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Sigma Labs Announces Full Year 2018 Financial Results

 April 1, 2019 - 8:00 AM EDT
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Sigma Labs Announces Full Year 2018 Financial Results

Conference call today, April 1, 2019 at 9:00 am eastern time

SANTA FE, N.M., April 01, 2019 (GLOBE NEWSWIRE) -- 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 fiscal year ended December 31, 2018.

Highlights for 2018 and 2019 Developments

  • Demonstrated proof of concept for closed loop quality control during metal additive manufacturing. Using Sigma’s PrintRite3D® technology, the system operates by monitoring the process output and extracting process metrics. The process metrics are then compared to baseline metrics. The system then determines what process input parameter values need to be changed and implements those remedial changes in real time.
     
  • Launched PrintRite3D® 4.0 Product Suite with its patent-applied-for TED and TEP features enabling rapid AM machine optimization (TED) and in process quality assurance including signatures of precursors of developing quality anomalies (TEP).
     
  • Concurrent with the PrintRite3D® 4.0 release, the Company introduced its Rapid Test and Evaluation Program enabling qualifying customers to “try before they buy.”
     
  • Entered into a Cooperative Research and Development Agreement (CRADA) with the National Institute of Standards and Technology (NIST) to help develop Additive Metal Manufacturing Standards in the U.S.
     
  • Awarded contract for its PrintRite3D® hardware, software and engineering services by a federally funded organization involved in the space industry.
     
  • Awarded a Rapid Test and Evaluation Program contract with a leading global materials and service provider in additive manufacturing (AM).
     
  • Awarded Rapid Test and Evaluation Program contract win in the Oil and Gas Industry with a leading provider of integrated oilfield products, services and digital solutions.
     
  • Awarded three U.S. Patents, US 9,999,924, US 10,207,489 and US 10,226,817, that provide protections for methods of assuring part quality using real time data from multiple sensor types.
     
  • Closed offerings for total gross proceeds of $5,351,220; $3,390,100 in 2018 and $1,961,120 in 2019.
     
  • Darren Beckett and Dr. Martin Piltch assumed responsibilities of retiring CTO and Founder, Mark Cola. 
     
  • Hired a Germany-based Business Development Manager and a London based Applications Engineer to facilitate our continued expansion into the European market.
     
  • Hired a U.S.-based Business Development Manager, North and South America.
     
  • Joined Manufacturing Technology Centre to advance industrialization of Additive Manufacturing with in-process quality control.
     
  • Sigma Labs and Fraunhofer IAPT announced a collaborative research and development agreement to test and validate the use of the PrintRite3D’s In-Process-Quality-Assurance suite to identify and quantify machine and process inconsistencies as well as to define in-process defect thermal signatures in the part formation process and correlate them to CT scan results. Also named a member of the Additive Alliance of Fraunhofer IAPT, a leading network for Additive Manufacturing (AM). As the first US company to be granted a membership in the Alliance, Sigma Labs becomes part of the global research consortium to advance the development and implementation of AM.

“2018 was a momentous and, we believe, decisive year for our company. We completed a 17-month transition from an R&D company fielding an R&D tool into a Technology Commercialization company that introduced a commercial-industrial version of our PrintRite3D in November 2018. Sigma then commenced rolling out this technology through a Rapid Test and Evaluation Program directed at companies that manufacture or buy metal 3D manufactured parts and demand quality assurance solutions to improve yields and product risks that are below their companies’ high standards,” said John Rice, CEO of Sigma Labs. “The release to market of our TED and TEP tools was a seminal moment for us as it means that now we can give our customers the ability to identify inherent ‘built-in’ inconsistencies in 3D metal manufacturing equipment performance, allowing them to immediately address these inconsistencies, and we can discern the signatures of precursors of quality anomalies in real time before most of these first emerging problems spoil part quality. In 2018, we announced our successful proof of concept of closed loop control. Our Ted and TEP tools are essential for discerning and characterizing the information required by a closed loop control system. We are pleased with our progress and our pathway here.”

