Sigma Additive Solutions Reports Second Quarter 2023 Financial Results
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Sigma Additive Solutions Reports Second Quarter 2023 Financial Results

SANTA FE, NM – August 14, 2023 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 operating results for the quarter ended June 30, 2023.

Second Quarter 2023 Results Conference Call

Due to discussions related to the Company's ongoing consideration of a range of strategic alternatives designed to enhance shareholder value, including a possible strategic investment, acquisition, merger, business combination, or similar transaction, Sigma is not hosting its regular quarterly conference call. Future material developments related to strategic alternatives will be publicly communicated to shareholders.

Management Commentary

Jacob Brunsberg, President and Chief Executive Officer of Sigma, stated, “During the second quarter we continued our progress reducing expenses and cash burn while working with Lake Street Capital Markets and advisors on the exploration of a variety of strategic alternatives.

“We expect our expenses to continue to decrease into the third quarter. In our Current Report on Form 8-K filed with the SEC on July 20, 2023, we reported that we had received four written, non-binding proposals to purchase assets or acquire the company in a merger or reverse merger and were in talks regarding the respective proposals, as well as possible alternative transactions with other parties that expressed interest in a possible transaction as we worked to formally close our strategic transaction process. We also reported that we had reduced our headcount to a core team we felt important to a possible sale of the company or all or a portion of its assets and support of current customers and had discontinued our product development activities and ceased to pursue new customers.

“Since July 20, 2023, we have received additional written, non-binding proposals as well as revised previous proposals to purchase certain assets of the Company and/or acquire the Company in a merger or reverse merger. Although we have not yet entered into any definitive agreements, we are continuing to work towards such definitive agreements with interested parties. We look forward to providing additional updates in the weeks to come,” concluded Brunsberg.

Second Quarter 2023 Financial Results

Revenue for the second quarter of 2023 totaled $97,043 compared to revenues of $236,660 for the second quarter of 2022. The decrease was primarily due to decreased PrintRite3D sales, decreased subscription-based revenue, and decreased annual maintenance contract revenue.

Gross profit for the second quarter of 2023 was $60,552 as compared to $43,585 in the second quarter of 2022. Gross margin for the second quarter of 2023 was 62% compared to gross margin of 18% for the prior year quarter. The increase was primarily attributable to a lower cost of revenue due to fewer unit sales and installations in the second quarter of 2023 as compared to the second quarter of 2022.

Total operating expenses for the second quarter of 2023 were $1.4 million, compared to $2.3 million in 2022, a decrease of 40%. The decrease was primarily attributable to a decrease in salaries and benefits, office expenses, and business travel attributable to our reduced workforce.

Net loss for the second quarter of 2023 was $1.3 million, or $0.12 per share, as compared to a net loss of $2.3 million, or $0.22 per share in the second quarter of 2022.

Cash totaled $0.4 million at June 30, 2023, as compared to $2.8 million at December 31, 2022. Cash used in operating activities for the six months ended June 30, 2023 totaled $2.4 million as compared to $4.3 million in the six months ended June 30, 2022. Average monthly cash usage in the second quarter of 2023 was approximately $373,000, down from an average of $452,000 for the first quarter of 2023 and $652,000 for the fourth quarter of 2022.

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 identify and successfully negotiate a strategic transaction and, failing that, 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.

Condensed Balance Sheets

 

 

 

June 30, 2023

 

 

December 31, 2022

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash

 

$

368,443

 

 

$

2,845,931

 

Accounts Receivable, net

 

 

45,454

 

 

 

371,620

 

Inventory

 

 

940,034

 

 

 

950,943

 

Prepaid Assets

 

 

137,105

 

 

 

105,226

 

Total Current Assets

 

 

1,491,036

 

 

 

4,273,720

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Property and Equipment, net

 

 

227,787

 

 

 

304,903

 

Intangible Assets, net

 

 

1,215,411

 

 

 

1,125,285

 

Total Other Assets

 

 

1,443,198

 

 

 

1,430,188

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

2,934,234

 

 

$

5,703,908

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

300,562

 

 

$

277,492

 

Deferred Revenue

 

 

127,188

 

 

 

120,073

 

Accrued Expenses

 

 

115,195

 

 

 

231,633

 

Total Current Liabilities

 

 

542,945

 

 

 

629,198

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

542,945

 

 

 

629,198

 

 

 

 

 

 

 

 

 

 

Commitments & Contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 316 and 465 shares issued and outstanding, respectively

 

 

1

 

 

 

1

 

Common Stock, $ 0.001 par value; 24,000,000 shares authorized; 10,772,713 and 10,498,802 shares issued and outstanding, respectively

 

 

10,773

 

 

 

10,499

 

Additional Paid-In Capital

 

 

54,904,792

 

 

 

54,406,694

 

Accumulated Deficit

 

 

(52,524,277

)

 

 

(49,342,484

)

Total Stockholders’ Equity

 

 

2,391,289

 

 

 

5,074,710

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

2,934,234

 

 

$

5,703,908

 

 

 

Sigma Additive Solutions, Inc.

