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Jeff et al - It's worth listening to the Protolabs' conference call replay for some discussion-worthy, seemingly relevant points to Sigma.
In particular, on the Q & A, at minute 36:50 an analyst asks about their 'Digital Inspection Reporting"
(I'm unfamiliar with any specifics of Protolabs' Digital Inspection service... What I found interesting though is that the co's CEO makes what sounds like essentially a very similar set of points as we have heard from Sigma mgmt -- regarding engineers being slow to change away from traditional inspection practices which are both more expensive and less efficient. Protolabs' CEO emphasizes the potential for both cost savings and efficiency and indicates that they are starting to receive requests for digital inspection reports so that their customers who are interested in gaining experience with digital inspection can do so...
There also was a question asked in re to 3D metal printing and the degree of interest that Protolabs is seeing there and whether they see a shift towards more 3D printing with metal in their business, (vs plastic), and as I recall from the answer, it seems Protolabs is seeing growth in both plastic and metal production... Their revenue growth for 3D parts production, specifically, is somewhere around 12% or 13%, for the quarter, overall, as I recall.
Anyway, I'm not sure precisely the degree to which either of these points -- Protolabs' 3d metal printing growth, and their digital inspection reporting service-- is relevant to Sigma and what we are hearing from Sigma's management, but I believe there is some relevance on both points, (perhaps a lot), which may underscore the credibility of what we are hearing from Sigma, and welcome your thoughts.
https://edge.media-server.com/m6/p/epn5s29w
Jeff, It is interesting though to see that GE remains focused on what appears to be the same and/or quite similar approaches to Sigma, isn't it? If they are on this same track, doesn't their focus continue to validate at least the concepts and approaches to the solutions?
Whether they will ever turn back to Sigma I have no idea, but the fact that they seem to want to improve upon the same or similar approaches, in my opinion, confirms that GE has not found a fundamentally different or better way, even conceptually, to work towards.
But my opinion is not the opinion of an engineer. Yours is!
Interesting. What indicates the foreign nations following?
Yes, Driftin, Thank you very much.
If it looked like the merger were proceeding, I would have confidence that it likely makes sense. Such is my confidence in the current management. The fact that it looks as if they are not likely proceeding with the merger I think underscores that decisions are being made with deliberation and care. Whether it was a matter of price, changes in the market for contract printing, or in the final analysis - just not being convinced that the companies' functions would come together in such a way as to enhance value, or some combination of reasons...it's clear that there is a good deal of analysis and consideration of strategy, occurring.
Also, if they are taking a pass on combining up with other entities with different functions in AM, this probably underscores that mgmt sees software sales, beyond the sort of testing contract sales, as approaching. That's not to say that they see those sales coming tomorrow, next month, or within any certain timeframe. But if they thought that software sales, (beyond sales for testing purposes which we already have a fair amount of), were way off in the future, they probably would be looking to try some other approach, and focusing less exclusively on software sales, which seems to be the real drive, here and now.
Emerging companies generally treat preservation of cash as priority one. In my opinion, there is nothing more to be read in here.
Re the lesser odds of a merger with Morf, my speculation is that Morf simply wanted too much at the same time as margins are compressing on the contract manufacturing work that Morf does. In other words, Rice wouldn't necessarily have had to conclude that he didn't like the marriage, conceptually. He may just have thought that it was more costly than his value-add expectations warranted.
If indeed this is the explanation, this sort of financial prudence is just what we would want from management.
Additionally, I suspect that PrintRite might not end up on Morfs' machines any time soon. The potential deal to merge -- it could have just recently become apparent that acceptable terms could not be reached and Rice may not be so certain that Morf should have PrintRite under the dynamic circumstances.
Relatedly, Rice would like nothing more than to be able to announce that we've moved beyond the testing contract revenue stage and have taken the next step, and I tend to think this news might have been in hand already, if he did not have a sensitivity and determination re letting our software go cheap. In other words, I think they may be trying to balance the importance of being able to announce additional revenue, in a traditional sales transaction against letting the product licenses go cheap and thus setting a price ceiling. I suspect that Morf will need to demonstrate that they are providing tangible value in some form to Sigma, or they may not get Printrite at all. That's my speculation.
