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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-14 · 256 added, 228 removed, 169 unchanged (74% of the section changed)

1 unchanged sentence

Forward-looking

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

Statements” including but not limited to, statements regarding a possible strategic transaction, dissolution and liquidation or

bankruptcy of the Company.

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.

This Quarterly Report contains “Forward-Looking Statements.”

All statements other than statements of historical fact are “Forward-Looking Statements” including but not limited to, statements

regarding the pending strategic transactions or the possible dissolution and liquidation or bankruptcy of the Company.

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, 2022 and elsewhere 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 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, 2022 and elsewhere in this Quarterly Report.

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

78 unchanged sentences

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.

As of September 30,

2023 and September 30, 2022, the Company has established an allowance for doubtful accounts of $115,000 and $0, respectively.

Valuation - Inventories consist of raw materials used in the production of customized parts, work-in-process and finished goods components

which will be sold to customers.

Inventories are valued at the lower of cost or net realizable value, using the first-in, first-out (FIFO)

Inventories are valued at the lower of cost or net realizable value, using the first-in, first-out

Charges for obsolete inventory are based on identification of specific items resulting from regular, on ongoing reviews of our

49 unchanged sentences

of a range of strategic alternatives, including a possible strategic investment, acquisition, merger, business combination, or similar

our Current Report on Form 8-K filed with the SEC on July 20, 2023, we reported that we had received four written, non-binding proposals

to purchase assets or acquire the company in a merger or reverse merger and were in talks regarding the respective proposals, as well

as possible alternative transactions with other parties that expressed interest in a possible transaction as we worked to formally close

our strategic transaction process.

We also reported that we had reduced our employee headcount via furloughs and layoffs to five employees,

including our President and Chief Executive Officer and Chief Financial Officer and two key employees considered important to a possible

sale of the company or all or a portion of its assets and support of current customers, and had discontinued our product development

activities and ceased to pursue new customers.

See “Liquidity and Capital Resources,” below.

Since the filing of the Current Report, we have received additional

written, non-binding proposals as well as revised previous proposals to purchase certain assets of the Company or acquire the Company

in a merger or reverse merger.

Although we have not yet entered into any definitive agreements, we are continuing to work towards such

definitive agreements with interested parties.

See “Risk Factors,” below for a discussion of certain risks and uncertainties

regarding a possible transaction.

our Current Report filed with the SEC on October 13, 2023, we reported that we had entered into an Asset Purchase Agreement with Divergent

Technologies, Inc., or Divergent, pursuant to which have agreed to sell to Divergent, and Divergent has agreed to purchase from us, certain

assets consisting primarily of patents, software code and other intellectual property for a purchase price of $1,626,242, including a

$37,000 earnest-money deposit previously paid to us by Divergent.

The closing under the Asset Purchase Agreement is expected to occur

subsequent to the closing or termination of our acquisition of NextTrip Holdings, Inc.

parties’ respective obligations to close are subject to the accuracy of the parties’ respective representations and warranties

and performance of their respective covenants and satisfaction or waiver of other customary conditions specified in the Asset Purchase

our additional Current Report filed with the SEC on October 13, 2023, On October 12, 2023, we reported that we had entered into a Share

Exchange Agreement with NextTrip Holdings, Inc., pursuant to which we will acquire NextTrip (the “Acquisition”) in exchange

for shares of our common stock, which we refer to as the Exchange Shares, subject to approval of our shareholders and other conditions

described below.

As a result, NextTrip will become a wholly owned subsidiary of Sigma, which is expected to change its corporate name

to “NextTrip, Inc.” following the Acquisition.

the closing of the Acquisition, the shareholders of NextTrip will be issued a number of Exchange Shares equal to 19.99% of our issued

and outstanding shares of common stock immediately prior to the closing.

Under the Share Exchange Agreement, the NextTrip shareholders

will be entitled to receive additional shares of our common stock, referred to as the Contingent Shares, subject to NextTrip’s

achievement of future business milestones specified in the Share Exchange Agreement.

Alternatively,

independent of the aforementioned milestones, for each month during the fifteen (15) month period following the closing date that in

which $1,000,000 or more in gross travel bookings are generated by the combined company, to the extent not previously issued, the Contingent

Shares will be issuable up to the maximum Contingent Shares issuable under the Share Exchange Agreement.

