Sigma Labs Announces Financial Results for the First Quarter Ended March 31, 2017 and Provides Corporate Update
May 15 2017 - 4:13PM
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 months ended
March 31, 2017 and provided a company update.
First Quarter 2017 Business Highlights and
Recent Developments
- May 2017 – Sigma Labs unveiled PrintRite3D® INSPECT™ V.2.0
quality assurance software at RAPID + TCT 2017, North America's
preeminent event for discovery, innovation, and networking in 3D
manufacturing.
- May 2017 – Sigma Labs completed funding a loan in the principal
amount of $250,000 to Jaguar to provide working capital to Jaguar
to, among other things, stand up a metallurgical laboratory and
become ASM9100 certified for contracts related to AM of
high-precision aerospace and defense components, in furtherance of
our strategic alliance. Sigma will receive from Jaguar priority for
use of certain machines and services of Jaguar.
- April 2017 – Sigma Labs announced a new contract with
Solar Turbines, Incorporated, a subsidiary of Caterpillar Inc.
(NYSE:CAT), which will implement Sigma Labs’ In-Process Quality
Assurance™ (IPQA®) technology for the production of gas turbine
components using metal additive manufacturing (“AM”).
- April 2017 – Sigma Labs released its OEM Developer's Kit for
PrintRite3D® INSPECT™ quality assurance software version 2.0, an
alpha version of which was placed with a European OEM partner to
test, evaluate and incorporate into its AM 3D printers.
- April 2017 – Sigma Labs Board of Directors appointed John Rice
as Chairman of the Board of Directors. Sam Bell, Frank Garofalo and
John Rice were appointed to serve as independent directors during
the first quarter 2017.
- March 2017 – Sigma Labs entered into a non-binding LOI with
Morf3D to commence negotiations on a mutually acceptable M&A
Agreement with respect to a proposed merger with Morf3D. It is
anticipated that this transaction, if consummated, would help the
Company achieve its goal of becoming a fully integrated business
able to charge for materials selection, design and manufacturing
and in-process quality assurance. It is further the goal that the
combined entity would emerge as a fully integrated additive
manufacturing company poised to serve the aerospace and defense
industry, which is rapidly transitioning to 3D metal additive
manufacturing and which could provide the kind of cost savings
required to meet the $56 billion increase slated for the defense
industry 2017 budget. The closing of the transaction is subject to
definitive documentation and closing conditions, some of which are
beyond the Company's control.
- March 2017 – Sigma Labs entered into a long term non-exclusive,
multi-year commercial OEM agreement with Additive Industries B.V.
of The Netherlands, which Sigma believes could generate several
million dollars over the next few years.
- March 2017 – Sigma Labs completed funding a loan in the
principal amount of $500,000 to Morf3D pursuant to a Secured
Convertible Promissory Note dated March 27, 2017, to provide
working capital to Morf3D to, among other things, lease an EOS M
400 system for Morf3D for Morf3D to expand production for contracts
related to AM of high-precision aerospace and defense (“A&D”)
components, in furtherance of Sigma Labs' strategic alliance and in
contemplation of a possible acquisition of or merger with
Morf3D.
- March 2017 – Sigma Labs entered a commercial alliance with
Jaguar Precision Machine, LLC to expand its suite of integrated,
advanced manufacturing services. Sigma Labs will license its
PrintRite3D® software to Jaguar. The addition of Jaguar allows
Sigma Labs to provide end-to-end 3D advanced component
manufacturing capabilities, including: computer aided design (CAD);
engineering (CAE); manufacturing (CAM); and inspection (CAI).
- March 2017 – Sigma Labs announced a contract with Aerojet
Rocketdyne, a subsidiary of Aerojet Rocketdyne Holdings, Inc.
(NYSE:AJRD), as a follow-on to last year’s award tied to a U.S. Air
Force propulsion initiative for liquid-fueled rocket engine
applications.
- February 2017 – Sigma Labs signed a commercial alliance with
Morf3D to bring enhanced solutions for AM to the A&D sector
including the future manufacture of certain 3D printed parts. Sigma
Labs will license its PrintRite3D® software to Morf3D.
- February 2017 – Sigma Labs closed an underwritten public
offering of 1,410,000 units, with each unit consisting of one share
of common stock and one warrant to purchase one share of common
stock with gross proceeds from the offering, including the exercise
of the over-allotment option, of approximately $5.8 million, before
deducting underwriting discounts and commissions and other offering
expenses. Sigma Labs completed a 1-for-2 reverse stock split and
uplisted to the NASDAQ Capital Market, as well.
- January 2017 – Sigma Labs signed a commercial agreement with
Pratt & Whitney, a unit of United Technologies Corp., for its
PrintRite3D® software along with participation by Pratt &
Whitney in Sigma Labs' Early Adopter Program.
- January 2017 – Sigma Labs entered into a long term
non-exclusive, multi-year commercial OEM agreement with a leading
European provider of cutting-edge products for additive
manufacturing, which Sigma believes could generate up to $6 million
over its duration.