Hi Driftin - Cool that you are there and thank you for the offer to ask questions. If possible to chat with other attendees...it would be interesting to compare notes with others. Anyone there representing an institutional interest?
In terms of the Q/A with mgmt I would suggest that, working off of Mark Cola's predictions of about a year ago, (if memory serves), that the industry was about 12 - 18 months out as far as commitments to series production, asking again what they think the remaining timeline is there -- still the same, or pushed further out, (?) would be helpful to know.
Also, in the last quarterly call RIce was talking about some other potential customers -- on a different tier from the aerospace behemoths -- anything you can pull out of him as an estimate as to when they expect -- "with no promises, of course" but their best estimate, would be great if you could coax a "no-promises" timeline estimate from him.
If they can be relaxed a bit with "no promises" as the context of the question they might be more likely to toss out a NO-PROMISES ESTIMATE of timing.
THANK YOU
Speculation, Maxin, but I suspect mgmt knows that they have met the threshold of votes for approval and this may be the reason if they have not pursued to confirm the votes on those shares.
A lawyer generally does not have an opportunity to receive far more renumeration if they are successful on a given case. That is the circumstance here. If Rice executes successfully he'll be far more rewarded as a result of growth in the stock's performance than he will from a salary.
Additionally, there are many highly successful lawyers who will not take cases when they don't like their odds of success. This is particularly true at the higher end of practice, both civil and criminal, where reputations for success can make the difference in many millions to come.
Yes, but where we differ in our opinions is this. I'm not only encouraged by what I think a strong management team is capable of, and consider the matter of product/ technology quality as a separate issue, as you indicate you do. I'm encouraged that a management team of this caliber, who have a much closer viewpoint than we possibly could, have the confidence in the technology and the odds of success to put their time and energy, expertise and reputations behind Sigma.
That's not to say that there is no chance they could be wrong. Of course you cannot be certain of success. But Rice's business smarts -- in addition to his impressive CV -- come across through his communications. I just don't think that people with his degree of formal and street education take on this sort of work -- particularly in a case where this might be their last big endeavor -- without a pretty high degree of confidence, not only in themselves, but in that which they are signing on to sell.
Alan, that you aren't short Sigma is not a revelation. What's less clear, in my opinion, is whether some part of you remains divided on whether to take a long position and hopes that maybe you might have the opportunity -- another round in which to further consider doing so at a lesser price. Personally, I doubt such an opportunity will come to pass. I think the stock has reasonable support in this vicinity... (in my opinion)
I'm not expecting any big revelation out of the annual meeting, although I do think there is some possibility of a positive news release prior to Monday's meeting. What I do expect, and don't feel compelled to travel to NM to confirm, is that the professionalism and legitimacy of the current management team, which I think we've seen indications of, will extend to the administration/ execution of the meeting and carry-forward in a variety of positive ways, from there.
It's likely that anyone who maintains a short position will want to get out at the best price possible, this week, in advance of next Monday's annual meeting. (In my opinion)
If a deal is consummated with Morf -- either you believe that the whole is greater than the sum of its parts in regard to this much discussed potential merger, or you don't. I tend to believe that these companies do achieve some benefits from being fit together. Morf isn't flying so high on its own to demand an unreasonable price, otherwise they would not have been in a position to need the funds that we loaned them.
In the balance of leverage and circumstances between Morf and Sigma, how you could conclude, definitively, and express yourself emphatically, that Sigma is dealing from a position of "severe weakness" ... doesn't seem logical.
I don't think either company has an obvious upper-hand in the negotiations, but I'm confident that if you asked most any objective and disinterested business-person, (financially and emotionally), to consider the relative standing of these two entities, Sigma and Morf, in a negotiation context, they would tell you that Sigma, who has recently loaned a needy Morf money, is in the RELATIVELY better position.
Klaus - Thanks for the info. Are you okay with letting us know how you voted re the Board's proposals?
Maxin and All - FYI -- no problem here with receipt of voting materials from Ameritrade. (1 account). And I've voted in FAVOR of all BOD initiatives. Also, I know that a relative with a Merrill account, (1 account), received the materials. However, I do have a friend who holds shares also who does not think his voting materials have arrived, though he indicates that the envelope could possibly have inadvertently been discarded, and I'm not sure of his brokerage, but will inquire.
