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Item 5. Market for Registrant’s Common Equity

2022-03-24 compared with 2021-03-24 · 28 added, 254 removed, 2 unchanged (99% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

common stock trades on The NASDAQ Capital Market under the symbol “SGLB.”

of March 23, 2021, there were approximately 554 holders of record of our common stock based on information provided

by our transfer agent.

have not paid any dividends on our common stock to date and do not anticipate that we will pay dividends in the foreseeable future.

Any payment of cash dividends on our common stock in the future will be dependent upon the amount of funds legally available,

our earnings, if any, our financial condition, our anticipated capital requirements and other factors that the board of directors

may think are relevant.

However, we currently intend for the foreseeable future to follow a policy of retaining all of our earnings,

if any, to finance the development and expansion of our business and, therefore, do not expect to pay any dividends on our common

stock in the foreseeable future.

However, we have paid dividends on our preferred stock pursuant to an agreement with investors

and may do so in the future pursuant to future financing agreements, if any.

Pursuant to the Series D Preferred Stock Certificate

of Designations, the Company may not declare or pay any cash dividend or distribution on any of its capital stock, other than

as required by the Certificate of Designations.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

common stock trades on The NASDAQ Capital Market under the symbol “SGLB.”

of March 23, 2022, there were approximately 568 holders of record of our common stock based on information provided by

our transfer agent.

We have not paid any dividends

on our common stock to date and do not anticipate that we will pay dividends in the foreseeable future.

Any payment of cash dividends

on our common stock in the future will be dependent upon the amount of funds legally available, our earnings, if any, our financial condition,

our anticipated capital requirements and other factors that the board of directors may think are relevant.

We have paid dividends

on our preferred stock pursuant to an agreement with investors and may do so in the future pursuant to future financing agreements, if

The Certificate of Designations of our Series D Preferred Stock prohibits us from declaring or paying any cash dividend

or distribution on any of its capital stock, other than as required by the Certificate of Designations.

Sales of Unregistered Securities

did not repurchase any of our securities during the fiscal year ended December 31, 2020.

In March 2021, the

Company issued 1,500 shares of common stock valued at $4.99 per share to an investor relations firm as partial compensation for

services previously rendered.

The shares were issued without registration under the Securities Act of 1933, as amended (the “Securities Act”),

in reliance upon the exemption from registration under Section 4(2) of the Securities Act for transactions not involving a public offering.

fiscal 2021, we purchased 5,204 shares of our common stock at a price of $3.47 per share, the average of the Company’s opening

and closing stock price on the date of purchase, upon the exercise of our right of first refusal in connection with an employee’s

exercise of an option to purchase such shares.

Total number of shares purchased

Average price paid per share

Total number of shares purchased as part of publicly

announced plans or programs

Maximum number or approximate dollar value of

shares that may yet be purchased under the plans or programs

August 15 – August 31, 2021

SELECTED FINANCIAL DATA.

applicable to a “smaller reporting company”

as defined in Item 10(f)(1) of SEC Regulation S-K.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

is a leading provider of in-process quality assurance (IPQA®) software to the additive manufacturing industry.

Sigma specializes

in the development and commercialization of real-time monitoring solutions known as PrintRite3D®

for 3D metal advanced

manufacturing technologies.

PrintRite3D detects and classifies defects and anomalies real-time during the manufacturing process,

enabling significant cost-savings and production efficiencies.

We are dedicated to setting the quality standard for Additive Manufacturing

and accelerating the worldwide adoption of 3D metal printing.

We work closely with international standards organizations, renowned

universities, research organizations, advanced manufacturers, and leading design and simulation software companies.

is printer agnostic and works with most of the leading 3D metal printers.

Business Update

stated earlier, the worldwide COVID-19 pandemic caused a reduction, and in some cases a freeze, in capital spending within the

Company’s targeted industries and had what the Company believes to be a short-term negative impact on the Company’s

expected timing of generating meaningful revenue.

Further, the future impact of the outbreak, including variations of the virus,

is highly uncertain and cannot be predicted so that no assurance can be given that the outbreak will not have a material adverse

impact on the future results of the Company.

It is also uncertain as to any further disruption of the global financial markets,

which may reduce our ability to access capital, either at all, or on favorable terms.

February 27, 2020, we effected a reverse split of our common stock on a 1-for-10 basis.

Accordingly, all common shares, stock

options, warrants, and per share amounts contained in this Annual Report have been retroactively adjusted to reflect the reverse

split for all periods presented.

