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Were they paying a non-recurring engineering payment to the suppliers of their steel and aluminum frames to help those suppliers stay afloat during the spring and summer? And now that they will use BMG in their midframes, and those frames are researched, designed, developed and tested by the Apple/Maze partnership, they can cut those payments to lower production costs? The maze companies are willing to accept this because they are going to make their money by franchising out the materials, machines and expertise to the CMs; a far more diverse income stream than CNCing stainless steel for seasonal spikes in iPhone production?
Conflict of Interest
Design guide and PR are for customers or prospective customers. Rushing it before earnings, without including biocompatibility, but including references to CE, hints that they expect some curious (non-medical) eyes to be looking for information soon.
I'm willing to speculate that there is significant meaning to the fact that they used 2 phone pics in the brochure, for the reasons that Josh states. I'm also sure that Apple isn't signing off on using an exploded view of a 2020 phone. So instead, they use a picture of a "fair trade" phone from the Netherlands circa 2016.
Thanks for the correction.
40 day requirement for accelerated filers is November 9. Since that is a Saturday, I assume they legally have until EOB on Monday the 11th, unless they file another extension.
The phone pictured is the Fairphone 2 from 2016. I assume the picture was used as a generic picture of a cell phone.
https://www.westfalen-blatt.de/Ueberregional/Nachrichten/Multimedia/2521751-Computer-Fairphone-startet-Vermarktung-ueber-Mobilfunk-Provider
The pictures are even labeled "ExplodedPhone" and "PhoneBack". Very unLQMT-like. Especially right before earnings. Things are beginning to change.
9 cents means nothing without factoring in the shares outstanding. If we had 92 million shares outstanding but a .90 cent share price, would you still think the stock is worthless? How about 9.2 million shares outstanding but a $9 share price?
9 cents means I can buy 100 times more shares than $9. In the end, I own the same percentage of the company.
Now if you bought at $9 and rode it down to .09...
$87 million market cap. That is the number that shows investor sentiment. It is relatively low compared to the $300+ million valuation we had a few years ago, showing that investors have lost quite a bit of faith in the company. However, it is still close to three times our cash on hand. Someone believes in it.
For lack of any hard information to the contrary thanks to the silent treatment, this is a worthless stock.
Yes. Definitely Yes.
I suppose that is what the Bentley SUV is for.
Keep in mind, this second scenario requires Li to be smart enough to out flank Apple, but too dumb to not waste money on a factory when all he wanted was to "steal the IP".
or....
1. Li invests $63 million in a struggling company on its last leg
2. Apple looks the other way not seeing the threat
3. Li "steals the IP"
4. Li then sets up territories that prohibit EON from using the stolen IP in half of the world without signing those rights away as CEO of LQMT for free
5. Li buys and furnishes a factory for $10 million or so that he then shutters two years later at a loss
5. Li lose his $63 million as the cost of IP
6. We lose money.
1. Apple 2010 and birth of CIP
a. No CE for LQMT
b. Apple gets trademark rights in China
2. Berylium is toxic
3. LM105 - no Berylium
4. Apple was going to use sapphire and Liquidmetal in the iPhone
a. GTAT and Visser happened
b. LM105 is an expensive formulation
5. LQMT sinking and living on share dilution and bank credit
6. Lugee Li makes a (relatively small investment in LQMT)
7. Li has a plan to create the maze and a cheaper formulation
8. Apple and Li meet. Steipp told by Apple to bring Li into the fold
9. Li protects Eon IP from Apple
10. Apple can manufacture without Eon, but with Engel and LM105 at triple the price, or with Eon. Apple bluffs and says they are staying put, relying on CIP patents
11. Li counters with Huawei et al. and Chinese government support
12. Apple sees the writing on the wall, and agrees to use Eon machines and 106c, provided all prototypes perform identically
13. Apple cannot have their prototypes revealed, so they demand that Li create a secure facility with Engel and Eon machines. LQMT is sworn to secrecy with penalties of $50 million per breach.
a. In order to enforce this, every employee signs an NDA
b. Answering any questions, including investor phone calls, will lead those investors to quickly understand the relationship with Apple. As a consequence, there is a lights-out policy where nothing is to be discussed unless required by law
14. Apple finishes its prototyping and moves into production. LF is no longer needed by LQMT, so they seek to lease it to a production partner.
15. LQMT makes insane money from Apple and we all buy orange lamborghinis, give money to Alzheimer's research, and buy stupidly expensive bottles of champagne.
What does the MTA and PLA say about receiving royalties on the purchase, setup and use of 1000 machines by a CM using 106C? Does it forbid a LQMT royalty if this if the CM is making a CE product?
There are plenty of angles here to make money that aren’t as simple as LQMT manufactures parts for Apple through Yihao. We co-developed the alloy. We co-developed the automation. We co-own the barriers of entry that keep even Foxconn or Apple from doing this without the maze. CE or not, we will see revenue.
Anything iPhone related would go through the bigger CMs. Yihao can’t handle Apple in addition to their other big customers. Wish we could track the number of machines being built.
I believe that 46 million was last quarter. Annual was 217.72 million in 2018.
I'd rewrite it like this...
Combining Liquidmetal's application development experience with Yihao's established status as a high volume manufacturer will lower the cost of customer projects.
Penny stocks are a bet/gamble on what may come, not what is already in place. If Li came into our world by way of Apple, and Apple walks away if you do not keep your mouth shut, you keep it shut.
The no CE in the financial reports are accurate until they aren’t. They are reporting what happened in the past.
This is why joshuaeyu’s posts resonate with me. He is laying out the logic for what might be coming. If 106c is not covered by CIP, the right of first refusal has expired, and competitors want what you have, Apple has every incentive to compromise if the “me only” application is there. And we won’t hear about the change until we absolutely need to.
