What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-13 · 82 added, 86 removed, 523 unchanged (24% of the section changed)

4 unchanged sentences

($ in thousands, except par value and share data)

September 30,

Current assets:

41 unchanged sentences

($ in thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Licensing and royalties

19 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Other comprehensive income (loss), net of tax

12 unchanged sentences

Balance - December 31, 2023

- 917,285,149 $ 917 $ 18,179 $ 288,126 $ ( 276,743 ) $ 190 $ ( 79 ) $ 30,590

Stock-based compensation

- - - - 63 - - - 63

- - - - - ( 574 ) - - ( 574 )

Other comprehensive loss

- - - - - - ( 5 ) - ( 5 )

Balance - June 30, 2024 (unaudited)

- 917,285,149 $ 917 $ 18,179 $ 288,189 $ ( 277,317 ) $ 185 $ ( 79 ) $ 30,074

Balance - September 30, 2024 (unaudited)

Balance - December 31, 2022

- 917,285,149 $ 917 $ 18,179 $ 288,013 $ ( 274,696 ) $ ( 296 ) $ ( 78 ) $ 32,039

Stock-based compensation

- - - - 72 - - - 72

- - - - - ( 1,297 ) - - ( 1,297 )

Other comprehensive loss

- - - - - - 237 - 237

Balance - June 30, 2023 (unaudited)

- 917,285,149 $ 917 $ 18,179 $ 288,085 $ ( 275,993 ) $ ( 59 ) $ ( 78 ) $ 31,051

Balance – March 31, 2024

- 917,285,149 $ 917 $ 18,179 $ 288,151 $ ( 277,057 ) $ 198 $ ( 79 ) $ 30,309

Balance - September 30, 2023 (unaudited)

comprehensive

Paid-in Capital

Balance - June 30, 2024

Stock-based compensation

- - - - 38 - - - 38

- - - - - ( 260 ) - - ( 260 )

Other comprehensive loss

- - - - - - ( 13 ) - ( 13 )

Balance - June 30, 2024 (unaudited)

- 917,285,149 $ 917 $ 18,179 $ 288,189 $ ( 277,317 ) $ 185 $ ( 79 ) $ 30,074

Balance – March 31, 2023

- 917,285,149 $ 917 $ 18,179 $ 288,047 $ ( 275,283 ) $ ( 132 ) $ ( 78 ) $ 31,650

Balance - September 30, 2024 (unaudited)

Balance - June 30, 2023

Stock-based compensation

- - - - 72 - - - 38

- - - - - ( 710 ) - - ( 710 )

Other comprehensive loss

- - - - - - 73 - 73

Balance - June 30, 2023 (unaudited)

- 917,285,149 $ 917 $ 18,179 $ 288,085 $ ( 275,993 ) $ ( 59 ) $ ( 78 ) $ 31,051

Balance - September 30, 2023 (unaudited)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

3 unchanged sentences

($ in thousands, except per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities:

7 unchanged sentences

Prepaid expenses and other current assets

Other assets and liabilities

Accounts payable and accrued liabilities

14 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the Six and Three Months Ended June 30, 2024 and 2024

For the Nine and Three Months Ended September 30, 2024 and 2024

(numbers in thousands, except percentages, share and per share data)

18 unchanged sentences

Basis of Presentation and Recent Accounting Pronouncements

The accompanying unaudited interim consolidated financial statements as of and for the three and six months ended June 30, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q.

The accompanying unaudited interim consolidated financial statements as of and for the three and nine months ended September 30, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q.

Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements.

1 unchanged sentence

All intercompany balances and transactions have been eliminated in consolidation.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for any future periods or the year ending December 31, 2024.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any future periods or the year ending December 31, 2024.

The accompanying unaudited consolidated financial statements should be read in conjunction with the Company's 2023 Annual Report on Form 10 -K filed with the Securities and Exchange Commission (“SEC”) on March 12, 2024.

5 unchanged sentences

The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value.

As a result of this assessment, the Company did not recognize any other-than-temporary impairment losses considered to be credit related for the three and six months ended June 30, 2024 and 2023.

As a result of this assessment, the Company did not recognize any other-than-temporary impairment losses considered to be credit related for the three and nine months ended September 30, 2024 and 2023.

The Company will invest excess funds to maximize investment yield, while maintaining liquidity and minimizing credit risk.

3 unchanged sentences

The Company evaluates its debt securities with unrealized losses on a quarterly basis for potential other-than-temporary impairments in value.

As a result of this assessment, the Company did not recognize any other-than-temporary impairment losses considered to be credit related for the three and six months ended June 30, 2024 and 2023.

