to a new cathode patent from CATL, to its magnesium alloy producing subsidiary, to Eon, to LQMT.
"Located in Shouning County of Ningde, which boasts abundant water, electricity resources and magnesium reserves, the joint venture is designed to be a first-class magnesium alloy manufacturer, making use of four parent companies' industrial experience and expertise and Ningde's local advantage in new energy vehicle industry and relevant supports policies and facilities."
So CATL has a 25% stake in a joint venture that also includes Eontec as a partner. The JV "is designed to be a first-class magnesium alloy manufacturer."
CATL supplies batteries to Tesla.
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https://www.eurekalert.org/pub_releases/2019-01/kift-mbd012819.php
https://www.eenewspower.com/news/magnesium-battery-uses-cathode-fools-gold
https://newscenter.lbl.gov/2017/11/28/holy-grail-batteries-solid-state-magnesium-battery-big-step-closer/
https://www.advancedsciencenews.com/magnesium-batteries-an-alternative-to-lithium/
I've seen BMG referenced in anode and cathode material with respect to Lithium iron phosphate batteries...
https://www.nature.com/articles/am201498
https://pubs.rsc.org/en/content/articlelanding/2015/cp/c5cp02059j#!divAbstract
https://www.frontiersin.org/articles/10.3389/fmats.2019.00328/full
The question, as always, is where does LQMT fit into any of this?
"In late August, it signed a framework agreement with three automotive material and component suppliers to build a joint venture focusing on magnesium alloy material."
Do we know if this is amorphous?
This is a possible interpretation, I agree. What makes me doubt that it is Martin, is that they could have used Martin’s name and they did not.
"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."
My opinion is that these are new orders based upon the red above.They could have named are current customers without issue, or at least easily made the distinction that they were resuming production on existing contracts.
It is dangerous, especially as an investor, to come to a conclusion first and then begin looking for proof that fits your assumptions. When you do that, you end up defending another poster's post of a single photo, by saying that Stream Metal, founded in 2014, created a liquidmetal midframe prior to 2012, that was ripped off by a French artist in 2012 to add to 4 or 5 other renderings, so that it could be ripped off by Zhejiang Guanyu in 2016, so that we could compare it to a leaked photo of the iPhone 12 in 2020 and conclude that the puzzle is now complete.
I was only replying to jr5's post with a picture and no commentary. Nothing more.
Of course midframe prototypes made from Liquidmetal exist. We are well past that argument. The argument at hand is whether or not an entity somehow affiliated to LQMT/EONTEC won the bid to produce parts for the iPhone 12 in 2020/2021.
The second picture that jr5 posted, the iPhone 12 midframe leak, is the interesting one. This is ostensibly from a current production run. If we could determine that that metal is indeed Liquidmetal, then we have something. It matches the patent, grooves and all. That isn't enough to convince me, but it is enough to give me hope.
You are saying that this advertisement from Stream Metal is pre-2012?
The picture posted by jr5 here...
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=157610730
...was created by Antoine Brieux in 2012. It is on his blog here...
https://www.nowhereelse.fr/iphone5-lm-concept-63619/
I respectfully disagree. The articles I linked in my second post were from May 1, 2012 and specifically named the French designer of that specific artwork.
https://www.idownloadblog.com/2012/05/01/liquidmetal-iphone-5-concept/
https://www.nowhereelse.fr/iphone5-lm-concept-63619/
"As rumors about Apple switching to the all-new metallic glass material for a next-generation iPhone continue to persist, one designer has weighed in with own rendition of what the device might look like, both from the inside and the outside – and it’s quite noteworthy.
As you know, Apple obtained a worldwide exclusive license to use Liquidmetal alloy in consumer electronics products. With previous rumors alleging a complete redesign, a Liquidmetal-based iPhone is certainly a plausible proposition…
French designer Antoine Brieux has gone all out creating these gorgeous sixth-generation Liquidmetal iPhone shots, available on his blog."
It is a iPhone 5 concept from a French designer circa 2012.
https://www.idownloadblog.com/2012/05/01/liquidmetal-iphone-5-concept/
Who is the "they" that posted this that makes it relevant? How does it match the iPhone 12 leaked photo?
https://www.nowhereelse.fr/iphone5-lm-concept-63619/
iPhone 5 concept from 2012...
https://www.idownloadblog.com/2012/05/14/iphone-5-rumors-hurt-aapl-q212/
Why do you say that? It looks like it has the grain of stainless.
I've been using $20 million in earnings per dollar of share price (50 P/E) when I do my dreaming. I think that is conservative for the first few dollars of share price.