I AGREE.
Ted, I see. On another matter, any thoughts on the authorized vote?
Silver - Thus far I've not voted either. Sincerely interested in your mullings! I'm not completely decided on a vote, but am leaning toward voting in favor of increasing the authorized. Basically, if a stockholder believes in giving the new mgmt/board crew a fair opportunity -- it would seem that bringing the much discussed merger to fruition is at/ near the top of their agenda and presumably they need add'l shares and $$$s which would come from the public sale of the shares, to make the merger possible.
I think I'd prefer dilution of my holdings, IF it means that they will bring in enough $$$s, and are paying an appropriate price for the entities, such that there is a decent chunk of money left over. (Though we gotta make a decision re a vote on the authorized w/o the benefit of knowing what will be paid for the entity/ies in the merger, should the merger be consummated).
Do you have a sense of how they might go about paying for the other entities? Any guess at teh proportions of share compensation vs cash?
Earnestly interested in your thoughts on the authorized increase vote in re the merger and otherwise.
Nope - No call re the vote and I'm holding a goodly number of shares.
Ted, thanks for the additional information here, per your reading of the documents. So, one the one note, the loan that was originated in October of last year, it's due to be repaid next month. How about the other note? Do you know when it's due?
Can anyone clarify the following re the Supplement to the Prospectus, filed today?
Here below, is an excerpt -- I believe the "up to" number is the same as in the original prospectus...but there is a reference made here to "two" stockholders. But does the "up to" share tally at 434K seems perhaps a little light to include another investor, in addition to the loan holders?
Interested in others' thoughts on the likely identity of the 2nd shareholder and the tally of the maximum number of shares.
"...The Prospectus and this Supplement No. 1 relate to the offer and sale from time to time of up to 434,877 shares of our common stock by two of our stockholders, referred to in the Prospectus as the “selling stockholders...”
Seems more like the last week or two, no?
Speaking of industry events, are there any upcoming this fall that you intend to attend?
Jeff, Any weigh-in on the likelihood that EOS has its own quality control software that could be comparable to Sigma's?
Thanks
Ted, thank you.
Hawks, I hear you. To speculate a little further though, if ultimately there is some sort of adjudication or pre-adjudication negotiation of the patent competition matter, could it reflect somehow in Sigma's favor and GE's disfavor if GE continues to purchase and utilize Sigma's technology, (including updates), for their quality control of their manufacturing?
Also, while I'm not under the illusion that the other behemoth partners are paying millions for Sigma's technology at this point...and instead seem to be paying small dollars in the context of their enormous R&D and production budgets... it still seems notable and interesting that the others are continuing at least to pay something and to test/ work with Sigma's technologies, but not GE.
Specifically, do I have it correct that as far as the America Makes partners, it's only GE that currently is not utilizing Printrite?
Ted, is this, below, the formula for share conversion, that you are referring to/ going by?
The Notes are convertible into shares of Common Stock at a conversion price equal to the lesser of (i) the final unit price of the Company’s proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Notes (subject to adjustment as provided therein). As such, as of December 31, 2016, the conversion price of the Notes was $8.10, which is 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance.
Ted, so your understanding is that nothing should be inferred from yesterday's filing as to the investor/lenders' choice of form of payment from Sigma, (shares vs cash), in satisfaction of the loan. Is that your understanding?
Also, can you walk us though the language and any calculation regarding the note conversion price, to shares? In other words, how are you reaching the conclusion as to conversion price?
Thank you
Here's more on the conversion of loan to shares provision excerpted from the prospectus.... My mind is turning to mud here. Does anyone have the clarity of mind to apply the conversion formula indicated below?
In connection with the Financing Transaction, the Company entered into a Registration Rights Agreement, dated October 17, 2016, with the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement related to the Financing Transaction with the Securities and Exchange Commission (“SEC”) covering the resale of (i) the shares of Common Stock that will be issued to the Investors upon conversion of the Notes (the "Conversion Shares"), and (ii) the Warrant Shares that will be issued to the Investors upon exercise of the Warrants. The Notes are secured by the assets of the Company pursuant to a Security Agreement, dated October 17, 2016, between the Company and the "collateral agent" (as defined in the Notes) for the benefit of itself and each of the Investors.
