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Licensing agreement with Apple helps Liquidmetal pay off $11M debt

post #1 of 45
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Following an exclusive agreement with Apple to license its unique metal alloy for an undisclosed sum, Liquidmetal Technologies immediately paid off $10.9 million in debt, suggesting the deal between the two companies was worth at least that much.

The payments were revealed in Liquidmetal's 8-K filing with the U.S. Securities and Exchange Commission this week. While it is still unknown exactly how much Apple paid Liquidmetal for the exclusive rights to use its more durable metal alloys in portable electronic devices, the filing reveals the deal was likely worth at least $10.9 million.

"The foregoing obligations were paid with proceeds from the previously announced strategic licensing transaction with Apple Inc.," the filing reads.

The debt payments were made on Aug. 5, the very same day that Apple and Liquidmetal entered into their agreement to utilize amorphous metal alloys with unique atomic structures. The deal could result in Apple products that are stronger, lighter, and resistant to wear and corrosion.

The largest payment from Liquidmetal was $8.2 million to repay all of its outstanding 8% Senior Secured Convertible Notes. Another $2.4 million for unsecured debt was paid to Ricardo Salas and Norden LLC, while $0.3 million in secured debt was paid to HANA Financial.

The material owned by Liquidmetal is a metal alloy developed by a research team at the California Institute of Technology that are 2.5 times the strength of commonly used titanium alloy and 1.5 times the hardness of stainless steel found in portable electronic devices. Introduced for commercial applications in 2003, the product has since been found in medical equipment, sporting goods, and devices used by the U.S. Department of Defense.

Apple and Liquidmetal entered into a paid, exclusive license that allows only the Cupertino, Calif., company to use the intellectual property in electronic products. Liquidmetal remains free to license its metal alloy to companies for products other than electronics.



The technology allows for thinner, smaller design in products while offering greater protection for internal components, with a scratch and corrosion resistant exterior.

Whether any existing Apple products already use Liquidmetal's intellectual property is unknown. A spokesperson for the company contacted by AppleInsider declined to comment.



Past devices where Liquidmetal's technology was utilized include the Nokia Vertu smartphone, Sandisk Sansa media player, and Sandisk U3 Smart thumb drives. The product was also used to create strong hinge components for devices like flip smartphones.

A report from the Associated Press said it's not a sure thing that Liquidmetal's material will ever make it into Apple's products. "Though it matches the sleek Apple aesthetic, it's prohibitively expensive," it said, noting that the material contains large amounts of platinum, which costs $1,500 per ounce.

The report said that Liquidmetal's material can be cast precisely, with little or no need for machining. The company has also made tougher, more durable variants of "metallic glass."
post #2 of 45
Anyone want to license me to relieve my debt?
post #3 of 45
Perhaps Apple will simply use this alloy to improve their hinges as well.

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post #4 of 45
Quote:
Originally Posted by AppleInsider View Post

Past devices where Liquidmetal's technology was utilized include the Nokia Vertu smartphone, Sandisk Sansa media player, and Sandisk U3 Smart thumb drives. The product was also used to create strong hinge components for devices like flip smartphones.

A report from the Associated Press said it's not a sure thing that Liquidmetal's material will ever make it into Apple's products. "Though it matches the sleek Apple aesthetic, it's prohibitively expensive," it said, noting that the material contains large amounts of platinum, which costs $1,500 per ounce.

The report said that Liquidmetal's material can be cast precisely, with little or no need for machining. The company has also made tougher, more durable variants of "metallic glass."

Besides these uses a perhaps more cost effective use is in coatings see

http://www.liquidmetal.com/applicati...industrial.asp

You can make out of cheaper materials and then use coatings have a durable scratch resistant case.
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post #5 of 45
Quote:
Originally Posted by AppleInsider View Post

A report from the Associated Press said it's not a sure thing that Liquidmetal's material will ever make it into Apple's products. "Though it matches the sleek Apple aesthetic, it's prohibitively expensive," it said, noting that the material contains large amounts of platinum, which costs $1,500 per ounce.

The report said that Liquidmetal's material can be cast precisely, with little or no need for machining. The company has also made tougher, more durable variants of "metallic glass."

This is the stupidest thing I've ever heard. What company buys an exclusive license for something they never plan to use??? I'm assuming before they spend millions of dollars, they would have experimented and decided if they were going to use it or not. Seriously, people.
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post #6 of 45
Quote:
Originally Posted by Smiles77 View Post

This is the stupidest thing I've ever heard. What company buys an exclusive license for something they never plan to use??? I'm assuming before they spend millions of dollars, they would have experimented and decided if they were going to use it or not. Seriously, people.