Condensed Statements of Operations

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

97,043

 

 

$

236,660

 

 

$

227,202

 

 

$

288,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

36,491

 

 

 

193,075

 

 

 

100,155

 

 

 

233,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

60,552

 

 

 

43,585

 

 

 

127,047

 

 

 

55,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries & Benefits

 

 

554,182

 

 

 

1,184,818

 

 

 

1,485,764

 

 

 

2,476,828

 

Stock-Based Compensation

 

 

138,489

 

 

 

167,439

 

 

 

363,339

 

 

 

338,415

 

Operations and R&D Costs

 

 

105,259

 

 

 

146,885

 

 

 

231,971

 

 

 

290,303

 

Investor, Public Relations and Marketing

 

 

57,824

 

 

 

152,300

 

 

 

112,768

 

 

 

246,626

 

Organization Costs

 

 

38,240

 

 

 

60,817

 

 

 

89,438

 

 

 

119,566

 

Legal & Professional Service Fees

 

 

152,025

 

 

 

144,528

 

 

 

336,276

 

 

 

355,944

 

Office Expenses

 

 

94,190

 

 

 

303,600

 

 

 

248,689

 

 

 

509,032

 

Depreciation & Amortization

 

 

21,470

 

 

 

29,861

 

 

 

49,597

 

 

 

61,445

 

Other Operating Expenses

 

 

202,892

 

 

 

89,177

 

 

 

294,873

 

 

 

176,964

 

Total Operating Expenses

 

 

1,364,571

 

 

 

2,279,425

 

 

 

3,212,715

 

 

 

4,575,123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(1,304,019

)

 

 

(2,235,840

)

 

 

(3,085,668

)

 

 

(4,519,785

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

9

 

 

 

1,176

 

 

 

17

 

 

 

2,747

 

State Incentives

 

 

-

 

 

 

-

 

 

 

-

 

 

 

76,628

 

Exchange Rate Gain (Loss)

 

 

(849

)

 

 

(10,436

)

 

 

(3,352

)

 

 

(10,766

)

Interest Expense

 

 

(3,235

)

 

 

(2,070

)

 

 

(6,471

)

 

 

(3,389

)

Other Income

 

 

-

 

 

 

-

 

 

 

35,680

 

 

 

-

 

Total Other Income (Expense)

 

 

(4,075

)

 

 

(11,330

)

 

 

25,874

 

 

 

65,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE PROVISION FOR INCOME TAXES

 

 

(1,308,094

)

 

 

(2,247,170

)

 

 

(3,059,794

)

 

 

(4,454,565

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income Taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(1,308,094

)

 

$

(2,247,170

)

 

$

(3,059,794

)

 

$

(4,454,565

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Dividends

 

 

(10,688

)

 

 

(14,220

)

 

 

(22,435

)

 

 

(28,440

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Applicable to Common Stockholders

 

$

(1,318,782

)

 

$

(2,261,390

)

 

$

(3,082,229

)

 

$

(4,483,005

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss per Common Share – Basic and Diluted

 

$

(0.12

)

 

$

(0.22

)

 

$

(0.29

)

 

$

(0.43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding – Basic and Diluted

 

 

10,772,713

 

 

 

10,498,802

 

 

 

10,731,922

 

 

 

10,498,802

 

 

 

Sigma Additive Solutions, Inc.

Condensed Statements of Cash Flows

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2022

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net Loss

 

$

(3,059,794

)

 

$

(4,454,565

)

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

 

 

 

 

 

 

 

 

Noncash Expenses:

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

49,597

 

 

 

61,445

 

Stock Based Compensation - Employees

 

 

363,339

 

 

 

338,415

 

Stock Based Compensation - Third Party Services

 

 

(489

)

 

 

23,490

 

Stock Based Compensation - Directors

 

 

13,523

 

 

 

43,442

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

326,166

 

 

 

120,434

 

Inventory

 

 

10,909

 

 

 

(73,586

)

Prepaid Assets

 

 

(31,879

)

 

 

(17,197

)

Accounts Payable

 

 

23,070

 

 

 

33,958

 

Deferred Revenue

 

 

7,115

 

 

 

(18,151

)

Accrued Expenses

 

 

(116,438

)

 

 

(372,188

)

NET CASH USED IN OPERATING ACTIVITIES

 

 

(2,414,881

)

 

 

(4,314,503

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of Property and Equipment

 

 

42,516

 

 

 

(83,848

)

Purchase of Intangible Assets

 

 

(105,123

)

 

 

(115,197

)

NET CASH USED IN INVESTING ACTIVITIES

 

 

(62,607

)

 

 

(199,045

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH FOR PERIOD

 

 

(2,477,488

)

 

 

(4,513,548

)

 

 

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

 

2,845,931

 

 

 

11,447,047

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

368,443

 

 

$

6,933,499

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Noncash investing and financing activities disclosure:

 

 

 

 

 

 

 

 

Preferred Stock Dividends

 

$

22,435

 

 

$

28,440

 

Conversion of Preferred Shares to Common Shares

 

$

188,830

 

 

$

-

 

Other noncash operating activities disclosure:

 

 

 

 

 

 

 

 

Issuance of Securities for Services

 

$

13,034

 

 

$

66,932

 

Disclosure of cash paid for:

 

 

 

 

 

 

 

 

Interest

 

$

6,471

 

 

$

3,389

 

Income Taxes

 

$

-

 

 

$

-