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Sigma Additive Solutions Reports First Quarter 2023 Financial Results

Sigma Additive Solutions Reports First Quarter 2023 Financial Results

 

Company Continues Evaluation of Strategic Alternatives Designed to Enhance Shareholder Value

 

Expanding Partner Collaborations Driving Momentum for Software Scale

 

SANTA FE, NM – May 15, 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 operational results for the first quarter ended March 31, 2023.

 

First 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 announcements related to strategic alternatives will be publicly communicated to shareholders.

 

With this activity continuing, in parallel, Sigma continued to progress its core business.

 

Key First Quarter and Subsequent 2023 Highlights and Business Update

Management Commentary

 

Jacob Brunsberg, President and Chief Executive Officer of Sigma, stated, “During the first quarter we continued to focus on expanding the industry partnerships that are critical to the growth of our software-only solutions, targeted for release in Q2 2023. We believe that these collaborations would unlock market potential and expand the total addressable market that could drive our company forward.

 

“In parallel, we continue to work with Lake Street Capital Markets on the exploration of a variety of strategic alternatives designed to enhance shareholder value, including a possible strategic investment, acquisition, merger, business combination, or similar transaction. We look forward to providing additional updates in the months to come as we seek to make progress on our evolution to a subscription pricing model and transform to software only product options,” concluded Brunsberg.

 

First Quarter 2023 Financial Results

 

Revenue for the first quarter of 2023 totaled $130,159 compared to revenues of $51,844 for the first quarter of 2022. The increase was primarily due to increased PrintRite3D sales, increased subscription-based revenue, and increased annual maintenance contract revenue.

 

Gross profit for the first quarter of 2023 was $66,495 as compared to $11,753 in the first quarter of 2022. Gross margin for the first quarter of 2023 was 51% compared to gross margin of 23% for the prior year quarter. The gross margin increase was primarily driven by an increase in subscription and legacy Rapid Test & Evaluation (“RTE”) revenue during the first quarter of 2023.

 

Total operating expenses for the first quarter of 2023 were $1.8 million, compared to $2.3 million in 2022, a decrease of 19%. The decrease was primarily attributable to a decrease in salaries and benefits, office expenses, and business travel.

 

Cash used in operating activities for the three months ended March 31, 2023 totaled $1.3 million as compared to $2.0 million in the three months ended March 31, 2022. Average monthly cash usage in the first quarter of 2023 was approximately $452,000, down from an average of $652,000 for the fourth quarter of 2022 and $717,000 for the full year of 2022.

 

Net loss for the first quarter of 2023 was $1.8 million, or $0.17 per share, as compared to a net loss of $2.2 million, or $0.21 per share in the first quarter of 2022.

 

Cash totaled $1.5 million at March 31, 2023, as compared to $2.8 million at December 31, 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 Contact

Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
Email Contact

www.mzgroup.us

 

Sigma Additive Solutions, Inc.

Condensed Balance Sheets

 

 

 

March 31, 2023

(Unaudited)

 

 

December 31, 2022

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash

 

$

1,488,704

 

 

$

2,845,931

 

Accounts Receivable, net

 

 

210,449

 

 

 

371,620

 

Inventory

 

 

944,402

 

 

 

950,943

 

Prepaid Assets

 

 

235,003

 

 

 

105,226

 

Total Current Assets

 

 

2,878,558

 

 

 

4,273,720

 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Property and Equipment, net

 

 

284,193

 

 

 

304,903

 

Intangible Assets, net

 

 

1,165,558

 

 

 

1,125,285

 

Total Other Assets

 

 

1,449,751

 

 

 

1,430,188

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

4,328,309

 

 

$

5,703,908

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$

400,640

 

 

$

277,492

 

Deferred Revenue

 

 

153,443

 

 

 

120,073

 

Accrued Expenses

 

 

219,126

 

 

 

231,633

 

Total Current Liabilities

 

 

773,209

 

 

 

629,198

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

773,209

 

 

 

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

 

 

54,749,821

 

 

 

54,406,694

 

Accumulated Deficit

 

 

(51,205,495

)

 

 

(49,342,484

)

Total Stockholders’ Equity

 

 

3,555,100

 

 

 

5,074,710

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

4,328,309

 

 

$

5,703,908

 

 

 

Sigma Additive Solutions, Inc.