“In 2018, we also entered into and expanded our customer footprint in new industry verticals, including the Oil and Gas industry, as we implemented our increasingly successful Rapid Test and Evaluation Program approach to market growth. We also were awarded a contract for hardware, software and engineering services by a federally funded organization involved in the space industry. In order to expand our international sales opportunities, we hired a Business Development Manager who headquarters in Munich, Germany, an Applications Engineer who headquarters in Kingston upon Hull, England and a Business Development Manager for the Americas. While U.S. manufacturing employment has declined over the past 25 years, the future outlook for technologies like 3D metal manufacturing appears to be very bright. Taken alone, the U.S. manufacturing sector would be the ninth-largest economy in the world, according to the National Association of Manufacturers, in a new report issued by IndustryWeek Custom Research and Kronos Incorporated. To achieve their growth targets, manufacturers are investing in areas that will improve productivity and speed responsiveness and Sigma Labs now has a suite of products and services that can meet important unfilled niches of these needs,” Mr. Rice concluded.

2018 Full Year Financial Results

During the fiscal year ended December 31, 2018, we recognized revenue of $388,574 as compared to $641,049 recognized in 2017, a $252,475 reduction resulting from the shift from an emphasis on government and private industry funded research and development sales to our Rapid Test and Evaluation Program (“RTEP”).

Cost of sales for 2018 were $270,107 as compared to $272,372 in 2017, a decrease of $2,265.  This results from a combination of higher optics and software systems costs of our PrintRite3D® 4.0 Product Suite and the additional travel costs associated with the onsite collaboration required with RTEP. 

Sigma’s operating expenses for that twelve months ended December 31, 2018, were $5,687,271 as compared to $4,267,654 for the twelve months of fiscal 2017, a $1,419,617 increase. This increase resulted primarily from a combination of the requisite increase in salary and related costs of a 33% increase in employee count, the accrual of severance costs under executive employment agreement, increased internal R&D costs, higher travel cost for both business development outreach and onsite collaboration activities of RTEP and a more robust stock-based compensation program for both directors and employees in 2018.

The combination of lower sales revenue, higher cost of product and increased operations costs, discussed above, resulted in an operating loss of $5,568,804 in 2018 compared to a loss of $4,051,990 in 2017.

In 2018, our net other income and expense was a net expense of $5,359 compared to net expense of $525,526 in 2017.  The 2017 expense was largely due to the non-cash adjustments required for the revaluation of derivatives and amortization of debt discounts related to debt and equity financing activities in that year.

As of December 31, 2018, we had $1,279,782 in cash and had a working capital surplus of $1,747,836, as compared with $1,515,674 in cash and a working capital surplus of $2,656,695 as of December 31, 2017.

Investor Conference Call

Management will host a conference call today, April 1, 2019 at 9:00 am eastern time 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 May 1, 2019. 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 10129976. The webcast replay will be available through July 1, 2019.

About Sigma Labs

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 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 17, 2018 and which may be viewed at http://www.sec.gov.

Investor Relations Contact:
Bret Shapiro
Managing Director
CORE IR
561-479-8566
brets@coreir.com

 
Sigma Labs, Inc.
Condensed Balance Sheets 
(Unaudited)
      
  December 31, 2018 December 31, 2017 
      
ASSETS
  Current Assets:    
 Cash$1,279,782  $1,515,674  
 Accounts Receivable, net 38,800   104,538  
 Note Receivable, net 121,913   788,500  
 Inventory 240,086   192,705  
 Prepaid Expenses 67,255   55,278  
  Total Current Assets   1,747,836      2,656,695   
      
  Other Assets:    
 Property and Equipment, net 277,944   411,643  
 Intangible Assets, net 404,978   294,396  
 Investment in Joint Venture 500   500  
 Prepaid Stock Compensation -   31,576  
  Total Other Assets   683,422      738,115   
TOTAL ASSETS$   2,431,258   $   3,394,810   
      
LIABILITIES AND STOCKHOLDERS' EQUITY 
  Current Liabilities:    
 Accounts Payable$217,488  $100,884  
 Dividends Payable - Preferred -   -  
 Notes Payable 50,000   100,000  
 Deferred Revenue 51,498   35,680  
 Accrued Expenses 376,833   146,330  
  Total Current Liabilities   695,819      382,894   
TOTAL LIABILITIES   695,819      382,894   
      