Fair Value Measurements

8 unchanged sentences

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

As of June 30, 2024, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

As of September 30, 2024, the following table represents the Company’s fair value hierarchy for items that are required to be measured at fair value on a recurring basis:

Investments in debt securities (short-term)

89 unchanged sentences

government and agency securities

14,888 9,733 15,133 9,838

Corporate bonds

Income from these investments totaled $ 274 and $ 517 during the three and six months ended June 30, 2024, respectively, and $ 143 and $ 243 during the three and six months ended June 30, 2023, respectively.

2,890 4,605 2,931 4,552

17,778 14,338 18,064 14,390

Income from these investments totaled $ 258 and $ 775 during the three and nine months ended September 30, 2024, respectively, and $ 157 and $ 400 during the three and nine months ended September 30, 2023, respectively.

Such amounts are included as a portion of interest and investment income on the Company’s consolidated statements of operations.

Based on the Company’s review of its debt securities that are individually in an unrealized loss position at June 30, 2024, it was determined that the losses were primarily the result current economic factors, impacting all global debt and equity markets, that are the result of global macro events.

Based on the Company’s review of its debt securities that are individually in an unrealized loss position at September 30, 2024, it was determined that the losses were primarily the result of current economic factors, impacting all global debt and equity markets, that are the result of global macro events.

The impact of the Company’s investment portfolio is considered to be temporary, rather than a deterioration of overall credit quality.

As of June 30, 2024, all investments are current on their scheduled interest and dividend payments.

As of September 30, 2024, all investments are current on their scheduled interest and dividend payments.

The Company does not intend to sell and it is not likely that the Company will be required to sell these securities prior to recovering their amortized cost.

As such, the Company does not consider these securities to be other-than-temporarily impaired as of June 30, 2024.

As such, the Company does not consider these securities to be other-than-temporarily impaired as of September 30, 2024.

Trade Accounts Receivable

Trade accounts receivable consisted of the following:

September 30,

Trade accounts receivable

3 unchanged sentences

Prepaid expenses and other current assets consisted of the following:

September 30,

Prepaid service invoices

3 unchanged sentences

Inventories consisted of the following:

September 30,

Work in progress

2 unchanged sentences

Property and equipment consist of the following:

September 30,

Land, building, and improvements

4 unchanged sentences

Total property and equipment, net

Depreciation expense for three and six months ended June 30, 2024 was $ 77 and $ 156 , respectively.

Depreciation expense for three and six months ended June 30, 2023 was $ 78 and $ 156 , respectively.

Such amounts were included in selling, marketing, general, and administrative expenses within Company’s consolidated statements of operations.

Depreciation expense for three and nine months ended September 30, 2024 was $ 78 and $ 233 , respectively.

Depreciation expense for three and nine months ended September 30, 2023 was $ 78 and $ 234 , respectively.

Such amounts were included in selling, marketing, general, and administrative expenses within the Company’s consolidated statements of operations.

Patents and Trademarks, net

Patents and trademarks consisted of the following:

September 30,

Purchased and licensed patent rights

2 unchanged sentences

Accumulated amortization

( 2,361 ) ( 2,348 )

Total intangible assets, net

5 unchanged sentences

The Company amortizes capitalized patents and trademarks over an average of 10 -to- 17 -year periods.

Amortization expense for patents and trademarks was $ 5 and $ 9 for the three and six months ended June 30, 2024, respectively, and $ 6 and $ 12 for the three and six months ended June 30, 2023, respectively.

Amortization expense for patents and trademarks was $ 4 and $ 13 for the three and nine months ended September 30, 2024, respectively, and $ 4 and $ 16 for the three and nine months ended September 30, 2023, respectively.

Other assets consisted of the following:

September 30,

Utility deposits

2 unchanged sentences

Accrued liabilities consisted of the following:

September 30,

Accrued payroll, vacation, and bonuses

2 unchanged sentences

Other current liabilities consisted of the following:

September 30,

Aged payables to vendors, individuals, and other third parties

7 unchanged sentences

On December 16, 2021, the Company granted option grants under the Company’s 2012 Equity Incentive Plan, as approved to by the Board, for employees up to 1,400,000 shares of the Company’s common stock in total.

Under this plan, the Company had outstanding grants of options to purchase 3,073,000 and 2,993,000 shares of the Company’s common stock as of June 30, 2024 and December 31, 2023, respectively.

Under this plan, the Company had outstanding grants of options to purchase 3,073,000 and 2,993,000 shares of the Company’s common stock as of September 30, 2024 and December 31, 2023, respectively.