It's the AP. They're not exactly current on science.
post #7 of 45
Quote:
Originally Posted by ghostface147 View Post

Anyone want to license me to relieve my debt?

Depends on what your measurements are
post #8 of 45
Could be that Apple already used parts of this IP in the development of the IP4 case. Jobs stated that a newly patented alloy was created just for this purpose, but no other details. The IP that LiquidMetal owns could have decreased the cost and time involved in the development of a new alloy dramatically. Apple may have licensed limited use of the IP initially and then negotiated the broad exclusive rights agreement later. Just a thought....
post #9 of 45
Quote:
Originally Posted by Smiles77 View Post

This is the stupidest thing I've ever heard. What company buys an exclusive license for something they never plan to use???

Any company that wants to keep it from the competition. Why else would they pay for exclusive rights?

Why did Google by AdMob? Because they couldn't make their own mobile advertising platform? Please. Google has enough money to write their own OS for advertising. They just wanted to keep Apple out of the ad business. See? Happens all the time.
post #10 of 45
Yield strength is one measurement. What about the density--how does the density of the Liquidmetal alloy compare with that of Titanium alloy? I'd like to see the ratio of yield strength to density.
post #11 of 45
Quote:
Originally Posted by Foo2 View Post

Yield strength is one measurement. What about the density--how does the density of the Liquidmetal alloy compare with that of Titanium alloy? I'd like to see the ratio of yield strength to density.

"metallic glass" Does this sound remotely like "transparent Aluminum" ????? :-)

Just a thought,
en
post #12 of 45
Quote:
Originally Posted by foobar View Post

Any company that wants to keep it from the competition. Why else would they pay for exclusive rights?

Why did Google by AdMob? Because they couldn't make their own mobile advertising platform? Please. Google has enough money to write their own OS for advertising. They just wanted to keep Apple out of the ad business. See? Happens all the time.

I was ignoring that because for all intents and purposes that is the stupidest thing of all time: second only to doing nothing with it.
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post #13 of 45
Quote:
Originally Posted by eldernorm View Post

"metallic glass" Does this sound remotely like "transparent Aluminum" ????? :-)

Just a thought,
en

Exactly!

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post #14 of 45
Quote:
Originally Posted by eldernorm View Post

"metallic glass" Does this sound remotely like "transparent Aluminum" ????? :-)

Just a thought,
en

Nah, the amorphous part refers to the lack of crystal organization of atoms w/in these goofy metals. It's pretty funky how they make 'em. All the electrons floating around the jacked atom arrangement will still interact w/ photons way too much for it to be transparent. Sorry man.
post #15 of 45
Quote:
Originally Posted by Smiles77 View Post

I was ignoring that because for all intents and purposes that is the stupidest thing of all time: second only to doing nothing with it.

We have #1 and #2, what's #3?
post #16 of 45
Quote:
Originally Posted by stompy View Post

We have #1 and #2, what's #3?

Number 3 would be giving it to Google for free.

Not sure what to make of that, actually.
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post #17 of 45
Quote:
Originally Posted by Smiles77 View Post

This is the stupidest thing I've ever heard. What company buys an exclusive license for something they never plan to use??? I'm assuming before they spend millions of dollars, they would have experimented and decided if they were going to use it or not. Seriously, people.

Sometimes companies are purchased for the intellectual property, not just their products.
post #18 of 45
My only concern would be that some potential competitor to Apple may buy LQMT at a handsome premium (which, at one level I hope happens, since I bought at $0.44 and the stock is currently trading at $1.65 ). Apple might be thrown into a situation where that competitor has an inside look at its future product plans (a la Schmidt and his role in Apple's board).
post #19 of 45
Quote:
Originally Posted by Foo2 View Post

Yield strength is one measurement. What about the density--how does the density of the Liquidmetal alloy compare with that of Titanium alloy? I'd like to see the ratio of yield strength to density.

See http://www.liquidmetal.com/technology/, where they provide comparison info on yield strength and elastic limit. No specific info on density, although they claim a superior strength/weight ratio.

Might have to look up the inventors' published papers, I guess.
post #20 of 45
Quote:
Originally Posted by foobar View Post

Any company that wants to keep it from the competition. Why else would they pay for exclusive rights?