Condensed Statements of Operations

(Unaudited)

 

 

 

 

2023

 

 

2022

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

REVENUES

 

$

130,159

 

 

$

51,844

 

 

 

 

 

 

 

 

 

 

COST OF REVENUE

 

 

63,664

 

 

 

40,091

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

66,495

 

 

 

11,753

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Salaries & Benefits

 

 

931,583

 

 

 

1,292,010

 

Stock-Based Compensation

 

 

224,850

 

 

 

170,976

 

Operations and R&D Costs

 

 

126,712

 

 

 

143,418

 

Investor, Public Relations and Marketing

 

 

54,944

 

 

 

94,326

 

Organization Costs

 

 

51,198

 

 

 

58,749

 

Legal & Professional Service Fees

 

 

184,251

 

 

 

211,416

 

Office Expenses

 

 

154,499

 

 

 

205,432

 

Depreciation & Amortization

 

 

28,127

 

 

 

31,584

 

Other Operating Expenses

 

 

91,980

 

 

 

87,787

 

Total Operating Expenses

 

 

1,848,144

 

 

 

2,295,698

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(1,781,649

)

 

 

(2,283,945

)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Interest Income

 

 

8

 

 

 

1,571

 

State Incentives

 

 

-

 

 

 

76,628

 

Exchange Rate Loss

 

 

(2,503

)

 

 

(330

)

Interest Expense

 

 

(3,235

)

 

 

(1,319

)

Other Income

 

 

35,680

 

 

 

-

 

Total Other Income

 

 

29,950

 

 

 

76,550

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE PROVISION FOR INCOME TAXES

 

 

(1,751,699

)

 

 

(2,207,395

)

 

 

 

 

 

 

 

 

 

Provision for income Taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(1,751,699

)

 

$

(2,207,395

)

 

 

 

 

 

 

 

 

 

Preferred Dividends

 

 

(11,748

)

 

 

(14,220

)

 

 

 

 

 

 

 

 

 

Net Loss Applicable to Common Stockholders

 

$

(1,763,447

)

 

$

(2,221,615

)

 

 

 

 

 

 

 

 

 

Net Loss per Common Share – Basic and Diluted

 

$

(0.17

)

 

$

(0.21

)

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding – Basic and Diluted

 

 

10,690,677

 

 

 

10,498,802

 

 

 

 

Sigma Additive Solutions, Inc.

Condensed Statements of Cash Flows

(Unaudited)

 

 

 

 

March 31, 2023

 

 

March 31, 2022

 

 

 

Three Months Ended

 

 

 

March 31, 2023

 

 

March 31, 2022

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net Loss

 

$

(1,751,699

)

 

$

(2,207,395

)

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

 

 

 

 

 

 

 

 

Noncash Expenses:

 

 

 

 

 

 

 

 

Depreciation and Amortization

 

 

28,127

 

 

 

31,584

 

Stock-Based Compensation - Employees

 

 

224,850

 

 

 

170,976

 

Stock-Based Compensation - Third Party Services

 

 

(489

)

 

 

11,713

 

Stock-Based Compensation - Directors

 

 

7,728

 

 

 

21,721

 

Stock-Based Compensation

 

 

-

 

 

 

-

 

Change in Assets and Liabilities:

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

161,171

 

 

 

151,170

 

Inventory

 

 

6,541

 

 

 

(72,019

)

Prepaid Assets

 

 

(129,777

)

 

 

(50,996

)

Accounts Payable

 

 

123,148

 

 

 

114,105

 

Deferred Revenue

 

 

33,370

 

 

 

11,421

 

Accrued Expenses

 

 

(12,507

)

 

 

(209,299

)

NET CASH USED IN OPERATING ACTIVITIES

 

 

(1,309,537

)

 

 

(2,027,019

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Purchase of Property and Equipment

 

 

-

 

 

 

(83,248

)

Purchase of Intangible Assets

 

 

(47,690

)

 

 

(58,851

)

NET CASH USED IN INVESTING ACTIVITIES

 

 

(47,690

)

 

 

(142,099

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH FOR PERIOD

 

 

(1,357,227

)

 

 

(2,169,118

)

 

 

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

 

2,845,931

 

 

 

11,447,047

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

 

$

1,488,704

 

 

$

9,277,929

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures:

 

 

 

 

 

 

 

 

Noncash Investing and Financing Activities Disclosure:

 

 

 

 

 

 

 

 

Preferred Stock Dividends

 

$

11,748

 

 

$

14,220

 

Conversion of Preferred Shares to Common Shares

 

 

188,830

 

 

 

-

 

Other Noncash Operating Activities Disclosure:

 

 

 

 

 

 

 

 

Issuance of Securities for services

 

$

7,239

 

 

$

33,434

 

Disclosure of Cash Paid for:

 

 

 

 

 

 

 

 

Interest

 

$

3,235

 

 

$

1,319

 

Income Taxes

 

$

-

 

 

$

-