Maybe preparing for the earnings release, LQMT stock price fell down by 7.01% yesterday and closed the market at $0.65 on a volume of more than twice the average for the stock. The expectations about the company’s earnings were not so optimistic and the share price almost touched the $0.5 level from the middle of August.
The filed 10-Q for the third quarter is controversial, and the accompanying press release from the company looked very modest, pointing out only the positive things that happened within the three months ended this September. The increase in the revenues and the positive income from operations are not insubstantial, but it is another question if that alone will be enough to make the share price jump up today.
The further details are not so good, particularly the capital structure and some former financing activities of the company. Liquidmetal continue accumulating debt and the working capital deficit reached the remarkable value of $27.8 million from “only” $17,2 in the previous quarter. That resulted from an enormous increase in the warrant liabilities, whereby the change in the fair value of warrants issued from convertible notes and preferred stock also led to a total net loss of over $16.6 million, or 16.6 times higher the loss in the last quarter.
Along with the outstanding warrants and stock options, the preferred stock of the company is also convertible, and Liquidmetal keeps diluting its shareholders. For the nine months of this year, the total number of common shares increased by almost 1.80 times, equal to a 78% dilution, resulting mainly from the conversion of preferred stock.