Accounting Policies

preparation of financial statements in conformity with accounting principles generally accepted in the United States requires

management to make estimates and assumptions that affect the reported assets, liabilities, sales and expenses in the accompanying

financial statements.

Critical accounting policies are those that require the most subjective and complex judgments, often employing

the use of estimates about the effect of matters that are inherently uncertain.

Such critical accounting policies, including the

assumptions and judgments underlying them, are disclosed in Note 1 to the Financial Statements included in this Annual Report.

However, we do not believe that there are any alternative methods of accounting for our operations that would have a material

effect on our financial statements.

of Operations

Ended December 31, 2020 Compared to the Year Ended December 31, 2019.

generate revenues through PrintRite3D®

hardware and CAI software licensing of our PrintRite3D®

technology to customers

that seek to improve their manufacturing production processes, and through ongoing annual software upgrades and maintenance fees.

Additionally, we generate revenues from our contract manufacturing activities in metal AM.

Our ability to generate revenues in the future will depend on our ability to further commercialize and increase market presence

of our PrintRite3D®

technologies, and it will depend on whether key prospective customers continue to move from AM

metal prototyping to production.

the fiscal year ended December 31, 2020 (“fiscal 2020”), we generated an aggregate of $807,488 in revenues, as compared

to an aggregate of $402,446 in revenues generated by us in the fiscal year ended December 31, 2019 (“fiscal 2019”).

The contributors to the $405,042 increase were increases in new PrintRite3D®

6.0 system sales of $394,959,

increased revenues from our Rapid Test and Evaluation (“RTE”) program of $37,064, increased annual maintenance revenues

of $11,240, and increased revenue from contract AM jobs of $8,651, partially offset by decreases in on-site engineering

and installation revenues of $47,872.

Our cost of revenue for fiscal 2020 was $591,957 compared to $574,301 during the same

period in 2019, an increase of $17,656.

The increase is primarily due to increased PrintRite3D®

6.0 system sales, and parts

and materials upgrades for certain customers.

Sigma’s

total operating expenses for fiscal 2020 were $5,914,299 as compared to $6,211,830 for fiscal 2019, a $297.531 decrease.

fiscal 2020, salaries and benefits costs were $2,622,162 as compared to $2,354,329 for the same period in 2019.

increase resulted primarily from salary increases and related employer payroll taxes of $148,270, employee bonuses of $127,250,

and increased sales commissions of $8,800, partially offset by lower benefits costs of $23,578.

compensation for fiscal 2020 was $596,842 compared to $497,240 for the same period in 2019.

This $99,602 increase

resulted primarily from stock grants made to employees of $23,610 and additional stock options granted to employees of

fiscal 2020, Sigma incurred research and development expenditures of $351,404 compared to $647,994 in the same period of

The $296,590 decrease is primarily the result of completed product development, as well as the reduced use of consultants

during the year.

Sigma’s

investor and public relation fees incurred in fiscal 2020 were $434,852, compared to $417,750 in fiscal 2019.

The increase in the comparative expenditures results primarily from an additional investor relations consultant of $90,369,

increased investor conferences and virtual shareholder meetings of approximately $20,000, partially offset by decreased advertising

and trade show expenses of $100,000.

costs for fiscal 2020 were 425,847, compared to $530,958 for the same period in 2020.

The decrease of $105,111 is primarily attributable

to lower directors’

compensation in 2020 of $135,944 and investment bank consulting fees of $31,500, partially offset by

increased shareholder services costs of $49,149 as a result of a special shareholders meeting held in March 2020 and costs incurred

for the conversion of Series D Preferred Stock throughout 2020.

and professional service fees in fiscal 2020 were $676,142 compared to $664,403 paid in fiscal 2019.

The increase of $11,739

is primarily attributable to an increase in legal fees of $128,010 related to a special shareholders meeting, Nasdaq

compliance related matters, and our 2020 financings, and an increase in IT services fees of $17,101, partially offset by reduced

utilization of recruiting firms of $49,851 and consultants of $86,574.

fiscal 2020, Sigma’s office expenses were $416,580 compared to $747,881 in the same period of 2019.

decrease in these expenditures resulted primarily from reduced travel costs of $309,451 as a result of COVID-19 restrictions,

and lower office supplies expense of $56,371 due to employees working remotely for most of the year, partially offset by an increase

in postage and shipping costs of $18,446 related to PrintRite 3D returns from expired RTE programs.

and amortization expense in 2020 was $105,175, as compared to $192,569 in 2019.

