SASI Sigma Additive Solutions Inc

Partner Integration Momentum Driving Path for Software Scale

Management to Host Conference Call Today at 4:30 P.M. ET

Sigma Additive Solutions, Inc. (NASDAQ:SASI) ("Sigma", "we," "our," or the "Company"), a leading provider of quality assurance software to the commercial 3D printing industry, has reported its financial and operational results for the fourth quarter and full year ended December 31, 2022.

Key Fourth Quarter and Subsequent 2022 Highlights and Business Update

• Expanded collaborations for connected software solutions with:
  • Materialise, a global leader in 3D printing software and service solutions, to provide additive manufacturing (AM) users automated quality control by integrating the PrintRite3D® quality assurance solution into the new software solution Materialise Process Control on their Co-AM platform
  • Dyndrite, providers of the GPU-accelerated computation engine used to create next generation digital manufacturing hardware and software, allowing connection of Dyndrite-generated tool paths to in-process quality data for the first time
• Expanded collaborations for connecting market hardware to PrintRite3D software with:
  • DyeMansion, the global leader in connected & integrated post-processing solutions for industrial polymer 3D-printing, to add an integrated hardware/software solution option that offers extra quality assurance for DyeMansion’s post-processing solutions, expanding Sigma’s quality product coverage beyond just the 3D printer space
  • Expanded OEM footprint by connecting Sigma PrintRite3D software and analytics to EOS and SLM application programming interfaces (APIs) through the EOS Developer Network (EDN) and SLM’s open architecture SLM.Quality API
  • Novanta, a premier global supplier of laser photonics, to pioneer the first fully integrated scan head with quality assurance – agnostic of original equipment manufacturer (OEM) printer
• Reduced operating expenses to align with a quicker path to profitability, including our largest cost, salary expense, by 40% from April 2022, while retaining key employees and better aligning the business to our software scaling model
• Continued development of the Company’s intellectual property and patent portfolio, adding IP beyond just hardware into critical analytics and machine learning reaching a total number of granted patents to 29 with an additional 40 patent applications in-process by the end of 2022, providing options to explore licensing structures for the market
• We continue to evaluate options to fortify our balance sheet including the previously announced retention of Lake Street Capital Markets as Sigma’s financial advisor in connection with the Company's consideration of a range of strategic alternatives designed to enhance shareholder value, including a possible strategic investment, acquisition, merger, business combination, or similar transaction

“We continue to track key performance indicators (KPIs) to monitor the progress and execution of our new business plan. During the quarter, we established key relationships that are important to our path to grow our software-only solutions targeted for release in Q2 2023. These collaborations are opening paths to market and increasing total addressable market, two things that drive the growth potential of the company. We see our focus on this and other KPIs as critical to achieving our business plan over the next two years. During the quarter we continued to make progress on our subscription model and transition to software-only product options to support the additive industry as a whole, making Sigma accessible at scale for supporting qualification and production across thousands of machines at hundreds of customer sites,” stated Jacob Brunsberg, President and Chief Executive Officer of Sigma.

KPIs to Monitor Progress:

• Revenue of $154 thousand in Q4 2022, tracking with a shift to subscription pricing as we continue to work towards our full software-only offering suite in 2023, mixed with operating cost reductions aligning to current strategy
• Order backlog, defined as firm orders received but not yet shipped, currently totals $125 thousand of both perpetual and subscription sales. Total additional revenue to be recognized from transactions closed in previous quarters totals $370 thousand, yielding a combined total of $495 thousand of revenue to be recognized in future periods
• Pipeline opportunity is opening with OEM collaborations providing the ability to connect via APIs with software-only products, which increases Sigma’s addressable market while lowering barriers to entry that existed in prior product
• Deal cycle time continues to track with switch to subscription models as well, which sets up Sigma’s software-only products targeted for Q2, 2023
• Partner additions increased ahead of plan, including 8 OEM/hardware partners (Novanta, Additive Industries, DMG Mori, Aconity, amace, EOS, DyeMansion, and SLM Solutions) and 4 ISV partners (Materialise, AMFG, Sentient Science, and Dyndrite) with more pending

Management Commentary

Brunsberg continued, “We have listened to the market and our customers. The prior business model that depended on hardware retrofits did not meet the cost needs of the market and did not provide a scalable structure for Sigma. We have moved quickly to provide more cost effective integrated and software-only solutions that we believe significantly lower our barriers to entry and provide a faster path to scalability of connected quality solutions for the market.

