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Driftin:
I think if you look at the financing history SGLB was running on empty when they got the $900,000 cash infusion on October 20. At their expense run rate those funds will run out sometime in Q-1 depending upon any additional revenue they can manage to generate.
Regarding INSPECTOR and INSPECT: Do you really think if they were one and the same that SGLB would not be touting that fact for all they are worth? Their continued silence speaks volumes.
Driftin: Good to have you back. The Board has missed your contributions. I don't really have any opinion on your thoughts that INSPECTOR and INSPECT could be one and the same other than it seems like wishful thinking at this point.
You are correct that the interest in SGLB's IP will evaporate when the loan is repaid. The difficulty is that the company will need additional funding before Q-1 is over. Unless Mark pulls a rabbit out of his hat in terms of significant sales next quarter that is going to make it impossible to repay the loan from the new financing. To do so they would have to come up with the million dollar principle repayment plus more than $30,000 in interest. I don't see the stock price varying much from current levels absent a significant sales announcement. The issuance of new shares will drive the share price lower yet and unless the company undertakes massive dilution they will be hard pressed to raise enough new money to survive for more than a few quarters at the outside. Not a pretty picture, but that's the way I see it.
Tax loss selling is pretty much over. I wouldn't expect the share price to drop much more, if any. The real blow to the share price is going to come in Q-1 when they are forced to issue more shares.
Kanya. I should have made myself clearer in my post. I was agreeing with Wicke that it was more likely that a share offering would be closer to one-half the then market price, rather than his assertion about GE. I haven't seen anything to support his belief in that regard. The ability to raise funds through a new share offering is going to be seriously hampered by the already mortgaged IP and the debt obligation that must be repaid next year.
Wick I think you are likely correct. I made an attempt to paint as positive a picture as I could. Your scenario is probably more realistic. Not only does the company have the IP leveraged but they have a loan repayment and interest obligation of 1.1 million dollars due in 2017. Investors hoping to jump start the company will have to satisfy the loan obligation before a penny can go into working capital.That's going to put a huge damper on any future share offering.
Obviously the best time to issue additional shares is when you have very good news to report in conjunction with the share offering. Shareholders can then see the projected future profitability and are happy to subscribe to additional shares. When there is no good news in sight the offering price will have to be lower (sometimes substantially lower) than the current market price or no one will buy. Just for discussion's sake assume that the share price was .80 at the time SGLB had to have more funds. With no positive news to boost the price the offering might have to be at .60 to attract investors. Immediately after the offering the market price would also approximate .60 because new buyers would not want to pay a premium over what had just been offered. If SGLB wanted to raise 1.2 million dollars at .60 a share they would have to sell 2 million additional shares. The shares outstanding would then stand at 8.268 million shares and every share would be worth about 24% less than it was previously. Not a pretty picture. Everyone can make their own assumptions about a share offering price and come up with their own predictions and potential dilution.
Jeff: You can hope, pray, fantasize, etc. about the future here but unless you actually take some action nothing is going to change. There are a whole slug of people on this Board (you included) who would be doing a far better job of looking out for shareholder's interests than the current Board. You don't have to be an electronics engineer to ask the kind of questions at Board meetings that are obviously NOT being asked today. SIlver, Driftin, Z, Ted, Duffy, Chef, Dad among many others would do a far better job of looking out for shareholders. Why not run an entire slate of candidates, if for no other reason then to send a message that something has to change? Now is the time to put a list of viable candidates together, not after suffering through another non-event annual shareholder's meeting in April. I don't have enough shares here anymore to make a difference, but I can tell you that if I had suffered the kinds of losses that many here have to date, I would not be sitting on the sidelines hoping for things to change. It ain't going to happen
Characterizing SGLB's return to the glory days as "unlikely" is more than fair (if not generous). Anything is possible but "unlikely" nails it in my opinion. Dilution is not "possible" it's essential to stay in business, and this time around it won't be a loan it will be a stock offering (before the end of Q-1). With the added interest expense of $25,000 a quarter plus an accrued expense item of $250,000 a quarter for the loan repayment SGLB, is digging itself deeper in the hole. The potential for SGLB's suite of products has always been there but the ability to execute on the potential has never materialized and with Mark talking about late 2017 early 2018 for significant sales the immediate future doesn't seem bright.
SGLB has flushed out it's Board of Directors recently with additional independent members. I had hoped that one or more of these would have had the courage to step up and question the company's progress and Mark's seemingly iron-hand control over the company's focus. It's now about four months before the next Board meeting and there is time to put up one or more of the more knowledgeable posters here and actively support their election so that there is some real shareholder representation on the Board. The Board continues to be a rubber stamp for Mark and if shareholders are satisfied with that nothing is going to change, and in my opinion the outlook is bleak.