Why did Google by AdMob? Because they couldn't make their own mobile advertising platform? Please. Google has enough money to write their own OS for advertising. They just wanted to keep Apple out of the ad business. See? Happens all the time.

Did they succeed? Did they think they had a chance to succeed? AdMob had the biggest mobile ad market share. If Google was so confident why couldn't they just compete with AdMob with or without Apple ownership?

It seems to me Google had already pissed Apple off with Android. Now they are frantically trying to protect their core business.
post #21 of 45
Quote:
Originally Posted by anantksundaram View Post

My only concern would be that some potential competitor to Apple may buy LQMT at a handsome premium (which, at one level I hope happens, since I bought at $0.44 and the stock is currently trading at $1.65 ). Apple might be thrown into a situation where that competitor has an inside look at its future product plans (a la Schmidt and his role in Apple's board).

And which blockhead competitor is going to do that knowing that Apple has the exclusive rights to use the material in electronic devices?
post #22 of 45
Quote:
Originally Posted by peter02l View Post

And which blockhead competitor is going to do that knowing that Apple has the exclusive rights to use the material in electronic devices?

Even being unable to use the material, I believe the idea is that gaining insight into Apple's future plans would be worth a lot. Then again, aren't there laws about using insights gained by being a shareholder of a company in the competing products of your company?
post #23 of 45
Quote:
Originally Posted by anantksundaram View Post

My only concern would be that some potential competitor to Apple may buy LQMT at a handsome premium (which, at one level I hope happens, since I bought at $0.44 and the stock is currently trading at $1.65 ). Apple might be thrown into a situation where that competitor has an inside look at its future product plans (a la Schmidt and his role in Apple's board).

Assuming that Apple's attorneys are doing their jobs, it is extremely likely that the license agreement contains a right of first refusal. If someone else offers to buy the company, Apple gets the right to buy it for those terms first.
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post #24 of 45
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Originally Posted by jragosta View Post

Assuming that Apple's attorneys are doing their jobs, it is extremely likely that the license agreement contains a right of first refusal. If someone else offers to buy the company, Apple gets the right to buy it for those terms first.

Fair point.
post #25 of 45
Quote:
Originally Posted by Smiles77 View Post

This is the stupidest thing I've ever heard. What company buys an exclusive license for something they never plan to use??? I'm assuming before they spend millions of dollars, they would have experimented and decided if they were going to use it or not. Seriously, people.

I would assume that Apple has some ideas that would utilize this in a way that would make the item better than what the competition has, or could make without it. But that doesn't mean that Apple has definite plans for its use, or that they even ran tests on it themselves.

Apple now has so much money that if they see a product or idea that they may find useful, and it doesn't cost that much, they could spend the small amount to wrap it up if they could use it. And if they don't, a few tens lf millions means so little to them that it would be worth it to just have it waiting for them if they do decide to use it for something later. And then of course, it prevents anyone else from coming up with bright ideas.
post #26 of 45
Quote:
Originally Posted by dtidmore View Post

Could be that Apple already used parts of this IP in the development of the IP4 case. Jobs stated that a newly patented alloy was created just for this purpose, but no other details. The IP that LiquidMetal owns could have decreased the cost and time involved in the development of a new alloy dramatically. Apple may have licensed limited use of the IP initially and then negotiated the broad exclusive rights agreement later. Just a thought....

They said Stainless Steel alloy.
post #27 of 45
Quote:
Originally Posted by Foo2 View Post

Yield strength is one measurement. What about the density--how does the density of the Liquidmetal alloy compare with that of Titanium alloy? I'd like to see the ratio of yield strength to density.

There's lots of info on this on the internet. Just Google liquidmetal. Lots of stuff will come up, including the density of the various alloys.

They have three main alloys. One based on beryllium, another based on zirconium, and the last based on titanium.
post #28 of 45
Quote:
Originally Posted by eldernorm View Post

"metallic glass" Does this sound remotely like "transparent Aluminum" ????? :-)

Just a thought,
en

In normal thicknesses, there is no such thing as transparent metal. If silver is beaten thinly enough to a thousanths of an inch or so in thickness, it becomes transparent, but that's about it.
post #29 of 45
Quote:
Originally Posted by anantksundaram View Post

My only concern would be that some potential competitor to Apple may buy LQMT at a handsome premium (which, at one level I hope happens, since I bought at $0.44 and the stock is currently trading at $1.65 ). Apple might be thrown into a situation where that competitor has an inside look at its future product plans (a la Schmidt and his role in Apple's board).