The Notes are convertible into shares of Common Stock at a conversion price equal to the lesser of (i) the final unit price of the Company’s proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Notes (subject to adjustment as provided therein). As such, as of December 31, 2016, the conversion price of the Notes was $8.10, which is 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance.
Each Warrant has an initial exercise price equal to the lesser of (i) the final unit price of the Company’s proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Warrants (subject to adjustment as provided therein), which Warrants may be exercised on a cashless basis as provided in the Warrants. As such, as of December 31, 2016, the exercise price of the Warrants was $4.05, which is 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance.
Here's a post by KMey with excerpt from the docs... Not certain if this clarifies whether the investor/lenders have elected shares, or not. Opinions?
KMey3434 Wednesday, 05/17/17 02:40:19 PM
Re: MDuffy post# 50823
Post #
50827
of 53757 Go
On October 19, 2016, we closed a private placement of secured convertible notes in the aggregate principal amount of $1,000,000 and three-year warrants to purchase up to 80,000 shares of our common stock, under a Securities Purchase Agreement with certain accredited investors. Aggregate gross proceeds, before expenses, to us were $900,000
The derivative liability is the result of the $1 million of Notes, and the 160,000 warrants, that were issued in October 2016, both of which contain anti-dilution provisions in the event the Company engages in specified transactions. The Notes mature on October 17, 2017 and the warrants expire on October 17, 2019
connection with the Financing Transaction, the Company entered into a Registration Rights Agreement, dated October 17, 2016, with the Investors (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement related to the Financing Transaction with the Securities and Exchange Commission (“SEC”) covering the resale of (i) the shares of Common Stock that will be issued to the Investors upon conversion of the Notes (the "Conversion Shares"), and (ii) the Warrant Shares that will be issued to the Investors upon exercise of the Warrants. The Notes are secured by the assets of the Company pursuant to a Security Agreement, dated October 17, 2016, between the Company and the "collateral agent" (as defined in the Notes) for the benefit of itself and each of the Investors
Prospectus Summary - The Offering,” the number of shares offered for sale by the selling stockholders consists of (i) 242,131 shares of our common stock currently issuable upon the conversion of our secured convertible promissory note (the “Notes”) held by the selling stockholders, (ii) 84,746 shares of our common stock, which represent our estimate of the maximum number of additional shares of common stock that could become issuable upon conversion of the Notes in the event that the price-based anti-dilution provisions of the Notes are triggered, (iii) 80,000 shares of common stock currently issuable upon the exercise of our common stock purchase warrants (the “Warrants”) held by the selling stockholders, and (iv) 28,000 shares of common stock, which represent our estimate of the maximum number of additional shares of common stock that could become issuable upon exercise of the Warrants in the event that the price-based anti-dilution provisions of the Warrants are triggered.
I'm not sure whether the registration is to give the investor the choice of shares vs cash, or the choice to sell shares. In other words, it's clear that this prospectus in no way obligates the investor to sell the shares, but I think the act of registering the shares for sale MAY indicate that the investor has exercised its right to accept shares over cash in satisfaction of the loan. Why go to the expense and trouble of registering shares for possible sale if the shares haven't even been placed with the investor?
But I'll offer the same caveat as you -- I ain't sure either! Anybody know more definitely?
Looks to me like they are registering the shares giving the investor the option if they so choose shares vs cash. Don't know for sure though.
Jeff, Key et al --
Doesn't it appear to you that this share registration indicates that the investor/lenders are opting for the shares in lieu of the money, as repayment of the loan? Or is your understanding different from mine? If I'm right about this then in these professional investors' opinion, the shares will be worth more -- in their opinion -- either over the short or longer term.
Sigma Prospectus filed --
Folks -- who understands the possible implications and details of the registration statement/prospectus just filed by Sigma? No promises that I have the details correct -- because there's complexity and quite a bit of detail behind the "anti-dilution" provisions...etc... but if I'm not mistaken this registration may represent a move on the part of the Investors/Lenders who loaned the million dollars to Sigma, pre-uplisting, to take repayment in shares vs cash...