Outlook:
Completely agree!! Total share volume for week prior to Q-3 report: 39,900 shares traded. Total share volume for week of Q-3 report: 290,400 shares traded. Do you detect some minor dissatisfaction with the report?
It would appear that our "independent" board of directors are on an extended leave-of-absence. They have a fiduciary duty to look out for shareholder's best interests. Perhaps a class action lawsuit would be just the thing to make them sit up and take notice of what is occurring. They are long overdue in taking corrective action:
24 consecutive quarters without a penny of profit
A major stock dilution and another one just around the corner.
A management team that focuses on partnerships, evaluation schemes, and industry presentations rather than sales.
A dismal sales forecasting record
A questionable product offering that has been exposed and tested by all but never purchased in volume.
A sales team that has had no measurable success to date.
Questionable big-ticket purchases (million dollar computer)
No noticeable effort at cost containment in tough times (layoffs, salary reductions)
Gee........... Wake up Board of Directors....do your duty!!
Very sorry for your loss. I do believe however that your analysis is correct and SGLB will very definitely have to dilute (before the end of Q-1) or go out of business. With any significant sales forecast in the distant future your decision, while painful, was correct. I have made the same difficult choices many times and it is never fun. Unfortunately, I always seem to make them too late in the game. Just one more word of caution. You are going to see what appear to be "give-away" prices on the stock over the next few months. Don't be too quick to jump back in thinking it can't possibly go any lower. Just keep in mind the number of shares outstanding and the projected timeframe for any significant sales.
Ted:
You said: I look at the information provided by the company and past history, separate the facts from the projections and do my own evaluation.
I try to do the same and we apparently don't look in the same place. The 3rd Q 10Q shows a cash balance of $137,000 and accounts receivable of $119,000. It also shows an accounts payable balance of $143,000 and accrued expenses of $96,000. That is very close to a wash. In other words they were flat broke, and likely modestly in the hole when they received the loan cash infusion of $900,000 on October 20. You also state that they received $100,000 for the Siemen's sale this month. I don't see that anywhere and when Mark was asked he said it was a "modest deal" in "Mark speak" that translates to free or virtually free based upon past experience. I also see a $700,000 expense run rate and not $600,000 as you stated. In summation I believe they do have funds enough to finish out 2016 and to begin, but not complete Q-1 2017 without the need for additional funds. Also, keep in mind that they have additional interest expenses from the loan of $25,000 a quarter and an obligation to repay the full one million dollars in October. With Mark stating that robust sales are not going to pick up until late 2017 or early 2018 I simply don't see how they can survive, particularly when they will be forced to make at least one more significantly diluting share offering.
From Albuquerque on-line Business News this morning:
Sigma Labs just signed a deal to work with one of the giants in the 3-D printing space.
The Santa Fe-based company announced Monday it is signing a contract to work with Siemens Industrial Turbomachinery AB of Sweden.
Mark Cola, CEO of Sigma Labs, said the company has signed an agreement with Siemens Industrial Turbomachinery AB.
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Mark Cola, CEO of Sigma Labs, said the company has signed an agreement with Siemens… more
Mark Cola, CEO of Sigma, said Siemens contacted the company earlier this year about helping with quality assurance as its 3-D manufacturing demand grows. Sigma will provide statistical process control and assure part quality for Siemens burner repairs and set the stage for productivity optimization.
"We are very delighted," Cola said about the new deal. "This is a perfect fit for Sigma Labs."
While it won't mean any additional jobs initially, Cola said going forward as the company meets its milestones for the next six months, it could turn into a bigger opportunity. The company has 11 employees.
Siemens is one of the giant global players in the 3-D space.
"We're pleased to have them as a new customer, to take a hold of our technology," Cola said.
Sigma's technology and software helps 3-D printing customers ensure quality control and assurance during manufacturing, as opposed to checking a product's quality after it's manufactured. Checking quality during manufacturing helps increase turnaround times. Using 3-D printing, Siemens has been able to reduce its turnaround manufacturing time of burner repairs parts twelvefold.
Sigma hopes to deploy the new contract by the end of the year. Cola declined to give a dollar amount for the new deal but said it's a "modest deal" for the company.
Siemens applies additive manufacturing across its gas turbine operations, and Sigma will assist it in providing high-quality 3-D printed components for such applications.
The 3-D printing industry is expected to grow from $16 billion in 2016 to $36 billion in 2020. Business First recently reported on Sigma's effort to fill a big gap in that market.
Silver:
If you are still in the market for SGLB shares the "buying opportunities" should be terrific. With "tax loss' season upon us and any hope of profitability a distant and iffy proposition you will have lots of buying opportunities in the single digits. I do admire your optimism but I still believe you to be dead wrong about the future.
And you believe that?At a $700,000 a quarter expense rate they are going to have sufficient funds to last through 2017....sure they are. Mark is desperate and his lies are growing exponentially.
