Liquidmetal Technologies Inc (LQMT)

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Eontec Q&A

https://pdf.dfcfw.com/pdf/H2_AN202002271375559309_1.pdf

Stock code: 300328
Stock abbreviation: Eontec
Announcement No .: 2020-008
Eontec

Announcement on the reply to the attention letter of Shenzhen Stock Exchange

All members of the company and the board of directors ensure that the information disclosed is true, accurate and completeFalse records, misleading statements or major omissions.

Dongguan Eontec (hereinafter referred to as "Eontec" or "Company") in 2020On February 25, 2015, the "About Eontec" issued by the Shenzhen Stock Exchange GEM Management Department" Letter of Concern for Joint-Stock Co., Ltd." (GEM Concern Letter [2020] No. 132) (hereinafter referred to as "Follow Letter "), the company attaches great importance to this, and has carefully checked the issues mentioned in the concern letter item by item.The relevant questions of the concern letter are as follows:

Question 1

Your company's basis for identifying Tesla as a Tier 1 supplierThe specific situation of the product, including the details of the product provided, the product target, the sales volume and financialAmount, credit policy, accounts receivable and rebate, etc., combined with the order in hand and the signing of the contractThe impact of Tesla's business cooperation on your company's financial status and operating results, and reminds you of related risks.

Company reply:

The company and Tesla started the business cooperation of aluminum alloy CCB bracket parts as early as 2014. With both sidesIn-depth cooperation and recognition of the company's research and development strength, the company began new energy with Tesla in 2015 Cooperating with the accessories business such as car door lock covers, the company directly delivered to Tesla, becoming Tesla's first-class The supplier has continued to this day. In addition to purchasing directly from the company, Tesla has also been designated by Hydro After purchasing parts such as car front beam devices from the company, TKP also purchased parts such as steering systems from the companyIs supplied to Tesla. Tesla's customers have already published in the 2018 annual report and the 2019 semi-annual report dew.

The company provides Tesla with a new energy vehicle door lock cover and becomes a Tesla first-level supplier. The situation is as follows:

The liquid metal material of the company has the characteristics of high strength, high hardness, corrosion resistance and wear resistance. In February 2015, he began to intervene in the door lock cover project of Tesla's new energy vehicles and actively provided liquid metal vehicles to himSample of door lock cover. Through a four-month development period, the liquid metal car door lock cover produced by the company, the hardness and impact resistance have been repeatedly tested by customers, and the excellent material characteristics and molding process of liquid metalThey all meet Tesla's product design requirements, and the samples provided by the company have been approved by customers. Company on 201Received an order from Tesla in July and mass-produced it. Since then, liquid metal has achieved the first time in Tesla Mod The application on el X is also the first application of liquid metal in the automotive field, with a very important milestone In order to achieve a breakthrough of 0 to 1 for the subsequent expansion of liquid metals. Since the beginning of cooperation, car door locks All orders for cover are directly placed by Tesla to the company, and the company directly delivers to Tesla as a tier one supplier.

Question 2

The specific situation of your company's new energy vehicle products, including product details, new energy vehicle ownersTo customers, the sales volume and amount of another period in the past two years, etc., combined with the above situation, explain that your company Replying to Tesla's judgment is one of the company's important customers of new energy vehicle products.

Company reply:

In recent years, in view of the vigorous development of the new energy vehicle market and the characteristics of the industry, the company has deeply cultivated new energy vehicles Parts business, from early market development, technology research and development, equipment and personnel planning, production capacity matching, inspectionFocused on planning and implementation of inspection and testing and other links, formed a professional auto parts technical team, purchased high-precisionDensity 180T-4000T large die casting machine, CNC machining center, large mold processing equipment and testing equipmentEtc., to provide customers with professional and fast one-stop service, ensuring the motor, electronic control, battery pack, liquid metal Timely development and quantity of new energy automotive components such as lock covers, steering gears, central control navigation, body structure parts, etc.The production and delivery have won unanimous praise from domestic and foreign new energy vehicle manufacturers and component system customers.The new energy vehicle terminal brands involved in the company's current products include: BYD, Geely, Chrysler,Tesla, Karma, etc., the first-tier suppliers include: Ningde Times, LG, etc.