The decrease of $87,394 is primarily the result

of our fully depreciated 3D printer in 2020, partially offset by an increase in patent amortization expense during the year.

operating expenses for fiscal 2020 totaled $285,295, compared to $158,706 for fiscal 2019.

The increase of $126,589 is primarily

due to an increase in insurance premiums, in particular our Director’s & Officer’s policy premium which increased

fiscal 2020, our net other income & expense was net income of $498,629 compared to net income of $62,836 in

The increase of $435,793 is primarily due to increased incentives from the State of New Mexico of $99,780 and income

from the Company’s Payroll Protection Plan loan of $361,700, partially offset by a decrease in interest income of $17,702

and an increase in interest expense of $5,223.

Sigma’s

net loss before preferred dividends for fiscal 2020 decreased $1,120,710 overall and totaled $5,200,139,

as compared to a net loss before preferred dividends of $6,320,849 for fiscal 2019.

Net loss applicable to common stockholders

for fiscal 2020 was $7,009,414, as compared to $6,320,849 for fiscal 2019.

The 2020 net operating loss component of the overall

loss being $684,917 lower than in 2019 and the other income component being a $435,793 higher.

Preferred stock dividends

were $1,809,275 in 2020 and $0 in 2019.

and Capital Resources

of December 31, 2020, we had $3,700,814 in cash and working capital of $4,332,053, as compared to $86,919 in cash

and a working capital deficit of $98,315 as of December 31, 2019.

On January 12, 2021, the Company closed a public

offering of common stock resulting in net proceeds of approximately $4,532,444 after deducting commissions and other

offering expenses payable by the Company.

In February and March

of 2021, the Company received net cash proceeds of $1,136,010 from the exercise of outstanding warrants.

believe that our existing cash on hand will be sufficient to fund our anticipated operating costs and capital expenditure requirements

through 2021.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources

sooner than we expect.

of the numerous risks and uncertainties associated with the research, development, and commercialization of our products, we are

unable to estimate the exact amount of our working capital requirements.

Our future capital requirements will depend on many factors,

cost of expending, maintaining, and enforcing our intellectual property portfolio, including filing, prosecuting, defending

and enforcing our patent claims and other intellectual property rights;

effect of competing technological and market developments;

revenue from the sales of our existing and future products;

cost of operating as a public company;

other factors listed under Item 1A “Risk Factors.”

major sources of funding have been proceeds from public and private offerings of our equity securities (both common stock and

preferred stock), and from warrant exercises.

On March 15, 2019, the Company closed a public offering of equity securities resulting

in net proceeds of approximately $1,679,230 after deducting commissions and other offering expenses payable by the Company.

May 2019, the Company closed a private placement of equity securities resulting in net proceeds of approximately $515,000, after

deducting placement agent commissions and other offering expenses payable by the Company.

In August 2019, the Company closed a

public offering of equity securities resulting in net proceeds of approximately $1,971,000, after deducting placement agent commissions

and other offering expenses payable by the Company.

In September 2019, Aegis Capital Corp.

partially exercised its over-allotment

option granted by the Company in the foregoing August 2019 public offering, resulting in net proceeds of $148,800 after deducting

placement agent commissions.

In January 2020, we completed two private placements consisting of shares of our newly created Series

D and Series E Preferred Stock, warrants to purchase additional shares of Series D Preferred Stock and warrants to purchase shares

of our Common Stock resulting in net cash proceeds to us of approximately $1,711,124.

During 2020, institutional holders of

the Series D Preferred Warrants exercised 6,146 of 6,156 such warrants resulting in net proceeds to the Company of $5,820,998.

As of March 23, 2021, if all of the remaining common warrants to purchase our common stock are exercised by the holders thereof,

the potential net proceeds to us will be $1,291,000.

On April 6, 2020, we closed an offering of equity securities in which the

Company sold and issued to certain institutional investors (a) shares of the Company’s common stock and pre-funded warrants,

and (b) Series A Warrants (the “Private Warrants”) to purchase shares of the Company’s common stock pursuant

to a private placement resulting in net proceeds of approximately $1,230,000.

As of March 23, 2021, if all of the Series A Warrants

are exercised by the holders thereof for cash, the potential gross cash proceeds to us will be $956,015.

