Sigma Labs, Inc. (NASDAQ: SGLB) (“Sigma Labs”), a leading provider
of quality assurance software to the commercial 3D printing
industry, reported its financial and operational results for the
second quarter ended June 30, 2019.
Key Second Quarter 2019 and Subsequent
Highlights
- Selected by a major international OEM machine manufacturer to
deploy two PrintRite3D® quality assurance software programs as part
of an evaluation process for a broader rollout.
- Selected by Airbus (AIR:FP / OTC: EADSY), a global leader in
aeronautics, space and related services to deploy the PrintRite3D
version 5.0 software product into a laser powder bed printer as
part of a testing and evaluation program ahead of a larger
potential commercial rollout throughout the Airbus organization.
- Partnered with Materialise NV (NASDAQ: MTLS), a leading
provider of additive manufacturing software and 3D printing
solutions, and as a result of being Sigma’s first RTE installation,
entered an agreement to integrate Sigma Labs’ proprietary
PrintRite3D software solution into Materialise’s embedded hardware
solution.
- Launched the breakthrough PrintRite3D® version 5.0 quality
assurance software at the RAPID+TCT 3D Printing and Additive
Manufacturing Conference in May 2019, a step-change software update
featuring real-time melt pool analytics with automated anomaly
detection, enabling exciting new industrial-scale applications of
the company’s software.
- Realized third-party validation of Sigma Labs’ proprietary
PrintRite3D® quality assurance software through a Defense Advanced
Research Project Agency (DARPA) research study conducted in
collaboration with Honeywell Aerospace.
- Fortified our balance sheet through a $2.3 million underwritten
public offering of common stock in August 2019 to advance
commercialization efforts of its proprietary quality assurance
software products.
- Appointed Frank D. Orzechowski as Chief Financial Officer
effective July 1, 2019. The 30-year financial and operational
veteran has led large teams through significant corporate
transactions, including mergers and acquisitions, financings and
other transactions during his career.
- Presented at multiple investor and industry conferences to
strengthen the company’s commercial and investor presence,
including:
- AeroDef Manufacturing Conference in Long Beach,
California;
- RAPID+TCT 2019 Additive Manufacturing Conference in
Detroit; and
- 9th Annual LD Micro Invitational Investor Conference in
Los Angeles, California.
Management Commentary
“The second quarter of 2019 was highlighted by
sustained commercialization efforts, as we continue to make
meaningful progress towards integrating our proven quality
assurance technology into innovative new applications in the
multi-billion-dollar industrial 3D printing market,” said John
Rice, Chief Executive Officer of Sigma Labs.
“Our focus remains on four key areas:
- Product Development: Making our proprietary
PrintRite3D software increasingly simple to use for our customers
and integrating it into exciting new end-user applications, as
demonstrated with our version 5.0 which integrated an improved user
interface as well as other exciting new capabilities, transforming
it into a readily usable software product.
- Securing New Evaluation Programs: As with our
recently announced Airbus partnership to evaluate our PrintRite3D
version 5.0 software for a broader rollout, we continue to seek
placements with top-tier manufacturers, allowing them to ‘test
drive’ our software, demonstrating the clear value and making a
wider-scale purchase more likely.
- Negotiating OEM Transactions: As part of our
broader vision for the company, our goal is to have PrintRite3D
deployed into the marketplace directly from the factory, coming
pre-installed on new machines. We will continue to make a strong
push at all the original equipment manufacturers to establish
long-term OEM partner agreements to integrate PrintRite3D into
their machines, adding value both for Sigma Labs shareholders and
their end-customers who will experience better overall
manufacturing quality.
- Preserving Shareholder Value: We recently
announced the completion of a $2.3 million public offering of
common stock, which fortifies our balance sheet and, through our
capital-light operating model and disciplined approach to capital
allocation, brings Sigma Labs much closer to a profitable entity.
We seek to minimize dilution wherever possible and constantly seek
out new ways to build long-term value for our shareholders.