Anyone can confirm if that is their understanding and fill in any details?
Thank you
Folks -- who understands the possible implications and details of the registration statement/prospectus just filed by Sigma? No promises that I have the details correct -- because there's complexity and quite a bit of detail behind the "anti-dilution" provisions...etc... but if I'm not mistaken this registration may represent a move on the part of the Investors/Lenders who loaned the million dollars to Sigma, pre-uplisting, to take repayment in shares vs cash...
Anyone can confirm if that is their understanding and fill in any details?
Thank you
Yes, interesting. And all the more compelling when you consider the context, in my opinion.
Well said.
Hawks, Jeff, Key, Jackie and All, Was the invite to present at the Third Joint FAA - USAF Workshop a first invite for Cola/ Sigma?
If there was no invitation to speak in either the launch or second years and this year, (August 2017), was the first, it seems that this might be taken as an indicator of enhanced reputation and awareness for Sigma, and that this runs counter to an appearance of lesser respect for Sigma following the America Makes report release, yes?
Sigma Labs to Present at the Third Joint FAA – USAF Workshop on Qualification/Certification of Additively Manufactured (AM) Parts
SANTA FE, N.M., Aug. 25, 2017 (GLOBE NEWSWIRE) -- Sigma Labs, Inc. (NASDAQ:SGLB) (“Sigma Labs” or the “Company”), a provider of quality assurance software under the PrintRite3D® brand, today announced that the Company has received an invitation to speak at the Third Joint FAA – USAF Workshop on Qualification and Certification of Additively Manufactured Parts. Mark Cola, Sigma Labs’ President and CTO, will present, “In-situ Monitoring for Additive Manufacturing: Implications for the Digital Manufacturing Age," at 2:30 p.m. Eastern Time, on Thursday, August 31, 2017 at the University of Dayton River Campus.
Hawks, I appreciate your posts because your interest and approach strike as sincere and earnest and your knowledge of research practices, as someone in the science field, is a bonus.
I think the questions you pose are logical and important. But -- and this is of course speculation...you seem to leave possible politics outside of your discussion. As a businessperson, and admittedly as a non-scientist, I would add that while I don't begin to claim any certainty of understanding of the possible politics of the matter, it does strike me as a possibility that things may be a little more complicated than meets the eye, politically speaking.
I mean, hasn't GEA been after the same, or very similar patent award as Sigma -- having filed their application one day later? Were the patent applications indeed for the very same technology? Perhaps you can confirm this?
Total speculation here, admittedly, but maybe when Mark cites the earlier version that was tested within America Makes, what he really could mean is that, yes, improvements have been made, but also maybe he is saying, wait a minute, GE... here's another chance to reconsider your grading of our technology, under the cover of the updates that we have made.
If you think that there is a political dynamic here...And I'm not saying that there is -- I'm merely saying that it seems possible that there could be...but if there is...then you have to figure that a big part of the political dynamic would be David and Goliath-esque in nature and that the last thing that Sigma would do, practically speaking, would be to start making allegations against GE.
Maybe the companies' interests divided that day that GEA filed their patent application and Cola hasn't felt exactly able to speak candidly about things re GE and has harbored hopes all along that by not acting adversarially his giant partner might come around.
Either he knows, on some level, that the testing and report were fair and his technology didn't measure up fully, or he knows that it wasn't fair and that he's trapped from candor in saying so in complicated circumstances, with a partner a thousandfold in size.
Strictly my theoretical speculation. I don't claim to know the answer, but I do think there could be political complexities.
IF the actual public offering of additional shares, (not the authorization to increase the number of shares), is wrapped together with a "whole is greater than the sum of its parts, MERGER), AND the company raises additional millions of dollars from the sale of shares, then I will reevaluate where we stand in terms of assets, both cash and otherwise, and prospects for growth.
As it stands now -- and what I think I know regarding the value of the merger and the few million we have in the bank, currently... Yes, I think I would prefer additional shares and some dilution...should we end up merged with the particular entities that have been contemplated, and if there are also several million additional dollars in the company's coffers.
The Harvard/ MIT/ many years experienced businessmen will receive share compensation that they will want very much to endeavor to grow in value.
That's my opinion.