On January 12, 2021,

the Company closed a public offering of equity securities resulting in net proceeds of approximately $4,532,444 after deducting

commissions and other offering expenses payable by the Company.

need to raise additional amounts to fund our operations, maintain compliance with the NASDAQ listing

requirements and implement our business plan.

There is no assurance as to the amount and availability of any required future financing

or the terms thereof.

Such financing, if in the form of equity, may be highly dilutive to our existing stockholders and may otherwise

include onerous terms.

If in the form of debt, such financing may include covenants and repayment obligations which may be difficult

to meet and that could adversely affect our business operations.

There is also significant uncertainty from the affect that the

novel coronavirus may have on the availability and type of financing.

To the extent that funds are not available to us, we may

be required to delay, limit, or terminate our business operations and lose our NASDAQ listing.

2021, we expect to sustain our operations and our commercialization and marketing efforts with our cash reserves and revenues

generated from sales of our PrintRite 3D®

We expect that continued enhancements of our IPQA®-enabled

PrintRite3D®

technology will enable us to further commercialize this technology into the AM metal market in 2021.

To support the commercialization of our PrintRite3D®

technology, we plan to continue funding our development activities

and operating expenses by licensing our PrintRite3D®

systems and supporting field services, as applicable, and providing PrintRite3D®-enabled

engineering consulting services concerning our areas of expertise (materials and manufacturing quality assurance and process control

technologies) and through the use of proceeds from sales of our securities.

Cash Used in Operating Activities

cash used in operating activities in 2020 decreased to $4,809,868 from $5,514,805 in 2019, which is a decrease

in cash used of $704,937.

This decrease is primarily attributable to:

(1) a decrease in our net loss

before preferred dividends of $1,120,710;

(2) higher equity-based compensation expenses of $150,644

(a) increased options and common share grants awarded to employees of $99,602;

(b) increased stock options granted

to consultants in lieu of cash of $70,096, partially offset by (c) lower equity based compensation for directors of $60,117;

an increase in accounts receivable of $259,282 due to increased sales;

(4) a decrease in inventory growth in 2020 from 2019

(5) a decrease in current and long-term prepaid expenses of $319,463 primarily due to the release of

collateral for a letter of credit and amortization of our three-year membership in the UK’s National Centre for Additive

Manufacturing (“NCAM”);

(6) a decrease in accounts payable and accrued expenses of $732,471 due to

payments in 2020 related to 2019 payables as well as lower accounts payable in 2020 resulting from our improved cash position;

(7) a decrease in deferred revenue of $149,439;

(8) long-term Stock Appreciation Rights granted to employees and consultants of

(9) long-term deferral of Payroll Taxes under the CARES Act of $37,728;

and (10) a decrease in depreciation expense of

Cash Used by Investing Activities

cash used by investing activities during fiscal 2020 was $298,359, which compares to cash used by investing activities

during the same period of 2019 totaling $85,798.

The increase is primarily due to increased purchases of fixed assets

of $54,587, additional costs incurred for patents of $36,561 and the receipt of cash from loan repayments of $121,913

Cash Provided by Financing Activities

provided by financing activities during fiscal 2020 increased to $8,722,122 from $4,407,740 during the same period in 2019,

an increase of $4,314,382 primarily as a result of the exercise of Series D Preferred warrants from our January 2020

private offering, which resulted in net proceeds to the Company of $5,820,998, partially offset by lower net proceeds from

our 2020 private and public offerings over 2019.

have no credit lines as of March 24, 2021, nor have we ever had a credit line since our inception.

ability to continue to fund our liquidity and working capital needs will be dependent upon the success of our efforts to generate

revenues from existing and future PrintRite3D®-proof-of-concept contracts, follow-on contracts resulting from successful proof-of-concept

engagements, possible strategic partnerships, and by obtaining additional capital from the sale of securities or by borrowing

funds from lenders to fulfill our business plans.

If we issue additional equity or debt securities, stockholders may experience

additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders

of our common stock.

There is no assurance that we will be successful in obtaining additional funding.

The Company is unable to

predict the effect, if any, that the novel coronavirus outbreak may have on its access to the financing markets.

If we fail to

obtain sufficient funding when needed, we may be forced to delay, scale back or eliminate all or a portion of our commercialization

efforts and operations.

and changing prices have had no effect on our continuing operations over our two most recent fiscal years.

have no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

applicable to a “smaller reporting company.”

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Statements are referred to in Item 15, listed in the Index to Financial Statements and filed and included elsewhere herein as

a part of this Annual Report on Form 10-K.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity