Liquidmetal Technologies reports growing losses

Liquidmetal Technologies reports growing losses
Liquidmetal Technologies reports growing losses
Liquidmetal Technologies reports growing losses

Liquid metal injection molding is a potentially disruptive technology for the production of precise, small parts for medical devices. Series production costs are much lower than machining, an advantage that grows as volumes rise. Considerable strength derives from the material’s amorphous atomic structure.

One major medical OEM had 150 senior engineers take time in the middle of the day to hear a presentation from Liquidmetal Technologies (Rancho Santa Margarita, CA), the only company commercializing the technology, which has been the subject of significant research at CalTech, MIT, Yale and Cambridge. Potential applications for Liquidmetal alloys include specialized blades, orthopedic instruments, dental devices, and general surgery devices.

The company reports: “The potential value offered by our alloys is higher performance in some cases and cost reduction in others, the latter stemming from the ability of Liquidmetal alloys to be net shape cast into components, thus reducing costs of secondary processing.” Yet a recent annual financial report filed with the Securities and Exchange Commission indicates that the company is struggling to build a viable revenue stream for its products while its losses continue to grow. And it may face a critical financial deadline later this year.

Liquidmetal Technologies had a net loss of $14 million on revenues of $591,000 in 2012 compared to a loss of $6.9 million on revenues of $572,000 in 2011. The company, which was formed in 1987, has had to sell valuable technology rights to Apple and Swatch for one-time payments in order to maintain operations.

Last July, the company entered into a private placement transaction for $12 million in principal amount of senior convertible notes due on Sept. 1, 2013. The notes are convertible at any time at the option of the holders into shares of the company’s common stock at a conversion price of $0.352 per share.

The company’s stock had traded in a range as high as $0.63 in the past year, but the stock is now trading at just $0.09 per share. CEO Thomas Steipp says the company has enough cash to last into 2014 and is pursuing three strategies to maintain cash flow.

Also concerning was a reduction last year in R&D expenditures by $177,000 to $943,000. R&D has been important for the young company to develop consistent, quality parts. The technology, which is currently in its third-generation, is extremely interesting, and has attracted big respected players in addition to Apple and Swatch.

The atomic structure of Liquidmetal alloys is the feature that differentiates them from other alloys and metals. Bulk Liquidmetal alloys can retain their amorphous atomic structure throughout a solidification process and therefore do not develop crystalline grains. As a result they exhibit superior strength and other superior performance characteristics compared to their crystalline counterparts.

Zirconium-titanium Liquidmetal alloys are reported to be 250% stronger than commonly used titanium alloys such as Ti-6Al-4V, and they also can be injection molded with special equipment developed by Engel, which entered into a non-exclusive license agreement with Liquidmetal Technologies more than a year ago.

Engel has developed a molding approach described as “elegant, clean and simple.” In a sense, it’s a bit of “back to the future” because the system uses a plunger to push feedstock into the mold cavity, an approach largely abandoned for plastics when the reciprocating screw came into wide use more than 50 years ago.

When the mold opens, a robot places a metal ingot into a heating chamber located on one side of the tool. The heated metal is then pushed into a mold by a plunger where it is formed under a vacuum. After the robot pulls out of the heating chamber, it picks up a set of finished parts from the cavity-side of the mold. The parts are placed on a conveyer where the tree-like runners are automatically degated. Sprues and runners are fed of the expensive composition back into the system.

The current machines are designed for 100-gram-shot charges per cycle. Alloy LM001B has a density of 6.0 g/cm3, so the current maximum alloy volume is 16.7cm3. The surface finish is described as essentially the same as the mold. Shrinkage is just 0.2%, a big difference from the powder metal injection molding process, which uses conventional metals. MIM also requires other time-consuming processing steps to achieve its final shape and mechanical properties.

The final Liquidmetal part may require some drilling, which apparently is considered less expensive than action in the tool. Some polishing or welding may also be required. In 1993, researchers at the California Institute of Technology developed the first commercially viable amorphous alloy in a bulk form.