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

Posted:
in General Discussion edited January 2014
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."
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Comments

  • Reply 1 of 44
    Anyone want to license me to relieve my debt?
  • Reply 2 of 44
    Perhaps Apple will simply use this alloy to improve their hinges as well.
  • Reply 3 of 44
    finetunesfinetunes Posts: 2,065member
    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.
  • Reply 4 of 44
    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.
  • Reply 5 of 44
    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.
  • Reply 6 of 44
    Quote:
    Originally Posted by ghostface147 View Post


    Anyone want to license me to relieve my debt?



    Depends on what your measurements are
  • Reply 7 of 44
    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....
  • Reply 8 of 44
    foobarfoobar Posts: 102member
    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.
  • Reply 9 of 44
    foo2foo2 Posts: 1,077member
    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.
  • Reply 10 of 44
    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
  • Reply 11 of 44
    smiles77smiles77 Posts: 668member
    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.
  • Reply 12 of 44
    sockrolidsockrolid Posts: 2,788member
    Quote:
    Originally Posted by eldernorm View Post


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



    Just a thought,

    en



    Exactly!
  • Reply 13 of 44
    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.
  • Reply 14 of 44
    stompystompy Posts: 310member
    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?
  • Reply 15 of 44
    smiles77smiles77 Posts: 668member
    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.
  • Reply 16 of 44
    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.
  • Reply 17 of 44
    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).
  • Reply 18 of 44
    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.
  • Reply 19 of 44
    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.
  • Reply 20 of 44
    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?
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