SGLB won't be in business in 12-18 months, and if by chance they are the stock will be so watered down that it won't matter. Dilution is coming far quicker than six months. They will be out of funds at the end of this quarter and will have to issue stock....they don't have any collateral left to put up for a loan....not that anyone would give them one. How much longer are the "faithful" going to believe a word Mark says? Hasn't he proven by now that he is both inept as a business person and shades the truth to serve his own purposes at every opportunity. Each conference call get's worse and worse.
Murray:
A Wall Street Journal article this morning states that GE now has 28 3D printers in operation at their Auburn facility and are scheduled to produce 6,000 fuel nozzle injectors this year. While production rates will increase over time this certainly sounds like the "full production" that Mark has claimed was the hold up for Printrites orders. How much longer can he use the excuse that mass production is what is holding up orders?
I think your questions are great but you are going to need a "backup questioner" to pick up the slack with unanswered questions if the moderator cuts you off as taking up too much time.
Hawks, I can only relate my personal experience and why I made the post. I worked in Silicon Valley for 25 years in a variety of roles. In my experience the topic that came up at virtually every lunch break or cocktail party was the constant stream of new technologies being introduced in the area and how it might affect our business, what it might replace, how reliable was it rumored to be, and finally, if it were deemed a future winner how could you invest. That's just my experience, but it definitely got me to wondering about the industry insiders view of SGLB. If their products are really destined to play a vital role, have no known competition that perform similar functions, and have the potential to become an industry standard in an exploding growth industry the stock price would have been driven by industry insiders to reflect that potential. The fact that it has not should be serious reason for concern.....despite what Mark may tell us.
Silver:
You say: "So how does that apply to SGLB? In my opinion it is similar to ARCAM. No real competition for alternate choices"
I'm no fan of Mark Cola, but he has done a superb job of getting SGLB's offerings in front of perspective users. With over two dozen test sites in operation and presentations and booths at major 3D printing events as well as numerous print articles about the products he has saturated the industry with information and hands on experience with the product offerings. Just for the sake of argument lets assume that every test site has at least four engineers who work with, and have an in-depth understanding of the IPQA offerings.Additionally there are more than a few thousand industry engineers and managers who have heard Mark's presentations, attended a trade show booth, etc. Overall Mark has created an industry-wide awareness in the capabilities of his IPQA solutions. I can accept the oft made assertions here that the industry is not mature enough at this point to effectively employ SGLB's solutions in a mass production environment. That quite likely is true. What I have a much more difficult time getting my head around is with the wide-spread awareness (and often detailed familiarity) with SGLB's capabilities and potential within the 3D market universe how the stock can trade as it has. If those in the industry who have been exposed to SGLB's offerings really believed that the offerings had any chance of becoming an industry standard, or that there was no real alternative that provided similar results do you really believe the stock would be trading as it has been? Mark has aggressively demonstrated and marketed his offerings to the industry and while the pace of sales can at least be partially justified the obvious lack of faith in the future role SGLB's products will have on the industry cannot. Somewhere there is a disconnect. Nobody ignores a stock in a hyper-growth industry that is going to dominate it's segment when they can buy unlimited quantities at less than $3.00 a share. It simply does not make sense.
Officers and Directors are required to file a Form 4 with the Securities and Exchange Commission when purchasing or disposing of stock. The Form 4's are public records. None have ever been filed.
Yes, it is telling that no senior managers or Board members have EVER purchased a single share of SGLB on the open market. Silver's scenario of buyers snapping up shares at an offering and uplist will happen if, and only if, there is a major sale that precedes the event. If not, any new share offering will be a bloodbath. By my calculations Mark has something like 120 days before his new money runs out. After that the future is very much in doubt unless sales kick in sufficient to carry the company.
The loan is for 12 months, but there is only enough funds to keep them afloat for 90-120 days. Mark won't be afforded another opportunity like this one...his time to actually put some revenue on the table is running out.
Silver:
I don't see you (or anyone else here stepping up to buy at this bargain price)....what's holding you back? As far as "last ditch effort on the loan", I believe that is exactly what it was. They were flat out of money and had no alternatives here, other than to issue more shares, which thankfully they did not do.
I am certainly no fan of Witty, but let's be fair here. What exactly would you like him to promote? SGLB got tossed a lifeline for another quarter's operation. While they were fortunate to secure a loan instead of issuing shares at a depressed price they had to put the entire assets of the company up as collateral. Most here believe the lenders have been made privy to upcoming orders that will materialize in this quarter and that would make sense. On the other hand this could be a last ditch effort on the part of Mark to hold out hope for orders in the near term that he has no assurance of receiving. Long term participants in this board have not been buying on the news. It's not reasonable to expect Witty to generate interest in investors that currently don't have anything committed here.
