Sigma Labs, Inc. (NASDAQ:SGLB) (“Sigma Labs” or the “Company”), a
provider of quality assurance software under the PrintRite3D®
brand, today announced financial results for the three and nine
months ended September 30, 2017 and provided an overview of recent
developments.
Third Quarter 2017 Business Highlights
and Recent Developments
- November 2017 – Sigma Labs and 3DSIM announced the release of
3DSIM’s new FLEXTM, a critical piece in the AM digital thread
enabling simulation capability to model thermal sensors for metal
additive manufacturing processes.
- October 2017 – Sigma Labs announced plans to unveil its
PrintRite3D® INSPECT™ In-Process Quality Assurance Software Version
3.0 with 3D-thermal mapping and imaging tools at Formnext 2017. The
release includes software enhancements and hardware upgrades and
completes migration to a distributed web-based application, and
contains the latest In-Process Quality Assurance™ (“IPQA®”)
analytics algorithms, which provide future generations of closed
loop controllers.
- September 2017 – Sigma Labs announced it delivered its
cloud-based PrintRite3D® INSPECT® Software Version 2.0 to the
advanced additive manufacturing ("AM") facility operated by Siemens
Industrial Turbomachinery AB.
- August 2017 – Sigma Labs’ President and CTO presented "In-situ
Monitoring for Additive Manufacturing: Implications for the Digital
Manufacturing Age" at the Third Joint FAA - USAF Workshop on
Qualification and Certification of Additively Manufactured
Parts.
- August 2017 – Sigma Labs announced entering into an agreement
with Digital-CAN Tech Co., LTD to serve as the Company's
non-exclusive sales agent in Taiwan. Digital-CAN is at Taiwan's
forefront in the AM industry with over a decade of experience in
industrial 3D printing and rapid prototyping. Digital-CAN is AS9100
and ISO13485 certificated (Quality Systems Standards for Aircraft,
Space, Defense and Medical Devices industry suppliers), and is one
of Taiwan's largest additive manufacturing centers.
- August 2017 – Sigma Labs announced that its cloud-based
PrintRite3D® INSPECT® software Version 2.0 was installed at
Woodward Inc. Aircraft Turbine Systems group at its Zeeland, MI
location. The Company's PrintRite3D® software is part of Woodward's
additive manufacturing strategies to ensure that Woodward's
aerospace and industrial customers receive quality product.
- August 2017 – Sigma Labs announced signing Jeta Enterprises as
a new manufacturer’s representative for sales of Sigma Labs
contract printing and AM services in the Pacific Northwest region
of the U.S, including Oregon and Washington states. Jeta’s strong
customer base in Aerospace and Medical Devices coupled with its
expertise in custom-engineered components positions it to serve a
growing base of demand for advanced component manufacturing.
- July 2017 – Sigma Labs announced that Mark Cola was appointed
as Sigma Labs’ Chief Technology Officer on July 24, 2017,
responsible for building and implementing the Sigma Labs
technological strategy and guiding key technical advancements
towards digitalization in the context of the Industrial Internet of
Things (IIoT). Mr. Cola formerly served as CEO of Sigma Labs and
his new title is President and Chief Technology Officer. Mr. Cola
will seek to expand and grow the Company through next-generation
products and key customer development in a broad range of
industries.
- July 2017 - John Rice, who has served as Chairman of the Board
of the Company since his appointment in April 2017, replaced Mr.
Cola as CEO. As Chairman and interim CEO, Mr. Rice oversees Sigma
Labs' implementation of internal and external growth, with an
emphasis on internal focus technology, sales, and efficiency, and
externally, reaching into the marketplace to expand the Company’s
digital technical bandwidth with respect to the Company's IPQA®
technology and AM. Mr. Rice brings substantial operating and
investment experience to these tasks, including with respect to
operations of startup and emerging companies, corporate finance,
and mergers and acquisitions.
- July 2017 – Sigma Labs announced the June 30, 2016 publication
of its U.S. Patent Application No. US 2016/0185048; Multi-Sensor
Quality Inference and Control for Additive Manufacturing Processes.
