Sigma Labs Inc (SASI)

[Jackle]

With regards to whether the cost of the PrintRite3D® would appeal to companies there are plenty signs that that would not be an issue at all. If PrintRite3D® does as it is expected, and developed to the standard expected, then it is a disruptive technology that will reap huge cost benefits over the it’s lifecycle. As Mark discusses it is a paradigm shift from traditional make-inspect-remake models to inspection ‘in-process’. It was interesting to see Mark mention recently “What companies have resorted to is using computed tomography,” Cola said. “Well, you can imagine that that becomes very expensive. In some cases, for these really complex designs, we have some customers that, for every dollar they’re spending making the part, they're spending four to six dollars just inspecting it. There are huge costs involved in just assuring that they've made the right part.” (1)

I hear no convincing argument that PrintRite3D does not work as intended from anyone here on this board. And yes, there have been Sales so get over that.

From our own 10Q it states
Current methods for providing quality are cost prohibitive because approximately 25% of parts produced by 3D printing need to be destroyed in the post-production quality control process. Additional costs are incurred by using scanning technology on these parts . We offer our clients the ability to use sensors to track each layer, and our software continuously analyzes the part so that when it is finished we know if it is production quality. We believe our PrintRite3D® software could reduce inspection costs by a factor of 10 and development time for new parts by 50% or more

Effectively companies can reduce costs and time by using metal AM, but then they can reduce metal AM costs and time by installing PrintRite3D® to inspect in-process. So savings on top of savings relative to traditional manufacturing. As well as this PrintRite3D® can guarantee the build against set parameters and design intent, something that Donald Godfrey of Honeywell says that traditional OEM’s cannot do. (2) In fact a key driver for Sigma is that it is an independent measure of quality assurance. Of course all machine makers are improving their quality systems dramatically, but what they can’t do is independently verify quality. A machine that attempts to verify its own quality leaves itself open to an important flaw of self-assessment. The ENTIRE point of the America Makes project wherby GE invited Sigma to participate was “the need for the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components, which is currently lacking within the industry. “(3)

PrintRite3D® as many of us are aware, really comes into its own in a mass production setting. This is where the cost and time savings really kick in. If it works as expected then there is zero doubt that the cost savings over time will dwarf the cost of the machine. On top of the physical time/cost savings the compliance to design intent also allows for streamlining of supply chain and administrative costs too, especially in a highly regulated industry such as aerospace.

So there is little doubt that a working PrintRite3D®’s ability to combine inspection and manufacturing WILL REDUCE COST AND TIME in a production run environment. They are also the only commercial, independent system available. THAT is why there is a long list of potential customers on our EAP and OEM program. If it does what it is predicted, then it will be VERY useful for anyone entering production on a mass scale. The key is a) full adoption and b)keeping the company’s finances running in a healthy state as bigger orders come in what is a seemingly slow evaluation period.

Does it work as intended? I have yet to see anything that suggest it doesn’t, and plenty of signs that it does.
The US Air force wants it used to define an efficient process for qualifying AM components on its high profile RD-180 projects
Honeywell wants it in their quality assurance chain and on their DARPA project. Honeywell have jointly presented with us on it and are working with us to Darpa phase 3. That in itself is a major sign it works.
Additive Industries is still hyping it on their website as a integral part of their Additive World software. (They built a new machine to include what the industry wanted or felt was lacking)
We know there is a large, highly impressive client list in active negotiations both from machine manufacturing angle and end user perspective, a large majority of whom would have already seen
PrintRite3D® showcased at the likes of America Makes and EWI/AMC (of whom many of our potential client list are members) or as supply chain partners of the developmental partners GE and Honeywell (Woodward is a prime example).
Sales HAVE occurred (I’m bored of hearing they haven’t). Following the logical path these have been sold predominantly as evaluation for a roll out into mass production numbers when ready. Is there any argument that a company would start by buying one system and then expanding once evaluated and ready for mass production? Why is it so hard to understand this progression?

Will it be adopted?
If you were redesigning a production facility now, as it appears many are in the process of doing then incorporating a “working as intended” PrintRite3D® would make a lot of sense. Are these production runs built yet? Not to the degree we would hope. Are they being planned? Absolutely. Will they ALL have PrintRite3D® installed as standard? Not a chance, but as their confidence grows in using it, and it works as expected why would they not incorporate it, and the system of in-process monitoring, across a larger field? It’s a better system. It’s a faster system. It’s a cheaper system and importantly it’s a very adaptable system across machines and materials. In the America Makes project call that GE Aviation bought Sigma in for, that we have been told was based around Sigma’s technology, the remit was very specific, i say again “this project will address the need for the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components, which is currently lacking within the industry” (3)

Will the company’s finances remaining in a health state as the bigger orders start to appear over the next 3,6,9 months?
Well, this is really the question that the company needs to start answering. They have no debt and access to funding if needed, but if they are in the knowledge that orders are incoming, and I cannot believe that in all their discussions with all these potential customers they do not have a good insight into what kind of needs each one will have, then it will be ‘fairly’ easy for them to manage funds accordingly. It will not take huge amounts of short term sales to cover quarterly costs even though they are higher than a year ago in anticipation of the bigger orders. It’s not pretty, but it’s manageable, drip feeding a machine or two here and there. As I said, at worst they have access to capital raise if they have too. We are, in theory, presently bridging the gap between research and reality as companies plan, evaluate and eventually build these production runs that focus around 3D Printing. Sigma will be involved in all steps of this process with their prospective customers but they do not CONTROL the process, nor the time frame.

In summary, if one believes the technology works, as advertised, as it appears to do, then it is not a great leap of faith to believe that a large section of our customer list, and beyond will adopt it in one scale or another. Once beyond evaluation PrintRite3D orders will not be singles, but multiples and site licenses. Such is the nature of the technology if offers and the workplace within which it will function. Put simply it makes sense, it saves time, it saves money and it is arriving just as major industrial companies are rebuilding and re-designing production floors around this new AM technology. Is it plug and play, no. Does evaluation, internal review, capex cycles and the likes all take time, absolutely. Is it a frustrating period sitting in the dark? Absolutely. Will Sigma scrape along until the adoption upspring kicks in… absolutely!

I have yet to hear any convincing argument that PrintRite3D does not work as intended, and in various limited discussions with industry experts who are aware or have used it I have confirmation that it does in fact work, and confirmation that in a mass production setting it will come into its own.

I would agree with Silver that what is priced in at these levels is very little of the above, and a whole deal of day to day OTC shenanigans. I am very much enjoying the cheap shares though. Patience will win this game.

(1) http://www.engineering.com/Library/ArticlesPage/tabid/85/ArticleID/12645/Sigma-Labs-Introduces-Much-Needed-In-Process-Quality-Assurance-to-Metal-3D-Printing.aspx
(2) https://drc.libraries.uc.edu/bitstream/handle/2374.UC/745770/ISABE2015_CS%26A_Donald%20Godfrey_227_MANUSCRIPT_20193.pdf?sequence=2
(3) https://www.americamakes.us/news-events/press-releases/item/475-second-projectcall-awardees