“Years ago, this may have not been possible. With the recent opening of system architectures and API connectivity, we have a path to provide critical software-only quality solutions that connect more broadly and uniformly to the industry. We continue to work with standards organizations and have formalized collaborations with OEMs, scanner manufacturers, and synergistic software providers to provide channels to deliver these solutions.

“Aligning around our future product path, we have added a space customer that is contributing to our product council feedback, added our first automotive customer, and have planned multi-site expansion at a key aerospace customer that connects us to another OEM. This OEM integration work is bearing fruit as we have our first customer targeted to implement a software-only OEM API connected suite in Q2 aligning with our software-only product launch schedule.

“Looking ahead, we continue to move with urgency in our business transition to put ourselves in position to be the home for connected digital quality to support qualification and production across thousands of machines at hundreds of customer sites.”

Fourth Quarter and Full Year 2022 Financial Results

Revenue for the full year of 2022 totaled $0.63 million, compared to revenue of $1.7 million for the full year of 2021. The decrease was primarily due to fewer perpetual license PrintRite3D® unit sales, and a decrease in contract additive manufacturing. Partially offsetting these decreases were an increase in revenues from the subscription-based pricing program, the legacy Rapid Test and Evaluation (“RTE”) program, on-site installation and support, consulting services, and annual maintenance contracts.

Gross profit for the full year of 2022 was $0.3 million, compared to gross profit for the full year of 2021 of $1.1 million. Gross margin for the full year of 2022 was 44% compared to gross margin of 66% for the full year 2021. The gross margin decrease was primarily driven by an increase in the price of certain PrintRite3D system components as a result of configuration changes and discounted sales to universities and research institutions as members of our AcGovDustrial Network.

Total operating expenses for 2022 were $9.0 million, compared to $9.6 million in 2021, a decrease of 5.7%. The decrease was primarily attributable to a decrease in stock-based compensation, a decrease in operating and research and development costs, partially offset by increases in salary and benefits, office expenses, and increased business travel.

Cash used in operating and financing activities for the year ended December 31, 2022 totaled $8.6 million as compared to $6.6 million in the year ended December 31, 2021. Average monthly cash usage in the fourth quarter of 2022 was approximately $652 thousand, down from an average of $711 thousand for the third quarter of 2022 and $717 thousand for the full year of 2022.

Net loss for the full year of 2022 was $8.7 million, or $0.83 per share, as compared to a net loss of $7.5 million, or $0.76 per share in 2021.

Cash totaled $2.8 million at December 31, 2022, as compared to $11.4 million at December 31, 2021.

Fourth Quarter and Full Year 2022 Results Conference Call

Sigma Additive Solutions CEO Jacob Brunsberg and CFO Frank Orzechowski will host the conference call, followed by a question-and-answer period.

To access the call, please use the following information:

Date:

Thursday, March 30, 2023

Time:

4:30 p.m. Eastern time, 1:30 p.m. Pacific time

Toll-free dial-in number:

1-877-407-9039

International dial-in number:

1-201-689-8470

Conference ID:

13734527

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1-949-491-8235.

The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1584485&tp_key=2404ac8bec and via the investor relations section of the Company's website at www.sigmaadditive.com.

A replay of the conference call will be available after 7:30 p.m. Eastern time through April 13, 2023.

