What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 268 added, 305 removed, 203 unchanged (74% of the section changed)

2 unchanged sentences

Balance Sheets

March 31, 2023

December 31, 2022

Receivable, net

Current Assets

Accounts Receivable, net

Prepaid Assets

Total Current Assets

Other Assets:

Property and Equipment, net

Intangible Assets, net

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

and Equipment, net

AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts Payable

Deferred Revenue

Accrued Expenses

Total Current Liabilities

TOTAL LIABILITIES

Commitments & Contingencies

Stockholders’ Equity

Preferred Stock, $ 0.001 par value;

& Contingencies

Stockholders’

Stock, $ 0.001 par value;

10,000,000 shares authorized;

316 and 465 shares issued and outstanding, respectively

Common Stock, $ 0.001 par value;

Stock, $ 0.001 par value;

24,000,000 shares authorized;

10,772,713 and 10,498,802 shares issued and outstanding, respectively

Additional Paid-In Capital

Accumulated Deficit

Paid-In Capital

( 52,524,277 )

( 49,342,484 )

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

Stockholders’ Equity

LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to condensed financial statements.

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Statements of Operations

Three Months Ended

COST OF REVENUE

and R&D Costs

Public Relations and Marketing

& Professional Service Fees

& Amortization

Operating Expenses

Salaries & Benefits

Stock-Based Compensation

Operations and R&D Costs

Investor, Public Relations and Marketing

Organization Costs

Legal & Professional Service Fees

Office Expenses

Depreciation & Amortization

Other Operating Expenses

Total Operating Expenses

LOSS FROM OPERATIONS

Operating Expenses

FROM OPERATIONS

( 1,304,019 )

( 2,235,840 )

( 3,085,668 )

( 4,519,785 )

INCOME (EXPENSE)

Rate Gain (Loss)

Other Income (Expense)

Interest Income

State Incentives

Exchange Rate Loss

Interest Expense

Total Other Income

LOSS BEFORE PROVISION FOR INCOME TAXES

BEFORE PROVISION FOR INCOME TAXES

( 1,308,094 )

( 2,247,170 )

Provision for income Taxes

( 3,059,794 )

( 4,454,565 )

Preferred Dividends

Net Loss Applicable to Common Stockholders

for income Taxes

$ ( 1,308,094 )

$ ( 2,247,170 )

Net Loss per Common Share – Basic and Diluted

Weighted Average Number of Shares Outstanding – Basic and Diluted

$ ( 3,059,794 )

$ ( 4,454,565 )

Loss Applicable to Common Stockholders

$ ( 1,318,782 )

$ ( 2,261,390 )

$ ( 3,082,229 )

$ ( 4,483,005 )

Loss per Common Share – Basic and Diluted

Loss per Common Share – Basic

Average Number of Shares Outstanding – Basic and Diluted

Average Number of Shares Outstanding – Basic

accompanying notes to condensed financial statements.

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of Stockholders’ Equity

the Three Months Ended March 31, 2023, and March 31, 2022

Shares Outstanding

Preferred Stock

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Preferred Stock

Shares Outstanding

Preferred Stock

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Balances, December 31, 2022

the Three Months and Six Months Ended June 30, 2023 and June 30, 2022

the Three Months Ended June 30, 2023 and June 30, 2022

March 31, 2023

( 51,205,495 )

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( 1,308,094 )

Preferred Stock Dividends

Common Shares Issued for Conversion of Preferred Stock

Common Warrant Issued for Conversion of Preferred Stock

Stock Options Issued to Directors for Services

Stock Options Issued for Third Party Services

Stock Options Issued to Employees

Balances, March 31, 2023

Stock Dividends

Options Issued to Directors for Services

Options Issued to Employees

June 30, 2023

( 52,524,277 )

Preferred Stock

Shares Outstanding

Preferred Stock

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Balances, December 31, 2021

March 31, 2022

$ ( 42,814,795 )

1 unchanged sentence

( 2,247,170 )

Preferred Stock Dividends

Stock Options Issued to Directors for Services

Stock Options Issued for Third Party Services

Stock Options Issued to Employees

Balances, March 31, 2022

Stock Dividends

Options Issued for Third Party Services

Options Awarded to Directors for Services

Options Awarded to Employees

June 30, 2022

$ ( 45,076,185 )

the Six Months Ended June 30, 2023 and June 30, 2022

December 31, 2022

$ ( 49,342,484 )

( 3,059,794 )

Stock Dividends

Shares Issued for Conversion of Preferred Stock

Warrant Issued for Conversion of Preferred Stock

Options Issued to Directors for Services

Options Issued for Third Party Services

Options Issued to Employees

June 30, 2023

( 52,524,277 )

December 31, 2021

$ ( 40,593,180 )

( 4,454,565 )

Stock Dividends

Options Issued for Third Party Services

Options Awarded to Directors for Services

Options Awarded to Employees

June 30, 2022

$ ( 45,076,185 )

accompanying notes to condensed financial statements.

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Statements of Cash Flows

March 31, 2023

March 31, 2022

Three Months Ended

March 31, 2023

March 31, 2022

OPERATING ACTIVITIES

$ ( 3,059,794 )

$ ( 4,454,565 )

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

Noncash Expenses:

Depreciation and Amortization

Stock-Based Compensation - Employees

Stock-Based Compensation - Third Party Services

Stock-Based Compensation - Directors

Stock-Based Compensation

Change in Assets and Liabilities:

Accounts Receivable

Prepaid Assets

Accounts Payable

Deferred Revenue

Accrued Expenses

NET CASH USED IN OPERATING ACTIVITIES

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

and Amortization

Based Compensation - Employees

Based Compensation - Third Party Services

Based Compensation - Directors

Based Compensation

in assets and liabilities:

CASH USED IN OPERATING ACTIVITIES

( 2,414,881 )

( 4,314,503 )

INVESTING ACTIVITIES

Purchase of Property and Equipment

Purchase of Intangible Assets

NET CASH USED IN INVESTING ACTIVITIES

FINANCING ACTIVITIES

NET CASH PROVIDED BY FINANCING ACTIVITIES

NET CHANGE IN CASH FOR PERIOD

of Property and Equipment

of Intangible Assets

CASH USED IN INVESTING ACTIVITIES

CASH PROVIDED BY FINANCING ACTIVITIES

CHANGE IN CASH FOR PERIOD

( 2,477,488 )

( 4,513,548 )

CASH AT BEGINNING OF PERIOD

CASH AT END OF PERIOD

Supplemental Disclosures:

Noncash Investing and Financing Activities Disclosure:

Preferred Stock Dividends

Conversion of Preferred Shares to Common Shares

Other Noncash Operating Activities Disclosure:

Issuance of Securities for services

Disclosure of Cash Paid for:

AT BEGINNING OF PERIOD

AT END OF PERIOD

investing and financing activities disclosure:

Stock Dividends

of Preferred Shares to Common Shares

noncash operating activities disclosure:

of Securities for Services

of cash paid for:

accompanying notes to condensed financial statements.

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novel and unique manufacturing and materials technologies.

Sigma believes that some of these technologies will fundamentally redefine

conventional quality assurance and process control practices by embedding them into the manufacturing processes in real time, enabling

process intervention and ultimately leading to closed loop process control.

The Company anticipates that its core technologies will allow

its customers to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve breakthrough

product potential in many industries, including aerospace, defense, oil and gas, bio-medical, and power generation.

of Presentation - The accompanying financial statements have been prepared by the Company in accordance with Generally Accepted Accounting

Principles (“GAAP”) in the United States of America.

In the opinion of management, all adjustments (which include only normal

recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2023 and

2022 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in financial statements

prepared in accordance with GAAP have been condensed or omitted.

The Company suggests these condensed financial statements be read in

conjunction with the December 31, 2022 audited financial statements and notes thereto included in the Company’s Annual Report on

The results of operations for the period ended March 31, 2023 are not necessarily indicative of the operating results for

the full year.

The Company’s core technologies are designed to allow its customers

to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve breakthrough product

potential in many industries, including aerospace, defense, oil and gas, bio-medical, and power generation.

of Presentation - The accompanying financial statements have been prepared by the Company in accordance with Generally

Accepted Accounting Principles (“GAAP”) in the United States of America.

In the opinion of management, all adjustments

(which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash

flows at June 30, 2023 and 2022 and for the periods then ended have been made.

Certain information and footnote disclosures normally

included in financial statements prepared in accordance with GAAP have been condensed or omitted.

The Company suggests these

condensed financial statements be read in conjunction with the December 31, 2022 audited financial statements and notes thereto

included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The results of operations for the period ended June 30, 2023 and 2022

are not necessarily indicative of the operating results for the full year.

Concern – The Company has sustained losses and had negative cash flows from operating activities since its inception.

in 2017, the company committed itself to a focused initiative to transition its product and culture from research and development into

an enterprise with a commercial industrial product and a business-oriented operation culture.

Company currently has sufficient cash and working capital to fund operations through June 2023 and will require additional funding in

the public or private markets in the near-term to be able to continue operations.

The Company currently has no understanding or agreement

to obtain such funding, and there is no assurance that we will be successful in obtaining additional funding.

If we fail to obtain sufficient

funding when needed, we will be forced to delay, scale back or eliminate all or a portion of our commercialization efforts and operations.

As a result, there is substantial doubt about our ability to continue as a going concern.

reported in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 20, 2023, the Company estimates

that it has sufficient cash and working capital to fund its scaled-back operations as described below through August 2023 only.

June 30, 2023, the Company has reduced its employee headcount to five, discontinued all product development activities and ceased to

pursue new customers while continuing to consider a possible reverse merger, sale of the company or all or a portion of its assets, and

other alternatives.

Except for possible sales of shares of our common stock under the At-The-Market Issuance Sales Agreement described

in Note 5- Subsequent Events, we have no agreement or arrangement to obtain any financing.

There is no assurance that we will be able

to enter into a definitive agreement with respect to a possible transaction or sell the Company or any of its assets or, if so, when

or on what terms.

If we fail to complete the sale of the Company or its assets or shares of common stock or obtain additional financing, we will be forced to resort to

the dissolution and liquidation or bankruptcy of the Company.

For these reasons, there is substantial doubt about our ability to continue

as a going concern.

Value of Financial Instruments - The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables,

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and preferred stock were excluded due to the anti-dilutive effect they would have on the computation.

At March 31, 2023 and 2022, the

At June 30, 2023 and 2022, the

Company had the following common shares underlying these instruments:

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from Computation of Earnings Per Share

Stock Options

Preferred Stock

Total Underlying Common Shares

following table shows the amounts used in computing loss per share and the effect on net loss and the weighted average number of shares

of dilutive potential common stock for the periods ended March 31, 2023 and 2022:

Underlying Common Shares

following table shows the amounts used in computing loss per share and the effect on net loss and the weighted average number of potentially

dilutive shares for the periods shown:

Schedule of Computing Loss Per Share

Three Months Ended March 31

Net Loss per Common Share - Basic and Diluted

Loss Applicable to Common Stockholders (numerator)

Loss per Common Share - Basic and Diluted

Loss per Common Share - Basic

Applicable to Common Stockholders (numerator)

$ ( 1,318,782 )

$ ( 2,261,390 )

Weighted Average Number of Common Shares Outstanding Used in Loss Per Share During the Period (denominator)

$ ( 3,082,229 )

$ ( 4,483,005 )

Weighted Average Number of Common Shares Outstanding Used in Loss Per Share

During the Period (denominator)

Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions

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value or estimated net realizable value.

No patents were written off in the first quarter of 2023 or in fiscal 2022.

No patents were written off in the second quarter of 2023 or in fiscal 2022.

Utility patents

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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 of 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

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

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

for terms of 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 use during the term of the arrangement.

These leases 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 upon at least

30 days written notice.

Some, but not all, of the leases permit lessees to purchase the equipment 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,

respectively.

The Company has elected single component practical expedient accounting 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 single component practical expedient accounting.

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 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.

from these operating leases for the three months ended March 31, 2023 was $ 17,006 .

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

at least 30 days written notice.

Some, but not all, of the leases permit lessees to purchase the equipment 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, respectively.

The Company has elected single component practical expedient accounting 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;

this component is not eligible for single component practical expedient accounting.

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 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.

from these operating leases for the three and six months ended June 30, 2023 was $ 11,337 and $ 28,343 .

Receivable and Allowance for Doubtful Accounts - Trade accounts receivable are carried at original invoice amount less an estimated

allowance for doubtful accounts.

We determine the allowance for doubtful accounts by identifying potential troubled accounts and by using

historical experience and future expectations applied to an aging of accounts.

Trade accounts receivable are written off when deemed

uncollectible.

Recoveries of trade accounts receivable previously written off are recorded as income when received.

As of June 30, 2023

and June 30, 2022, the Company has established an allowance for doubtful accounts of $ 115,600 and $ 0 , respectively.

Lease Payments Receivable

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Lease Payments Receivable

Year ending December 31,

2023 (remaining)

ending December 31,

Underlying Operating Leases:

under operating leases as of March 31, 2023 was comprised of the following:

under operating leases as of June 30, 2023 was comprised of the following:

Schedule of Assets underlying Operating Leases

March 31, 2023

PrintRite 3D Hardware

Accumulated Depreciation

Net Book Value

Company is depreciating the underlying equipment over its useful life of 7 years, but certain subassemblies and components may have a

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2 – Inventory

March 31, 2023 and December 31, 2022, the Company’s inventory was comprised of the following:

June 30, 2023 and December 31, 2022, the Company’s inventory was comprised of the following:

Schedule of Inventory

March 31, 2023

December 31, 2022

Raw Materials

Work in Process

Finished Goods

Total Inventory

3 – Intangible Assets

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If a patent application is denied, then the costs will be expensed at that time.

the three months ended March 31, 2023, $ 5,130 of costs related to patents issued to us during 2023 were reclassified from provisional

patent application to patents and began to be amortized as of the date of issue.

following is a summary of definite-life intangible assets less accumulated amortization as of March 31, 2023 and December 31, 2022, respectively:

the six months ended June 30, 2023, $ 27,571

of costs related to patents issued during the quarter were reclassified from provisional patent application to patents and began to

be amortized as of the date of issue.

following is a summary of definite-life intangible assets less accumulated amortization as of June 30, 2023 and December 31, 2022, respectively:

Summary of Definite-life Intangible Assets and Accumulated Amortization

Provisional Patent Applications

Patent Applications

Accumulated Amortization

Net Intangible Assets

expense on intangible assets was $ 7,418 and $ 4,978 for the three months ended March 31, 2023 and 2022, respectively.

Intangible Assets

expense on intangible assets was $ 14,996 and $ 10,993 for the six months ended June 30, 2023 and 2022, respectively.

estimated aggregate amortization expense for years ending December 31 is as follows:

Schedule of Aggregate Amortization Expense

2023 (Remaining)

Intangible asset and

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4 - Stockholders’ Equity

the first quarter of 2023, the Company issued 227,587

shares of common stock in exchange for the conversion of 132

shares of Series D Convertible Preferred Stock, and 43,241

shares of common stock as in-kind payment of dividends thereon.

in the first quarter of 2023, the Company issued 2,428

shares of common stock in exchange for the conversion of 17

shares of Series E Convertible Preferred Stock, and 655

shares of common stock as in-kind payment of dividends thereon.

Company is authorized to issue 10,000,000

shares of preferred stock, $ 0.001

par value per share, of which 316

shares were issued and outstanding at March 31, 2023 and December 31, 2022.

the second quarter of 2023, the Company did not issue any shares of common stock.

the first quarter of 2023, the Company issued 227,587 shares of common stock in exchange for the conversion of 132 shares of Series D

Convertible Preferred Stock and 43,241 shares of common stock as in-kind payment of dividends thereon.

in the first quarter of 2023, the Company issued 2,428 shares of common stock in exchange for the conversion of 17 shares of Series E

Convertible Preferred Stock and 655 shares of common stock as in-kind payment of dividends thereon.

Company is authorized to issue 10,000,000 shares of preferred stock, $ 0.001 par value per share, of which 316 and 465 shares were issued

and outstanding at June 30, 2023 and December 31, 2022, respectively.

January 2020, the Company entered into a Securities Purchase Agreement with certain institutional investors (the “Institutional

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issued or sold, shares of Common Stock for a consideration per share less than a price equal to the conversion price then in effect).

January 27, 2023, the holder of the remaining 132 outstanding shares of Series D Preferred Stock elected to convert such shares in their

entirety, which resulted in the issuance of 270,828 shares of common stock.

March 31, 2023, there were no shares of Series D Preferred Stock outstanding.

January 27, 2023, the holder of the remaining 132 outstanding shares of Series D Preferred Stock elected to convert such shares, which resulted in the issuance of 270,828 shares of common stock.

June 30, 2023, there were no shares of Series D Preferred Stock outstanding.

with the Institutional Private Placement, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued

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for stock splits, dividends, recapitalizations and similar events).

January 23, 2023, the holder of 17 shares of Series E Preferred Stock elected to convert such shares in their entirety, which resulted

in the issuance of 3,083 shares of common stock.

March 31, 2023, 316 shares of Series E Preferred Stock were outstanding, which if converted as of March 31, 2023, including the make-whole

dividends, would result in the issuance of 58,568 shares of common stock.

January 23, 2023, the holder of 17

shares of Series E Preferred Stock elected to convert such shares, which resulted in the issuance of 3,083

shares of common stock.

June 30, 2023, 316

shares of Series E Preferred Stock were outstanding, which were convertible into 60,332

shares of common stock, including in-kind dividends thereon.

Company’s 2013 Equity Incentive Plan expired on March 15, 2023.

As such, there were no shares of common stock reserved for future

issuance thereunder as of March 31, 2023.

January 26, 2023, the Company granted options to its non-employee directors to purchase up to an aggregate of 52,380

shares of common stock at an exercise price of $ 0.58 .

As of March 31, 2023, 25 %

of such grants were fully vested and exercisable, and the remaining 75 %

will vest in equal quarterly installments over the remaining three quarters of 2023, subject to the directors remaining in our

service through such dates.

January 26, 2023, the Company granted 19 employees options to purchase up to an aggregate of 381,285

shares of common stock in connection with their employment.

The options have an exercise price of $ 0.58

and vested as to 50 %

on the date of the grant, and will vest as to the remaining 50 %

in equal monthly installments over the subsequent 23 months, provided that the employees remain employed by the Company through such

Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the

Company’s common stock on the grant date, but not less than 100% of the fair market value.

Stock options are typically granted throughout the year and generally vest over a period from

one to three years of service and expire five years from the grant date, unless otherwise specified.

The Company recognizes

compensation expense for the fair value of the stock options over the vesting period for each stock option

stock-based compensation expense included in the statements of operations for the three months ended March 31, 2023 and 2022 was $ 224,850

issuance thereunder as of June 30, 2023.

January 26, 2023, the Company granted options to its non-employee directors to purchase up to an aggregate of 52,380 shares of common

stock at an exercise price of $ 0.58 .

As of June 30, 2023, 50 % of such grants were fully vested and exercisable, and the remaining 50 %

will vest in equal quarterly installments over the remaining two quarters of 2023, subject to the directors remaining in our service

through such dates.

January 26, 2023, the Company granted 19 employees options to purchase up to an aggregate of 381,285 shares of common stock in connection

with their employment.

The options have an exercise price of $ 0.58 and vested as to 50 % on the date of the grant, and will vest as to

the remaining 50 % in equal monthly installments over the subsequent 23 months, provided that the employees remain employed by the Company

through such dates.

Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s

common stock on the grant date, but not less than 100% of the fair market value.

Stock options are typically granted throughout the year

and generally vest over a period from one to three years of service and expire five years from the grant date, unless otherwise specified.

The Company recognizes compensation expense for the fair value of the stock options over the vesting period for each stock option award.

stock-based compensation expense included in the statements of operations for the six months ended June 30, 2023 and 2022 was $ 363,339

and $ 338,415 respectively, all of which is related to stock options.

fair value of stock-based awards was estimated using the Black-Scholes model with the following weighted average assumptions for the

three months ended March 31, 2023 and 2022:

six months ended June 30, 2023, and 2022:

Schedule of Share Based Payments Award Stock

Options Valuation Assumptions

Dividend yield

Risk-free interest rate

interest rate

100.23 - 100.25 %

Expected volatility

106.4 - 110.0

Expected life (in years)

activity for the three months ended March 31, 2023 and the year ended December 31, 2022 was as follows:

life (in years)

activity for the six months ended June 30, 2023 and the year ended December 31, 2022 was as follows:

of Share Based Compensation Stock Option Activity

Options outstanding at December 31, 2021

Forfeited or cancelled

Options outstanding at December 31, 2022

Forfeited or cancelled

Options outstanding March 31, 2023

Options expected to vest in the future as of March 31, 2023

Options exercisable at March 31, 2023

Options vested, exercisable, and options expected to vest at March 31, 2023

outstanding at December 31, 2021

outstanding at December 31, 2022

outstanding at June 30, 2023

expected to vest in the future as of June 30, 2023

exercisable at June 30, 2023

vested, exercisable, and options expected to vest at June 30, 2023

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of

our common stock for those awards that have an exercise price below the market price of our common stock.

At March 31, 2023, no option

At June 30, 2023, no option

had an exercise price below the $ 0.35 closing price of our common stock as reported on The Nasdaq Capital Market.

March 31, 2023, there was $ 581,865 of unrecognized stock-based compensation expense related to unvested stock options with a weighted

June 30, 2023, there was $ 387,351 of unrecognized stock-based compensation expense related to unvested stock options with a weighted

average remaining recognition period of 1.42 years.

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of common stock are reserved or will be issued pursuant to the Plan.

may be granted to any Service Provider.

A SAR is the right to receive an amount equal to the Spread with respect to a share of the

Company’s common stock (“Share”) upon the exercise of the SAR.

The “Spread” is the difference between

the exercise price per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of

exercise of the SAR.

The exercise price per share will not be less than 100% of the fair market value of a share of common stock on

the date of grant of the SAR.

The administrator of the Plan will have the authority to, among other things, prescribe the terms and

conditions of each SAR, including, without limitation, the exercise price and vesting provisions, and to specify the provisions of

the SAR Agreement relating to such grant.

Company did not grant any SAR’s during the three months ended March 31, 2023.

Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period

for each SAR award.

The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,”

and any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date.

fair value of SAR awards was estimated using the Black-Scholes model with the following weighted average assumptions for the three

months ended March 31, 2023 and March 31, 2022:

A SAR is the right to receive an amount equal to the Spread with respect to a share of the Company’s

common stock (“Share”) upon the exercise of the SAR.

The “Spread” is the difference between the exercise price

per share specified in a SAR agreement on the date of grant and the fair market value per share on the date of exercise of the SAR.

exercise price per share will not be less than 100% of the fair market value of a share of common stock on the date of grant of the SAR.

The administrator of the Plan will have the authority to, among other things, prescribe the terms and conditions of each SAR, including the exercise price and vesting provisions, and to specify the provisions of the SAR Agreement relating to such grant.

Company did not grant any SAR’s during the six months ended June 30, 2023.

Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the vesting period for each

The SARs are revalued at each reporting date in accordance with ASC 718 “Compensation-Stock Compensation,” and

any changes in fair value are reflected in the Statement of Operations as of the applicable reporting date.

fair value of SAR awards was estimated using the Black-Scholes model with the following weighted average assumptions for the six months

ended June 30, 2023 and the year ended December 31, 2022:

of Share Based Payments Award Stock Options Valuation Assumptions

Dividend yield

Risk-free interest rate

interest rate

0.82 - 2.79 %

Expected volatility

108.0 - 119.0 %

Expected life (in years)

activity for the three months ended March 31, 2023 and the year ended December 31, 2022 was as follows:

life (in years)

activity for the six months ended June 30, 2023 and the year ended December 31, 2022 was as follows:

of Stock Option Activity

SARs outstanding at December 31, 2021

Forfeited or cancelled

SARs outstanding at December 31, 2022

Forfeited or cancelled

SARs outstanding March 31, 2023

SARs expected to vest in the future as of March 31, 2023

SARs exercisable at March 31, 2023

SARs vested, exercisable, and SARs expected to vest at March 31, 2023

outstanding at December 31, 2021

outstanding at December 31, 2022

outstanding June 30, 2023

expected to vest in the future as of June 30, 2023

exercisable at June 30, 2023

vested, and exercisable, and SARs expected to vest at June 30, 2023

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the market price of

our common stock for those awards that have an exercise price below the market price of our common stock.

At March 31, 2023, no SAR had

At June 30, 2023, no SAR had

an exercise price below the $ 0.35 closing price of our common stock as reported on The Nasdaq Capital Market.

March 31, 2023, there was $ 665,799 of unrecognized stock-based compensation expense related to unvested SARs with a weighted average

remaining recognition period of 1.95 years.

activity for the three months ended March 31, 2023 and the year ended December 31, 2022 was as follows:

June 30, 2023, there was $ 474,228 of unrecognized stock-based compensation expense related to unvested SARs with a weighted average remaining

recognition period of 1.75 years.

activity for the six months ended June 30, 2023 and the year ended December 31, 2022 was as follows:

of Warranty Activity

Warrants outstanding at December 31, 2021

Forfeited or cancelled

Warrants outstanding at December 31, 2022

Forfeited or cancelled

Warrants outstanding at March 31, 2023

outstanding at December 31, 2021

outstanding at December 31, 2022

( 2,412,086 )

outstanding at June 30, 2023

5 - Subsequent Events

April 13, 2023, The Nasdaq Stock Market (“Nasdaq”) notified us that although the Company’s common stock had not regained

compliance with the minimum $1.00 bid price per share requirement for continued inclusion on The Nasdaq Capital Market under Nasdaq Listing

Rule 5550(a)(2), the Nasdaq Staff has granted us an additional 180 calendar days, or until October 9, 2023, to regain compliance

based on our meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements

for initial listing on The Nasdaq Capital Market, with the exception of the bid price requirement, and our intention

to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary.

According to Nasdaq’s

notice, if at any time during this additional time period the closing bid price of our common stock is at least $1 per share for a minimum

of 10 consecutive business days, the Staff will provide written confirmation of compliance and this matter will be closed.

we choose to implement a reverse stock split, it must be completed no later than ten business days prior to October 9, 2023 to regain

If it appears to Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will

notify us that our common stock will be subject to delisting.

July 2023, the Company realized gross proceeds of approximately $ 135,000 from the sale of equipment.

On July 14, 2023, the employment of Stephan Kuehr,

General Manager of European Operations, terminated.

August 14, 2023, the Company entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with Lake Street

Capital Markets, LLC, or Lake Street, pursuant to which the Company may issue and sell from time to time through Lake Street, as sales

agent, shares of our common stock having an aggregate offering price of up to $ 1,500,000 (the “Offering”).

The Offering is being made pursuant to a

prospectus supplement filed with the Securities and Exchange Commission in connection with the Offering under its Registration Statement

on Form S-3 (File No.

333-257054), which became effective on June 29, 2021, and the base prospectus contained therein.

delivery of a placement notice, and subject to the terms and conditions of the Sales Agreement, Lake Street as sales agent may sell shares

of common stock by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act

of 1933, as amended.

The sales agent is not required to purchase any shares of common stock from the Company or sell any specific number

or dollar amount of common stock but will use its commercially reasonable efforts consistent with its normal trading and sales practices

as our agent to sell shares of common stock in the Offering as instructed by us.

Company or Lake Street may suspend or terminate the Offering upon notice to the other and subject to other conditions.

Company has agreed to pay Lake Street a commission of 3.0 % of gross proceeds from the Offering and to reimburse Lake Street for certain

The Company has also agreed to afford Lake Street customary indemnification and contribution rights.

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 1. Financial Statements