This patent application is related to real-time quality analysis
during AM processes and the characterization of material properties
using acoustic signals emitted during AM which can be used in
addition to optical signals to simplify the qualification of
printed parts.
- July 2017 – Sigma Labs announced that it signed a Technology
Development Agreement (TDA) with OXYS Corporation, a technology
company in Cambridge, MA working in the Industrie 4.0 space.
The first project to be executed under the TDA will be a new
architecture platform for the Company's PrintRite3D® INSPECT.
"This has been a strong quarter for Sigma Labs
in which Sigma Labs’ technical team has placed PrintRite3D® INSPECT
firmly in step with a market that we believe is pushing towards
production," said John Rice, interim CEO of Sigma Labs. “Our newly
released PrintRite3D® INSPECT™ In-Process Quality Assurance
Software Version 3.0 with 3D-thermal mapping and imaging tools is a
major step forward for Sigma Labs that positions us at the
forefront of the AM market with capabilities that facilitate
enhanced real time AM manufacturing.”
Third Quarter Ended September 30, 2017
Financial Results
During the three and nine months ended September
30, 2017, we recognized revenue of $78,046 and $518,802,
respectively, as compared to $189,952 and $642,230 in revenue
recognized during the same periods in 2016. The decrease in revenue
was primarily due to reduced programmatic sales, the revenue from
which was only partially replaced by new EAP and OEM Partner
Program sales due to the incentivized pricing associated with those
two programs. We financed our operations during the three and nine
months ended September 30, 2017 and 2016 primarily from
PrintRite3D® system sales, DARPA and Aerojet programs, engineering
consulting services we provided to third parties during these
periods and through sales of our common stock and debt securities.
We anticipate that our revenue will increase in future periods as
we seek to further commercialize and expand our market presence for
our PrintRite3D®-related technologies, and obtain new contract
manufacturing orders in connection with our EOS M290 metal printer,
as well as further perform on our engineering consulting contracts
for the Aerojet Rocketdyne Booster Propulsion program and Honeywell
Aerospace for the DARPA Phase III and Plus up efforts. Our Cost of
Revenue for the three and nine months ended September 30, 2017 was
$81,214 and $267,160, respectively, as compared to $69,259 and
$207,744 for the same periods in 2016. The increases are
attributable to the additional costs associated with implementation
of the EAP and OEM programs.
Our General and Administrative Expenses for the
three and nine months ended September 30, 2017, were $576,855 and
$1,814,843, respectively, as compared to $437,870 and $1,314,055
for the same periods in 2016. Our payroll expenses for the three
and nine months ended September 30, 2017 were $295,890 and
$973,172, respectively, as compared to $259,011 and $727,494 for
the same periods in 2016. Our expenses relating to stock-based
compensation for the three and nine months ended September 30, 2017
were $199,225 and $505,630, respectively, as compared to $105,641
and $236,554, respectively, for the same periods in 2016. Our
research and development expenses for the three and nine months
ended September 30, 2017 were $57,947 and $225,562, respectively,
as compared to $37,526 and $88,504 for the same periods in
2016.
General and Administrative Expenses principally
include internal operating and sales expenses and outside service
fees, the largest component of which consists of services in
connection with our obligations as an SEC reporting company. The
increase in General and Administrative expenses for the three and
nine months ended September 30, 2017 as compared to the same period
in 2016 is principally the result of fees relating to and as a
consequence of our February 2017 public offering that resulted in
net proceeds of approximately $5,225,650, fees incurred in
connection with investing in strategic partners, the increase in
interest and finance costs on the $1,000,000 note originated in
October of 2016, along with the continued development of our
IPQA®-enabled PrintRite3D® technologies and our related efforts to
expand our services. The increase in payroll expenses for the three
and nine months ended September 30, 2017 as compared to the same
periods in 2016 is principally the result of our hiring of
additional software development staff to assist in acceleration of
our IPQA®-enabled PrintRite3D® technologies and 2017 increases in
administrative salaries. The increase in research and development
expenses for the three and nine months ended September 30, 2017 as
compared to the same periods in 2016 is principally the result of
increased contract consulting combined with software and hardware
upgrades required for the continued development and improvement of
our software and technology. The increase in stock-based
compensation costs is due to the fact that the majority of stock
options were granted after September 30, 2016, thus more stock
option vesting occurred in each quarter of 2017 than in the same
periods of 2016.