Meaning Apple didn’t get the exclusivity that they had previously demanded? It sure seems like CE is on the table.
Microsoft’s hinge also rotates 360 degrees. It will need to be strong.
"When the Zr-based metallic glass (e.g. the LM105 metallic glass) is used, a normal oxidized color is blue on the surface."
e.g. = "for example"
That does not limit the patent to LM105, only to ZR-based metallic glass.
Companies may request a filing extension for their Form 10-Q's and 10-K's by submitting Form 12b-25 via the EDGAR system. By filing this form, a filer may gain up to 5 additional days to file Form 10-Q or 15 days to file Form 10-K. Companies have up to 24 hours after the original filing deadline to file Form 12b-25.
https://www.securexfilings.com/sec-deadlines/
This happened last quarter. I assume they are doing the same this quarter. That means they have until Monday to issue an NT 10-Q. If they do this, they then have 5 additional days (8/14).
Assuming a big expansion, LF manufacturing may still never make sense, and those employees never replaced. I suspect they had a medical contract that required LM105 and MIM capacity that fell through.
In the 8K they made the point a few times about finding domestic manufacturing partners. They may have elected to expand the service and licensing model out in the USA as well, using special guest starts from China rather than paying salaries in LF.
As always, your theory is as good as mine until the curtain is pulled back.
What if that near-term revenue was insufficient to make LQMT profitable with the LF facility, but significant enough to make it profitable afterwards? For example $4 million - $6 million annually in 2020?
If your goal is NASDAQ, that year of profitability is massive.
The 10Q deadline for accelerated filers is today, 40 days after the end of the quarter.
https://www.securexfilings.com/sec-deadlines/
They are either required to file a 10Q or an extension like last quarter.
My guess based upon previous discussions...
1. LQMT co-developed 106c and machinery with Eon
2. The PLA states that co-development requires another agreement
3. A contract manufacturer has begun manufacturing with #1 during our 1st quarter
4. The agreement from #2 was not finalized due to the TW
5. The TW escalated on Friday, catching LQMT and EON by surprise
6. LQMT extends to hammer out final agreement so that it can appropriately state earnings
7. Extension says..."additional time is needed to assess the impact of subsequent events (TW escalation was subsequent to the end of Q1), on existing accruals and accounting positions (how much and in which quarter did LQMT earn money under the agreement), and determine whether such events are material for disclosure (can we get away with saying nothing? and if not, what do we need to disclose?)."
If you’re going to extend then why not use all of the time? That doesn’t mean that if pressed they couldn’t produce it sooner.
It could be as complicated as deciding whether to run as contract(s) through LQMT West vs. East to avoid the new tariiffs. China retaliates today, potentially making it even harder to discern.
We’ll see soon.
Maybe the royalty percentage on payments from Eon/Yihao differ depending upon the result of the TW last week.
I think Li expects that the entire capacity of the LF facility will be needed down the road for prototyping and design in a multi-billion dollar BMG market where his companies are dominant.
If MIM, or other sales leads, or small production runs present themselves in the near-term, he is likely willing to spend to accommodate them, as we will need the capacity eventually.
I do not believe he is betting any of his $63 million on the ability for LF to stand on its own before the material itself goes mainstream. That doesn't mean we won't contract something bigger out to Yihao, or land a bigger contract that requires more machines in the meantime. If we do, that's gravy.
Just my opinion.
So you do not agree there is a jointly developed alloy and a jointly developed machine that would require a new agreement under the PLA?
No argument from me until we see what an agreement holds. However...
If a machine costs $500K, and worldwide demand for midframes alone ramps to 100 million phones a month over the next 4 years, the CM world will need a minimum of 5000 machines to meet demand. Assuming the world wants to make something other than midframes out of 106c, let's double it to 10,000, half million dollar machines.
In a world with 10,000 machines, the companies with the machines will push for the use of the metal, because they have a competitive advantage.
In a world where the "Maze" has a 3 - 5 year head start on the rest of the BMG market, there will be pressure for those without machines to buy those machines that have a proven record in the largest supply chains in the world, even if other companies catch up. Li will offer them the easier route of joining the maze (like he did with us).
Will LQMT be profitable? There are two unknowns...
1. Will the large phone manufacturers adopt 106c? If so, the large CMs will buy machines. They currently only have one place to get those machines. The construction of those machines was constrained by capital until the "Rich Uncle" invested. Follow the machines.
2. LQMT needs to cut the deal required by the the PLA. The percentage is unknown. It is purportedly waiting on the result of the Trade War. The percentage royalty that comes our way may be small. However, it may be a small percentage of an enormous and sustained wave of new material production that lasts for over a decade.
Guitar pins and Zyris machine covers are great things to talk about while waiting. I wish I played the guitar.
If I read the theory correctly, it isn't that the trade war is preventing us from signing a contract. It is that we have jointly developed both an alloy (106c) and machinery (sold by LK) which requires a new agreement under the PLA. That agreement will not be signed until the effect of the trade war is known. In other words, our profit in the agreement must account for any tariffs that Eon and JVs will pay.
In this theory, as the world gears up for 5g and EVs, the midframes, routers, camera frames, battery housings, etc., will be made by large contract manufacturers (e.g. FoxConn) who will need a very large number of machines, and a large amount of alloy in order to meet demand. The Maze was built to capitalize on this demand. We are part of the Maze. We are missing the agreement required by the PLA for the already acknowledged, co-developed alloy and machines.
Has there been any public news from this visit? I haven’t been able to find anything.
$144k revenue for the quarter.