Liquidmetal (LQMT) and Apple

In past articles we have discussed companies such as Nanosteel and Modumetal that are using nanotechnology to create metals and coatings with superior properties that stand to displace commodity metals in applications from automotive to aerospace. One company that has a long history of marketing amorphous alloys with very unique properties is LiquidMetal. As mentioned many times in the past, over-the-counter (OTC) companies merit a great deal of scrutiny as they generally tend to lose investors’ money.

LQMT_Logo

In May of 2002, Tampa based Liquidmetal (OTCBB:LQMT) had an IPO on Nasdaq with the share price reaching almost $20 per share giving the company a market cap of nearly $1 billion dollars. LQMT’s value proposition was a unique amorphous alloy targeted to be used in electronics casings for cell phones, components for golf clubs, watch cases, and medical devices. Fast forward to today andLiquidmetal has been delisted from Nasdaq to the over-the-counter (OTC) exchange with a market cap that sits at around $50 million and a current share price of 14 cents. For the six months ended June 30 2013 LQMT had taken in $250 thousand in revenues and had an accumulated deficit of over $195 million. If you invested in LQMT at their IPO in 2002 you would have already lost over 99% of your investment.

LQMT_Stock_Chart
Source: Google Finance

Technology
Liquidmetal’s patented amorphous alloy is a metal comprised of Zirconium, Titanium, Copper, Nickel and Beryllium. The alloy is unique in that it shares the best qualities of both metals and plastics. Due to its unique atomic structure, the Liquidmetal alloy arranges its atoms in random formations, like a plastic or liquid. This alloy can be injection-molded into precise shapes just as you would plastic yet maintains the properties of metal with a strength twice that of titanium alloys.

Liquidmetal and Apple
Much speculation and stock price volatility of LQMT over the years has surrounded the relationship between Apple and Liquidmetal. In 2010, Liquidmetal entered into a contract with Apple offering them the following for a one-time payment of $20 million:

Licensor grants to Licensee a fully paid-up, royalty-free,irrevocable, perpetual, worldwide exclusive license and sublicense, with the right to grant sublicenses, under the LMT Technology in the exclusive field of use of Consumer Electronic Products, to use, reproduce, publish, display, distribute, perform, exploit and disclose the LMT Technology.

Liquidmetal has since used the one-time payment to pay down debt and finance continuing operations of the company. While rumors abound regarding the use of Liquidmetal in various Apple products, the contract is very clear when it states that LQMT stands to gain no royalties from Apple regardless of whether or not the amoprhous alloy is implemented in any number of Apple products. While the endorsement of LQMT’s technology by Apple is positive, Liquidmetal investors will need to look elsewhere to realize the windfall that they had hoped could have been realized from their relationship with Apple.

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