“During the First Quarter of 2017, we made
additional, significant progress in our further establishing the
requisites for Sigma Labs and our partners to provide market
leading, end to end 3D advanced manufacturing ecosystem
capabilities including computer aided design (CAD); engineering
(CAE); manufacturing (CAM); and inspection (CAI), with Web, IoT and
cloud-based integration, designed to represent groundbreaking
advancements in process control and real-time quality assurance,”
said Mark Cola, President & CEO of Sigma Labs. “We are very
pleased with the progress we have achieved in our client and OEM
partner growth, as well, and we hope to realize increased revenue
from our diversified channel growth strategies which include
PrintRite3D® system sales, engineering consulting services
including the Aerojet Rocketdyne Booster Propulsion program and
Honeywell Aerospace for the DARPA Period 3 efforts, among others,
as well as new contract manufacturing orders in connection with our
contract AM service provider business and related activities from
our strategic alliance and potential business combination with
Morf3D. Sigma Labs also appointed its new Board of Directors in the
first quarter 2017 and appointed John Rice Chairman in April 2017.
We are especially pleased to welcome our new directors who will
serve to steward Sigma Labs in its future growth and market
leadership,” Mr. Cola concluded.
First Quarter Ended March 31, 2017
Financial ResultsDuring the three months ended March 31,
2017, total revenue was $150,203, as compared to $358,455 in
revenue during the same period in 2016. The decrease in revenue was
primarily due to the completion of the GEA America Makes Program in
2016, providing three months of revenue in 2016 but no revenue in
2017, and the completion of the DARPA Phase II project in 2016,
providing three months of revenue in 2016 but no revenue in
2017.
Net loss for the three months ended March 31, 2017
increased over the prior year and totaled $943,965 as compared to
$470,667 for the same period in 2016. The increase in Net loss was
primarily attributable to decreased revenue and higher expenses in
the quarter.
Investor Conference CallManagement
will host a conference call today, Monday, May 15, 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 June 15, 2017. The replay can be accessed via Sigma
Lab's 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 10107055. The webcast replay will be
available through 8/15/17.
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.
Sigma Labs, Inc. |
Condensed Balance Sheets |
|
|
|
|
|
(Unaudited) |
|
|
|
March 31, 2017 |
|
Dec. 31, 2016 |
|
|
|
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash |
$ |
4,633,046 |
|
|
$ |
398,391 |
|
Accounts Receivable, net |
|
157,354 |
|
|
|
288,236 |
|
Note Receivable, net |
|
500,000 |
|
|
|
- |
|
Inventory |
|
200,973 |
|
|
|
187,241 |
|
Prepaid Assets |
|
29,017 |
|
|
|
36,056 |
|
Total Current Assets |
|
5,520,390 |
|
|
|
909,924 |
|
|
|
|
|
Other Assets: |
|
|
|
Property and Equipment, net |
|
558,310 |
|
|
|
564,933 |
|
Intangible Assets, net |
|
237,365 |
|
|
|
226,450 |
|
Investment in Joint Venture |
|
500 |
|
|
|
500 |
|
Prepaid Stock
Compensation |
|
165,208 |
|
|
|
167,562 |
|
Total Other Assets |
|
961,383 |
|
|
|
959,445 |
|
|
|
|
|
TOTAL
ASSETS |
$ |
6,481,773 |
|
|
$ |
1,869,369 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Accounts Payable |
|
280,020 |
|
|
|
112,175 |
|
Notes Payable, net of original issue discount $55,228 at
March 31, 2017 and net of original issue
discount $79,886 and net of
debt discount $358,280 at December 31, 2016 |
|
944,772 |
|
|
|
561,834 |
|
Accrued Expenses |
|
161,781 |
|
|
|
125,116 |
|
Total Current Liabilities |
|
1,386,573 |
|
|
|
799,125 |
|
Long-Term Liabilities |
|
|
|
Derivative Liability |
|
- |
|
|
|
93,206 |
|
Total Long-Term Liability |
|
- |
|
|
|
93,206 |
|
|
|
|
|
TOTAL
LIABILITIES |
|
1,386,573 |
|
|
|
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; |
|
|
|
4,570,199
and 3,133,789 issued and outstanding at |