50 P/E is investors betting that the company will double earnings in 2 years. I think that is possible or even conservative up to a $4 - $5 billion valuation. After that, it gets harder to double every two years.
Nice post. Two comments on this...
Since the contract is ours, I don't imagine that we will be getting a royalty. We will instead get the full gross revenue from the sale. We will then have a large cost of goods sold payable to YiHao. That could leave us with the same 6% as a royalty would have (or more). The difference is that we get to see $240 million annually in revenue on the income statement, and $14.4 million annually in gross profit. Big top line numbers will have a good psychological effect for a long-time penny stock, even if earnings are the same as they would have been in a royalty arrangement.
While I doubt we are making a mid-frame at YiHao, we might be making twice as many parts at half the size and half the price. The end result would be the same. Using mid-frames as a output measure is an easy way to stay consistent.
Even better!
50 machines = 1 million larger parts (midframe size) per month. Assuming $10 - $15 per part (revenue), our potential is quite high.
Total revenue depends on the volume we are producing. Actual parts per month vs. capacity per month is still a question. One could argue that they YiHao would not have bought machines just to have them sit idle.
Looking forward to November.
Ear buds are part of Yihao’s website...
http://www.yihaometal.com/?p=9064
I noticed the initials but hadn’t done the research. The nice thing is that the event at 10 am eastern will end the speculation either way on that one.
My wild guess is that they are part of the Samsung wireless earbuds that will be announced tomorrow. Hence the relatively early 10-Q announcement.
https://www.theverge.com/2020/7/10/21319734/samsung-galaxy-buds-live-true-wireless-earbuds-bean-shaped-unpacked
Samsung Galaxy Buds Live (or BEANS) in Mystic Black & Bronze full official renders from all angles.
— Ishan Agarwal (@ishanagarwal24) July 29, 2020
These renders show us that wing tips which is how they will be able to fit well inside your ears. Looks cute, honestly. With ANC. Thoughts?#Samsung #GalaxyBudsLive #Unpacked pic.twitter.com/eul5EyAvk0
"In China, the Company Law stipulates that all enterprises, foreign-invested or otherwise, must register a fixed level of operational capital with the relevant authorities—deemed the company’s “registered capital”—as part of the basic corporate establishment process. Owing to strict foreign exchange controls, a foreign company’s registered capital is often the only funds it has access to for paying its operational expenses prior to becoming cash flow positive."
"This core piece of information is contained within a company’s articles of association and printed on its business license, making it somewhat burdensome to modify. Nevertheless, for a variety of reasons, it is sometimes necessary (or beneficial) for a company to increase or decrease its registered capital. Doing so requires filing an application with the original Administration of Industry and Commerce (AIC) of registration, with the procedure strongly differing between an increase or decrease. Like other types of company registered information (name, business scope, etc.), changes of registered capital are publicly accessible via AIC records."
"Until recently, foreign investors were required to carefully estimate the amount of registered capital needed, as they were obliged to pay in the total amount within two years. However, pursuant to the revised Company Law implemented on March 1, 2014, the time-frame for capital contributions has been eliminated, as well as any minimum levels of registered capital. Therefore, investors may now decide on both the amount of registered capital (also called “subscribed capital”) and the period of capital contributions; however, these remain contingent upon approval from local government authorities."
Since this was a listing of companies that are considered related parties, I assuem that ZhuZhou Yian is just the next company on the list of disclosed related parties. It likely has no relationship to LQMT.
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https://www.china-briefing.com/news/raise-fold-changing-registered-capital-company-china/
https://www.morganlewis.com/topics/entrepreneurresources/~/media/files/special-topics/erh_pubs/erh_doingbusinessinchina_elscdeskbook
https://chinalawhelp.com/registered-capital/
https://www.pinsentmasons.com/out-law/guides/doing-business-in-china-part-2---establishing-a-business-in-china
https://www.china-briefing.com/news/calculators-for-registered-capital-and-total-investment-china/
I see this as a reporting requirement to protect minority shareholders from majority shareholders (e.g. Li) who have connected interests in Hong Kong and elsewhere, from directing monies to connected companies. In those cases, someone like Li might make less at Eontec but more overall when the connected companies are combined, thereby screwing the minority shareholder that only has interest in Eon.
This particular page of text seems to be fulfilling an obligatory requirement to report connected transactions, identifying the type of transaction, listing the amount or predicted amount, and stating that, while permitted, the transaction needs to be fairly negotiated at market price. This disclosure allows the smaller shareholders to appropriately evaluate their investment in an environment where majority shareholders own pieces and parts of companies in both Hong Kong and China, each with subsidiaries, controlling entities, joint ventures, etc.
