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Don’t think you are seeing this correctly.... an effective mechanical technician commands $60k+ and a good applications engineer runs $80k. There is no such thing as hiring minimum wage people for any of these jobs.
Second point...it takes many hours (think 100s) to hire just one good engineering employee. You cannot just call up manpower or agency and get what you need. It’s very time intensive which explains the “what do they do all day? some folks ask. Training and teaching are also a big part since people with BMG experience are non-existent in the potential workforce.
The 10K from 12/31/2017 gives employment number as 28 full time/zero part time. Here it is just 12 months later and I see 38 on this message board. Staffing is a leading indicator...just curious
Reference hard copy of 10K, Page 10 under “employees”.
Headcount....I seem to have missed something. At what point in 2018 did the LQMT headcount go from 23 to 35 or 38? This is very significant when it comes to machine staffing. Do we have detail as to what positions were added?
It could telegraph the move from a one shift to a two shift operation.
It looks like things are falling into place...the only question is when the impact will be recognized by the marketplace.. I would hope that this will happen within 2019.
My major concern it that the overall market environment would overshadow the good news associated with LQMT. If this should occur, it could happen that we report $3-4 million in revenue for 2019 and still have the selling price languishing around $.25. Hope not.
Merry Christmas and Happy Holidays to all
Potential stockholders, can appear from strange directions...consider the expanding customer base like Zyris, Tesla , Apple and others as the source of the increased interest in the stock. Many folks (not the ones who make supplier decisions) could be comfortable plunking $10k as a speculation on a technology they have previewed. They are perfectly positioned to see the technology and recognize its potential.
Hyperventilation is a problem on this Board....relax! Step back and think...6 million shares isn’t even a million bucks so in the last 2 days we have perhaps $1.5 million over the ”normal” volume. It’s nice but not enough to write home about.
The $8 million revenue for break even was determined by calculating the revenue necessary to offset the “burn rate”. The problem with that assumption has to do with staffing. Out of something like 25 employees, probably 10 are R&D, 5 are Administrative/support and maybe 10 are capable of actually running the equipment. Multiple machines and multiple shifts require a much larger operating staff even with robotics. They are a staffed for prototyping and funneling the actual production to Eontec (except for a few bits and pieces).
They stated the intention to use Eontec as a contract manufacturer for any substantial orders so I see that as the path to profitability. LQMT will function as the Market Development and become commission collectors...at least for now.
Perhaps an “insurance model” is a better way to think about LQMT...Sell the policy (develop the application), step back (collect the commission) , go sell some more policies (applications). Basically developing a portfolio of commission streams.
Interesting about the 50,000 pounds of something shipped to Thyssen.
What is a reasonable expectation for the Q4 financial results. Q3 had $205k of revenues that were specified as customer tooling (not the sale of actual product). The royalties/fees had an unspecified source so we have no idea whether the origin is Asia, Europe or North America. We don’t know whether it’s from Swatch or perhaps some new source under a NDA
So...not knowing whether Q3 was a fluke or something real, what can/should we expect from Q4?
Companies don’t start big projects in the 4th quarter, They recap their ending year and develop plans the the new year and position themselves to hit their bonus bogies for the next year. Q4 is a short quarter as potential customers wind down.
We should be very cautious about our expectations...I would be pleasantly surprised to see revenues in the $250-$500k range but I don’t think it will happen. I do think Li is very conscious about trends and we will probably exceed the Q3 numbers but I don’t expect a blow-out.
Surprise me.
The power upgrade is a non-issue unless there are 4 more machines in transit.
This price movement is bizarre....from down 12% to up 6% in 30 minutes. I would call it a selling climax if we managed to move 5 or 10 million shares but no such luck.
Absolutely Incredible that $8000 of selling pressure could move the stock 8%. Whatever happened to market efficiency?
I was able to get into the the website project status area and found the part where we are listed as “under review”. The permit is assigned to (JA) listed as “planning intern”. She has a total of 5 projects and the LQMT permit is the oldest at October 10, 2018. Other projects (assigned to other resources) can go back to Spring 2018. Gotta deal with the system!
Scalpels and needles can be reprocessed into new scalpels and needles easily!
It seems that this board revels in hashing over and over things that we can’t really do anything about. It may look like therapy but it isn’t healthy...if you are really that unhappy, fold your tent and move on!
If you are a survivor of the GTAT experience, it could explain a lot.
Demographics check....I too am in my mid-seventies. Is this board composed of a bunch of old men with nothing better to do?
Remember...wireless charging exports the largest piece in the case (the battery) so the pacemaker can approach the size of a jelly bean.
How options work.....I can tell that there many on this board that don’t understand the Ins and outs of options. At this point, these options have no value...I’ll use BB’s numbers as an example:
Options for 4 million shares @0.14 per share are granted which vest (become active) staged over the next 3 years. The recipient can buy the stock in the future for $.14/share
If the stock stays below $.14 they are worthless
If after they vest, and the stock has appreciated to say $1 and BB wants to exercise the options, BB has to put up $560k to get the 4 million shares but that isn’t the end. The difference between $.14 and $1.00 is taxable income. Income tax on the $3.44 million at 40% is very close to $1.4 million due now.