“Our core software product, proven out and
vetted through case studies with DARPA and Honeywell Aerospace,
addresses significant unmet market challenges facing the 3D metal
printing industry. I believe we are on the cusp of realizing key
operational milestones that position us for a memorable year and
look forward to creating long-term value for our shareholders as we
continue our steady pace of operational execution.
“Given the recent momentum, new CFO appointment,
and to increase our transparency with the investor community, we
will be returning to a regular cadence of quarterly conference
calls commencing with third quarter of 2019 financial results in
early November. We look forward to sharing more on our developing
story at upcoming industry conferences in Austin, Texas and
Frankfurt, Germany and soon to be announced investor conferences in
2019,” concluded Rice. Second Quarter 2019 Financial
Results
Revenue for the second quarter of 2019 decreased
66% to $33,582, as compared to $98,663 in the second quarter of
2018. This decrease is primarily attributable to the 100%
dedication of our printer to Internal R&D in the second quarter
of 2019 as we accelerated development of the Inspect product, as
well as an overall decline in AM revenue.
Gross profit in the second quarter of 2019
decreased to negative $27,043, as compared to $30,095, or 30.5% of
revenues, in the second quarter of 2018. The decrease in our gross
margin is primarily attributable to the additional travel and labor
costs associated with the on-site and remote collaboration involved
in initiation of the company’s Rapid Test and Evaluation
programs.
Total operating expenses were $1.6 million in
the second quarter of 2019, as compared to $1.4 million in the
second quarter of 2018.
Net loss in the second quarter of 2019 totaled
$1.6 million, or $(0.15) per share, compared to a net loss of $1.4
million, or $(0.25) per share, in the second quarter of 2018.
Cash totaled $0.7 million at June 30, 2019, as
compared to $1.9 million at March 31, 2019. Subsequent to the
closing of the second quarter of 2019, Sigma Labs completed a $2.3
million public offering of common stock.
About Sigma LabsSigma Labs,
Inc. (NASDAQ: SGLB) is a leading provider of quality assurance
software to the commercial 3D printing industry under the
PrintRite3D® brand. Founded in 2010, Sigma is a software company
that specializes in the development and commercialization of
real-time computer aided inspection (CAI) solutions known as
PrintRite3D® for 3D advanced manufacturing technologies. Sigma
Labs’ advanced computer-aided software product revolutionizes
commercial additive manufacturing, enabling non-destructive quality
assurance mid-production, uniquely allowing errors to be corrected
in real-time. For more information, please visit
www.sigmalabsinc.com.
Forward-Looking
Statements This 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
April 1, 2019 and which may be viewed
at http://www.sec.gov.
Investor Contact:Chris
TysonManaging DirectorMZ Group - MZ North
America949-491-8235SGLB@mzgroup.uswww.mzgroup.us
Sigma Labs,
Inc.Condensed Balance
Sheets(Unaudited)
|
June 30, 2019 |
|
|
December 31, 2018 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
|
Cash |
$ |
696,390 |
|
|
$ |
1,279,782 |
|
Accounts Receivable, net |
|
37,982 |
|
|
|
38,800 |
|
Note Receivable, net |
|
