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Kanya: I believe you have this backward. I have not seen anything in John Rice's performance that would make me think any less of him as a manager. Quite the contrary, and when you couple his skill set with those of the rest of the Board I think that you are very fortunate to have the management team that you do in place. Most small high tech startups are not nearly so fortunate. So what's the problem? The problem is clearly the product. Rather than being "world class" it has proven to be unloved by the entire industry. It's not just the SGLB home team trying to sell Printrite it's an additional army of resellers and OEM's that have taken on the sales challenge and not a single one has achieved any measurable success in placing more than a token number of installations over a time period going on ten years now. I suppose it's possible that release 3.0 is the Holy Grail that will turn everything around but up until this point it is clearly a product issue and not a management issue that has resulted in the dismal results to date. Based upon past product claims for the previous releases, I wouldn't hold my breath for any different results this time.
"We have multiple recurring deals, multiple multi-year deals with OEMs, multiple companies stating they plan to add to multiple machines after the testing and evaluation."
"multiple recurring deals"....How does this work? Show me the revenue. By "recurring" are you referring to Mark's revenue estimates? We all know how valid these have been. The fact is that we have no "deals" that have produced any meaningful revenue to date.
"multi-year deals with OEM's" The expectation was that these OEM's would embed Printrite software into their machines and offer it as an option. It would appear from the absense of revenue from this source that no one has selected the Printrite option.
"multiple companies stating they plan to add to multiple machines after testing and evaluation. Please provide some direct quotes from users (not Mark) that clearly state this intention. I'm not personally aware of any.
This is all just more blue-sky hopes and dreams totally invalidated by the lack of meaningful sales. Soon to be replicated when Q-3 results are released.
Great fact filled, non emotional post. Thank you. Please stay involved.
If you and Joe both were nearly as omnipotent as you claim to be you would be as wealthy as you are loud. Please let us know when you cover those shorts.
OK, This is no longer fun. What are the thoughts for Q-3 earnings? Sure glad that I sold half in the mid fives. I can't see why the market is treating this so badly. All commentary has pretty much dried up here, which also makes me nervous.
I don't think you are suggesting that the noteholders are going to convert the warrants when the stock is trading at or below $2.00 a share are you? In my opinion they would not convert until the share price was at least in the $2.20 range and then quite likely quickly sell at market. If they wanted shares below $2.00 they would simply purchase them at market prices (highly unlikely). Unless something dramatic changes in the company's ability to move product in quantity the whole exercise may be a non-event with no wareants ever being converted and the company forced to pay it's debt in cash.
Still struggling a bit. Unless the share price takes a pretty good bump above $2 quickly they are going to take their October payment in cash. That leaves the 50% due in May of next year. I would agree that there is an excellent chance that the share price will exceed $2.00 by a sufficient margin for them to cash out the remaining warrants and I agree that this will preserve precious cash on hand for the company but the negative of the $2.00 conversion is that it further dilutes existing shareholders so it would seem somewhat of a wash to me.
I'm struggling with your logic, but perhaps I am reading this wrong. As I see the amendment the company will still have to repay half of the note in October of this year and the other half in May of next year assuming they do not convert any of the warrants. As to saving the company money, the note holders would never have converted shares at $4.13 they would have just demanded the loan be repaid in cash. I don't see any savings for SGLB at all here. The only thing they gained is an extension of 50% of the loan proceeds due until next year by granting the revision in the warrant price. As RFB pointed out it seems to me that this also puts a lid on potentional share price appreciation too much above $2 because the investors will cash out if they can achieve a 10% premium or so. Help me understand why this is incorrect.
Driftin:
The elephant in the room that SGLB does not seem to ever want to discuss is revenue. My guess is that Q-3 will be as dismal as past quarters in terms of revenue generation. SGLB has a million dollar loan that comes due in a few days as well. Even with acquisitions apparently off the table they are drawing down funds at an alarming rate. If nothing changes I would anticipate more dilution by Q-2 next year. Rice mentioned recently that he was changing the culture at SGLB from R&D to more of a sales focus. Did he speak about this at all? what steps he has taken or planned to take? Thanks very much for sharing your notes. It's a shame that there were not some mean-spirited SOB's in the crowd to ask the difficult questions. My impression of past meetings also is that the audience is made up largely of SGLB emplyees and the managements old buddies from around town and the lab. Too bad.
Driftin:
I think it's terrific that you could attend. I would press them really hard on why they think Printrite is not selling. You will obviously get the response that the market is not mature enough...blah blah blah. I would press them on the feedback they are getting from pilot sites and why they believe they have not ordered in quantity and I would ask what "specific steps" they are taking to enhance their sales.
Hawks. Did not attend this year. Pretty amazing however with all the money many have invested here that apparently there is no representation at the meeting. One gets a whole new perspective on the company just by attending. We should get a report of the results this PM
I agree with the new management teams smarts. Unfortunately Sigma does not have a marketing or a financial issue they have an issue with product acceptance in the marketplace. I'm not sure how the new management can correct that. Kudos to them if they do. They will have to show me.