Your new cost basis is $1 for future tax purposes.
So...if one is fortunate enough to end up in the black, you have to liquidate half your windfall to exercise the options
The upside...zero risk and it is possible to pocket $2 million if things go right so that part keeps you “interested”.
Guess....someone died and his heirs went to a financial advisor who said LQMT was a penny stock with no potential and recommended liquidation.
Price movement speculation....I’ve been studying the price movement for this latest fall and have a potential scenario that could explain the relentless price pressure...
Just suppose that you are a 10 million share holder of LQMT and you feel that that 2 million is the number you wish to hold going forward...How do you get out?
You can’t go to the market with a sell order for 8 million or even 1 million without destroying the market. You have to sell in small lots of 20000 or maybe even 50000. Every time the stock begins to exhibit any strength you are right there to dump another chunk and squashing any positive move...thus the relentless pressure.creates a downward bias. This movement feeds upon itself as others see the price erosion and want to preserve their capital.
The volume entering the market is from what I’ll call the “shadow float” ...(that massive number of shares that don’t seem to trade) Moving into the general marketplace dramatically increases the number of shares for sale but there are no new buyers so the price reacts downward until a sale is made.
Death by a thousand cuts.
I’m with Occam’s Razor.
Question.... Would you trade 1 share of Apple for 1300 shares of LQMT? How about 1300 LQMT for 1 share of Apple?
Investor or speculator?
Correct me if I’m wrong (I know someone will) but I seem to remember the 5% rule that deals with stock ownership stating that if an individual/organization controls greater the 5%, they have to do a SEC declaration to let others know.
That means that there could be a “whale” out there with say 40 million shares and nobody would know.
Think of all the Apple execs that were exposed to LQMT over the last decade! It’s not as if we are a supplier or customer....not sure if it creates a conflict of interest or not.
Float Question Revisited—-I’ve been here before but here goes again...Outstanding shares = 910 million and Li has 410 million leaving 500 million shares out there somewhere. We trade say 1 million a day which works out to 0.2% of “available shares” which is very tiny.
The stock is quite volatile on this million shares which points to a very large pool of tightly held shares that aren’t participating in the market. The Market Makers may have 10-20 million on their books but that still doesn’t explain it..
Is there a model that estimates the “effective float” that takes into account price movement, volume, number of transactions, time to fill etc. to get a better estimate of the actual shares available to trade?
I still maintain that it trades like a stock with a trading pool of 25 million shares or less.
The Board has to award the options so obviously, Li is for it...I’ll go with reward or hook. Either case it looks favorable.
My conclusion is that Li has decided that this is the team going forward and he wants a “hook” to keep them on board. These options vest over 3 years so the hook is set! $700k is peanuts and not worth all this discussion. It’s the future value that creates commitment.
If we take the word “royalty” and substitute the word “commission” and define it as a fee for developing an application including the sales/engineering and follow-up with the customer...would you be more comfortable?
The royalty examples you cite are really “clean” company to company contracts but what if we interpret Li’s matrix as a single entity so the relationship is more like a “division to division” transaction. Think about Ford foundry division selling steel to the car assemble division and using a negotiated “transfer pricing” model. It could be as simple as calling Eontec a manufacturing sub-contractor for LQMT...all they are doing is supplying one service in a chain of steps necessary to satisfy the customer.
None of this requires disclosure.
Agreed!
The revenue line of the Q3 lists a total of $253k which is composed of product related sales of $205k plus $48k of “royalties and licensing”. Looking back to Q2 and Q1, there is nothing to report for this item...so why is it there if there was no expectation. They could have easily reported total revenue off $205 and most of us would have said “WOW—a triple from last quarter”.
I contend that the “royalty and licensing” procedures are defined and in place and it is a level of detail they have chosen not to share.
I’m not saying that there won’t be costs incurred by LQMT in the procurement of orders and the engineering of the products but their internal costs will not be as high as they would have been if the manufacturing was done at LF.
That said, enforcement of royalty collection has always been an informational “black hole” and just because they have chosen not to share the details, doesn’t mean they don’t exist. I guess I’m a bit more optimistic that this is all defined and they only people that need to know the details are the parties involved.
By the way...I wouldn’t share the source or nature of any potential large orders because it only provides ammunition to competitors who will attempt take the business away. Ditto about patents..they only teach competitors your technology and saves them years of R&D. Anything critical, especially process related should not be shared and should be kept as a “trade secret”.
Bottom line impact of domestically produced sales and royalties from sales produced by Eontec for the US market will differ greatly. Most of royalty money will flow directly to the net income line unburdened by operating costs.
The mix will affect the sales necessary for break-even.
What could be the possible business advantage of assimilating LQMT into a company controlled by the Chinese government. Seems to me that would create a strong negative for American companies to form a strong relationship. If LQMT is to be the entry into the US market, it would at least be good to maintain the illusion of an American company with a Chinese connection.
