Replies to post #196428 on Liquidmetal Technologies Inc (LQMT)

[joshuaeyu]

There are a few different ways to present the “financial” in a legal manner.

I see revenue and net income model for YiHao relationship. It has been like that for the past few quarters.

I do see pure (branding) royalty model with big whale CM in coming years.

Just one person opinion

[Eicheljager]

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.