Contingent Shares, together with the shares of our common stock issued at the closing, will not exceed 6,000,000 shares of our

common stock, or approximately 90.2% of our issued and outstanding shares of common stock immediately following the issuance of such

Assuming all the business milestones are achieved and no other change in our outstanding shares, Sigma shareholders will retain approximately 9.8% of the Company’s

outstanding shares immediately following the issuance of such shares.

parties’ respective obligations to close the Acquisition are subject to the satisfaction or waiver of various conditions specified

in the Share Exchange Agreement.

The conditions include approval by Sigma shareholders of the issuance of the Exchange Shares as required

by applicable listing standards of Nasdaq, amendments to our amended and restated articles of incorporation

to change our name as described above and to increase our authorized common stock, the continued listing or our common stock on Nasdaq,

as well as customary other closing conditions.

Agreement contains representations and warranties and covenants of the parties customary for a transaction of this nature which will

not survive the closing of the Acquisition.

The Share Exchange Agreement also contains customary covenants regarding the conduct of the

respective businesses of Sigma and NextTrip pending the closing of the Acquisition.

The Share Exchange Agreement permits us to sell our

quality assurance software assets at or after the closing of the Acquisition as contemplated by our Asset Purchase

Agreement with Divergent Technologies, Inc.

Share Exchange Agreement may be terminated by the parties by mutual agreement or by a party in the event of a breach of the other party’s

representations, warranties or covenants, subject to certain exceptions, or if the Acquisition is not completed by December 31, 2023.

of Operations

Months Ended June 30, 2023 and June 30, 2022

the three months ended June 30, 2023, we recognized revenue of $97,043, as compared to $ 236,660 in the same period in 2022, a decrease

of $139,617, or 59%.

The decrease was due to decreased PrintRite3D sales of $111,200, decreased annual maintenance contract revenue of

$7,739, decreased RTE revenue of $5,300 and decreased on-site development and support of 44,044 as compared to the second quarter of

Partially offsetting the decreases were increases in PrintRite3D lease revenue of $3,166 and in PrintRite3D consulting services

cost of revenue for the three months ended June 30, 2023 was $36,491, as compared to $193,075 for the same period in 2022, a decrease

Months Ended September 30, 2023 and September 30, 2022

the three months ended September 30, 2023, we recognized revenue of $141,988, as compared to $ 188,245 in the same period in 2022, a

decrease of $46,257, or 25%.

The decrease was due to decreased PrintRite3D sales of $41,595, and decreased annual maintenance contract

revenue of $13,560, as compared to the third quarter of 2022.

Partially offsetting the decreases were increases in PrintRite3D lease

revenue of $5,669, and on-site development and support revenue of $3,229.

cost of revenue for the three months ended September 30, 2023 was $176,116, as compared to $79,713 for the same period in 2022, an increase

of $96,403, or 121%.

The decrease e was primarily attributable to fewer unit sales and installations in the second quarter of 2023 as

compared to the second quarter of 2022.

total operating expenses for the three months ended June 30, 2023 were $1,364,571, as compared to $2,279,425 for the same period in 2022,

The increase was primarily attributable to the cost of a new quad laser intended for a lease that was sold at a

discounted price in the third quarter of 2023 as compared to the third quarter of 2022.

total operating expenses for the three months ended September 30, 2023 were $866,199, as compared to $2,392,956 for the same period

in 2022, a decrease of $1,526,757, or 64%.

The decrease was primarily attributable to a decrease in salaries and benefits of

$938,911, a decrease in stock-based compensation of $191,340, a decrease in operations and R&D costs of $152,000, a decrease in

organization costs of $92,942, and a decrease in office expense of $119,531 primarily attributable to reduced headcount and travel

as further described below.

and benefits costs were $288,894 for the three months ended September 30, 2023, as compared to $1,227,805 for the same period in 2022,

a decrease of $938,911, or 77%.

The decrease was primarily attributable to a decrease in salaries and benefits of $630,636, a decrease

in investor, public relations, and marketing expense of $94,475, and a decrease in office expense of $209,410 primarily attributable

to reduced headcount and travel as further described below.

and benefits costs were $554,182 for the three months ended June 30, 2023, as compared to $ 1,184,818 for the same period in 2022, a

decrease of $630,636, or 53%.