  Stockholders' Equity     
 Preferred Stock, $0.001 par; 10,000,000 shares authorized;   
 0 shares issued and outstanding -   -  
 Common Stock, $0.001 par; 22,500,000 shares authorized;   
 8,776,629, and 4,978,929 issued and outstanding, respectively 8,777   4,979  
 Additional Paid-In Capital 21,501,407   17,192,394  
 Accumulated Deficit (19,774,745)  (14,185,457) 
TOTAL STOCKHOLDERS' EQUITY   1,735,439      3,011,916   
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $   2,431,258   $   3,394,810   
      

 

  
Sigma Labs, Inc. 
Condensed Statements of Operations  
(Unaudited) 
    
  Twelve Months Ended 
  December 31,
2018
 December 31,
2017
 
      
REVENUES$388,574  $641,049  
      
COST OF REVENUES 270,107   272,372  
      
 GROSS PROFIT (Loss)   118,467      368,677   
      
EXPENSES    
 Salaries & Benefits 2,056,584   1,509,672  
 Stock-Based Compensation 1,145,530   719,796  
 Operating & R&D Costs 493,410   302,043  
 Investor & Public Relations 633,035   554,990  
 Legal & Professional Services Fees 564,854   563,300  
 Office Expense 466,657   324,920  
 Depreciation & Amortization 192,374   196,943  
 Other Operating Expenses 134,827   95,989  
   Total Expenses   5,687,271      4,267,654   
 OPERATING INCOME (LOSS)   (5,568,804)    (3,898,977) 
      
OTHER INCOME (EXPENSE)    
 Interest Income 35,178   40,107  
 State Incentives -   154,568  
 Change in fair value of derivative liabilities -   (186,908) 
 Exchange Rate Gain (Loss) 162   -  
 Interest Expense (3,966)  (161,852) 
 Loss on Disposal of Assets (36,733)  (13,161) 
 Debt Discount Amortization -   (358,280) 
   Total Other Income (Loss)   (5,359)    (525,526) 
      
      
LOSS BEFORE PROVISION FOR INCOME TAXES   (5,574,163)    (4,424,503) 
      
Provision for income Taxes   -       -    
      
Net Loss$  (5,574,163) $  (4,424,503) 
      
Preferred Dividends (15,125)  -  
      
Net Loss applicable to Common Stockholders$  (5,589,288) $  (4,424,503) 
      
Net Loss per Common Share - Basic and Diluted$   (0.81) $   (1.00) 
 
Weighted Average Number of Shares     
  Outstanding - Basic and Diluted 6,898,047   4,403,479  
 
     

 

   
Sigma Labs, Inc.  
Condensed Statements of Cash Flows  
For the Periods Ended   
(Unaudited)  
        
   December 31, December 31,  
     2018     2017    
OPERATING ACTIVITIES     
 Net Loss$(5,574,163) $(4,424,503)  
        
 Adjustments to reconcile Net Income (Loss) to Net Cash used in operating activities:     
  Noncash Expenses:     
  Depreciation and Amortization 192,374   196,943   
  Stock Based Compensation 1,145,530   719,796   
  Loss on Writeoff of Assets 36,733   13,161   
  Refund on Write-off of Asset -   15,700   
  Gain/Loss on Change in Derivative Balance -   186,908   
  Original Issue Discount Amortization -   88,442   
  Debt Discount Amortization -   358,280   
  Change in assets and liabilities:     
  Accounts Receivable, net 65,738   183,698   
  Interest Receivable 34,390   -   
  Inventory (24,844)  (5,464)  
  Prepaid Assets (1,652)  (16,957)  
  Accounts Payable 116,604   (11,291)  
  Deferred Revenue 15,818   32,365   
  Accrued Expenses 230,501   24,529   
  NET CASH USED IN OPERATING ACTIVITIES$  (3,762,971) $  (2,638,393)  
        
INVESTING ACTIVITIES     
  Purchase of Furniture and Equipment (79,116)  (69,463)  
  Purchase of Intangible Assets (149,409)  (70,997)  
  Notes Receivable 632,197   (788,500)  
  NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES   403,672      (928,960)  
        