On January 27, 2015, the Company adopted its 2015 Equity Incentive Plan ( “2015 Plan”), which provided for the grant of stock options to officers, employees, consultants and directors of the Company and its subsidiaries.

5 unchanged sentences

Under ASC 718, the Company is required to measure the cost of employee services received in exchange for stock options and similar awards based on the grant-date fair value of the award and recognize this cost in the income statement over the period during which an employee is required to provide service in exchange for the award.

Stock based compensation expense attributable to these plans was $ 38 and $ 63 for the three and six months ended June 30, 2024, respectively, and $ 38 and $ 72 for the three and six months ended June 30, 2023, respectively.

Stock based compensation expense attributable to these plans was $ 42 and $ 105 for the three and nine months ended September 30, 2024, respectively, and $ 17 and $ 89 for the three and nine months ended September 30, 2023, respectively.

Expected volatilities are based on historical volatility expected over the expected life of the options.

7 unchanged sentences

Amounts recorded to lease income are comprised of base rents and direct facility expenses, recorded on a straight-line basis over the lease term.

Reimbursements for common area maintenance and utility expense are recorded as reductions to like expenses within sales, general, and administrative costs.

Reimbursements for common area maintenance and utility expenses are recorded as reductions to like expenses within sales, general, and administrative costs.

The future minimum rents due to the Company under the facility lease are as follows:

2024 (remaining six months)

2024 (remaining three months)

Loss Per Common Share

1 unchanged sentence

Diluted EPS reflects the potential dilution of securities that could share in the earnings.

Options to purchase 26,584,667 shares of common stock at prices ranging from $ 0.05 to $ 0.38 per share were outstanding at June 30, 2024, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Options to purchase 26,595,667 shares of common stock at prices ranging from $ 0.07 to $ 0.38 per share were outstanding as of June 30, 2023, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Warrants to purchase 10,066,809 shares of common stock, priced at $ 0.07 per share, outstanding at each of June 30, 2024 and June 30, 2023 were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Options to purchase 26,584,667 shares of common stock at prices ranging from $ 0.05 to $ 0.38 per share were outstanding at September 30, 2024, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Options to purchase 19,101,167 shares of common stock at prices ranging from $ 0.07 to $ 0.38 per share were outstanding as of September 30, 2023, but were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Warrants to purchase 10,066,809 shares of common stock, priced at $ 0.07 per share, outstanding at each of September 30, 2024 and September 30, 2023 were not included in the computation of diluted EPS for the same period as the inclusion would have been antidilutive, given the Company’s net loss.

Related Party Transactions

On March 10, 2016, the Company entered into the 2016 Purchase Agreement with Liquidmetal Technology Limited, providing for the purchase of 405,000,000 shares of the Company’s common stock for an aggregate purchase price of $ 63,400 .

Liquidmetal Technology Limited was a newly formed company owned by Professor Li.

In connection with the 2016 Purchase Agreement and also on March 10, 2016, the Company and Eontec entered into a license agreement pursuant to which the Company and Eontec entered into a cross-license of their respective technologies.

2 unchanged sentences

Yihao is currently the Company’s primary contract manufacturer.

As of June 30, 2024 and December 31, 2023, Professor Li is a greater-than 5 % beneficial owner of the Company and serves as the Company’s Chairman.

Equipment and services procured from Eontec, and their affiliates, were $ 143 and $ 258 during the three and six months ended June 30, 2024, respectively, and $ 43 and $ 78 during the three and six months ended June 30, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company has outstanding payables to Eontec, and their affiliates of $ 0 and $ 30 , respectively.

As of September 30, 2024 and December 31, 2023, Professor Li is a greater-than 5 % beneficial owner of the Company and serves as the Company’s Chairman.

Equipment and services procured from Eontec, and their affiliates, were $ 143 and $ 258 during the three and nine months ended September 30, 2024, respectively, and $ 43 and $ 78 during the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the Company has outstanding payables to Eontec, and their affiliates of $ 96 and $ 30 , respectively.

On May 10, 2022, Mr.

121 unchanged sentences

Results of Operations

Comparison of the three months ended June 30, 2024 and 2023

Three Months Ended June 30,

Comparison of the three months ended September 30, 2024 and 2023

Three Months Ended September 30,

Licensing and royalties

10 unchanged sentences

Net loss attributable to Liquidmetal Technologies shareholders

Revenue – Total revenue increased to $242 for the three months ended June 30, 2024 from $67 for the three months ended June 30, 2023.

Revenue – Total revenue increased to $316 for the three months ended September 30, 2024 from $127 for the three months ended September 30, 2023.