Among the company's direct customersIncluding: BYD, Geely, Tesla, Karma, Ningde Times, LG, TKP, etc.

The company has the full process technology of new material products such as aluminum alloy and magnesium alloy, and has independent mold development Capacity, the production capacity of die casting equipment is from 180T to 4200T, covering all parts from large to small, with sophisticated CNC machining center, diversified surface treatment and assembly lines can meet the different needs of new energy automobile partsClaim.

At present, the new energy vehicle parts produced by the company are mainly: battery pack shell, motor shell, electric control box, Steering gear parts, etc. Battery packs, electronic controls, and motors are all core components of new energy vehicles.

The battery pack is used to protect the batteryThe outer shell of the product has a larger size, and has certain strength requirements, compactness requirements, and leak test requirements.In 2017, the company successfully produced Geely’s first die-cast structure battery pack using a 4000T die-casting machine.

The product has good strength and structure, and the dimensional accuracy is much higher than the design of the metal stamping structure. Excellent flatness, Good sealing performance, lightweight structure can reduce the weight of the battery pack, improve the cruising range of electric vehicles,Improve the energy density of the battery. At the same time, the company also developed BYD's dump truck battery pack, K9 electric BUS battery module parts, etc. Electronic control is the key to the battery management system, the accuracy of electric control and motor products. The requirements are relatively high, and there are leakage tests and strength requirements. The company successfully used 2200T large die casting machineDeveloped the electric control project of BYD Auto. Currently, cooperation with LG customers on electric control and motor products is underway in development.

The automobile steering gear parts are mainly made of magnesium alloy die-casting in the design.It is calculated that the strength of magnesium alloy products can meet customer needs, and the weight of the product is 33% lighter than that of aluminum alloy. Magnesium alloy auto parts have very good weight reduction significance in automobile lightweight. At present, the company hasHe cooperated to supply parts for Tesla Model S, 3, X and other models.

In 2018, 2019, January-February 26, 2020, the company's terminal sales of Tesla products accounted for The proportion of the company's new energy vehicles is 36.43%, 39.76%, 78.92%, so the company judges that Tesla is a public company. One of the important customers of the company's new energy automotive products.

Question 3

The specific situation of the company providing products to the Ningde era, including the details of the products provided, the productionProduct targets, sales volume and amount in the last two years, credit policy, accounts receivable and repayment, etc., combined The order in hand and the signing of the contract show that the business cooperation with the Ningde era will affect your company's financial situation and operation.The impact of the results and related risks.

Company reply:

The company has outstanding technology, production capacity, and on-site management capabilities for lightweight new materials for new energy vehicles.Strong lean production capacity and complete industrial chain advantages. The company has sophisticated die casting technology (companyHigh-precision 180T-4000T large die casting machine), precision CNC machining center and testing equipment guaranteeThe stability and precision of automotive products can meet the needs of customers for product functions and prices.Provide professional and fast one-stop service, the company has motors, electronic control, battery packs and other new energy automotive partsThe products have been mass-produced and delivered, and have won a number of domestic and foreign new energy vehicle manufacturers and component system customers.Praise.

The company began business and technical cooperation with the Ningde era in 2018, and passed the Ningde German Times factory audit and successfully obtained the supplier code.

Based on the company's advanced production and technical strength in the field of new energy vehicles, it has a high degree of cooperation with the Ningde era Supporting advantages. The company became one of its core suppliers in 2019, with which it carried outIn the cooperation of new energy vehicle battery pack technology and many other, through multi-level technical discussions and tests,There are 11 models of magnesium / aluminum alloy battery pack end plates, 1 model of aluminum alloy battery box is under mold development, and dozens magnesium / aluminum alloy new energy battery pack accessory project is under evaluation and development. Less from January to February 26, 2020 sample shipment of battery packs. Therefore, since the two parties are currently in the preliminary cooperation stage and have not yet entered the mass production stage, they should Receivables, income receivables, on-hand orders, etc. are relatively small, and the impact on the company's financial status and operating results are similar for smaller.