Toll-free replay number:

1-844-512-2921

International replay number:

1-412-317-6671

Replay ID:

13734527

About Sigma Additive Solutions

Sigma Additive Solutions, Inc. is a leading provider of in-process quality assurance (IPQA™) solutions to the additive manufacturing industry. Sigma specializes in the development and commercialization of real-time monitoring and analytics known as PrintRite3D® for 3D metal and polymer advanced manufacturing technologies. PrintRite3D detects and classifies defects and anomalies real-time during the manufacturing process, enabling significant cost-savings and production efficiencies by reducing waste, increasing yield, and shortening cycle times. Sigma believes its software solutions will be a major catalyst for the acceleration and adoption of industrial 3D printing.

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. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are risks relating to, among other things, Sigma’s ability to satisfy its capital needs through increasing its revenue and obtaining additional financing, the extent of the market's acceptance of PrintRite3D®, and general economic, industry or political conditions in the United States or internationally. Sigma 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 Sigma’s forward-looking statements, please see disclosures contained in Sigma's public filings with the SEC, including the "Risk Factors" in Sigma's Annual Report on Form 10-K, and which may be viewed at www.sec.gov.

Sigma Additive Solutions, Inc. (formerly Sigma Labs, Inc.)

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

December 31, 2021

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$

2,845,931

 

 

$

11,447,047

 

Accounts Receivable, net

 

 

371,620

 

 

 

412,192

 

Inventory

 

 

950,943

 

 

 

710,080

 

Prepaid Assets

 

 

105,226

 

 

 

114,278

 

Total Current Assets

 

 

4,273,720

 

 

 

12,683,597

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Property and Equipment, net

 

 

304,903

 

 

 

232,282

 

Intangible Assets, net

 

 

1,125,285

 

 

 

925,111

 

Total Other Assets

 

 

1,430,188

 

 

 

1,157,393

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

5,703,908

 

 

$

13,840,990

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts Payable

 

$

277,492

 

 

$

206,442

 

Deferred Revenue

 

 

120,073

 

 

 

148,855

 

Accrued Expenses

 

 

231,633

 

 

 

625,942

 

Total Current Liabilities

 

 

629,198

 

 

 

981,239

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

629,198

 

 

 

981,239

 

 

 

 

 

 

 

 

Commitments & Contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 465 shares issued and outstanding

 

 

1

 

 

 

1

 

Common Stock, $0.001 par value; 24,000,000 shares authorized; 10,498,802 shares issued and outstanding

 

 

10,499

 

 

 

10,499

 

Additional Paid-In Capital

 

 

54,406,694

 

 

 

53,442,431

 

Accumulated Deficit

 

 

(49,342,484

)

 

 

(40,593,180

)

Total Stockholders’ Equity

 

 

5,074,710

 

 

 

12,859,751

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

5,703,908

 

 

$

13,840,990

 

Sigma Additive Solutions, Inc. (formerly Sigma Labs, Inc.)

Condensed Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2022

 

December 31, 2021

REVENUES

 

$

630,428

 

 

$

1,651,765

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

349,930

 

 

 

559,965

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

280,498

 

 

 

1,091,800

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

Salaries & Benefits

 

 

4,740,437

 

 

 

4,286,368

 

Stock-Based Compensation

 

 

793,251

 

 

 

1,066,455

 

Operations and R&D Costs

 

 

653,194

 

 

 

890,553

 

Investor, Public Relations and Marketing

 

 

422,645

 

 

 

503,823

 

Organizational Costs

 

 

311,606

 

 

 

726,147

 

Legal & Professional Service Fees

 

 

725,285

 

 

 

915,530

 

Office Expenses

 

 

914,802

 

 

 

734,386

 

Depreciation & Amortization

 

 

116,167

 

 

 

94,105

 

Other Operating Expenses

 

 

352,115

 

 

 

353,818

 

Total Operating Expenses

 

 

9,029,502

 

 

 

9,571,185

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(8,749,004

)

 

 

(8,479,385

)

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Interest Income

 

 

3,487

 

 

 

13,866

 

State Incentives

 

 

76,628

 

 

 

-

 

Exchange Rate Loss

 

 

(16,190

)

 

 

(263

)

Other Income

 

 

-

 

 

 

1,092,441

 

Interest Expense

 

 

(7,345

)

 

 

(11,264

)

Total Other Income (Expense)

 

 

56,580

 

