Liquidmetal Technologies Inc (LQMT)

[GregCost]

Steipp's-interview-posted-inside... Honest, maybe-too-much-so


http://www.plasticstoday.com/articles/liquidmetal-technologies-sets-cash-raising-strategies04102013

Liquidmetal Technologies sets cash-raising strategies
By Doug Smock Published: April 10th, 2013

Liquidmetal Technologies has enough cash to last into 2014 and is currently pursuing three strategies to boost its future cash position, CEO Thomas Steipp said in an interview with Plastics Today.

"Our revenues at this time are relatively modest, but what we are really measuring is the growth of prototypes going out into the market. We raised money in the middle of last year that is being amortized through equity and that runs through August of this year."

Liquidmetal Technologies had a net loss of $14 million on revenues of $591,000 in 2012 compared to a loss of $6.9 million on revenues of $572,000 in 2011. R&D expenses were cut by $177,000 to reduce costs.

Steipp said that once cash runs out the company needs to raise revenues again to support its amorphous metal injection molding business. He hopes cash comes in through one of three different areas now being pursued.

First is conversion of prototypes to production revenue streams. He said that the escalation of prototype programs is promising. Liquidmetal Technologies shipped five prototypes in the first quarter of 2013, up from four in the fourth quarter of 2012, three in the third quarter of 2012, and three in the first half of 2012. The company's technology was stabilized at the end of 2011.

The most significant interest is coming from companies that have been machining parts from titanium or stainless steel. Once the cost of the mold is amortized, bulk metal glass injection molding is far less expensive than machining. Amorphous metals are also much stronger than traditional crystalline metals.
Liquidmetal Technologies has ordered one specially designed Engel injection molding machine, which is now in operation at its production partner's plant in Denver, CO. He said that the company has made millions of parts for consumer electronics. He said while the business was welcome it was "a boom or bust" situation.

The company is now focusing on applications in aerospace, medical and specialty manufacturing that have multi-year life cycles. Those companies require significant testing of the parts, which slows the conversion of prototype programs to full-scale production programs.

The second is through additional licensing programs. The company has already received licensing payments from Apple and Swatch. "While we did licenses exclusively for those two, there are opportunities for time-limited or non-exclusive licenses. One area that comes to mind is golf where we have a publicly announced program to develop a golf club and test it."
Other potential licensing markets are in eyewear, automotive, aerospace, medical and oil and gas. "All are areas where we have seen interest or have shipped prototype parts." The company is looking for upfront cash payments, even at a discount, rather than long-term royalty payments.

A third area of potential revenue would be other types of licensing. The company could also issue stock or bonds to raise funds.

"Those are goals. We have not announced any programs in those areas," Steipp said in the interview.

He added that while Liquidmetal Technologies may have spent less in R&D, "it was a modest amount less. We have added individuals in R&D, most recently an engineering VP who has a background at McKinsey, PhD at Cambridge and industry experience. We are not cutting back on our engineering focus."