What they did was to spin off another company for the purpose of licensing all their IP. Then this company licensed this IP to Apple, and the rest back to the main company. They won't know what Apple's plans are.
post #30 of 45
Quote:
Originally Posted by peter02l View Post

Did they succeed? Did they think they had a chance to succeed? AdMob had the biggest mobile ad market share. If Google was so confident why couldn't they just compete with AdMob with or without Apple ownership?

It seems to me Google had already pissed Apple off with Android. Now they are frantically trying to protect their core business.

Unlike Apple, Google is just an Ad placement company. Everything else they do is just to offer a platform to put those Ads into. To them, Apple is a big threat, because with the iOS products and their apps, people are looking at Google's Ad platform less and less. The apps deliver most of the information that would otherwise be gotten through the Google search box.

If Apple is involved in Ads too, then that's a double threat to Google. I can understand them being very nervous about Apple getting the largest internet Ad agency. Did their buying AdMob out from Apple help them? Not likely in the long run, but perhaps it set Apple's plans back a few months.
post #31 of 45
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Originally Posted by Market_Player View Post

Depends on what your measurements are

Hope for your sake a reply doesn't come back "10.5 inches and it produces it's own liquid mettle!"
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post #32 of 45
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Originally Posted by Curmudgeon View Post

Sometimes companies are purchased for the intellectual property, not just their products.

Since Apple didn't buy the company what was the point of your comment?!

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post #33 of 45
Quote:
Originally Posted by eldernorm View Post

"metallic glass" Does this sound remotely like "transparent Aluminum" ????? :-)
Just a thought,
en

I think this refers to the structure of the material. Metal has a crystalline structure. Liquid metal like glass has an amorphous or non-crystilline structure. Glass is like a liquid.

Not all glass is transparent.
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post #34 of 45
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Originally Posted by melgross View Post

What they did was to spin off another company for the purpose of licensing all their IP. Then this company licensed this IP to Apple, and the rest back to the main company. They won't know what Apple's plans are.

Perhaps that was obvious from the filing, but could you point me to a cite. Many thanks!
post #35 of 45
Please, refrain from long quotes; They are unnecessary to the intelligent reader and they clutter the screen.

Also, I wonder when Liquidmetal would make it into road/racing bicycles to perhaps replace titanium.
post #36 of 45
Quote:
Originally Posted by FineTunes View Post

I think this refers to the structure of the material. Metal has a crystalline structure. Liquid metal like glass has an amorphous or non-crystilline structure. Glass is like a liquid.

Most of that is not true.

First, metals can be crystalline or amorphous or (most commonly) a mixture of crystalline and amorphous.

Second, Glas is not like a liquid. It is typically described as a supercooled liquid, but current research shows that to not be a very accurate description.

Even for liquid metal, there could be tiny crystalline areas (perhaps domains of just a few angstroms.
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post #37 of 45
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Originally Posted by foobar View Post

Any company that wants to keep it from the competition. Why else would they pay for exclusive rights?

Why did Google by AdMob? Because they couldn't make their own mobile advertising platform? Please. Google has enough money to write their own OS for advertising. They just wanted to keep Apple out of the ad business. See? Happens all the time.

I'm pretty sure they will use it. It being expensive is no reason not to use it, especially if you're Apple.

If SANDISK!! could use it in their U3 Flash drives and Sansa media players (and trust me, I KNOWW exactly how cheap SanDisk is as a company) then I think Apple can comfortably use it. It isn't made of diamonds.
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post #38 of 45
Quote:
Originally Posted by melgross View Post

In normal thicknesses, there is no such thing as transparent metal. If silver is beaten thinly enough to a thousanths of an inch or so in thickness, it becomes transparent, but that's about it.

Various metals can be combined with oxygen and crystallized into a completely transparent form.
post #39 of 45
Quote:
Originally Posted by tonton View Post

Various metals can be combined with oxygen and crystallized into a completely transparent form.

Then they're no longer metals - they're metal oxides.

Your statement is like saying it's OK to eat sodium and bathe in chlorine because sodium chloride is common table salt.
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post #40 of 45
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Originally Posted by jragosta View Post

Then they're no longer metals - they're metal oxides.

Your statement is like saying it's OK to eat sodium and bathe in chlorine because sodium chloride is common table salt.

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