Driftin:
It certainly reads that way. I totally agree. The only worry being that Mark has not proven to be the sharpest businessman on the block and has made it an unfortunate practice of over-promising and under-delivering.
"I think the 10% interest is the $100,000 off the top, then conversions start later," I don't believe this is the case because the note talks about the principal amount being one million dollars. If the one million contained the 10% interest it would be worded differently, at least I believe it would be. Anyone else have an idea how the "missing $100,000" is accounted for?
Driftin:
It's not your tablets problem, that attachment is simply not there. Since the title of the attachment is "Patent Collateral" it does seem clear that some or all patents were pledged as part of the collateral. Of course this only comes into play if SGLB violates the agreement in some manner. I'd put in a written request to Witty or Cola for the details.
From the investors perspective (assuming the collateral is solid) they have a minimum return of 15% on their investment within the year and the potential for significantly higher returns if sales develop as hoped for. That's not bad either.
Here's what I get. Two investors with aggregate loan of a million dollars. $900,000 available to SGLB subject to additional expenses. (I'm not clear what the missing $100,000 is applied to).
Note is convertible to common shares (at option of note holders)at the lower of the cost of shares at the upcoming offering, or 150% of the closing price of the common shares when note was signed (something like $4.00 a share). The warrants are exercisable under the same terms 90 days after offering or after July of next year which ever comes first). The term of the loan is one year with quarterly interest payments. The loan can be repaid without penalty at 115% of the outstanding balance plus accrued interest.
Lot's of other provisions but that seems to be the major features. Making the leap of faith that the loan will carry them until major sales take place I would say it was a better deal than I would have expected investors to give them.
Silver:
Unless the announcement wording is simply sloppy (always a possibility with Witty) I read it to say that the note IS convertible (at some unknown terms at this point) AND in addition they have issued warrants to purchase an additional 160,000 shares. We should all know the details shortly.
"announced that it has closed a private placement by the Company of Secured Convertible Notes in the aggregate principal amount of $1,000,000 (the "Notes") and three-year warrants to purchase up to 160,000 shares of the Company's common stock,
Yes, I missed that point. I assumed the $100,000 difference in the loan and proceeds available accounted for all the expenses. It's beginning to sound like this could be an expensive short-term solution.
Driftin:
As you say hard to know how positive this is until the details are known. Quite frankly, I was astounded that they could manage a loan instead of a private offering. On the surface, at least, that's a very good thing. The announcement said "notes" instead of note. I wonder if this was just an error or whether there are multiple notes making up the one million dollar total. Finally, while the note (or notes) is for 1 million dollars the proceeds to the company are $900,000. So you have to add another 10% interest to whatever the "official rate" will be.
I believe that the moderators have access to modify the introduction.
Not exactly news. Williams has been on board since August 15.
Silver:
You and I often disagree but your post is absolutely outstanding and hits every nail on the head. I only hope that Mark takes it to heart and responds in some sort of meaningful manner. He clearly owes it to his investors to do so.
They have to qualify for listing and they are very far removed from doing so. It's not going to happen any time soon.
Driftin:
Always good to hear your point of view. It is fortunate that there is more than one perspective on the future of the company or there would be no market at all. Not surprisingly we have a quite different outlook. Your hope for a slow grinding decline if there is a share offering without the benefit of supporting positive news is misplaced in my opinion. If they plan to raise anywhere close to the 10 million dollars they announced earlier the dilution will be massive and the share price will crater. The decline will be instantaneous and massive. There will be a large number of shareholders who have had their fill of Mark's business management skills and the continuing lack of verification of Printrite's marketability.
Rumor has it that Mark will be leading the Santa Fe Halloween parade this year dressed as the Pied Piper. Seems only fitting.
"I believe it is nearly time that the cat is going to be out of the bag." No question about it!! The long debate between proponents and detractors is soon to be over. Good luck Silver, I mean that sincerely.
Nobody likes to lock in a loss and walk away when they are way under water. That's just human nature and completely understandable. The question is do you want to lose another dollar a share or more when they do the share offering, because that is what is going to happen. I don't know about it going to a quarter or .50, that seems pretty extreme, but it is going to take a sizable hit in price.
When the dust settles it will be really interesting to gain a better understanding of their lack of sales. Is it really a great product that fills a needed niche and was just too early to market as the proponents believe, or has it been a non-competitive product from the beginning that simply failed to meet the needs of those many who participated in the testing. For those gearing up questions for the conference call I believe the horse is going to be out of the barn by the time the call is held and the questions may very well have a different focus after the share offering.
"At the risk of being completely wrong".... If someone completely unfamiliar with SGLB were to come across this message board they would certainly be puzzled. There is clearly little middle ground concerning the future outlook for the company. Posters are either wildly optimistic or extremely pessimistic. Quite obviously someone is going to be "wrong". It shouldn't be too much longer before the future is more clearly revealed.