The increase was attributable to increase in product shipments primarily related to the launch of health monitoring rings utilizing our technology.

Cost of sales – Cost of sales was $187, or 77.3% of total revenue, for the three months ended June 30, 2024, as compared to $52, or 77.6% of total revenue, for the three months ended June 30, 2023.

Cost of sales – Cost of sales was $239, or 75.6% of total revenue, for the three months ended September 30, 2024, as compared to $89, or 70.1% of total revenue, for the three months ended September 30, 2023.

The increase in our cost of sales was primarily driven by lower product revenues during Q3 2023 compared to Q3 2024.

Once we are able to sustain and increase shipments of routine, commercial products and parts through our contract manufacturers, we expect our cost of sales percentages to decrease, stabilize, and be more predictable.

Gross profit – Our gross profit increased by $40 from $15 for the three months ended June 30, 2023 to $55 for the three months ended June 30, 2024.

Our gross margin percentage increased slightly from Q2 2023 to Q2 2024.

Gross profit – Our gross profit increased by $39 from $38 for the three months ended September 30, 2023 to $77 for the three months ended September 30, 2024.

Our gross margin percentage decreased slightly from Q3 2023 to Q3 2024.

Our gross profit percentages have fluctuated and may continue to fluctuate based on production volumes and quoted production prices per unit and may not be representative of our future business.

If we are able to sustain and increase shipments of routine, commercial products and parts through future orders to third party contract manufacturers, we expect our gross profit percentages to stabilize, increase, and be more predictable.

Selling, marketing, general and administrative – Selling, marketing, general, and administrative expenses decreased by $95 to $857, or 354.1% of revenue, for the three months ended June 30, 2024 from $952, or 1,420.9% of revenue, for the three months ended June 30, 2023.

The decrease in expenses was primarily attributable to decrease in trade show and investment relations expenses in Q2 2024 compared to Q2 2023.

Research and development – Research and development expenses stayed the same in Q2 2024 compared to Q2 2023.

Selling, marketing, general and administrative – Selling, marketing, general, and administrative expenses increased by $157 to $903, or 285.8% of revenue, for the three months ended September 30, 2024 from $746, or 587.4% of revenue, for the three months ended September 30, 2023.

The increase in expenses was primarily attributable to an increase in operating expenses year over year.

Research and development – Research and development expenses stayed similar in Q3 2024 compared to Q3 2023.

Going forward, we will continue to perform research and development of new Liquidmetal alloys and related processing capabilities, albeit on a reduced basis.

2 unchanged sentences

Interest and Investment Income – Interest and investment income relates to interest earned from our cash deposits and investments in debt securities for the respective periods.

Interest and investment income was $274 and $143 for the three months ended June 30, 2024 and 2023, respectively.

The increase was primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government in Q2 2024 compared to Q2 2023.

Interest and investment income was $258 and $157 for the three months ended September 30, 2024 and 2023, respectively.

The increase was primarily due to higher overall yields on debt securities as a result of interest rate increases by the government in Q3 2024 compared to Q3 2023.

Lease income – Lease income relates to straight-line rental income received under the Facility Lease.

Such amounts were $89 and $89 for the three months ended June 30, 2024 and 2023, respectively.

Other income – Other income relates to collections from previously written off accounts receivables that were deemed uncollectable and employee retention tax credits for the three months ended June 30, 2024.

Such amounts were $89 and $89 for the three months ended September 30, 2024 and 2023, respectively.

Other income – Other income relates to employee retention tax credits for the three months ended September 30, 2024.

We did not have any in the prior year in the same period.

Comparison of the six months ended June 30, 2024 and 2023

Six Months Ended June 30, 2024

Comparison of the nine months ended September 30, 2024 and 2023

Nine Months Ended September 30,

Licensing and royalties

10 unchanged sentences

Net loss attributable to Liquidmetal Technologies shareholders

Revenue – Total revenue increased to $415 for the six months ended June 30, 2024 from $97 for the six months ended June 30, 2023.

Revenue – Total revenue increased to $731 for the nine months ended September 30, 2024 from $224 for the nine months ended September 30, 2023.

The increase was attributable to increase in product shipments primarily related to the launch of health monitoring rings utilizing our technology.

Cost of sales – Cost of sales was $321, or 77.3% of total revenue, for the six months ended June 30, 2024, as compared to $75, or 77.3% of total revenue, for the six months ended June 30, 2023.

The increase in our cost of sales was primarily driven by lower product revenues during six months ended June 30, 2023 compared to six months ended June 30, 2024.