Our General and Administrative expenses are
expected to continue to increase as we seek further
commercialization of our IPQA®-enabled PrintRite3D® technologies
through increased marketing and sales efforts. Similarly, we
anticipate that our payroll and non-cash compensation expenses will
continue to increase as we engage more employees and other service
providers to support our efforts to grow our business.
Our net loss for the three and nine months ended
September 30, 2017 increased over each of the prior year
comparative periods and totaled $1,116,910 and $3,049,616,
respectively, as compared to $719,320 and $1,931,833 for the same
periods in 2016. This increase in net loss was attributable to a
decrease in revenue and an increase in expenses as noted above.
As of September 30, 2017, we had $2,691,487 in
cash and had a working capital surplus of $2,482,056, as compared
with $398,391 in cash and a working capital surplus of $110,799 as
of December 31, 2016.
Investor Conference
CallManagement will host a conference call on Tuesday,
November 14, 2017 at 4:30pm to review financial results and
corporate highlights. Following management’s formal remarks, there
will be a question and answer session.
To listen to the call by phone, interested
parties within the U.S. should call 1-844-802-2441 and
International callers should call 1-412-317-5134. All callers
should ask for the Sigma Labs conference call. The conference call
will also be available through a live webcast at
www.sigmalabsinc.com. Details for the webcast may be found on the
Company’s IR events page at:
http://client.irwebkit.com/sigmalabsinc/events.
A replay of the call will be available
approximately one hour after the end of the call through December
14, 2017. The replay can be accessed via Sigma Labs' website or by
dialing 877-344-7529 (domestic) or 412-317-0088 (international) or
Canada Toll Free at 855-669-9658. The replay conference ID number
is 10114390. The webcast replay will be available through February
14, 2018.
About Sigma Labs, Inc. Sigma
Labs, Inc. is a provider of quality assurance software under the
PrintRite3D® brand and a developer of advanced, in-process,
non-destructive quality assurance software for commercial firms
worldwide seeking productive solutions for advanced manufacturing.
For more information please visit us at
www.sigmalabsinc.com.
Forward-Looking StatementsThis
press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended
(which Sections were adopted as part of the Private Securities
Litigation Reform Act of 1995). Statements preceded by, followed by
or that otherwise include the words “believe,” “anticipate,”
“estimate,” “expect,” “intend,” “plan,” “project,” “prospects,”
“outlook,” and similar words or expressions, or future or
conditional verbs such as “will,” “should,” “would,” “may,” and
“could” are generally forward-looking in nature and not historical
facts. These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the
Company's actual results, performance or achievements to be
materially different from any anticipated results, performance or
achievements. The Company disclaims any intention to, and
undertakes no obligation to, revise any forward-looking statements,
whether as a result of new information, a future event, or
otherwise. For additional risks and uncertainties that could impact
the Company’s forward-looking statements, please see the Company’s
Annual Report on Form 10-K (including but not limited to the
discussion under “Risk Factors” therein) filed with the SEC on
March 31, 2017 and which may be viewed at http://www.sec.gov.
Investor Relations Contact:Bret
ShapiroManaging DirectorCORE IR561-479-8566 brets@coreir.com
|
Sigma Labs, Inc. |
Condensed Balance Sheets |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current
Assets: |
|
|
|
|
Cash |
$ |
2,691,487 |
|
$ |
398,391 |
|
Accounts
Receivable, net |
|
105,725 |
|
|
288,236 |
|
Notes
Receivable, net |
|
775,267 |
|
|
- |
|
Inventory |
|
188,907 |
|
|
187,241 |
|
Prepaid
Assets |
|
49,896 |
|
|
36,056 |
|
Total Current Assets |
|
3,811,282 |
|
|
909,924 |
|
|
|
|
|
|
Other
Assets: |
|
|
|
|
Property
and Equipment, net |
|
446,449 |
|
|
564,933 |
|
Intangible Assets, net |
|
261,660 |
|
|
226,450 |
|
Investment in Joint Venture |
|
500 |
|
|
500 |
|
Prepaid
Stock Compensation |
|
49,528 |
|
|
167,562 |
|
Total Other Assets |
|
758,137 |
|
|
959,445 |
|
|
|
|
|
|
TOTAL
ASSETS |
$ |
4,569,419 |
|
$ |
1,869,369 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
Liabilities: |
|
|
|
|
Accounts
Payable |
$ |
114,747 |
|
$ |
112,175 |
|
Notes
Payable, net of original issue discount of $5,091 at September 30,
2017 and net of original issue discount of $69,703 and net of debt
discount $358,280 at December 31, 2016 |
|
994,909 |
|
|
561,834 |
|
Accrued
Expenses |
|
219,570 |
|
|
125,116 |
|
Total Current Liabilities |
|
1,329,226 |
|
|
799,125 |
|
|
|
|
|
|
Long-Term
Liabilities |
|
|
|
|
Derivative Liability |
|
- |
|
|
93,206 |
|
Total Long-Term Liability |
|
- |
|
|
93,206 |
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
1,329,226 |
|
|
892,331 |
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Preferred
Stock, $0.001 par; 10,000,000 shares authorized;None issued and
outstanding |
|
- |
|
|
- |
|
Common
Stock, $0.001 par; 7,500,000 shares authorized;4,577,651 and
3,133,789 issued and outstanding atSeptember 30, 2017 and December
31, 2016, respectively |
|
4,578 |
|
|
3,135 |
|
Additional Paid-In Capital |
|
16,046,185 |
|
|
10,734,857 |
|
Accumulated Deficit |
|
(12,810,570 |
) |
|
(9,760,954 |
) |
Total Stockholders' Equity |
|
3,240,193 |
|
|
977,038 |
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
4,569,419 |
|
$ |
1,869,369 |
|
|
|
Sigma Labs, Inc. |
Condensed Statements of
Operations |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30 |
|
Nine Months Ended September
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
78,046 |
|
$ |
189,952 |
|
$ |
518,802 |
|
$ |
642,230 |
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE |
|
81,214 |
|
|
69,259 |
|
|
267,160 |
|
|
207,744 |
|
|
|
- |
|
|
|
|
|
|
|
GROSS
PROFIT |
|
(3,168 |
) |
|
120,693 |
|
|
251,642 |
|
|
434,486 |
|
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
Other
General and Administration |
|
576,855 |
|
|
437,870 |
|
|
1,814,843 |
|
|
1,314,055 |
|
Payroll
Expense |
|
295,890 |
|
|
259,010 |
|
|
973,172 |
|
|
727,494 |
|
Stock-Based Compensation |
|
199,225 |
|
|
105,641 |
|
|
505,630 |
|
|
236,554 |
|
Research
and Development |
|
57,947 |
|
|
37,526 |
|
|
225,562 |
|
|
88,504 |
|
Total Expenses |
|
1,129,917 |
|
|
840,047 |
|
|
3,519,207 |
|
|
2,366,607 |
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
Interest
Income |
|
13,675 |
|
|
35 |
|
|
26,616 |
|
|
288 |
|
Other
Income- State Incentives |
|
2,500 |
|
|
- |
|
|
154,568 |
|
|
- |
|
Other
Income-Decrease in fair value of derivative liabilities |
|
- |