The interesting part to me is the amount. It seems to line up with our two small contracts. I don’t think it says much either way whether something big is in the works. There are too many variables, For example, Eon wouldn’t necessarily need to disclose potential revenue that originates with LQMT and is sourced to Yihao until the deal between Yihao and LQMT to make those parts is finalized.
Only an opinion based on what I’ve read this morning. I’m no expert.
I did a little research on that phrase. A “connected transaction” is :
“According to MB Listing Rules Chapter 14A, a connected transaction is any transaction between a listed issuer and a connected person, acquisition or disposal of interest in a company. Examples of connected persons are director, chief executive, substantial shareholder of the listed issuer, any person who was a director of the listed issuer within the preceding 12 months, a promoter or supervisor of a PRC issuer, etc.“
The “daily” part of that phrase is probably mistranslated and should say “continuing”. It could also be read as “relating to the daily operation”.
Continuing connected transaction - “Provide or purchase administrative or secretarial services and management, supply of goods, tenancy agreements, which are carried out on a continuing or recurring basis and are expected to extend over a period of time.”
https://www.efmaefm.org/0EFMAMEETINGS/EFMA%20ANNUAL%20MEETINGS/2008-Athens/papers/Adrian%20Cheuk%20Hung.pdf
https://www.researchgate.net/publication/227420578_Connected_transactions_and_firm_value_Evidence_from_China-affiliated_companies
https://www.cfainstitute.org/-/media/documents/article/position-paper/related-party-transactions-cautionary-tales-for-investors-in-asia.ashx
I only see that BASF acquired, on February 14, 2012, the former Energy Conversion Devices Inc. operating subsidiary "Ovonic Battery Company". The facilities in Michigan were once those of OBC.
Where is the link that says BASF owns Eutectix?
-----------
Eutectix LLC wasn't founded until 2014 and is listed as privately held. The only connection I see was that Great West Materials Group bought Ovonic owned the facility, sold it
"Eutectix LLC was founded in 2014 by Dr. John de Neufville, CEO, Dr. Henry Lee, Interim COO, Thomas Smith, CFO, and Robert Russotti, CMO. All four founders of Eutectix worked together at Voltaix, Inc., a leading manufacturer of gases and chemicals for the photovoltaic and semiconductor industries."
"Eutectix, LLC formed in May 2014 when it acquired the former Ovonic Materials manufacturing facilities at 1864 Northwood Drive Troy Michigan from Great Western Minerals Group. Great Western Minerals Group operated the facilities as Great Western Technologies Inc. (GWTI) from 2007."
2018 Eutectix acquires Materion Bulk Metallic Glass business
2016 Eutectix acquires Molycorp Metals and Alloys
2014 Eutectix acquires Great Western Technologies, Inc. GWTI
2012 BASF acquires OBC
2011 Molycorp Minerals LLC acquires SAI and forms Molycorp Metals and Alloys, Inc.
2009 SB LiMotive acquires Cobasys
2007 GWMG acquires Ovonic Materials facilities from ECD
2004 Cobasys forms
2000 Chevron – Texaco buys GM interest in GM Ovonic forms JV with ECD Ovonics called Texaco Ovonic Battery Systems & adds TO Hydrogen Systems and TO Fuel Cell Company
1999 Baotou Steel RE Hi-Tech forms JV to manufacture NiMH
1999 Santoku America, Inc. SAI purchases Rhodia Rare Earths metals and alloys business
1998 Sanyo buys 3% stake in GM Ovonic
1998 Research Chemicals becomes part of Rhodia Rare Earths, Inc.
1996 Ni(OH)2 manufacture begins – Honda buys 2% stake
1994 GM Ovonic JV for EV1
1988 Rhône¬Poulenc, Inc.purchases Research Chemicals
1985 ECD purchases ANR share of OBC
1982 ECD and ANR form OBC as JV
1978 ARCO funds R&D in hydrogen storage & PV
1966 Nuclear Corporation of America (NUCOR) establishes Research Chemicals
They invested $11 million of it, so it is not considered cash.
$597,000 for quarter, $1,373,000 for the year.
https://www.securexfilings.com/sec-deadlines/
We are an accelerated filer. Due by Monday, March 16.
Probably margin calls causing the selling.
This one is a little clearer...
https://techxcite.com/mobile/topic.html?id=33113
I understand. Apple will not allow a competitor to use the Liquidmetal name, thereby forcing them to place their order through LQMT if they want the brand recognition.
I’m slow today.
I think that any company that wants to get on the BMG bandwagon in the US needs to either play catch up with LQMT/Eontec or do what Eutectix has done.
This is our new business model and Eutectix is our first customer. Sell the machines, sell the material, license the technology and sell the expertise.