Cost of sales – Cost of sales was $560, or 76.6% of total revenue, for the nine months ended September 30, 2024, as compared to $164, or 73.2% of total revenue, for the nine months ended September 30, 2023.

The increase in our cost of sales was primarily driven by lower product revenues during nine months ended September 30, 2023 compared to nine months ended September 30, 2024.

Gross profit – Our gross profit increased by $72 from $22 for the six months ended June 30, 2023 to $94 for the six months ended June 30, 2024.

Our gross margin percentage had no change from six months ended June 30, 2023 to six months ended June 30, 2024.

Gross profit – Our gross profit increased by $111 from $60 for the nine months ended September 30, 2023 to $171 for the nine months ended September 30, 2024.

Our gross profit percentages have fluctuated and may continue to fluctuate based on production volumes and quoted production prices per unit and may not be representative of our future business.

Selling, marketing, general and administrative – Selling, marketing, general, and administrative expenses decreased by $138 to $1,620, or 390.4% of revenue, for the six months ended June 30, 2024 from $1,758, or 1,812.4% of revenue, for the six months ended June 30, 2023.

The decrease in expenses was primarily attributable to decrease in trade show and investment relations expenses during the six months ended June 30, 2024 compared to the same comparative period in the prior year.

Research and development – Research and development expenses decreased to $9 for the six months ended June 30, 2024 from $11 for the six months ended June 30, 2023.

Selling, marketing, general and administrative – Selling, marketing, general, and administrative expenses increased by $20 to $2,524, or 345.3% of revenue, for the nine months ended September 30, 2024 from $2,504, or 1117.9% of revenue, for the nine months ended September 30, 2023.

The increase in expenses was primarily attributable to increase in operating expenses during the nine months ended September 30, 2024 compared to the same comparative period in the prior year.

Research and development – Research and development expenses stayed similar during the nine months ended September 30, 2024 compared to the same period in the prior year.

Going forward, we will continue to perform research and development of new Liquidmetal alloys and related processing capabilities, albeit on a reduced basis.

2 unchanged sentences

Interest and Investment Income – Interest and investment income relates to interest earned from our cash deposits and investments in debt securities for the respective periods.

Interest and investment income was $517 and $243 for the six months ended June 30, 2024 and 2023, respectively.

The increase was primarily due to higher overall yields on debt securities as a result of an increase in overall interest rate increases by the government during the six months ended June 30, 2024 compared to same comparative period in the prior year.

Interest and investment income was $775 and $400 for the nine months ended September 30, 2024 and 2023, respectively.

The increase was primarily due to higher overall yields on debt securities as a result of higher overall interest rates by the government during the nine months ended September 30, 2024 compared to same comparative period in the prior year.

Lease income – Lease income relates to straight-line rental income received under the Facility Lease.

Such amounts were $178 and $207 for the six months ended June 30, 2024 and 2023, respectively.

Such amounts were $267 and $296 for the nine months ended September 30, 2024 and 2023, respectively.

Other income – Other income relates to collections from previously written off accounts receivables that were deemed uncollectable and employee retention tax credits for the nine months ended September 30, 2024.

We did not have any in the prior year in the same period.

1 unchanged sentence

Cash used in operating activities

Cash used in operating activities totaled $143 and $734 for the six months ended June 30, 2024 and 2023, respectively.

Cash used in operating activities totaled $619 135 and $1,200 for the nine months ended September 30, 2024 and 2023, respectively.

The cash was primarily used to fund operating expenses related to our business and product development efforts.

Cash provided by (used in) investing activities

Cash provided by (used in) investing activities totaled ($1,327) and $8,414, for the six months ended June 30, 2024 and 2023, respectively.

Cash provided by (used in) investing activities totaled ($3,812) and $8,414, for the nine months ended September 30, 2024 and 2023, respectively.

Investing inflows primarily consist of proceeds from the sale of debt securities.

1 unchanged sentence

Cash provided by financing activities

The Company did not have any financing activities during the six months ended June 30, 2024 and 2023.

The Company did not have any financing activities during the nine months ended September 30, 2024 and 2023.

Financing arrangements and outlook

2 unchanged sentences

These factors have previously required that we engage in equity sales under various stock purchase agreements to support its operations and strategic initiatives.

However, as of June 30, 2024, we had $7,372 in cash and restricted cash, as well as $15,793 in investments in debt securities.

However, as of September 30, 2024, we had $4,895 in cash and restricted cash, as well as $18,064 in investments in debt securities.

We view this total of $22,959 as readily available sources of liquidity in the event needed to advance our existing strategy, and/or pursue an alternative strategy.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements