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Sigma Labs Reports Second Quarter 2019 Financial Results

By GlobeNewswire,  August 14, 2019, 04:01:00 PM EDT


Recent Proof of Concept Wins with Major OEM's and Fortune Global 500 Companies Position Sigma for Commercial Orders

SANTA FE, N.M., Aug. 14, 2019 (GLOBE NEWSWIRE) -- 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:

     

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 Labs

    Sigma 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 Tyson

    Managing Director

    MZ Group - MZ North America

    949-491-8235

    SGLB@mzgroup.us

    www.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 Ended

    June 30,
        Six Months Ended

    June 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 $ -     $ -  

    Source: Sigma Labs, Inc.

    This article appears in: News Headlines

    Referenced Stocks: SGLB










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