79,875 |
|
|
|
121,913 |
|
Inventory |
|
570,426 |
|
|
|
240,086 |
|
Prepaid Assets |
|
68,718 |
|
|
|
67,255 |
|
Total Current
Assets |
|
1,453,391 |
|
|
|
1,747,836 |
|
|
|
|
|
|
|
|
|
Other
Assets: |
|
|
|
|
|
|
|
Property and Equipment, net |
|
205,538 |
|
|
|
277,944 |
|
Intangible Assets, net |
|
510,718 |
|
|
|
404,978 |
|
Investment in Joint Venture |
|
500 |
|
|
|
500 |
|
Total Other
Assets |
|
716,756 |
|
|
|
683,422 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
$ |
2,170,147 |
|
|
$ |
2,431,258 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
Accounts Payable |
$ |
368,055 |
|
|
$ |
217,488 |
|
Notes Payable |
|
50,000 |
|
|
|
50,000 |
|
Deferred Revenue |
|
78,773 |
|
|
|
51,498 |
|
Accrued Expenses |
|
271,154 |
|
|
|
376,833 |
|
Total Current
Liabilities |
|
767,982 |
|
|
|
695,819 |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
767,982 |
|
|
|
695,819 |
|
|
|
|
|
|
|
|
|
Commitments &
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
Preferred Stock, $0.001 par; 10,000,000 shares authorized; None
issued and outstanding, respectively |
|
- |
|
|
|
- |
|
Common Stock, $0.001 par; 22,500,000 shares authorized; 10,937,590,
and 8,776,629 issued and outstanding, respectively |
|
10,938 |
|
|
|
8,777 |
|
Additional Paid-In Capital |
|
24,243,575 |
|
|
|
21,501,407 |
|
Accumulated Deficit |
|
(22,852,348 |
) |
|
|
(19,774,745 |
) |
Total Stockholders’
Equity |
|
1,402,165 |
|
|
|
1,735,439 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
2,170,147 |
|
|
$ |
2,431,258 |
|
|
|
|
|
|
|
|
|
Sigma Labs,
Inc.Condensed Statements of
Operations(Unaudited)
|
Three Months EndedJune 30, |
|
|
Six Months EndedJune 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
$ |
33,582 |
|
|
$ |
98,663 |
|
|
$ |
98,032 |
|
|
$ |
202,078 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE |
|
60,625 |
|
|
|
68,568 |
|
|
|
157,180 |
|
|
|
142,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
(27,043 |
) |
|
|
30,095 |
|
|
|
(59,148 |
) |
|
|
59,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries & Benefits |
|
581,356 |
|
|
|
426,049 |
|
|
|
1,093,916 |
|
|
|
824,706 |
|
Stock-Based Compensation |
|
220,360 |
|
|
|
423,067 |
|
|
|
474,566 |
|
|
|
584,589 |
|
Operating R&D Costs |
|
118,845 |
|
|
|
95,045 |
|
|
|
264,117 |
|
|
|
217,022 |
|
Investor & Public Relations |
|
157,318 |
|
|
|
103,197 |
|
|
|
315,107 |
|
|
|
283,596 |
|
Legal & Professional Service Fees |
|
218,919 |
|
|
|
177,929 |
|
|
|
403,489 |
|
|
|
316,352 |
|
Office Expenses |
|
184,068 |
|
|
|
110,936 |
|
|
|
350,178 |
|
|
|
206,042 |
|
Depreciation & Amortization |
|
49,203 |
|
|
|
48,253 |
|
|
|
97,586 |
|
|
|
95,574 |
|
Other Operating Expenses |
|
38,994 |
|
|
|
38,035 |
|
|
|
77,203 |
|
|
|
71,760 |
|
Total Operating
Expenses |
|
1,569,064 |
|
|
|
1,422,511 |
|
|
|
3,076,162 |
|
|
|
2,599,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
(1,596,107 |
) |
|
|
(1,392,416 |
) |
|
|
(3,135,310 |
) |
|
|
(2,539,926 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income |
|
7,016 |
|
|
|
3,719 |
|
|
|
12,798 |
|
|
|
17,086 |
|
State Incentives |
|
- |
|
|
|
- |
|
|
|
51,877 |
|
|
|
- |
|
Exchange Rate Gain (Loss) |
|
(2,264 |
) |
|
|
1,304 |
|
|
|
(2,710 |
) |
|
|
1,304 |
|
Interest Expense |
|
(2,136 |
) |
|
|
(1,411 |
) |
|
|
(4,258 |
) |
|
|
(1,411 |
) |
Loss on Disposal of Assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(36,733 |