At present, the cooperation between the company and the Ningde era is steadily advancing, and it is planned to sign further cooperation agreements, equipment, personnel, etc. are also continuing to invest. According to the current situation, the company can partially invest in the second quarter of 2020Enter mass production, but it does not rule out the risk that the situation is expected to change in the future.

Question 4

Your company stated that it has the capacity to produce liquid metal hinges in large quantities and is able to supply customers in batches.According to the report, supplementary disclosure of the basic development of liquid metal hinges, including the company ’s main applications for liquid metal hinges Domain, major customers, sales volume and amount in the next two years, credit policy, accounts receivable and repayment Status, on-hand orders and the impact on the company's financial status and operating results.

Company reply:

Liquid metal, also known as bulk amorphous alloy, is called the third material revolution, which has a multi-component materialComposition characteristics, no phase change occurs during solidification molding, thereby forming an amorphous microstructure, the microstructure There is no lattice and grain boundary, and there is no origin of fracture failure, so that the material has high strength, high elasticity, High corrosion resistance and many other excellent properties. Material strength is three times that of stainless steel, and elasticity is three times that of titanium alloyTimes.

Since 2012, the company has cooperated with the Institute of Metal Research of the Chinese Academy of Sciences to develop related technologies for liquid metals; To further accelerate the progress of material development, the company established the New Materials Research Institute in 2017, and its R&D strength further strengthen. At present, the company has the development and production of liquid metal materials, equipment development and production, mold design andThe ability of the entire industrial chain of processing, product development and production. The liquid metal products that the company has mass produced include steam Car door lock, USB interface, mobile phone side decoration, camera decoration, Face-ID bracket, etc. product.

The application fields of liquid metal hinges are as follows: 1. Folding screen mobile phone shaft, two ways of inside and outside foldingThe folding screen mobile phone of the case requires the use of liquid metal shaft structural parts; 2. Notebook shaft structural parts, such as rotating shaft structural parts of the tablet, etc .; 3. Smart watch bracelet link structural parts.

2019 is a very important year for folding screen mobile phones, the key to the design of folding screen mobile phones is the strength of the hingeDegree and precision, and liquid metal has the characteristics of high precision, high flatness and high strengthOne of the preferred materials for components. So far, the company has provided two liquid gold for the largest mobile terminal customers in ChinaIt belongs to the hinge, which is defined as the first and second generations respectively. The specific conditions are as follows:

The first generation liquid metal hinge project was evaluated in July 2018, and the mass production time is 2019.10month;
The second-generation liquid metal hinge project was evaluated in October 2019 and started in November 2019.Into mass production, so far it can meet customer order needs.

According to the contract signed by the company and the customer, the credit policy for liquid metal hinge products is 60 days per month and 90 days per month. Today, as of now, customers are able to make timely payments according to the contract.

The project is a key project of the customer, and the customer signs a confidentiality agreement with the customer, the amount of delivery, the amount of deliveryRelevant data will have a certain impact on the customer's market. It is an important business secret of the customer and is classified.Agreement control area.

Question 5

Please combine the above question replies to explain one by one whether your company's related replies on Interactive EasyView, be true, accurate, complete, and fairly introduce and reflect the actual situation of the company, whether it is misleading statement. Please self-examine and explain whether there is a situation in your company that replaces the temporary announcement with an interactive and easy reply.If there is any undisclosed information that should be disclosed, is there any active response to market hotspots and hypeThe situation of the company's stock price.

Company reply:

The company's interactive platform involved Tesla's responses to company customers have been disclosed in previous periodic reports,It is basically consistent with the previously disclosed content, as follows:


Periodic reports 2017/8/22
2017 semi-annual report Section IV of the paper Theory and Analysis-Overview

In terms of new energy vehicles, liquid metal products has entered the new energy vehicle market, the company hasStable supply of liquid metal locks to Tesla buckle. For liquid metals, as of the reporting period At the end, the company entered Tesla and other domestic and foreign Customer supply chain.