The decrease was comprised of:

The decrease was attributable to:

(a) decreased salaries of $705,631 attributable to furloughed and terminated

(b) a decrease commission and bonus expense of $93,664 due to the reversal of 2022 year-end bonuses;

benefits of $75,835;

and (d) decreased severance expense of $2,035.

Offsetting these decreases was an increase in stock appreciation

rights of $40,371.

compensation was $138,489 for the three months ended June 30, 2023, as compared to $167,439 for the same period in 2022, a decrease of

$28,950, or 17%.

This decrease was primarily a result of forfeiture of options from former employees.

incurred operations and research and development costs of $105,259 during the three months ended June 30, 2023, as compared to $146,885

in the same period in 2022, a decrease of $41,626, or 28%.

The decrease was due to a decrease in operations costs of $14,755, and a decrease

in research and development costs of $26,871.

The decrease in operations costs related to fewer parts and material purchases in the second

quarter of 2023.

The decrease in research and development costs was primarily due to suspending consulting work with a third-party software

vendor in connection with the development of our software-only product suite.

incurred investor, public relations, and marketing costs of $57,824 during the three months ended June 30, 2023, as compared to $152,300

(b) a decrease in commission and bonus expense of $37,405;

(d) decreased severance

expense of $30,301;

and (e) a decrease in stock appreciation rights of $48,549.

compensation was $84,078 for the three months ended September 30, 2023, as compared to $275,418 for the same period in 2022, a decrease

of $191,340, or 70%.

This decrease was primarily a result of forfeitures of unvested options by former employees.

incurred operations and research and development costs of $245 during the three months ended September 30, 2023, as compared to

$152,245 in the same period in 2022, a decrease of $152,000.

The decrease was due to decreasing operations and R&D work as we

have shifted our focus to closing our two corporate transactions and supporting existing customers.

incurred investor, public relations, and marketing costs of $15,797 during the three months ended September 30, 2023, as compared to

$46,832 during the same period in 2022.

The decrease of $94,476, or 62%, was due to a decrease in investor relations consulting costs of $35,212,

a decrease in attendance at tradeshows and conferences of $48,094 due to fewer employees, and a decrease in marketing costs of $11,170.

incurred organization costs of $38,240 during the three months ended June 30, 2023, as compared to $60,817 during the same period in

The decrease of $22,577, or 37%, was primarily attributable to a decrease in non-employee director compensation of $15,926 primarily

due to fewer stock options granted in 2023 and a decrease in shareholder services of $5,966.

and professional fees incurred in the three months ended June 30, 2023 were $152,025, as compared to $144,528 incurred during the same

period in 2022, an increase of $7,497, or 5%.

This increase was a result of legal fees of $64,410 due to employment related matters,

and legal and financial advisors engaged to assist in Sigma’s evaluation of a corporate transaction.

Partially offsetting the increase

was a decrease in consulting expenses from 2022 of $48,929 which were related to a manufacturing consultant, technical accounting support,

HR consultant, and advisor to the Board of Directors, a decrease in accounting expenses of $3,555 and a decrease in IT service fees of

$4,429 related to new employee setup fees in 2022.

expenses for the three months ended June 30, 2023, were $94,190 as compared to $303,600 for the same period in 2022, a decrease of $209,410,

The decrease of $31,035, or 66%, was due to a decrease in investor relations consulting costs

of $22,609 as a result of renegotiated lower monthly fees and a decrease in marketing costs of $8,426.

incurred organization costs of $47,580 during the three months ended September 30, 2023, as compared to $140,522 during the same

period in 2022.

The decrease of $92,942, or 66%, was primarily attributable to a decrease in non-employee director compensation of

$21,359 primarily due to fewer stock options granted in 2023 and a decrease in shareholder services costs of $72,785 due to a change

in timing of our annual shareholders’ meeting from the third quarter of 2022 to the fourth quarter of 2023.

offsetting these decreases was an increase in regulatory compliance fees of $1,202.

and professional fees incurred in the three months ended September 30, 2023 were $251,265, as compared to $252,886 during the

same period in 2022, a decrease of $1,621.

This decrease was primarily a result of decreased recruiting fees of $74,250, and a decrease

in consulting expenses of $47,754 for an advisor to the board of directors and a marketing consultant.

Partially offsetting these decreases

was an increase in legal expenses fees of $116,426 due to employment related matters and legal and financial advisors engaged to assist

in Sigma’s evaluation of corporate transactions, and an increase in accounting expenses of $3,337.

expenses for the three months ended September 30, 2023, were $61,077 as compared to $183,608 for the same period in 2022, a decrease

of $122,531, or 67%.

The decrease resulted from:

(a) decreased travel and entertainment expenses of $71,746;

(b) decreased office supply expenses

(b) decreased office supply

expenses of $4,374;

(d) decreased payroll services expense of $10,538;

(e) decreased rent and

utilities of $11,534;

(e) decreased

rent and utilities of $10,588;

and (f) decreased training and education expense of $848.

These decreases were the result of a reduction in

the number of employees and no company-wide conference being held in 2023.

Partially offsetting these decreases was an increase in postage

and shipping expenses of $2,175 due to shipment of a PrintRite3D system to one of our partners in Europe.

and amortization expense for the three months ended June 30, 2023 was $21,470, as compared to $29,861 for the same period in 2022, a

decrease of $8,391, or 28%.

The decrease was primarily the result of the increased life expectancy of our leased and consigned PrintRite3D

operating expenses were $202,892 for the three months ended June 30, 2023, as compared to $89,177 for the same period in 2022.

increase was primarily due to bad debt expense of $115,600 related to a customer receivable for which collectability is in doubt.

the three months ended June 30, 2023, we realized net other expense of $4,075, as compared to net other expense of $11,330 in the same

period in 2022.

The decrease in net other expense of $7,255, was primarily due to lower foreign exchange rate losses in 2023.

dividends for the three months ended June 30, 2023 were $10,668, as compared to $14,220 for the same period in 2022.

The decrease was

due to fewer outstanding shares of preferred stock as a result of conversions to common shares.

net loss applicable to common stockholders for the three months ended June 30, 2023, was $1,318,782 as compared to $2,261,390 for the

same period in 2022, a decrease of $942,608, or 42%.

The decrease was primarily due to the decrease in the loss from operations of $931,821,

a decrease in preferred dividends of $3,533, and a decrease in total other expenses of $7,255.

Months Ended June 30, 2023 and June 30, 2022

the six months ended June 30, 2023, we recognized revenue of $227,202, as compared to $ 288,504 in the same period in 2022, a decrease

These decreases were the result of a reduction

in the number of employees.

and amortization expense for the three months ended September 30, 2023 was $24,554, as compared to $26,857 for the same period in 2022,

a decrease of $2,303, or 9%.

The decrease was primarily the result of returned and sold property and equipment.

operating expenses were $92,709 for the three months ended September 30, 2023, as compared to $86,783 for the same period in 2022.

$5,926 increase was primarily related to a FINRA filing fee.

the three months ended September 30, 2023, we realized net other income of $28,666, as compared to net other expense of $7,884 in the

same period in 2022.

The increase in other income of $36,550 was primarily due to the net gain on the sale of our 3DPrinter.

dividends for the three months ended September 30, 2023 were $10,687, as compared to $14,220 for the same period in 2022.

was due to fewer outstanding shares of preferred stock as a result of conversions to common shares.

net loss applicable to common stockholders for the three months ended September 30, 2023 was $882,348 as compared to $2,306,528 for

the same period in 2022, a decrease of $1,424,180, or 62%.

The decrease was due to the decrease in the loss from operations

of $1,384,097, a decrease in preferred dividends of $3,533, and an increase in other income of $36,550.

Months Ended September 30, 2023 and September 30, 2022

the nine months ended September 30, 2023, we recognized revenue of $369,188, as compared to $476,749 in the same period in 2022, a decrease

of $107,561, or 23%.

The decrease was due to decreased PrintRite3D sales of $49,701, decreased annual maintenance contract revenue of

$5,829, and decreased on-site development and support of $56,043 as compared to the second quarter of 2022.

The decrease primarily resulted from fewer PrintRite3D sales of $91,297, decreased annual maintenance and support

of $19,389, and decreased on-site development and support of $52,815 as compared to the third quarter of 2022.

Partially offsetting the

decreases were an increase in PrintRite3D lease revenue of $19,840, an increase in PrintRite3D consulting services of $25,500, and an

increase in RTE revenue of $10,600.

cost of revenue for the six months ended June 30, 2023 was $100,155, as compared to $ 233,166 for the same period in 2022, a decrease

increase in Rapid Test and Evaluation, or RTE revenue of $10,600.

cost of revenue for the nine months ended September 30, 2023 was $276,270, as compared to $312,879 for the same period in 2022, a decrease

of $36,609, or 12%.

The decrease was primarily attributable to fewer unit sales and installations in the second quarter of 2023 as compared

to the second quarter of 2022.

total operating expenses for the six months ended June 30, 2023 were $3,212,715, as compared to $4,575,123 for the same period in 2022,

The decrease was primarily attributable to fewer unit sales and installations in the third quarter of 2023 as compared

to the third quarter of 2022.

total operating expenses for the nine months ended September 30, 2023 were $4,078,912, as compared to $6,968,079 for the same period

in 2022, a decrease of $2,889,167, or 42%.

The decrease was primarily attributable to a decrease in salaries and benefits of $1,929,975,

a decrease in stock-based compensation of 166,416, a decrease in operations and R&D of 210,332, a decrease in investor, public relations,

and marketing expense of $164,893, a decrease in organization costs of 123,071 and a decrease in office expense of $382,875 primarily

attributable to reduced headcount and travel as further described below.

and benefits costs were $1,774,658 for the nine months ended September 30, 2023, as compared to $3,704,633 for the same period in

2022, a decrease of $1,929,975, or 52%.

The decrease was primarily attributable to a decrease in salaries and benefits of $991,064, a decrease

in investor, public relations, and marketing expense of $133,857, and a decrease in office expense of $260,343 primarily attributable

to reduced headcount and travel as further described below.

and benefits costs were $1,485,764 for the six months ended June 30, 2023, as compared to $ 2,476,828 for the same period in 2022, a

decrease of $991,064, or 40%.

The decrease was comprised of:

(a) decreased salaries of $812,160 attributable to furloughed and terminated

(b) a decrease commission and bonus expense of $75,958 due to the reversal of 2022 year-end bonuses;

benefits of $126,325;

(d) decreased stock appreciation rights expense of $22,331 due to quarterly revaluation at March and June 2023.

Partially offsetting these decreases was an increase in severance expense of $45,710.

compensation was $363,339 for the six months ended June 30, 2023, as compared to $338,415 for the same period in 2022, a decrease of

$24,924, or 7%.

This decrease was primarily a result of forfeiture of options from former employees.

incurred operations and research and development costs of $231,971 during the six months ended June 30, 2023, as compared to $290,303

(a) decreased salaries of $1,517,791 attributable to

furloughed and terminated employees;

(b) a decrease in commission and bonus expense of $113,363 due to the reversal of 2022 year-end

bonuses and fewer commissions on sales;

and (d) decreased stock appreciation rights

expense of $70,800 due to the quarterly revaluation at September 30, 2023.

Partially offsetting these decreases was an increase in

severance expense of $15,408.

compensation was $447,417 for the nine months ended September 30, 2023, as compared to $613,833 for the same period in 2022, a decrease

of $166,416, or 27%.

This decrease was primarily a result of the forfeiture of unvested options by former employees.

incurred operations and research and development costs of $232,216 during the nine months ended September 30, 2023, as compared to $442,548

in the same period in 2022, a decrease of $210,332, or 48%.

The decrease was due to a decrease in operations costs of $56,840, and a decrease

in research and development costs of $1,492.

The decrease in operations costs related to fewer parts and material purchases in the second

quarter of 2023.

The decrease in research and development costs was primarily due to suspending consulting work with a third-party software

vendor in connection with the development of our software-only product suite.

incurred investor, public relations, and marketing costs of $112,768 during the six months ended June 30, 2023, as compared to $246,626

The decrease was due to a decrease in operations costs of $141,346 and a

decrease in R&D costs of $68,986.

The decrease in operations costs related to fewer parts and material purchases in the third quarter

The decrease in R&D costs was primarily due to suspending consulting work with a third-party software vendor

in connection with the development of our software-only product suite.

incurred investor, public relations, and marketing costs of $128,565 during the nine months ended September 30, 2023, as compared to

$293,458 during the same period in 2022.

The decrease of $133,856, or 54%, was primarily due to a decrease in investor relations consulting costs

of $70,212, a decrease in attendance at tradeshows and conferences of $50,978 due to fewer employees, and a decrease in marketing costs

incurred organization costs of $89,438 during the six months ended June 30, 2023, as compared to $119,566 during the same period in 2022.