|
|
|
March 31,
2017 and 2016, respectively |
|
4,570 |
|
|
|
3,135 |
|
Additional Paid-In Capital |
|
15,795,550 |
|
|
|
10,734,857 |
|
Accumulated Deficit |
|
(10,704,919 |
) |
|
|
(9,760,954 |
) |
Total Stockholders'
Equity |
|
5,095,201 |
|
|
|
977,038 |
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ |
6,481,773 |
|
|
$ |
1,869,369 |
|
|
|
|
|
Sigma Labs, Inc. |
Condensed Statements of
Operations |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
March 31, 2017 |
|
March 31, 2016 |
|
|
|
|
|
|
|
|
Revenues |
$ |
150,203 |
|
|
$ |
358,455 |
|
|
|
|
|
COST OF REVENUE |
|
74,534 |
|
|
|
107,581 |
|
|
|
|
|
GROSS PROFIT |
|
75,669 |
|
|
|
250,874 |
|
|
|
|
|
EXPENSES: |
|
|
|
Other General and Administration |
|
643,795 |
|
|
|
395,488 |
|
Payroll Expense |
|
376,621 |
|
|
|
215,589 |
|
Stock-Based Compensation |
|
139,632 |
|
|
|
71,551 |
|
Research and Development |
|
48,762 |
|
|
|
39,071 |
|
Total Expenses |
|
1,208,810 |
|
|
|
721,699 |
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
Interest Income |
|
343 |
|
|
|
158 |
|
Other Income |
|
152,068 |
|
|
|
- |
|
Other Income-Decrease in fair value of derivative
liabilities |
|
93,206 |
|
|
|
- |
|
Other Expense - Debt discount amortization |
|
(56,441 |
) |
|
|
- |
|
Total Other Income |
|
189,176 |
|
|
|
158 |
|
|
|
|
|
LOSS BEFORE PROVISION FOR INCOME TAXES |
|
(943,965 |
) |
|
|
(470,667 |
) |
|
|
|
|
Provision for income Taxes |
|
- |
|
|
|
- |
|
|
|
|
|
Net
Loss |
$ |
(943,965 |
) |
|
$ |
(470,667 |
) |
|
|
|
|
Net Loss per
Common Share - Basic and Diluted |
$ |
(0.25 |
) |
|
$ |
0.08 |
|
|
|
|
|
Weighted
Average Number of Shares |
|
|
|
Outstanding - Basic and Diluted |
|
3,835,875 |
|
|
|
3,116,865 |
|
|
|
|
|
Sigma Labs, Inc. and Subsidiaries |
Condensed Statements of Cash
Flows |
(Unaudited) |
|
|
|
|
|
Three Months
Ended |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
Net Loss |
$ |
(943,965 |
) |
|
$ |
(470,667 |
) |
Adjustments to reconcile Net Income (Loss) to Net Cash used
in operating activities: |
|
|
|
Noncash Expenses: |
|
|
|
Amortization |
|
6,526 |
|
|
|
5,002 |
|
Depreciation |
|
39,623 |
|
|
|
42,868 |
|
Stock
Compensation |
|
140,671 |
|
|
|
71,551 |
|
Revaluation of derivative liability and debt discount related to
notes payable |
|
(93,206 |
) |
|
|
- |
|
Note
payable original issue discount |
|
24,658 |
|
|
|
- |
|
Note
payable debt discount amortization |
|
56,441 |
|
|
|
- |
|
Change in assets and liabilities: |
|
|
|
Accounts
Receivable |
|
130,882 |
|
|
|
(101,087 |
) |
Inventory |
|
(13,732 |
) |
|
|
(74,057 |
) |
Prepaid
Assets |
|
7,039 |
|
|
|
16,622 |
|
Accounts
Payable |
|
167,845 |
|
|
|
105,633 |
|
Accrued
Expenses |
|
36,665 |
|
|
|
11,107 |
|
NET CASH USED IN OPERATING ACTIVITIES |
|
(440,553 |
) |
|
|
(393,028 |
) |
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
Purchase
of Furniture and Equipment |
|
(33,000 |
) |
|
|
(25,430 |
) |
Purchase
of Intangible Assets |
|
(17,441 |
) |
|
|
(34,988 |
) |
Notes
receivable |
|
(500,000 |
) |
|
|
- |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(550,441 |
) |
|
|
(60,418 |
) |
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
Proceeds from issuance
of common stock and warrants |
|
5,225,649 |
|
|
|
- |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
5,225,649 |
|
|
|
- |
|
|
|
|
|
NET CASH DECREASE FOR PERIOD |
|
4,234,655 |
|
|
|
(453,446 |
) |
|
|
|
|
CASH AT BEGINNING OF PERIOD |
|
398,391 |
|
|
|
1,539,809 |
|
|
|
|
|
CASH AT END OF PERIOD |
$ |
4,633,046 |
|
|
$ |
1,086,363 |
|
|
|
|
|
Supplemental
Disclosure for Cash Flow Information: |
|
|
|
Cash paid
during the period for: |
|
|
|
Interest |
$ |
20,114 |
|
|
$ |
- |
|
Income
Taxes |
$ |
- |
|
|
$ |
- |
|
|
|
|
|
Supplemental
Schedule of Noncash Investing and Financing
Activities: |
|
|
|
Issuance of Common
Stock for services |
$ |
51,408 |
|
|
$ |
- |
|
|
|
|
|
Investor Relations Contact:
Bret Shapiro
Managing Director
CORE IR
561-479-8566
brets@coreir.com
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