) |
Total Other Income
(Expense) |
|
2,616 |
|
|
|
3,612 |
|
|
|
57,707 |
|
|
|
(19,754 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES |
|
(1,593,491 |
) |
|
|
(1,388,804 |
) |
|
|
(3,077,603 |
) |
|
|
(2,559,680 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
Taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(1,593,491 |
) |
|
$ |
(1,388,804 |
) |
|
$ |
(3,077,603 |
) |
|
$ |
(2,559,680 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per Common
Share – Basic and Diluted |
$ |
(0.15 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding – Basic and Diluted |
|
10,777,590 |
|
|
|
5,572,015 |
|
|
|
10,063,806 |
|
|
|
5,286,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sigma Labs,
Inc.Condensed Statements of Cash
Flows(Unaudited)
|
Six Months Ended |
|
|
June 30, 2019 |
|
|
June 30, 2018 |
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net Loss |
$ |
(3,077,603 |
) |
|
$ |
(2,559,680 |
) |
Adjustments to
reconcile Net Loss to Net Cash used in operating
activities: |
|
|
|
|
|
|
|
Noncash
Expenses: |
|
|
|
|
|
|
|
Depreciation and Amortization |
|
97,586 |
|
|
|
95,574 |
|
Stock Based Compensation |
|
474,150 |
|
|
|
594,915 |
|
Loss on Write-off of Asset |
|
- |
|
|
|
36,733 |
|
Change in assets and
liabilities: |
|
|
|
|
|
|
|
Accounts Receivable |
|
818 |
|
|
|
41,028 |
|
Interest Receivable |
|
27,038 |
|
|
|
38,139 |
|
Inventory |
|
(330,340 |
) |
|
|
47,100 |
|
Prepaid Assets |
|
(1,463 |
) |
|
|
(9,613 |
) |
Accounts Payable |
|
150,567 |
|
|
|
187,495 |
|
Deferred Revenue |
|
27,275 |
|
|
|
34,026 |
|
Accrued Expenses |
|
(105,678 |
) |
|
|
21,764 |
|
NET CASH USED IN
OPERATING ACTIVITIES |
|
(2,737,650 |
) |
|
|
(1,472,519 |
) |
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Purchase of Property and
Equipment |
|
(23,796 |
) |
|
|
(41,968 |
) |
Purchase of Intangible
Assets |
|
(107,124 |
) |
|
|
(60,147 |
) |
Payment Received from Notes
Receivable |
|
15,000 |
|
|
|
632,197 |
|
NET CASH PROVIDED BY
(USED IN) INVESTING ACTIVITIES |
|
(115,920 |
) |
|
|
530,082 |
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Proceeds from issuance of
Series B Preferred & Warrants |
|
- |
|
|
|
1,000,000 |
|
Proceeds from issuance of
Series C Preferred & Warrants |
|
- |
|
|
|
350,000 |
|
Gross Proceeds from issuance
of Common Stock and Warrants |
|
2,521,220 |
|
|
|
2,040,100 |
|
Less Offering Costs |
|
(326,890 |
) |
|
|
(443,700 |
) |
Proceeds from exercise of
Warrants |
|
75,848 |
|
|
|
- |
|
NET CASH PROVIDED BY
FINANCING ACTIVITIES |
|
2,270,178 |
|
|
|
2,946,400 |
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH FOR
PERIOD |
|
(583,392 |
) |
|
|
2,003,963 |
|
|
|
|
|
|
|
|
|
CASH AT BEGINNING OF
PERIOD |
|
1,279,782 |
|
|
|
1,515,674 |
|
|
|
|
|
|
|
|
|
CASH AT END OF
PERIOD |
$ |
696,390 |
|
|
$ |
3,519,637 |
|
|
|
|
|
|
|
|
|
Supplemental Disclosures: |
|
|
|
|
|
|
|
Noncash investing and financing activities
disclosure: |
|
|
|
|
|
|
|
Conversion of Convertible Debt for Stock |
$ |
- |
|
|
|
(50,000 |
) |
Other noncash
operating activities disclosure: |
|
|
|
|
|
|
|
Issuance of Common Stock for
services |
$ |
153,000 |
|
|
$ |
256,264 |
|
Disclosure of cash
paid for: |
|
|
|
|
|
|
|
Interest |
$ |
2,514 |
|
|
$ |
8,761 |
|
Income Taxes |
$ |
- |
|
|
$ |
- |
|
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