I don't know if I would read that much into it. I do believe that Apple is the whale that is going to propel us, that they demand silence from their suppliers, and that 2020 is the year. I am disputing that anything in the Q3 financials is foreshadowing 2020.
Unfortunately, we can't know for certain if we are better off or not, because we are not privy to the discussions that are shaping our future. Such is the nature of a penny stock. I see this as a blessing, not a curse. It has allowed me to get in at a very low price. I have other equities that provide me with more certainty. This one is in the "home run or strike out" account.
It is a significant increase over the previous year but not the previous quarters.
I do not see a significant increase in gross margin in Q3 over Q2. They look perfectly predictable knowing what we knew at the end of Q2.
Royalties were included in Q3 numbers but not in Q1 or Q2. They need to be removed if you are going to compare quarter-to-quarter. The Q3 royalties were the same as the 2018 Q3 royalties.
Q3 Revenue without royalties = $373K
Q3 Cost of Sales = $284K
Q3 Gross Profit without royalties = $89K
Q3 Gross Profit margin 89/373 = 23.86%
Q2 Gross Profit margin = 22.00%
Q1 Gross Profit margin = 20.00%
The increase came between 2018 and 2019. The 10qs explain this away with the 3 points. If we had been manufacturing something new that was far more profitable, we would have had more than 132K in revenues in Q2.
Q1 = 80% of revenue
Q2 = 78% of revenue
Q3 = 76% of revenue
To me it looks to be exactly as they have described it in the 10Q. They went from a prototype/preproduction world last year to producing this year. The more they produce, the more efficient they get. They created extra inventory in Q3 which accounted for the bump in revenue. Gross profit stayed relatively the same as Q1 and Q2. I don't see the hidden Apple revenue in there yet.
From the 10-Q...
"Revenue and operating expenses
Revenue. Total revenue increased to $421 for the three months ended September 30, 2019 from $253 the three months ended September 30, 2018. Total revenue increased to $776 for the nine months ended September 30, 2019 from $388 for the nine months ended September 30, 2018. The increase was attributable to higher volumes associated with the completion of higher volume orders to provide current customers with buffer inventories while manufacturing capabilities are transitioned to outsourced manufacturing. As a result, product revenues during the remainder of 2019 will likely not be indicative of short-term, prospective volumes.
Cost of sales. Cost of sales was $284, or 76% of products revenue, for the three months ended September 30, 2019, a decrease from $884, or 431% of products revenue, for the three months ended September 30, 2018. Cost of sales was $566, or 78% of products revenue, for the nine months ended September 30, 2019 a decrease from $1,026, or 302% of products revenue, for the nine months ended September 30, 2018. The decrease in our cost of sales as a percentage of products revenue for the three and nine months ended September 30, 2019 was primarily attributable to lower raw material costs as a result of market adjustments taken during the three and nine months ended September 30, 2019, higher volume production during the three and nine months ended September 30, 2019, and improvements in production throughput during 2019. If we begin increasing our products revenues with shipments of routine, commercial products and parts through our manufacturing facility and, in future periods, third party contract manufacturers, we expect our cost of sales percentages to decrease, stabilize and be more predictable.
Gross profit (loss). Our gross profit increased to $137 for the three month period ended September 30, 2019 from $(631) for the three month period ended September 30, 2018. Our gross profit (loss) as a percentage of products revenue, increased to 37% for the three month period ended September 30, 2019 from (308)% for the three month period ended September 30, 2018. Our gross profit (loss) increased to $210 for the nine month period ended September 30, 2019 from $(638) for the nine month period ended September 30, 2018. Our gross profit (loss), as a percentage of products revenue, increased to 29% for the nine month period ended September 30, 2019 from (188)% for the nine month period ended September 30, 2018.
Early prototype and pre-production orders generally result in a higher cost mix, relative to revenue, than would otherwise be incurred in an on-site production environment, with higher volumes and more established operating processes, or through contract manufacturers. As such, our gross profit percentages have fluctuated and may continue to fluctuate based on volume and quoted production prices per unit and may not be representative of our future business. If we begin increasing our products revenues with shipments of routine, commercial products and parts through future orders to our manufacturing facility and, in future periods, third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable."
So are you saying that item #3 in this list is due to manufacturing in China?
"The decrease in our cost of sales as a percentage of
products revenue for the three and nine months ended September 30, 2019 was primarily attributable to lower raw material costs as a result of market
adjustments taken during the three and nine months ended September 30, 2019, higher volume production during the three and nine months ended September 30, 2019, and improvements in production throughput during 2019"
Interesting. Does the same logic apply to large "all or nothing" buy orders?