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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-05 · 393 added, 323 removed, 97 unchanged (88% of the section changed)

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Quarterly Report contains “Forward-Looking Statements.” All statements other than statements of historical fact are “Forward-Looking

Statements” for purposes of these provisions, including but not limited to, statements regarding our expectations about development

and commercialization of our technology, any projections of revenues or statements regarding our anticipated revenues or other financial

items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products

or services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of

the foregoing.

All Forward-Looking Statements included in this Quarterly Report are made as of the date hereof and are based on information

available to us as of such date.

Statements” including but not limited to, statements regarding our expectations about development and commercialization of our

technology, any projections of revenues or statements regarding our anticipated revenues or other financial items, any statements of

the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements

regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing.

All Forward-Looking

Statements included in this Quarterly Report are made as of the date hereof and are based on information available to us as of such date.

We assume no obligation to update any Forward-Looking Statement.

In some cases, Forward-Looking Statements

can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,”

“anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,”

or the negative thereof or other comparable terminology.

Although we believe that the expectations reflected in the Forward-Looking Statements

contained herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove

to be correct, and actual results could differ materially from those projected or assumed in the Forward-Looking Statements.

Future financial

condition and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including

factors referred to in our press releases and reports filed with the Securities and Exchange Commission (“SEC”).

All subsequent

Forward-Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these

cautionary statements.

Additional factors that may have a direct bearing on our operating results are described under the caption “Risk

Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in our Form 10-Q for the quarterly

period ended March 31, 2022 and in this Quarterly Report.

In some cases, Forward-Looking Statements can be identified by the use

of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,”

“intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative

thereof or other comparable terminology.

Although we believe that the expectations reflected in the Forward-Looking Statements contained

herein are reasonable, there can be no assurance that such expectations or any of the Forward-Looking Statements will prove to be correct,

and actual results could differ materially from those projected or assumed in the Forward-Looking Statements.

Future financial condition

and results of operations, as well as any Forward-Looking Statements are subject to inherent risks and uncertainties, including factors

referred to in our press releases and reports filed with the Securities and Exchange Commission (“SEC”).

All subsequent Forward-Looking

Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary

Additional factors that may have a direct bearing on our operating results are described under the caption “Risk Factors”

in our Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in this Quarterly Report.

were incorporated as Messidor Limited in Nevada on December 23, 1985 and changed our name to Framewaves Inc.

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On May 17, 2022, we began doing business

as Sigma Additive Solutions.

as Sigma Additive Solutions, and on August 9, 2022 changed our name to Sigma Additive Solutions, Inc.

principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, and our telephone number is (505) 438-2576.

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and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange

Act”), and other information related to the Company, are available, free of charge, on that website as soon as we electronically

file those documents with, or otherwise furnish them to, the SEC.

The Company’s website and the information contained therein,

or connected thereto, are not and are not intended to be incorporated into this Quarterly Report.

Act”), and other information related to the Company, are available, free of charge, on our website.

The Company’s website

and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Quarterly Report.

Accounting Policies and Estimates

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.

By their nature, changes in these assumptions and estimates could significantly

affect our financial position or results of operations.

Significant accounting estimates that may materially change in the near future

are revenue recognition, impairment of long-lived assets, values of stock compensation awards and stock equivalents granted as offering

costs, and allowance for bad debts and inventory obsolescence.

Such critical accounting policies, including the assumptions and judgments

underlying them, are disclosed in Note 1 of the Notes to Financial Statements included in this Quarterly 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.

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

(“GAAP”) 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.

By their nature,

changes in these assumptions and estimates could significantly affect our financial position or results of operations.

accounting estimates that may materially change in the near future are revenue recognition, impairment of long-lived assets, values

of stock compensation awards and stock equivalents granted as offering costs, and allowance for bad debts and inventory

obsolescence.

Such critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 of

the Notes to Financial Statements included in this Quarterly 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.

critical accounting policies and estimates addressed below reflect our most significant judgements and estimates used in the preparation

of our financial statements

Recognition - The Company’s revenue is derived primarily from sales of our software and related hardware suite and from providing

engineering services under contracts.

Generally, revenue is recognized upon the transfer of promised goods or services to customers in

an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

estimates and judgements for determining revenue recognition include:

Recognition – The Company’s revenue is derived primarily from sales of our software and related hardware suite under

perpetual licenses and from providing engineering services under contracts.

The Company recognizes revenue in accordance with ASC

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2014-09, Revenue

from Contracts with Customers .

ASU 2014-09 is a comprehensive revenue recognition standard that superseded nearly all existing

revenue recognition guidance under prior GAAP and replaced it with a principles-based approach for determining revenue

The core principle of the standard is the recognition of revenue upon the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or

In general, we determine revenue recognition by:

(1) identifying the contract, or contracts, with our customer;

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to performance obligations in the contract;

and (5) recognizing revenue when, or as, we satisfy performance obligations by transferring

the promised goods or services.

In January 2022, the Company began offering a subscription

option to its customers, pursuant to which it enters into agreements to lease its PrintRite3D platform for terms between 12 and 36 months

and provide technical support and maintenance for the term of the arrangement, as well as installation and training.

The Company has determined

these are leases because they relate to discrete pieces of equipment that customers have the right to substantially all the economic benefit

from and exclusive right to use during the term of the arrangement.

These leases are classified as operating leases and the Company retains

title to the underlying equipment.

agreements may be renewed for successive one-year terms unless notice is given by either party of its intent not to renew at least 30

days before the end of the lease term.

For leases with 36-month terms, the lessee may terminate the agreement after the first 18

months with 30-days written notice.

Some, but not all, of the arrangements provide for a lessee to purchase the asset at a stated

amount that approximates fair value and are not reasonably certain to be exercised at the inception of the arrangement.

no anticipated variable lease payments at the inception of the arrangement.

There are two non-lease components in the arrangement

that consist of technical support and maintenance, and installation and training.

The Company has elected the single component practical

expedient to combine the technical support and maintenance with the lease as they have the same pattern of transfer.

The installation

and training do not have the same pattern of transfer;

and (5) recognizing revenue when, or as, we satisfy performance obligations by

transferring the promised goods or services.

January 2022, the Company began offering a subscription option to its customers, pursuant to which it leases its PrintRite3D platform

for terms between 12 and 36 months and provide technical support and maintenance for the term of the arrangement, as well as installation

and training.

The Company has determined these are leases because they relate to discrete pieces of equipment to which customers have

the right to substantially all the economic benefit and exclusive right to use during the term of the arrangement.

are classified as operating leases and the Company retains title to the underlying equipment.

leases may be renewed for successive one-year terms unless notice is given by either party of its intent not to renew at least 30 days

before the end of the lease term.

For leases with 36-month terms, the lessee may terminate the agreement after the first 18 months with

30-days written notice.

Some, but not all, of the leases permit lessees to purchase the asset at any time at an amount that approximates

fair value and are not reasonably certain to be exercised at the inception of the lease.

There are no anticipated variable lease payments

at the inception of the lease.

are two non-lease components in the arrangement that consist of technical support and maintenance, and installation and training.

The Company has elected the single component practical expedient to combine the technical support and maintenance with the lease as

they have the same pattern of transfer.

The installation and training component does not have the same pattern of transfer;

therefore, this component is not eligible for the single component practical expedient.

The consideration has been allocated on a relative fair value basis of the underlying lease and non-lease components.

The Company has

estimated the residual value of the leased assets based on the life of the underlying assets, the ability to refurbish and sell the assets,

as well as the Company’s ability to componentize the hardware and utilize subassemblies in other products.

The lease consideration is allocated

on a relative fair value basis of the underlying lease and non-lease components.

The Company has estimated the residual value of the

leased equipment based on its useful life, and the ability to refurbish and sell the equipment, as well as the Company’s

ability to componentize the hardware and utilize subassemblies in other products.

Company is depreciating assets over their useful life of 7 years, but certain subassemblies and components may have a longer economic

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Patents which are pending are not amortized.

Based Compensation – We measure the compensation costs of stock-based compensation arrangements based on the grant-date fair

value and recognize the costs in the financial statements over the period during which employees are required to provide services.

based compensation arrangements may include stock options, grants of shares of common stock with and without restrictions, performance-based

Stock-Based Compensation – We measure the compensation costs of stock-based compensation arrangements based on the grant-date fair

value and recognize the costs in the financial statements over the period during which recipients are required to provide services.

Stock-based compensation arrangements may include stock options, grants of shares of common stock with and without restrictions, performance-based

awards, and stock appreciation rights.

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based on the facts and circumstances of each particular grant.

grant date fair value of stock based and other equity instruments is calculated using the Black Scholes valuation model, and requires

estimates of several inputs to the model, including risk-free interest rates, dividends, and expected volatility of our stock price.

of Operations

Months Ended June 30, 2022 and June 30, 2021

generate revenues through perpetual and subscription-based licensing of our PrintRite3D® technology to customers that seek to improve

their manufacturing production processes, and through ongoing annual software upgrades and maintenance fees.

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.

January 2022, we announced the foundational elements of a three-year plan that we believe will increase the Company’s ability to

achieve its mission of setting the quality standard for AM.

The combined strategies are geared at making our technology more consumable

in terms of ease of use and cost by end users, both for initial purchases and expansion opportunities, making it easier for original

equipment manufacturers (“OEMs”) to embed our technology and generate attractive revenue streams for the OEM, and finally

increasing the Company’s gross margins by moving towards a software-only solution.

lower the barrier for initial users and for expansion opportunities within end users with a large number of printers, we began offering

our current PrintRite3D integrated hardware and software solution on a subscription basis.

The impact of the change will currently reduce

the initial upfront cost to a new user from over $100,000 to approximately $3,000-$4,000 per month.

fair value of common stock grants is based upon the closing price of our

common stock as reported on The Nasdaq Capital Market on the date of the grant.

The grant date fair value of stock options and SARs is

calculated using the Black Scholes valuation model, and requires estimates of several inputs to the model, including risk-free interest

rates, dividends, and expected volatility of our stock price.

Historically,

we have generated revenues through sales, and more recently, subscription-based licensing of our PrintRite3D® technology to

customers that seek to improve their manufacturing production processes, and through ongoing annual software upgrades and

maintenance fees.

However, 2022 has been a year of significant change for our business, from our symbolic name change to the

execution of a new approach to the market.

We have a mission to accelerate the adoption of additive manufacturing by setting the

industry standard for quality, and we have charted our path to deliver the first holistic digital

quality experience for the additive industry with the following objectives:

● Simplifying

the quality experience from up to twelve disparate software licenses and multiple manual

spreadsheets, to a single user experience that is holistic and integrated with production

strategic partnerships, expanding our partner ecosystem, and best ensuring success of existing

customers as they move into production.

products that are easier to use and less expensive, both for initial purchases and as expansion

opportunities.

a strategic corporate investment partner with clear product, customer, and financial synergies.

holistic digital quality experience connects in-process data upstream to CAD/CAM through the downstream inspection and material data.

This digital quality journey begins by creating a new qualification framework for in-process data.

The path to qualified parts and continued

production relies on more than just melt pool monitoring;

it also covers machine health, process health, and part health .

Our customers require specific data for qualification

and certification of parts and need a holistic approach to production quality, and further, require a way to simplify quality from 8-12

disparate software licenses and several manual spreadsheets, to one user experience that is integrated into their production workflow.

order to expand the number of OEMs distributing our technology, we launched a three-tiered OEM program directed to:

(1) new OEMs without

their own quality assurance or monitoring solution;

(2) established OEMs with a quality monitoring offering, but who have customers with

multiple printers from multiple OEMs and want a single 3rd party quality and analytics solution with consistent quality metrics across

printers, processes and materials;

and (3) OEMs building open application programming interfaces, or APIs, to integrate components of

Sigma’s proprietary technology with their current offerings.

We are now working with OEMs on their next generation printers to

offer a software-only solution that will utilize the printer’s computing infrastructure and dramatically reduce the overall cost

of its technology, enabling the opportunity to move towards a software only embedded solution on every printer sold by partner OEMs.

combination of subscription pricing and the software-only embedded OEM offerings are intended to make our technology more affordable

to acquire and easier for OEMs to bundle, distribute and support in an effort to become the industry standard.

shift in our business model has adversely affected our near-term revenue growth as we increase our focus on building strategic partnerships,

expanding our partner ecosystem, and ensuring the success of our existing customers as they move into production.

However, we believe

these changes will contribute to faster adoption of our product by end users and will result in more predictable and profitable revenues

over the longer term.

the three months ended June 30, 2022, we recognized revenue of $236,660, as compared to $144,148 in the same period in 2021, an increase

without their own quality assurance or monitoring solution;

(2) established OEMs with a quality monitoring offering, but who have

customers with multiple printers from multiple OEMs and want a single third party quality and analytics solution with consistent

quality metrics across printers, processes and materials;

and (3) OEMs building open application programming interfaces, or APIs, to

integrate components of Sigma’s proprietary technology with their current offerings.

We are now working with OEMs on their

next generation printers to offer a software-only solution that will utilize the printer’s computing infrastructure and

dramatically reduce the overall cost of its technology, enabling the opportunity to move towards a software only embedded solution

on every printer sold by partner OEMs.

To further augment this initiative, we have also begun integrating with industry wide

hardware providers, such as our recently announced relationship with a laser scanner provider.

We began offering our current PrintRite3D integrated hardware and software

solution on a subscription basis in 2022.

Among other things, at present the change reduced the initial upfront cost to a new user from

over $100,000 to approximately $3,000-$5,000 per month.

combination of subscription pricing and the new software-only products that can be embedded into OEM and software partner offerings

are intended to make our technology more affordable to acquire and easier to bundle, distribute and support in an effort to

become the industry standard.

shift in our business model has adversely affected our revenues and near-term

revenue growth as we increased our focus on building strategic partnerships, expanding our partner ecosystem, and ensuring the success

of our existing customers as they move into production.

Our ability to generate revenues in the future will depend on our ability to further

commercialize and increase market presence of our traditional PrintRite3D® technology, along with our new software-only offerings

that start to link industry quality together.

Additionally, it will depend on whether key prospective customers continue to move from

additive manufacturing prototyping to production, which our products are intended to accelerate.

However, we believe these changes

to our business model will contribute to faster adoption of our product by end users and will result in more predictable and profitable

revenues over the longer term.

In connection with this shift, we reduced our headcount in the third quarter

by a net of five employees.

With a further reduction of two employees in October, our full-time headcount now stands at twenty-five, a

net reduction of ten employees from our peak of thirty-five in April of this year.

Though we plan to hire one or two new employees to

fill open positions in the near-term, we expect our headcount will be stable for the next twelve to eighteen months.

As part of our vision to build the future of connected digital quality,

we have undertaken an initiative to attract a strategic corporate investment partner with clear product, customer, and financial synergies

This work is focused on identified companies that connect to our long-term quality vision.

This strategic investment initiative

is focused on synergies and potential product integration to accelerate market visibility and customer adoption.

the past ten years, Sigma has invested its resources to solve the problem of in-process AM quality:

melt pool analytics for the “part”.

This remained a retrofit lab solution until the last eight months.

Our prior product offering met the needs of materials scientists, but

overlooked the production needs of shop floor technicians, process engineers, and operations teams.

The addition of our “machine”

and “process” software products for additive manufacturing will provide a holistic in-process quality base for us to connect

to the broader digital quality ecosystem.

believe the industry is evolving.

Application Programming Interfaces, or APIs, are opening up, as some of our relationships with

OEMs have become public.

There is also a trend toward consolidation in additive manufacturing as companies align for profitability.

Sigma has made demonstrable progress in 2022 connecting to other products in the AM digital quality stream, and a connection to a strategic

partner paired with near term execution can augment our ability to scale, support the market, and create value.

Further, alignment with

a strategic partner allows for common growth, vision, and funding of the Company to achieve its mission, but also provides an opportunity

for other strategic relationships, including potential acquisitions that can further accelerate the execution of our digital quality

of Operations

Months Ended September 30, 2022 and September 30, 2021

the three months ended September 30, 2022, we recognized revenue of $188,245, as compared to $700,237 in the same period in 2021, a

decrease of $511,992, or 72.7%.

The decrease was primarily due to lower PrintRite3D® unit sales of $511,870, the shift to

subscription-based sales, and a decrease in contract additive manufacturing revenue of $11,190, partially offset by an increase in

annual maintenance contract renewals in the third quarter of 2022 of $11,068, as compared to the third quarter of 2021.

cost of revenue for the three months ended September 30, 2022 was $79,713, as compared to $164,766 for the same period in 2021, a decrease

of $85,053, or 51.6%.

The increase was primarily due to increased PrintRite3D® unit sales, revenue recognized from installations related

to previous year sales, and an increase in annual maintenance contract renewals in the second quarter of 2022, as compared to the second

quarter of 2021.

cost of revenue for the three months ended June 30, 2022 was $193,075, as compared to $116,397 for the same period in 2021, an

increase of $76,678, or 65.9%.

The increase was primarily attributable to increased unit sales in 2022, and increased travel,

installation, and support costs related to the previous year sales.

total operating expenses for the three months ended June 30, 2022 were $2,279,425, as compared to $2,168,651 for the same period in 2021,

an increase of $110,774, or 5.1%.

The increase was primarily attributable to an increase in salary and benefit costs, as described below,

related to the hiring of additional employees in an effort to expand the commercialization of our products, and an increase in office

expense due to a company-wide global conference held in the second quarter.

and benefits costs were $1,184,818 for the three months ended June 30, 2022, as compared to $985,348 for the same period in 2021, an

increase of $199,470, or 20.2%.

The decrease was primarily attributable to lower unit sales in the quarter.

total operating expenses for the three months ended September 30, 2022 were $2,392,596, as compared to $3,026,888 for the same period

in 2021, an decrease of $633,932, or 20.9%.

The decrease was primarily attributable to a decrease in stock-based compensation expense

of $384,093, a decrease in investor, public relations and marketing expense of $72,790, and a decrease in organization costs of $201,590

primarily attributable to a timing difference in stock option grants as further

explained below.

and benefits costs were $1,227,805 for the three months ended September

30, 2022, as compared to $1,222,760 for the same period in 2021, an increase of $5,045, or 0.4%.

The increase was comprised of:

(a) $166,469 of salary increases for existing employees and two new hires;

(b) an increase in commissions of $9,402 due to increased sales;

and (d) increased taxes

and benefits of $88,906.

Partially offsetting these increases was a decrease in stock appreciation rights of $92,697 resulting from the

June 30, 2022 revaluation.

compensation was $167,439 for the three months ended June 30, 2022, as compared to $116,441 for the same period in 2021, an increase

of $50,998, or 43.8%.

This increase was primarily a result of the expense related to options awarded to new employees and the expense

for annual option grants awarded to employees in the third quarter of 2021.

and research and development expenses of $146,885 were incurred during the three months ended June 30, 2022, as compared to $280,700

in the same period of 2021, a decrease of $133,815, or 47.7%.

The decrease was primarily due to a decrease in operations costs of $61,148

and a decrease in research and development expenses of $72,667.

The decrease in operations costs related to charges in the second quarter

of 2021 for inventory obsolescence and purchases of lab supplies.

The decrease in research and development expenses was attributable

to second quarter 2021 simulation project expenses of $73,188, and expenses of $11,750 related to the ongoing research and development

efforts for parts upgrades with no such projects in 2022.

Partially offsetting these costs was an increase in consulting expenses of

$12,271 in the second quarter of 2022 in connection with ongoing PrintRite3D software development.

public relations, and marketing expenses of $152,300 were incurred during the three months ended June 30, 2022, as compared to $114,762

of salary increases for existing employees and two new hires;

(b) an increase in severance costs of $88,379;

and (d) increased taxes and

benefits of $18,737.

Offsetting these increases was a decrease in SAR expense of $196,766 resulting from the September 30, 2022 revaluation

due to the decrease in our stock price, and a decrease in employee commissions and bonuses of $5,429.

Stock-based compensation was $275,418 for the three months ended September 30, 2022, as compared to $659,512 for the same period in 2021,

a decrease of $384,094, or 58.2%.

This decrease was primarily a result of the expense related to options awarded to new employees

and annual option grants awarded to other employees in the third quarter of 2021.

We incurred operations and research and development costs of $152,245 during

the three months ended September 30, 2022, as compared to $131,772 in the same period of 2021, an increase of $20,473, or 15.5%.

was primarily due to an increase in research and development expenses of $27,430, partially offset by a decrease in operations costs of

The increase in research and development expenses was attributable to an increase in consulting expenses of $14,930 in connection with ongoing PrintRite3D software development and research on the laser application of PrintRite3D for a

new OEM of $20,000, partially offset by costs of $7,500 incurred in the third quarter of 2021 related to a simulation project.

in operations costs related to charges in the third quarter of 2021 for inventory obsolescence and purchases of parts and materials.

We incurred investor, public relations, and marketing costs of $46,832

during the three months ended September 30, 2022, as compared to $119,622

during the same period in 2021.

The increase of $37,538, or 32.7%, was primarily due to an increase in tradeshow expenses of $47,691 as

a result of increased attendance following the lifting of COVID-19 related travel restrictions in 2022.

Partially offsetting these increases

were a decrease in investor relations consulting costs of $6,060 due to revaluation of stock appreciation rights held by consultants

and lower advertising expenses of $4,093.

costs incurred in the three months ended June 30, 2022 were $60,817, as compared to $158,529 during the same period in 2021.

decrease of $97,712, or 61.6% was primarily attributable to a decrease in shareholder services of $77,400 due to $58,780 of expenses

incurred in connection with a special shareholders meeting held in May of 2021, a decrease due to a timing difference of $18,620 resulting from expense recognized in the second quarter of 2021 as our annual shareholders meeting was held earlier in 2021 versus 2022, a decrease in processing of regulatory

filings of $1,231, and a decrease in non-employee director compensation of $19,081.

and professional fees incurred in the three months ended June 30, 2022 were $144,528, as compared to $244,019 incurred during the

The decrease of $72,790, or 60.9%, was primarily due to a decrease in tradeshow expenses of $38,136 as

a result of a timing difference of a rescheduled trade show from the second to the third quarter in 2021 due to COVID.

, and a decrease

in investor relations consulting costs of $33,207 due to decreased consulting fees and revaluation of outstanding SARs held

by consultants.

We incurred organization costs of $140,522 during the three months ended

September 30, 2022, as compared to $342,112 during the same period in 2021.

decrease of $201,590, or 58.9% was primarily attributable to a decrease in non-employee director compensation of $234,154 as compared

to stock options grants in the same period in 2021, partially offset by an increase in directors cash compensation.

Offsetting this decrease was an increase due to a timing difference of $33,909 resulting from expense recognized in the second quarter

of 2021 as our annual stockholders meeting was held earlier in 2021 than in 2022.

and professional fees incurred in the three months ended September 30, 2022 were $252,886, as compared to $261,075 incurred during the

same period in 2021, a decrease of $8,189, or 3.1%.

This decrease was primarily a result of a decrease in recruiting expenses of

$64,000 due to fewer new hires in 2022 as compared to 2021, a decrease in legal expenses of $32,300 as a result of one less

shareholders meeting in 2022 and fewer regulatory filings, a decrease in consulting expenses of $2,682, and a decrease in accounting

fees of $1,635.

Partially offsetting these decreases was an increase in IT expenses of $1,126.

expenses for the three months ended June 30, 2022 were $303,600 as compared to $151,871 for the same period in 2021, an increase of $151,729,

This decrease was a result of a decrease in accounting expenses of $18,118, and a

decrease in consulting expenses of $46,147 primarily due to stock option grant and the reclassification of a consulting expense to research

and development in 2021.