Periodic reports 2018/3/30
2017 Annual Report Section IV of business discussion and Analysis-Overview

In terms of new energy vehicles, the company has SILA supplies liquid metal locks steadily. In liquid As for the state of metals, the company's liquid metal products There are locks, card holders, hinges, USB devices Accessories, fingerprint module bracket, camera appearance Products such as parts, middle frames, mobile phone metal frames, etc.Into the mass production stage. As of the end of the reporting period, the company Established with well-known domestic and foreign customers such as Tesla A good cooperative relationship.

Periodic reports 2018/8/16
2018 semi-annual report Section IV of the paper Theory and Analysis-Overview

As for new energy vehicles, as of the reporting periodAt the end, the company and Tesla and other well-known international and domestic Customers establish cooperative relations. In the liquid metal side Noodles, liquid metal has been in Tesla's car doorLock, mobile phone tray, hinge, USB decoration Pieces and other products have entered mass production stage. As of the report At the end of the period, the company, Tesla and other well-known domestic and foreignThe customer has established a good cooperative relationship.

Periodic reports 2019/4/2
2018 Annual Report Section IV of business discussion and Analysis-Overview

As for new energy vehicles, as of the reporting period At the end, the company and Tesla and other well-known international and domestic Customers establish cooperative relations. In the liquid metal side Surface, liquid metal can not only meet the folding screen The thickness of the structure of the mobile phone, the complex structure The limit requirements, and the price of commercial preparation The ratio is very high. As of the end of the reporting period, the company Well-known customers at home and abroad such as Good partnership.

Periodic reports 2019/8/28
2019 Semi-annual Report Section IV of the paper Theory and Analysis-Overview

As for new energy vehicles, as of the reporting period At the end, the company and Tesla and other well-known international and domestic Customers establish cooperative relations. In the liquid metal sideThe company actively cooperates with well-known mobile phone customers Design and supply of liquid metal hinges By the end of the reporting period, the company and Tesla and other domestic Well-known foreign customers have established good cooperation system. According to the relevant provisions of the "Shenzhen Stock Exchange GEM Stock Listing Rules" And related matters did not meet the disclosure standards for major matters. The company attaches great importance to interaction with investors, in line with investment The investors take a responsible and responsible attitude and respond to questions from investors after careful verification. Objectively, truthfully, accurately, completely and fairly introduce and reflect the actual situation of the company, there is no misleading Narrate. Therefore, the company does not have the situation to replace the temporary announcement with the interactive platform, and there is no Undisclosed information, there is no situation to actively cater to market hot spots and speculate on the company's stock price.

Question 6

please explain your company's directors, supervisors, senior management, controlling shareholders, holding more than 5% of the shares Shareholders ’trading of your company ’s stock in the past month, whether there is insider trading or market manipulation, make up fully disclose whether the above personnel have a shareholding reduction plan in the next 6 months, and verify whether your company uses interactionIt is easy to reply to the situation of reducing the holding of the above personnel.

Company reply:

After verification by the company, the company's directors, supervisors, senior management, controlling shareholders, shareholders holding more than 5% of the sharesIn the past month, there has been no trading of company stocks, no insider trading, or market manipulation.As of the reply date of this concern letter, the company has not received the company's directors, supervisors, senior management personnel, holdingShareholders and shareholders holding more than 5% of the shares plan to reduce the company's shares in the next six months. Such as company directors, supervisors,Senior management, controlling shareholders, and shareholders holding more than 5% of the shares have plans to reduce their holdings. The company will follow the relevant laws and regulations Regulations, departmental rules and regulatory documents, and timely fulfill information disclosure obligations. Company directors, supervisors, Senior executives, controlling shareholders, and shareholders holding more than 5% of the shares have not bought or sold company shares in the past month.There are situations where the company uses interactive easy reply to cooperate with the above personnel to reduce holdings.

Special announcement.

Dongguan Eontec
Board of Directors
February 27, 2020