|
|
- |
|
|
93,206 |
|
|
- |
|
Other
Expense – Debt discount amortization |
|
- |
|
|
- |
|
|
(56,441 |
) |
|
- |
|
Total Other Income |
|
16,175 |
|
|
35 |
|
|
217,949 |
|
|
288 |
|
|
|
- |
|
|
|
|
|
|
|
LOSS BEFORE
PROVISION FOR INCOME TAXES |
|
(1,116,910 |
) |
|
(719,320 |
) |
|
(3,049,616 |
) |
|
(1,931,833 |
) |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Provision for
income Taxes |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Net
Loss |
$ |
(1,116,910 |
) |
$ |
(719,320 |
) |
$ |
(3,049,616 |
) |
$ |
(1,931,883 |
) |
|
|
|
|
|
|
|
|
|
Net Loss per
Common Share – Basic and Diluted |
$ |
(0.24 |
) |
$ |
(0.23 |
) |
$ |
(0.70 |
) |
$ |
(0.62 |
) |
|
|
|
|
|
|
|
|
|
Weighted
Average Number of Shares |
|
|
|
|
|
|
|
|
Outstanding –
Basic and Diluted |
|
4,574,460 |
|
|
3,129,675 |
|
|
4,330,565 |
|
|
3,121,821 |
|
|
|
Sigma Labs, Inc. |
Condensed Statements of Cash
Flows |
(Unaudited) |
|
|
|
|
|
|
|
Nine Months endedSeptember
30, |
|
|
2017 |
|
2016 |
OPERATING
ACTIVITIES |
|
|
|
|
Net
Loss |
$ |
(3,049,616 |
) |
$ |
(1,931,833 |
) |
Adjustments to
reconcile Net Income (Loss) to Net Cash used in operating
activities: |
|
|
|
|
Noncash
Expenses: |
|
|
|
|
Amortization – Patents |
|
2,289 |
|
|
6,526 |
|
Depreciation |
|
134,865 |
|
|
131,879 |
|
Stock
Compensation |
|
506,994 |
|
|
240,756 |
|
|
|
|
|
|
Revaluation of derivative liability and debt discount related to
notes payable |
|
(93,206 |
) |
|
- |
|
Note
Payable original issue discount |
|
74,794 |
|
|
- |
|
Note
Payable debt discount amortization |
|
56,441 |
|
|
- |
|
Change in
assets and liabilities: |
|
|
|
|
Accounts
Receivable |
|
182,511 |
|
|
160,623 |
|
Inventory |
|
(1,666 |
) |
|
(64,530 |
) |
Prepaid
Assets |
|
(13,840 |
) |
|
4,590 |
|
Accounts
Payable |
|
2,572 |
|
|
102,824 |
|
Notes
Payable |
|
301,839 |
|
|
- |
|
Accrued
Expenses |
|
94,454 |
|
|
24,799 |
|
NET CASH USED IN OPERATING ACTIVITIES |
|
(1,801,569) |
|
(1,322,366 |
) |
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
Purchase
of Furniture and Equipment |
|
(16,381 |
) |
|
(26,907 |
) |
Purchase
of Intangible Assets |
|
(37,498 |
) |
|
(61,556 |
) |
Notes
Receivable |
|
(775,267 |
) |
|
- |
|
Investment in Joint Venture |
|
- |
|
|
8,617 |
|
Loss on
Investment in Joint Venture |
|
- |
|
|
105 |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(829,146 |
) |
|
(79,741 |
) |
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
Proceeds
from issuance of common stock and warrants |
|
5,225,650 |
|
|
- |
|
Amendment
to Warrant Agreements |
|
(301,839 |
) |
|
- |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
4,923,811 |
|
|
- |
|
|
|
|
|
|
NET CASH
DECREASE FOR PERIOD |
|
2,293,096 |
|
|
(1,402,107 |
) |
|
|
|
|
|
CASH AT
BEGINNING OF PERIOD |
|
398,391 |
|
|
1,539,809 |
|
|
|
|
|
|
CASH AT END OF
PERIOD |
$ |
2,691,487 |
|
$ |
137,702 |
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information: |
|
|
|
|
Cash paid during the
period for: |
|
|
|
|
Interest |
$ |
50,418 |
|
$ |
- |
|
Income
Taxes |
$ |
- |
|
$ |
- |
|
|
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing
Activities: |
|
|
|
|
Issuance
of Common Stock for services |
$ |
85,408 |
|
$ |
152,265 |
|
Write-off
of Debt Discount |
$ |
(301,839 |
) |
$ |
- |
|
|
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