Good summary...I’m glad at least one shareholder provided insight. Particularly interested in 12 machines capability of producing $50 million at full capacity. This could be several years down the road but 4 machines could mean $15 million or so. Also points to a major capacity announcement once the power upgrade is complete
Wild card is the royalty payments and apparently there was no speculation on this subject...REALLY BIG orders have the ability to goose the royalty stream.
I’m thinking the net margin on LF orders at 25% and 75% on royalty payments
Or as many as 6-8 depending upon whether we are talking about BMG or MIM tooling....I think this is very encouraging and just the tip of the iceberg..
R & D expenditures were probably in the “process development” area (like 8 cavity production) and would be categorized as “trade secrets” and not patented since it would reveal too much to potential competitators. This is a very common practice.
Noumber of shareholders is not straight-forward....my shares are in street name at Fidelity and if they have 20 other clients with LQMT shares, does that count as 21 or 1?
I would look at it another way...we know where 410 million are and the balance is 500 million. Picking an average shareholder as 300000 shares...gives me a number of 1600-1700. An average of a million get us to 500 so now we can come up with a “reasonable range” number much larger than 200 but could be as high as 2000.
WHERE ARE THEY?
All we need to do is quadruple our revenue for 2-3 quarters and we will be “discovered”. The price will soar to $0.50 and the P/E won’t matter. It’s not investors that will drive price...it’s the speculators. Amazon just achieved profitability.
I would like to see enough interest to maintain 3-5 million share/day volume. We average a million which is a only $150k/day. Way too Thin!
Li has been referred to as a “billionaire” on this board...has anyone ever indicated as to whether we are talking dollars or huan? The difference between $150 million and $1 billion is significant when compared to $64 million.
I seem to remember a delay in the final timing when he was assembling the cash for the deal.
THE MASTER PLAN......Good science fiction is very hard to write—it’s important to weave facts with fiction to create a plausible plot. Everyone seems to be nibbling around all the moving parts, so I’m going to pull them together and see what comes out....
Li, as the major stockholder in Eontec decides that amorphous metals are the future but Eontec is too small to be a significant player so he sells most of his stock and uses the $64 million to buy 400 million shares of LQMT.
He then pledges the shares to an entity (Liquidmetal HK) perhaps to satisfy some Chinese regulation/perhaps not. Liquidmetal HK is recently created to receive the shares...it could be a post office with a balance sheet. The shares show up on Liquidmetal HK balance sheet so it’s a very wealthy PO Box. Hong Kong happens to be the financial capital of the Far East.
He goes to one of those financial institutions and uses the stock as collateral to borrow, say $30 million...think margin account
He then turns around, takes the money to Eontec and offers to use it to “cement” relationships with the BIG players in Chinese amorphous metal processing. These relationships are in the form of partnerships, joint ventures and possible creation of “subsideraries”. He creates the MAZE we have all been trying to figure out.
Next big jump....somewhere in the LQMT/CIP patent portfolio there is a key patent that causes them pause and Eontec holds a license. Assuming Eontec has the ability to sub-license the technology in return for a royalty fee, it creates a potential income stream for Eontec. I would expect the royalty fee to be low (2-3%) based on sales revenue not profit.
Eontec is obliged under the agreement to split the royalty with LQMT/LF based upon the ultimate destination of the final product no matter how many intermediaries are involved so a broad based income stream is created.
It will start small but will increase relentlessly..as income flows to LQMT/LF, the stock will appreciate to say, $.50 so the value of the collateral in Hong Kong goes to $200 million generating additional borrowing capacity for further expansion. A virtuous circle!
If the stock price does increase, we all benefit but if the stock goes to $0.05, Li gets a margin call and the whole thing falls apart.
I have no idea how CE products fit into this picture....chop away!
Everybody seems to be all hung up on whether the formulation of the alloys is something covered under the LQMT/CIP patent umbrella. It doesn’t have to be...more than 3/4 of the patents are process or product related and as such, the actual composition of the alloy is immaterial. If they are using manufacturing technology disclosed prior to 2016, it can be argued that royalties are due.
Guess you stay up later than I do...I was sleeping peacefully at 12:47 am.
I’ve done some more thinking on the blog’s explaination on how they are doing the heat treating and there is a second possible scenario...they could be transporting the semi-finished parts to their furnace manufacturer’s location and heat treating them on their equipment on the weekends. This would explain the comment about the oven being identical to the one they have purchased. Could also explain the need to use the weekends.
Still good news that they have come up with a way to get production moving.
Sounds like they have devised a “work around” that allows them to run the moulding equipment OR the furnace. They are moulding parts during the week and doing the heat cycle on the weekends. Seems quite positive to me. The fact that they have to use the weekends tells me Monday through Friday MAY be heavily scheduled...
Also good news.
Jason Bond input....we can value his input as much or as little as we want but I don’t think he spit that out in one afternoon....he’s been gathering pieces for a long time. Also..the whole thing is too bizarre to be made-up. Time will tell as far as accuracy.