Partially offsetting these decreases was an increase in recruiting expenses of $17,444 for new hires, an increase

in legal expenses of $39,487 as a result of a timing difference in the move of our annual stockholders meeting from the second

quarter in 2021 to the third quarter in 2022.

expenses for the three months ended September 30, 2022 were $183,608 as compared to $172,238 for the same period in 2021, an increase

of $11,370, or 6.6%.

The increase resulted primarily from:

(a) an increase in travel and entertainment expenses of $48,496 as compared to the same

period in 2021 as a result of COVID-19 related travel restrictions;

(b) expenses of $106,413 related to a Company-wide, global conference

held in May of 2022;

& subscriptions of $2,189 for new customer relationship management, product lifecycle management, and project management software;

and (e) an increase in rent and utilities expense of $2,041.

Partially offsetting these increases was a decrease in postage and shipping

and amortization expense for the three months ended June 30, 2022 totaled $29,861 as compared to $25,783 for the same period in 2021,

(a) an increase in travel and entertainment expenses of $17,825 as compared

to the same period in 2021 as a result of COVID-19 related travel restrictions;

(b) an increase in payroll service fees of $4,486 related

to annual price increases;

and (c) dues & subscriptions of $6,514 for new customer relationship management, product lifecycle management,

and project management software.

Partially offsetting these increases was:

(a) a decrease in postage and shipping of $8,093;

(b) a decrease

in office supplies of $2,645;

and (c) and a decrease in training and education expense of $5,368.

and amortization expense for the three months ended September 30, 2022 totaled $26,857, as compared to $27,689 for the same period in

2021, an increase of $832, or 7.2%.

The increase was primarily the result of PrintRite3D units sold under our subscription-based pricing

operating expenses were $89,177 for the three months ended June 30, 2022, as compared to $91,198 for the same period in 2021.

was primarily due to SEC filing fees related to various registration statements filed in June 2021, as compared to none in the second

quarter of 2022.

the three months ended June 30, 2022, we realized net other expenses of $11,330, as compared to net other income of $295,353 in 2021.

The decrease of $306,683, or 103.8% was primarily due to an unrealized gain of $290,150 from the 2021 revaluation of the derivative liability

resulting from our private placement of warrants to purchase 2,190,000 shares of common stock in the second quarter of 2021,a decrease

in interest income in 2022, and a foreign currency exchange loss of $10,436 in 2022 due to the strengthening of the US dollar against

net loss applicable to common stockholders for the three months ended June 30, 2022 was $2,261,390, as compared to $1,859,767 for the

same period of 2021, a $401,623 increase.

The increase was primarily due to the decrease in other income of $306,683 and increased loss

from operations of $94,940.

Months Ended June 30, 2022 and June 30, 2021

the six months ended June 30, 2022, we recognized revenue of $288,504, as compared to $602,288 in the same period in 2021, a decrease

of $313,784, or 52.1%.

The decrease was primarily due to a decrease in perpetual license sales of our PrintRite3D® units of $401,750,

and decreased revenues from our legacy Rapid Test and Evaluation (“RTE”) program of $20,000 in 2022.

Partially offsetting

these decreases was an increase in revenues of $14,171 from our subscription-based pricing program, on-site installation and support

revenue of $62,068, an increase in consulting service revenue of $4,500, and an increase in annual maintenance contract revenue of $27,227.

cost of revenue for the six months ended June 30, 2022 was $233,166, as compared to $244,728 for the same period in 2021, a decrease

The increase was primarily the result of depreciation expense associated with PrintRite3D units sold

under our subscription-based pricing program.

operating expenses were $86,783 for the three months ended September 30, 2022, as compared to $90,108 for the same period in 2021.

$3,326 decrease was primarily due to credit card transaction fees in September 2021, as compared to none in the third quarter of 2022,

partially offset by an increase in insurance premiums.

the three months ended September 30, 2022, we realized net other expenses of $7,884, as compared to net other income of $439 in 2021.

The increase in net other expenses of $8,323, was primarily due to a foreign currency exchange loss in 2022 due to the strengthening

of the US dollar against the Euro.

net loss applicable to common stockholders for the three months ended September

30, 2022 was $2,306,528, as compared to $2,505,198 for the same period of 2021, a decrease of $198,670, or 7.9%.

The decrease was primarily

due to the decrease in the loss from operations of $206,993, partially offset by an increase in net other expense of $8,323.

Months Ended September 30, 2022 and September 30, 2021

the nine months ended September 30, 2022, we recognized revenue of $476,749, as compared to $1,302,525 in the same period in 2021, a

decrease of $825,776, or 63.4%.

The decrease was primarily due to a decrease in sales of our PrintRite3D® units

of $919,355, decreased revenues from our legacy Rapid Test and Evaluation (“RTE”) program of $4,100, and decreased contract

additive manufacturing revenue of $11,189 in 2022.

Partially offsetting these decreases was an increase in revenues of $17,006 from our

subscription-based pricing program, on-site installation and support revenue of $49,068, an increase in consulting service revenue of

$4,500, and an increase in annual maintenance contract revenue of $38,295.

cost of revenue for the nine months ended September 30, 2022 was $312,879, as compared to $409,493 for the same period in 2021, a decrease

of $96,614, or 23.6%.

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incurred related to installations from 2021 sales.

operating expenses for the six months ended June 30, 2022 were $4,575,123, as compared to $3,950,057 for the same period in 2021, an

increase of $625,066, or 15.8%.

The increase was primarily attributable to an increase in salary and benefit costs, as described below,

related to the hiring of additional employees in an effort to expand the commercialization of our products.

and benefits costs were $2,476,828 for the six months ended June 30, 2022, as compared to $1,832,519 for the same period in 2021, an

increase of $644,309, or 35.2%.

operating expenses for the nine months ended September 30, 2022 were $6,968,079, as compared to $6,976,944 for the same period in 2021,

an decrease of $8,865.

The decrease was primarily attributable to a decrease in stock-based compensation for employees, executives, and

board members, a decrease in operating and R&D costs, partially offset by increases in salary and benefits, office expenses due to a company-wide global conference held in May of 2022, and increased travel in 2022 as described below.

and benefits costs were $3,704,633 for the nine months ended September 30, 2022, as compared to $3,055,279 for the same period in 2021,

an increase of $649,354, or 21.3%.

The increase was comprised of:

(a) $617,977 in employee salary increases and average full-time employee

headcount increasing by two;

(b) a $27,390 increase in severance;

and (c) increased taxes and benefits of $187,529.

Partially offsetting

these increases was a decrease in commissions of $33,263 due to fewer unit sales and a decrease in stock appreciation rights of $55,199

due to the June 30, 2022 revaluation.

compensation was $338,415 for the six months ended June 30, 2022, as compared to $233,919 for the same period in 2021, an increase of

$104,496, or 44.7%.

This increase was primarily due to the expense related to options granted to new employees, the expense of annual

option grants awarded to employees in the third quarter of 2021, and the expense related to the vesting of options granted to our Chief

Executive Officer in February, 2022.

and research & development expenses of $290,303 were incurred during the six months ended June 30, 2022, as compared to $477,040

headcount increasing by five;

(b) a $115,768 increase in severance due to the termination of employment of six employees;

and (c) increased

taxes and benefits of $206,257.

Partially offsetting these increases was a decrease in commissions of $38,682 due to fewer unit sales

and a decrease in SARs of $251,965 due to revaluations resulting from a decrease in our stock price.

Stock-based compensation was $613,833 for the nine months ended September 30, 2022, as compared to $893,431 for the same period in 2021, a

decrease of $279,597 or 31.3%.

This decrease was primarily due to the expense related to options granted to new employees and annual

option grants awarded to other employees in the third quarter of 2021.

We incurred operations and research and development costs of $442,548 during the nine months ended September 30, 2022, as compared to $608,812

in the same period of 2021, a decrease of $166,266, or 27.3%.

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The decrease in operations expense was due to:

(1) charges we incurred in

(a) charges we incurred in

2021 of $41,964 for inventory obsolescence, including $14,471 for metal powder write-offs;

(2) equipment upgrades in both our manufacturing

facility and our 3D metal printers totaling $12,277;

and (3) a decrease in parts and material purchases of $62,063.

Partially offsetting

these decreases was an increase in purchases of lab supplies of $7,939.

The decrease in research and development costs is due to expenses

associated with a simulation project in 2021 of $87,964, partially offset by an increase in consulting costs of $28,095 in connection

with ongoing PrintRite3D software development.

public relations, and marketing expenses of $246,626 were incurred during the six months ended June 30, 2022, as compared to $223,103

(b) equipment upgrades in 2021 in both our

manufacturing facility and our 3D metal printer totaling $12,277;

nine months of 2022;

and (d) a decrease in purchase of lab supplies of $2,212.

The decrease in research and development costs was due

to expenses associated with a simulation project in 2021 of $95,461, partially offset by an increase in consulting costs of $43,022 in

connection with ongoing PrintRite3D software development and $20,000 for research on laser application of PrintRite3D for a new OEM.

We incurred investor, public relations, and marketing expenses of $293,458

during the nine months ended September 30, 2022, as compared to $342,725

during the same period in 2021.

The increase of $23,523, or 10.5%, was primarily due to an increase in tradeshow expenses of $61,134 as

compared to 2021, when COVID-19 travel restrictions precluded attendance at such events.

Partially offsetting this increase was a decrease

in investor relations consulting costs of $29,534 due to a revaluation of stock appreciation rights at June 30, 2022, and lower advertising

expenses of $8,077.

costs incurred in the six months ended June 30, 2022 were $119,566, as compared to $236,145 during the same period in 2021.

of $116,579, or 49.4%, was primarily attributable to a decrease in shareholder services of $77,748 due to expenses of $58,780 incurred

in connection with a special shareholders’ meeting held in 2021, a timing difference of $18,620 in expenses related to our regular

annual shareholders’ meeting and a decrease in non-employee director compensation of $38,831.

and professional fees incurred in the six months ended June 30, 2022 were $355,944, as compared to $420,866 incurred during the same

period in 2021, a decrease of $64,922, or 15.4%.

This decrease was primarily a result of a decrease in legal expenses of $60,890 due to

one less shareholders meeting and fewer regulatory filings, and a decrease in recruiting expenses of $90,667 related to new hires in 2021.

These decreases were partially offset by an increase in consulting expenses of $34,625 attributable to the engagement of technical consulting

support in connection with our new subscription-based pricing model, $3,500 in external human resources consulting, and $40,209

related to consulting services for corporate matters, and an increase in audit fees of $8,301.

expenses for the six months ended June 30, 2022 were $509,032, as compared to $300,096 for the same period in 2021, an increase of $208,936,

The increase resulted primarily from:

(a) travel and entertainment of $102,957 as compared to significantly less travel in

2021 as a result of COVID-19 related travel restrictions;

(b) expenses of $106,413 related to a Company-wide, global conference held

in May of 2022;

(d) dues & subscriptions of $15,098 for new

customer relationship management, product lifecycle management, and project management software;

and (e) an increase in utilities expenses

Partially offsetting these increases was a decrease in postage and shipping of $20,690, and a decrease in office supply expense

and amortization expense for the six months ended June 30, 2022 totaled $61,445 as compared to $48,814 for the same period in 2021, an

The decrease of $49,267, or 14.4%, was primarily due to a decrease in investor relations consulting costs

of $62,741 resulting from a revaluation of SARs at June 30 and September 30, 2022, and lower advertising expenses of $9,524.

Partially offsetting this decrease was an increase in tradeshow expenses of $22,998 as compared to 2021, when COVID-19 travel restrictions

precluded attendance at such events.

We incurred organization costs of $260,088 during the nine months ended

September 30, 2022, as compared to $578,256 during the same period in 2021.