FINANCING ACTIVITIES     
  Proceeds from issuance of Series B Convertible Preferred & Warrants 1,000,000   -   
  Proceeds from issuance of Series C Convertible Preferred & Warrants 350,000   -   
  Proceeds from issuance of Common Stock and Warrants 2,040,100   5,823,300   
  Less Offering Costs (443,700)  (750,664)  
  Payments on Notes Payable -   (500,000)  
  Proceeds from Exercise of Warrants 192,132   112,000   
  Dividends on Preferred (15,125)  -   
  NET CASH PROVIDED BY FINANCING ACTIVITIES   3,123,407      4,684,636  153,013 
        
NET CASH INCREASE (DECREASE) FOR PERIOD$   (235,892) $   1,117,283    
        
CASH AT BEGINNING OF PERIOD$1,515,674  $398,391   
        
CASH AT END OF PERIOD$   1,279,782   $   1,515,674    
            
Supplemental Disclosures:     
 Noncash investing & financing activities disclosure:      
  Write-off of Derivative Liability$-  $(280,114)  
  Conversion of conv debt for stock$(50,000) $(408,566)  
 Other noncash operating activities disclosure:       
  Issuance of Common Stock for Services$256,264  $75,578   
 Disclosure of cash paid for:      
  Interest$12,205  $89,348   
        

 

           
Sigma Labs, Inc. 
Statement of Stockholders' Equity 
For The Twelve Months Ended December 31, 2018 and the Year Ended December 31, 2017 
 Common Stock
Shares
 Common Stock
Amount
 Additional Paid
in Capital
 Accumulated
Deficit
 Totals 
 
 
 
           
Balance December 31, 20163,133,789$3,135$10,734,857$-9,760,954$977,038 
           
Shares issued for Services at a price of $1.7220,000 20 34,384   34,404 
           
Shares issued for Services at a price of $3.255,232 5 16,999   17,004 
           
Shares issued for Services at a price of $2.277,489 7 16,993   17,000 
           
Shares issued for Services at a price of $2.078,213 8 16,992   17,000 
           
Shares sold in Dawson & James Offering at a net price of $3.7571,410,000 1,410 4,885,811   4,887,221 
           
Warrants sold in Dawson & James Offering at a price of $0.13    183,300   183,300 
           
Warrents sold at a price of $.01    2,115   2,115 
           
Debt discount on notes payable- - 0 - 0 
           
Shares Issued from exercise of Warrants141,000 141 -141 - 0 
           
Shares forfeited-8,250 -8 -9,822 - -9,830 
           
Fractional shares issued at reverse stock split1,178 1 - - 1 
           
Shares Issued for Note Payables Conversions200,000 200 399,800   400,000 
Shares Issued for Accrued Interest on Noter Payable (L1)4,278 4 8,552   8,556 
Shares Issued from exercise of Warrants (L1)56,000 56 111,944   112,000 
Writeoff of Derivative Liability upon note conversions    280,114   280,114 
           
Stock options awarded to employees    510,496   510,496 
           
Net loss for the twelve months ended December 31, 2017      -4,424,503 -4,424,503 
Balance December 31, 20174,978,929$4,979$17,192,394$-14,185,457$3,011,916 
           
Shares issued for Services at a price of $1.7223,256 23 39,977 - 40,000 
Shares issued for Services at a price of $1.2236176,744 177 216,087 - 216,264 
           
Convertible Preferred Shares issued in PIPE- - 877,499   877,499 
           
Shares issued for Conversion of Preferred1,000,000 1,000 -999 - 1 
Preferred Dividends Paid upon Conversion      -15,125 -15,125 
Shares Issued for Note Payables Conversions25,000 25 49,975 - 50,000 
Shares Issued for Cashless Exchange of Warrants4,800 5 -5 - 0 
           
Shares sold in DJames Public Offering at a net price of $0.8952,040,000 2,040 1,720,360 - 1,722,400 
Series C Convertible Preferred Shares Issued    346,500   346,500 
           
Shares issued for Conversion of Preferred350,000 350 -350 - 0 
           
Shares Issued from exercise of Warrants177,900 178 191,954 - 192,132 
           
Stock options awarded to employees- - 868,015 - 868,015 
           
Net loss for the Twelve months ended December 31, 20180 0 0 -5,574,163 -5,574,163 
Balance December 31, 20188,776,629$8,777$21,501,407$-19,774,745$1,735,438 
           

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Source: GlobeNewswire (April 1, 2019 - 8:00 AM EDT)

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