Liquidmetal Technologies Reports Third Quarter 2012 Results

RANCHO SANTA MARGARITA, Calif.--(BUSINESS WIRE)--Nov. 13, 2012-- Liquidmetal® Technologies Inc. (LTI) (OTCQB: LQMT), the leading developer of amorphous alloys and composites, reported results for the third quarter ended September 30, 2012.

Q3 2012 Operational Highlights

During the quarter, the company shipped four new Liquidmetal prototype parts to customers in the industrial, medical, and aerospace industries, bringing the total number of prototypes shipped in 2012 to seven.
LTI expanded its strategic partnership with Materion Brush, the company's certified Liquidmetal alloy production partner, adding the expertise and customer relationships of their global sales team to LTI's sales and marketing efforts.
LTI engaged Nomad Sales, an independent manufacturer's representative firm, to promote commercial applications of Liquidmetal in the aerospace, medical and industrial markets. The Nomad Sales partners each have more than 25 years of industry experience, and will leverage their relationships to promote Liquidmetal alloy in the Midwest region of the U.S.
At quarter-end, the company's IP portfolio included more than 50 licensed U.S. patents, with an additional 50+ patent applications pending. Its patent applications relate to the composition, processing, and application of Liquidmetal alloys.
LTI completed a $12 million senior convertible note financing to fund additional sales and marketing initiatives focused on accelerating customer acceptance and revenue growth.

Management Commentary

"During the third quarter of 2012, we made progress toward the continued commercialization of our revolutionary Liquidmetal technology," said Tom Steipp, president and CEO of Liquidmetal Technologies. "We achieved several operational milestones in the quarter, including the delivery of four new prototype parts, the expansion of our sales reach through partnerships with Materion and Nomad Sales, and the shipment of our first production parts as produced by our new certified Liquidmetal manufacturing partners. We believe that we now have the resources and infrastructure in place to support continued growth of prototype parts leading to full production within our targeted applications and accounts."

Q3 2012 Financial Summary

In the third quarter of 2012, the company generated nominal revenues as it focused on penetrating target applications and customers to sell prototype parts.

Total operating expenses in the third quarter of 2012 were $1.6 million, compared to $2.3 million in the same year-ago period. The year-over-year decrease is primarily due to a one-time settle expense recognized in Q3 2011.

Cash and cash equivalents totaled $8.7 million at September 30, 2012, as compared to $1.5 million at the end of the prior quarter. The increase in cash was due to the $12.0 million capital raise completed in July 2012.

Conference Call

Liquidmetal Technologies' management will hold a conference call later today (November 13, 2012) to discuss these results. The company's President and CEO Tom Steipp and CFO Tony Chung will host the call starting at 4:30 p.m. Eastern time. A question and answer session will follow management's presentation.

Date: Tuesday, November 13, 2012
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 888-263-2884
International: 913-905-3226
Conference ID#: 9941801

The conference call will be broadcast simultaneously and available for replay via the investors section of the company's website at www.liquidmetal.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

About Liquidmetal Technologies

Rancho Santa Margarita, California-based Liquidmetal Technologies, Inc. is the leading developer of bulk alloys and composites that utilize the performance advantages offered by amorphous alloy technology. Amorphous alloys are unique materials that are distinguished by their ability to retain a random structure when they solidify, in contrast to the crystalline atomic structure that forms in ordinary metals and alloys. Liquidmetal Technologies is the first Company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. For more information, go to www.liquidmetal.com.

Forward-Looking Statement

This press release contains "forward-looking statements," including but not limited to statements regarding the advantages of Liquidmetal's amorphous alloy technology, scheduled manufacturing of customer parts and other statements associated with Liquidmetal's technology and operations. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Liquidmetal's expectations and projections. Risks and uncertainties include, among other things; customer adoption of Liquidmetal's technologies and successful integration of those technologies into customer products; potential difficulties or delays in manufacturing products incorporating Liquidmetal's technologies; Liquidmetal's ability to fund its current and anticipated operations; the ability of third party suppliers and manufacturers to meet customer product requirements; general industry conditions; general economic conditions; and governmental laws and regulations affecting Liquidmetal's operations. Additional information concerning these and other risk factors can be found in Liquidmetal's public periodic filings with the U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Liquidmetal's 2011 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.


LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)

			September 30,			December 31,
			2012			2011
			(Unaudited)			(Audited)
ASSETS

Current assets:
	Cash		$	8,701		$	122
	Trade accounts receivable, net of allowance for doubtful accounts of $0 and $0			98			241
	Related party notes receivable			200			200
	Prepaid expenses and other current assets			846			248
		Total current assets	$	9,845		$	811
Property and equipment, net				154			162
Patents and trademarks, net				901			968
Other assets				32			52
		Total assets	$	10,932		$	1,993

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
	Accounts payable			235			803
	Accrued liabilities			170			457
	Accrued dividends			222			571
	Deferred revenue			-			67
	Short-term debt			-			1,712
	Convertible note, net of debt discount of $8,177			2,823			-
	Embedded conversion feature liability			6,080			-
		Total current liabilities	$	9,530		$	3,610

Long-term liabilities
	Warrant liabilities			5,302			-
	Other long-term liabilities			856			609
		Total liabilities	$	15,688		$	4,219

Shareholders' deficit:
	Convertible, redeemable Series A Preferred Stock, $0.001 par value; 10,000,000
		shares authorized; 506,936 and 1,299,151 shares issued and outstanding at
		September 30, 2012 and December 31, 2011, respectively		-			1
	Common stock, $0.001 par value; 400,000,000 shares authorized; 196,962,069
		and 134,467,554 shares issued and outstanding at September 30, 2012
		and December 31, 2011, respectively		193			130
	Warrants			18,179			24,438
	Additional paid-in capital			163,771			149,064
	Accumulated deficit			(186,899	)		(175,859	)
		Total shareholders' deficit	$	(4,756	)	$	(2,226	)

		Total liabilities and shareholders' deficit	$	10,932		$	1,993

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)

			For the Three Months						For the Nine Months
			Ended September 30,						Ended September 30,
			2012			2011			2012			2011
						(Restated)						(Restated)
Revenue
	Products		$	80		$	112		$	471		$	345
	Licensing and royalties			27			-			46			381
		Total revenue		107			112			517			726

Cost of revenue				73			43			256			212
	Gross profit			34			69			261			514

Operating expenses
	Selling, marketing, general and administrative			1,372			877			3,338			2,741
	Research and development			217			273			616			886
	Manufacturing contract costs			-			-			6,300			-
	Settlement expense			-			1,127			-			1,712
		Total operating expenses		1,589			2,277			10,254			5,338
Operating loss from continuing operations				(1,555	)		(2,208	)		(9,993	)		(4,824	)

	Change in value of warrants			4,184			743			4,010			1,327
	Change in value of embedded conversion feature liability			2,785			-			2,785			-
	Debt discount amortization			(6,247	)		-			(6,247	)		-
	Financing costs			-			-			(1,355	)		-
	Other income			-			20			-			26
	Interest expense			(240	)		(17	)		(258	)		(48	)
	Interest income			10			4			18			18

Loss from continuing operations before income taxes				(1,063	)		(1,458	)		(11,040	)		(3,501	)

	Income taxes			-			-			-			-

Loss from continuing operations				(1,063	)		(1,458	)		(11,040	)		(3,501	)

Discontinued operations:
	Loss on disposal of subsidiary, net of tax			-			(331	)		-			(331	)
	Loss from operations of discontinued operations, net of taxes			-			(96	)		-			(637	)

	Net loss			(1,063	)		(1,885	)		(11,040	)		(4,469	)

Other comprehensive income
	Foreign exchange translation gain (loss) during the period			-			(25	)		-			11
		Comprehensive loss	$	(1,063	)	$	(1,910	)	$	(11,040	)	$	(4,458	)

Per common share basic and diluted:

	Loss from continuing operations		$	(0.01	)	$	(0.01	)	$	(0.06	)	$	(0.03	)
	Loss from discontinued operations			-			-			-			-
	Basic and diluted loss per share		$	(0.01	)	$	(0.01	)	$	(0.06	)	$	(0.03	)

Source: Liquidmetal® Technologies Inc.

Company Contacts:
Liquidmetal Technologies, Inc.
Otis Buchanan
Media Relations
949-635-2120
otis.buchanan@liquidmetal.com
or
Liolios Group, Inc.
Matt Glover or Michael Koehler
Investor Relations
949-574-3860
LQMT@liolios.com

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