 

 

1,094,780

 

 

 

 

 

 

 

 

LOSS BEFORE PROVISION FOR INCOME TAXES

 

 

(8,692,424

)

 

 

(7,384,605

)

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

Net Loss

 

$

(8,692,424

)

 

$

(7,384,605

)

 

 

 

 

 

 

 

Preferred Dividends

 

 

56,880

 

 

 

103,567

 

 

 

 

 

 

 

 

Net Loss applicable to Common Stockholders

 

$

(8,749,304

)

 

$

(7,488,172

)

 

 

 

 

 

 

 

Net Loss per Common Share - Basic and Diluted

 

$

(0.83

)

 

$

(0.76

)

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding - Basic and Diluted

 

 

10,498,802

 

 

 

9,828,541

 

Sigma Additive Solutions, Inc. (formerly Sigma Labs, Inc.)

Condensed Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31, 2022

 

December 31, 2021

OPERATING ACTIVITIES

 

 

 

 

 

 

Net Loss

 

$

(8,692,424

)

 

$

(7,384,605

)

Adjustments to reconcile Net Loss to Net Cash used in operating activities:

 

 

 

 

 

 

Noncash Expenses:

 

 

 

 

 

 

Depreciation and Amortization

 

 

116,167

 

 

 

94,105

 

Gain on Derivative Liability

 

 

-

 

 

 

(1,092,441

)

Stock Based Compensation - Employees

 

 

793,251

 

 

 

1,066,455

 

Stock Based Compensation - Third Party Services

 

 

25,376

 

 

 

163,083

 

Stock Based Compensation - Directors

 

 

88,756

 

 

 

538,585

 

Change in assets and liabilities:

 

 

 

 

 

 

Accounts Receivable

 

 

40,572

 

 

 

(80,630

)

Inventory

 

 

(240,863

)

 

 

(50,429

)

Prepaid Assets

 

 

9,052

 

 

 

2,457

 

Accounts Payable

 

 

71,050

 

 

 

77,505

 

Deferred Revenue

 

 

(28,782

)

 

 

70,898

 

Accrued Expenses

 

 

(394,309

)

 

 

382,127

 

Long-Term portion of Stock Appreciation Rights

 

 

-

 

 

 

(48,341

)

Long-Term portion of Deferred Payroll Taxes under the CARES Act

 

 

-

 

 

 

(37,728

)

NET CASH USED IN OPERATING ACTIVITIES

 

 

(8,212,154

)

 

 

(6,298,959

)

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

Purchase of Property and Equipment

 

 

(164,622

)

 

 

(182,522

)

Purchase of Intangible Assets

 

 

(224,340

)

 

 

(177,228

)

NET CASH USED IN INVESTING ACTIVITIES

 

 

(388,962

)

 

 

(359,750

)

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

Gross Proceeds from Public and Private Issuances of Securities

 

 

-

 

 

 

14,869,899

 

Less Offering Costs

 

 

-

 

 

 

(1,600,967

)

Proceeds from Exercise of Warrants

 

 

-

 

 

 

1,136,010

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

-

 

 

 

14,404,942

 

 

 

 

 

 

 

 

NET CHANGE IN CASH FOR PERIOD

 

 

(8,601,116

)

 

 

7,746,233

 

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

 

11,447,047

 

 

 

3,700,814

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

2,845,931

 

 

$

11,447,047

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

Noncash investing and financing activities disclosure:

 

 

 

 

 

 

Issuance of Common Shares for Preferred Dividends

 

$

-

 

 

$

103,567

 

Other noncash operating activities disclosure:

 

 

 

 

 

 

Issuance of Securities for Services

 

$

114,132

 

 

$

701,668

 

Disclosure of cash paid for:

 

 

 

 

 

 

Interest

 

$

7,345

 

 

$

11,264

 

Income Taxes

 

$

-

 

 

$

-

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005636/en/

Sigma Additive Solutions Contact Chris Tyson Executive Vice President MZ Group - MZ North America 949-491-8235 SASI@mzgroup.us www.mzgroup.us