The decrease of $318,268, or 55%, was primarily attributable

to decreases in:

(a) non-employee director fees of $274,865, mostly as a result of a decrease in stock options issued;

and (b) stockholder

services of $43,304, primarily due to expenses incurred in 2021 in connection with a special stockholders meeting.

and professional fees incurred in the nine months ended September 30, 2022 were $608,830, as compared to $681,941 during the

same period in 2021, a decrease of $73,111, or 10.7%.

This decrease was primarily a result of a decrease in legal expenses of $21,403

due to one less stockholder meeting and fewer regulatory filings, a decrease in recruiting expenses of $73,223 related to new hires in

2021, and a decrease in accounting fees of $9,817 due to fulltime hire of temporary accounting support.

These decreases were partially

offset by an increase in consulting expenses of $30,530 attributable to the engagement of technical consulting support in connection

with our subscription-based pricing model, external human resources consulting, and hire of an inventory management consultant.

expenses for the nine months ended September 30, 2022 were $692,640, as compared to $472,335 for the same period in 2021, an

increase of $220,305, or 46.6%.

The increase was primarily the result sales of PrintRite3D units under our new subscription-based pricing

operating expenses were $176,964 for the six months ended June 30, 2022, as compared to $177,554 for the same period in 2021.

was primarily due to decrease in SEC filing fees of $5,850 and a decrease in licensing fees of $2,166, partially offset by an increase

in our insurance policy premiums for 2022 of $7,639.

the six months ended June 30, 2022, we realized net other income of $65,220, as compared to net other income of $1,096,290 in 2021.

decrease of $1,031,070, or 94.1%, was primarily due to a gain of $1,092,441 from the 2021 revaluation of the derivative liability resulting

from our private placement of warrants to purchase 2,190,000 shares of common stock in the second quarter of 2021, a foreign currency

exchange loss of $10,436 in 2022 due to the strengthening of the US dollar against the Euro, and a decrease in interest income of $4,326,

partially offset by $76,628 in New Mexico state incentives in the first quarter of 2022.

net loss applicable to common stockholders for the six months ended June 30, 2022 was $4,483,005, as compared to $2,571,334 for the same

period of 2021, a $1,911,671 increase.

The increase was primarily due to the increased loss from operations of $927,288 and the decrease

in other income of $1,031,070.

These increases were partially offset by a decrease in preferred dividends of $46,687.

The increase resulted primarily from:

(a) travel and entertainment of $113,616 related to increased

travel as compared to 2021 as a result of COVID-19 related travel restrictions;

(b) expenses of

$109,435 related to a Company-wide, global conference held in May of 2022;

related to new hires;

(d) dues & subscriptions of $21,715 for new customer relationship management, product lifecycle

management, and project management software;

and (e) an increase in utilities expenses of $1,755.

Partially offsetting these

increases was a decrease in postage and shipping of $28,783 and a decrease in office supply expense of $9,262.

and amortization expense for the nine months ended September 30, 2022 totaled $88,302 as compared to $76,502 for the same period in

2021, an increase of $11,800, or 15.4%.

The increase was primarily due to depreciation expense on PrintRite3D units leased under our

subscription-based program.

operating expenses were $263,747 for the nine months ended September 30, 2022, as compared to $267,663 for the same period in 2021, a

decrease of $3,916.

The decrease was due to:

(a) a decrease in SEC filing fees of $6,102;

(b) a decrease in licensing fees of $2,166;

and (c) a decrease in bank fees, primarily credit card transaction fees of $7,413.

These decreases were partially offset by an increase

in insurance policy premiums for 2022 of $11,765.

the nine months ended September 30, 2022, we realized net other income

of $57,336, as compared to net other income of $1,096,727 in 2021.

The decrease of $1,039,391, or 94.8%, was primarily due to a gain of

$1,092,441 from the 2021 revaluation of the derivative liability related to our private placement of warrants in the second quarter

of 2021, a foreign currency exchange loss of $16,950 in 2022 due to the strengthening of the US dollar against the Euro, and a decrease

in interest income of $7,028.

Partially offsetting these decreases was an increase of $76,628 in New Mexico state incentives in the first

quarter of 2022.

net loss applicable to common stockholders for the nine months ended September 30, 2022 was $6,789,533, as compared to $5,076,532 for

the same period of 2021, a $1,713,001 increase.

The increase was due to an increased loss from operations of $720,297 and a decrease

in other income of $1,039,391, partially offset by a decrease in preferred dividends of $46,687.

and Capital Resources

of June 30, 2022, we had $6,933,499 in cash and working capital of $7,515,540, as compared with $11,447,047 in cash and working capital

of $11,702,358 as of December 31, 2021.

of September 30, 2022, we had $4,800,680 in cash and working capital of $5,492,725, as compared with $11,447,047 in cash and working

capital of $11,702,358 as of December 31, 2021.

major sources of funding have been proceeds from public and private offerings of our equity securities and from warrant exercises.

March 26, 2021, the Company closed a public offering in which it issued 2,190,000 shares of common stock at a price

of $4.445 per share, resulting in net proceeds to the Company of approximately $8,736,487 after deducting placement agent commissions

and other offering costs payable by the Company.

In a concurrent private placement under the Purchase Agreement, the Company issued to

the purchasers warrants to purchase an aggregate of 2,190,000 shares of common stock at an exercise price of $4.32 per share.

became exercisable on May 24, 2021, and will expire two years after the initial exercise date.

January 12, 2021, the Company closed a public offering in which it issued 1,711,783 shares of common stock at a price of $3.00 per share,

March 26, 2021, the Company closed a public offering of 2,190,000 shares of common stock at a price of $4.445 per share,

resulting in net proceeds to the Company of approximately $8,736,487 after deducting placement agent commissions and other offering costs

payable by the Company.

In a concurrent private placement, the Company issued to the purchasers warrants

to purchase an aggregate of 2,190,000 shares of common stock at an exercise price of $4.32 per share.

Each warrant became exercisable

on May 24, 2021, and will expire two years after the initial exercise date.

January 12, 2021, the Company closed a public offering of 1,711,783 shares of common stock at a price of $3.00 per share,

resulting in net proceeds of approximately $4,532,445 after deducting commissions and other offering expenses payable by the Company.

the first quarter of 2021, the Company received net cash proceeds of $1,136,010 from warrant exercises.

believe that our existing cash on hand, together with expected revenue, will be sufficient to fund our anticipated operating costs

and capital expenditure requirements through at least 12 months from the filing of this Quarterly Report.

We have based this

estimate on assumptions that may prove to be wrong, and we may need to raise additional financing to fund our operations.

the first quarter of 2021, the Company received cash proceeds of $1,136,010 from warrant exercises.

believe that our existing cash on hand, together with expected revenue,

will be sufficient to fund our anticipated operating costs and capital expenditure requirements through at least the first quarter of

The Company is currently engaged in identifying sources of financing either in the form of equity or debt or a combination thereof.

No assurance can be given as to the availability of such financing, or, if available, that such financing would be on terms acceptable

to the Company.

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

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effect of competing technological and market developments.

2022, we expect to sustain our operations and our commercialization and marketing efforts with our cash reserves and revenues generated

from sales of our PrintRite3D® technology.

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 2022.

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).

worldwide COVID-19 pandemic caused a reduction, and in some cases a freeze, in capital spending within the Company’s targeted industries.

The future impact of the ongoing epidemic, including the emergence of variations of the virus, is highly uncertain and no assurance can

be given that our business and results of operations will not be materially and adversely affected.

It is also uncertain as to any further

disruption of the financial markets, which may reduce our ability to access capital on favorable terms or at all.

However, due to the

need to have more flexibility in supply chains with the ability to respond quickly to shortages in parts or products, we believe that

the crisis will eventually accelerate the adoption of 3D printing, which may benefit the Company.

The effects of a U.S.

or global recession, while difficult to predict,

could result in some customers delaying orders or not proceeding with planned orders for our PrintRite3D systems.

the remainder of 2022, we expect to sustain our operations and our commercialization and marketing efforts with our cash reserves

and revenues generated from sales of our PrintRite3D® technology.

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).

ongoing impact of the COVID-19 epidemic, in particular the shortage of certain components of our PrintRite3D systems, is highly uncertain

and no assurance can be given that our business and results of operations will not be materially and adversely affected.

It is also uncertain

as to whether any further disruption of the financial markets, which may reduce our ability to access capital on favorable terms or at

However, due to the need to have more flexibility in supply chains with the ability to respond quickly to shortages in parts or

products, we believe that the crisis will eventually accelerate the adoption of 3D printing, which may benefit the Company.

effects of a US or global recession, while difficult to predict, could result in some customers delaying orders or not proceeding with

planned orders for our PrintRite3D systems.

Cash Used in Operating Activities

cash used in operating activities during the six months ended June 30, 2022 increased to $4,314,503 from $ 3,266,620

during the same period in 2021, a $1,047,883, or 32.1% increase.

Contributing to this increase was an increase in net loss, adjusted

for non-cash expenses of $860,068, and decreases in accounts payable and accrued expenses of $510,530, and an increase in deferred revenue

Partially offsetting these increases in cash usage were, a decrease in accounts receivable of $178,322, a decrease in inventory

purchases of $113,762, and a decrease in prepaid expenses of $34,394.

cash used in operating activities during the nine months ended September 30, 2022 was $6,386,415 as compared to $4,786,590 during the

same period in 2021, an increase of $1,599,825, or 33%.

Contributing to this increase was an increase in net loss, adjusted for

non-cash expenses, of $1,373,377, and a decrease in accounts payable and accrued expenses of $469,397, an increase in inventory

purchases of $60,456, an increase in prepaid expenses of $49,506, and an increase in deferred revenue of $26,689.

offsetting these increases was a decrease in accounts receivable of $379,600.

Cash Used in Investing Activities

cash used by investing activities during the six months ended June 30, 2022 was $199,045, which compares to $ 108,021

of cash used by investing activities during the same period of 2021, an increase of $91,024, or 84.3%.

The increase resulted from

leased PrintRite3D units reclassified as property, plant and equipment, and increased patent costs during the first six months of 2022.

cash used in investing activities during the nine months ended September

30, 2022 was $259,952, which compares to $254,772 of cash used in investing activities during the same period of 2021, an increase of

$5,180, or 2%.

The increase resulted from an increase in patent costs of $37,963, partially offset by a decrease in purchases of property,

plant and equipment of $32,783 during the first nine months of 2022.

Cash Provided by Financing Activities

Company did not raise any capital nor were there any warrant exercises during the six months ended June 30, 2022.

Cash provided by financing

activities during the six months ended June 30, 2021 totaled $14,404,942 due to the receipt of the net proceeds of our January and March 2021 public and private offerings.

The exercise of outstanding warrants during

the six months ended June 30, 2021 provided an additional $1,136,010 in cash proceeds.

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

Company did not raise any capital nor were there any warrant exercises during the nine months ended September 30, 2022.

Cash provided

by financing activities during the nine months ended September 30, 2021 totaled $14,404,942 due to the receipt of the net proceeds of

$13,268,932 from our January and March 2021 public and private offerings and the exercise of outstanding warrants which provided an

additional $1,136,010 in cash proceeds.

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

from existing and future PrintRite3D contracts, follow-on contracts resulting from successful engagements, possible strategic partnerships,

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in obtaining additional funding.

The Company is unable to predict the effect that the COVID-19 outbreak or geopolitical events, including

the conflict in Ukraine, 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.

The Company is unable to predict the effect a global recession or geopolitical events, including the

on-going conflict in Ukraine, 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.

have no lines of credit or other financing arrangements.

Inflation, changing prices and rising interest rates have had no material

effect on our continuing operations over our two most recent fiscal years.

However, continued unfavorable trends may affect the prices

we pay for materials and other goods and services necessary to our business, thus increasing our use of cash.

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

However, continued unfavorable trends may affect the prices we pay for materials and other goods and services necessary to our business,

thus increasing our use of cash.

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

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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-Q

Item 2. Management’s Discussion and Analysis