The decrease of $30,128, or 25% was attributable to a decrease in non-employee director compensation of $29,920 primarily due to fewer

stock options granted in 2023 and a decrease in shareholder services of $872.

and professional fees incurred in the six months ended June 30, 2023 were $336,276, as compared to $355,944 incurred during the same

period in 2022, a decrease of $19,668, or 6%.

This decrease was a result of a decrease in consulting expenses from 2022 of $174,434 which

were related to a manufacturing consultant, technical accounting support, HR consultant, and an advisor to the Board of Directors, and

a decrease in IT service fees of $7,158 related to new employee setup fees in 2022.

Partially offsetting these decreases were an increase

in legal fees of $155,875 due to employment related matters and legal and financial advisors engaged to assist in Sigma’s evaluation

of strategic corporate transactions, and an increase in accounting fees of $6,049.

expenses for the six months ended June 30, 2023, were $248,689 as compared to $509,032 for the same period in 2022, a decrease of $260,343,

The decrease of $164,893, or 56%, was primarily due to a decrease in investor relations consulting

costs of $92,822 related to renegotiated lower fees, a decrease in attendance at tradeshows and conferences of $46,535 due to fewer employees,

and a decrease in marketing costs of $25,536.

incurred organization costs of $137,017 during the nine months ended September 30, 2023, as compared to $260,088 during the same period

The decrease of $123,071, or 47% was attributable to a decrease in non-employee director compensation of $51,278 primarily due

to fewer stock options granted in 2023 and a decrease in shareholder services of $71,914 as a result of a change in the timing of our

annual shareholders meeting from the third quarter of 2022 to the fourth quarter of 2023.

and professional fees incurred in the nine months ended September 30, 2023 were $587,541, as compared to $608,830 incurred during the

same period in 2022, a decrease of $21,289, or 3.5%.

This decrease was a result of a decrease in consulting expenses from 2022 of $222,187

which were related to a manufacturing consultant, technical accounting support, HR consultant, and an advisor to the Board of Directors,

a decrease in recruiting fees of $74,250, and a decrease in IT service fees of $6,539 related to new employee setup fees in 2022.

offsetting these decreases were an increase in legal fees of $272,302 due to employment related matters and legal and financial advisors

engaged to assist in Sigma’s evaluation of strategic corporate transactions, and an increase in accounting fees of $9,385.

expenses for the nine months ended September 30, 2023, were $309,765 as compared to $692,640 for the same period in 2022, a decrease

of $382,875, or 55%.

The decrease resulted primarily from:(a) decreased travel and entertainment expenses of $247,989;

(b) decreased office supply

expenses of $20,156;

(b) decreased

office supply expenses of $24,531;

(d) decreased payroll services expense of $14,640;

(e) decreased

rent and utilities of $13,607;

(e) decreased rent and utilities of $24,196;

and (f) decreased training and education expense of $33,559.

These decreases were all the result of a

reduction in the number of employees and no company-wide conference being held in 2023.

and amortization expense for the six months ended June 30, 2023 was $49,597, as compared to $61,445 for the same period in 2022, a decrease

of $11,848, or 19%.

The decrease was primarily the result of the increased life expectancy of our leased and consigned PrintRite3D systems.

operating expenses were $294,873 for the six months ended June 30, 2023, as compared to $176,964 for the same period in 2022.

increase was primarily due to bad debt expense of $115,600 related to a customer receivable for which collectability is in doubt.

the six months ended June 30, 2023, we realized net other income of $25,874, as compared to net other income of $65,220 in the same period

The decrease in net other income of $39,346, was primarily due to the New Mexico High Wage Tax credit of $76,628 received in

2022, partially offset by a write-off of accounts payable due to an unclaimed customer deposit in the first quarter of 2023.

dividends for the six months ended June 30, 2023 were $22,435, as compared to $28,440 for the same period in 2022.

The decrease was due

to fewer outstanding shares of preferred stock as a result of conversions to common shares.

net loss applicable to common stockholders for the six months ended June 30, 2023, was $3,082,229 as compared to $4,483,005 for the same

period in 2022, a decrease of $1,400,776, or 31%.

The decrease was primarily due to the decrease in the loss from operations of $1,434,117,

and a decrease in preferred dividends of $6,005, partially offset by a decrease in total other income of $39,346.

These decreases were all the

result of a reduction in the number of employees and no company-wide conference being held in 2023.

and amortization expense for the nine months ended September 30, 2023 was $74,151, as compared to $88,302 for the same period in 2022,

a decrease of $14,151, or 16%.

The decrease was primarily the result of the increased life expectancy of our leased and consigned PrintRite3D

systems, as well as returned and sold property and equipment.

operating expenses were $387,582 for the nine months ended September 30, 2023, as compared to $263,747 for the same period in 2022.

$123,835 increase was primarily due to an allowance for doubtful account of $115,600 related to a customer receivable for which collectability is uncertain.

the nine months ended September 30, 2023, we realized net other income of $54,539, as compared to $57,336 in the

same period in 2022.

The decrease of $2,797 was primarily due to the New Mexico High Wage Tax credit of $76,628 received in 2022,

partially offset by a net gain on the sale of our 3DPrinter and a write-off of accounts payable due to an unclaimed customer deposit

in the third quarter of 2023.

dividends for the nine months ended September 30, 2023 were $33,122, as compared to $42,660 for the same period in 2022.

was due to fewer outstanding shares of preferred stock as a result of conversions to common shares.

net loss applicable to common stockholders for the nine months ended September 30, 2023, was $3,964,577 as compared to $6,789,533 for

the same period in 2022, a decrease of $2,824,956, or 41.6%.

The decrease was primarily due to the decrease in the loss from operations

of $2,818,215 and a decrease in preferred dividends of $9,538, partially offset by a decrease in total other income of $2,797.

and Capital Resources

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our ability to continue as a going concern for 12 months from the date of the filing of this Quarterly Report,

of June 30, 2023, we had $368,443 in cash and working capital of $948,091, as compared with $2,845,931 in cash and working capital of

$3,644,522 as of December 31, 2022.

we reported in our 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

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

and ceased to pursue new customers.

We continue to explore a possible reverse merger, sale of the Company or all or a portion of its

assets, and other alternatives.

There is no assurance, however, 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 other strategic transaction in the immediate future, 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.

of September 30, 2023, we had $556,087 in cash and working capital of $564,386I, as compared with $2,845,931 in cash and working capital

of $3,644,522 as of December 31, 2022.

On October 13, 2023, we raised $772,468 in net proceeds

by selling 128,887 common shares pursuant to our ATM Agreement.

With these additional proceeds, the Company estimates that it has sufficient

cash and working capital to fund its scaled-back operations as described below through the earlier of the closing of our asset sale to

Divergent and acquisition of NextTrip, or March 2024.

The Company reduced its employee headcount, and discontinued product development

activities for the time being to ensure lowered expenses.

The Company is continuing to operate and support its existing customers who

have maintenance agreements and leases in place, supporting new installations in the field, and actively seeking potential sales of the

PrintRite3D systems and software to customers who have lease agreements in place, systems on consignment, or otherwise express interest

in Sigma’s products available for sale.

The Company completed two such sales in the quarter ended September 30, 2023, and believes

additional sales are achievable going forward as we progress towards closing the pending transactions.

There is no assurance, however,

that we will be able to close either transaction.

If we fail to complete the acquisition of NextTrip Holdings, Inc., we intend to proceed

with the sale of assets to Divergent Technologies, Inc.

and may seek to undertake another strategic transaction, if possible, or the dissolution

and liquidation or the bankruptcy of the Company.

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

Cash Used in Operating Activities

cash used in operating activities during the six months ended June 30, 2023 was $2,414,881 as compared to $4,314,503 during the same

period in 2022, a decrease of $1,899,622, or 44.0%.

the six months ended June 30, 2023, the net cash used in operating activities was the result of a net loss of $3,059,794 before preferred

dividends, partially offset by changes in working capital of $218,943, and non-cash expenses of $425,970 related to depreciation and

amortization of $49,597 and stock-based compensation of $376,373.

Changes in working capital were driven by a decrease in accounts receivable

of $326,166, a decrease in inventory of $10,909, an increase in accounts payable of $23,070, and an increase in deferred revenue of $7,115,

partially offset by an increase in prepaid expenses of $31,879 and a decrease in accrued expenses of 116,438, primarily as a result of

the reversal of bonus expense accrued in 2022.

The decrease in accounts receivable was a result of cash collections from 2022 sales and

the establishment of an allowance for doubtful accounts of $115,600, and the increase in prepaid expenses was due to deposits paid for

a third-party software developer, legal and accounting advisors, and a tradeshow.

the six months ended June 30, 2022, the net cash used in operating activities was the result of a net loss of $4,454,565 before preferred

dividends and the use of cash for working capital of $327,730, partially offset non-cash expenses of $466,792 related to depreciation

cash used in operating activities during the nine months ended September 30, 2023 was $2,586,884 as compared to $6,386,415 during the

same period in 2022, a decrease of $3,799,531, or 59.5%.

the nine months ended September 30, 2023, the net cash used in operating activities was the result of a net loss of $3,931,455 before

preferred dividends, partially offset by changes in working capital of $832,808 and non-cash expenses of $511,763 related to depreciation

and amortization of $74,151 and stock-based compensation of $466,244, partially offset by a gain on the sale of property and equipment of $28,632.

Changes in working capital were driven by a decrease in accounts

receivable of $312,620, a decrease in inventory of $175,877, a decrease in prepaid expenses of $67,393 an increase in accounts payable

and accrued expenses of $285,909, partially offset by a decrease in deferred revenue of $8,991.

The decrease in accounts receivable was

a result of cash collections from 2022 sales and the establishment of an allowance for doubtful accounts of $115,000, and the decrease

in inventory was due to the cessation of manufacturing activity.

The increase in accounts payable and accrued expenses was due to extending

payment times to vendors to conserve cash in advance of obtaining additional financing.

the nine months ended September 30, 2022, the net cash used in operating activities was the result of a net loss of $6,746,873 before

preferred dividends and the use of cash for working capital of $436,734, partially offset non-cash expenses of $797,192 related to depreciation

and amortization of $88,302 and stock-based compensation of $708,890.

Changes in working capital were driven by an increase in inventory

of $73,586, an increase in prepaid expenses of $17,197, a decrease in deferred revenue of $18,151, and a decrease in accrued expenses

of $372,188 partially offset by a decrease in accounts receivable of $120,434 and an increase in accounts payable of $33,958.

in accrued expenses was largely driven by the payment of incentive bonuses, and the decrease in accounts receivable was a result of cash

collections from 2021 sales.

Increases in inventory and prepaid expenses resulted from the stocking of long lead-time parts for planned

production and payment of our annual Nasdaq listing fee, respectively.

of $257,352, an increase in prepaid expenses of $63,446, a decrease in deferred revenue of $19,166, and a decrease in accounts payable

and accrued expenses of $141,192 partially offset by a decrease in accounts receivable of $44.422.

The decrease in accrued expenses was

largely driven by the payment of incentive bonuses, and the decrease in accounts receivable was a result of cash collections from 2021

Increases in inventory and prepaid expenses resulted from the stocking of long lead-time parts for planned production and payment

of our annual Nasdaq listing fee, respectively.

Cash Used in Investing Activities

cash used in investing activities during the six months ended June 30, 2023 was $62,607, which compares to $199,045 of cash used in investing

activities during the same period of 2022, a decrease of $136,438, or 68.6%.

The decrease resulted from a decrease in patent costs of

$10,074 and a decrease in purchases of property, plant and equipment of $126,364 during the first six months of 2023.

cash used in investing activities during the nine months ended September 30, 2023 was $67,515, which compares to $259,952 of cash used

in investing activities during the same period of 2022, a decrease of $192,437, or 74.0%.

The decrease resulted from a decrease in patent

costs of $30,589, proceeds from the sale of our 3D printer of $78,000, and no purchases

of property, plant and equipment during the first nine months of 2023.

Cash Provided by Financing Activities

Company did not raise any capital nor were there any warrant exercises during the six months ended June 30, 2023 or June 30, 2022.

ability to continue to fund our working capital needs will be dependent upon obtaining additional capital from the sale of

securities or by borrowing funds from lenders to fulfill our business plans.

If we issue additional equity or debt securities,

stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to

those of existing holders of our common stock.

On 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”).

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

funding from this Sales Agreement.

Company raised $364,555 in net proceeds through our ATM Agreement during the third quarter of 2023, and an additional $772,468 in net

proceeds in October, 2023.

There were no warrant exercises during the nine months ended September 30, 2023 or

September 30, 2022.

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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What changed 10-Q

Item 2. Management’s Discussion and Analysis