The management team is a huge improvement. My problem is with the product. You can have all the management talent in the world and if no one wants to buy what you have to sell you are not going to make much progress. I remain in the "show me" mode regarding Printrite. When they book a 10 million dollar order I'll take another look. Meanwhile there are many other fish in the pond.
I'm not short, but I don't agree. The quarterly meetings will not reveal anything new (significant events have to be announced separately). If this quarter is as punishing financially as recent quarters you are going to see a real hit on the share price. Investors are running out of patience. I find it fascinating that there will "apparently" be no represenation from this Board at the meeting. Many of you have a good deal of money at stake and it's hard to understand why you wouldn't want to show up and question these bozos in person.
I think Silver pretty much nailed it. Hard to think of much that SGLB management has done to earn the trust of shareholders. After being severely burned twice by unsuccessful dilutions what makes anyone believe this time will be different?
Putting yourself in the place of a company being acquired with a share-only deal think of the share premium you would insist upon to be acquired. SGLB is dealing from a position of severe weakness and any acquired company will make them pay dearly.
Kudos for showing Amanda the door....should have happened a long time ago. Not sure about Ms. Toups...time will tell. The company could have bought 48 hours a month of Williams time at $200 an hour for what they are paying Toups....not considering any benefits. Just getting rid of Amanda and her do-nothing job will more than pay for Toups however, so overall a smart move.
Has Exxon paid off the old Interoil stockholders for The Elk-Antelope Resource yet?
Long overdue!!
At the end of the day I think taste, price, and perhaps sugar content will be the deciding factors. The rest doesn't matter to most.
Kanya. It's kind of scary but I actually find myself agreeing with you.....at least partially. All the fuss about mergers is just further excuses to justify the lack of sales. I don't really believe that "motivation' is the issue either. It would be hard to believe that the sales team is not sufficiently motivated. I can imagine that they have all sorts of folks beating on them to produce results. So what's the problem? I believe the answer is simple. ASK YOUR CUSTOMERS AND POTENTIAL CUSTOMERS. Ask them why they have not placed quantity orders. What is it that they don't like? Reliability? Price? Support? Functionality? Competitors product? Your customers will be more than happy to tell you what the issues are, but you have to ask them first. Once you know, you have to fix the problem's'. Simple, but few ever ask, and they are the ones who are no longer in business.
Not true at all. You get no tax credit for "using" PR3D. The credit goes to the manufacturer not the user. Unfortunately one first has to make a profit before there is any tax to to credit and that goal appears to be a ways off yet.
Annual Meeting, October 2: There seems to be some additional interest in attending the annual meeting this year. Here are a couple of things to keep in mind: October always has the nicest weather in New Mexico, and hence is our busiest tourist season. The Albuquerque Balloon Fiesta opens the same week as the annual meeting and is our biggest annual tourist attraction. This means that flights, rental cars and hotels will be in short supply so book now if you plan to attend. Santa Fe has a small airport, but flights in and out are considerably more expensive than flying into Albuquerque and renting a car. Santa Fe is a pleasant hour long drive north of Albuquerque. A hotel room that costs $100 in Albuquerque will be $125 in Santa Fe, and if within walking distance of the Plaza $200. Santa Fe is filled with expensive restaurants that cater to tourists that the locals never patronize. If you want some terrific local cuisine try the La Plazuela Restaurant located in the La Fonda Hotel (directly on the Santa Fe Plaza). La Fonda is one of the original Santa Fe Railroad Harvey House Hotels and the La Plazuela Restaurant is brimming with New Mexican charm and absolutely terrific food at very moderate prices. Definitely worth a dinner or luncheon visit. A top local favorite for a green chile cheeseburger and a beer is Del Charro's Saloon located in the Inn of the Governor's (a two block walk from the Plaza). Del Charro's has great food and atmosphere at moderate prices, and few tourists. If you attend the meeting be sure and allow a day or two to explore the many pueblos, museums and other historical and scenic sights in the area. Santa Fe and Albuquerque both have a lot to offer.
The market seems to see things differently.
No matter how bleak things may look at the moment SGLB still has one remaining ace in the hole and that is an absolutely all-star board of directors. In past years the board was little more than a rubber stamp for Mark Cola and was made up of individuals who took no active part in the oversight of the corporation. Today we have a Board that is made up of individuals, all of whom ran their own management consulting firms with expertise in crisis management, strategic planning, acquisitions and mergers, business financing and accounting, and a host of other high-level business skills. They hold degrees from Harvard, MIT, and other prestigious institutions. They each have decades of high level consulting experiences with firms that were going through many of the difficulties SGLB currently faces.
While still active, most are in their seventies and it remains to be seen how involved they are going to be in getting SGLB back on track. I was less than impressed with the initial impression that John Rice made on the conference call, but the talent and the horse-power is clearly present in the Board's make up if they choose to dig in and get involved. I believe if they do, this will be an entirely different organization a year from now. If they do not, things look very bleak indeed.
Pretty funny.
Absolutely. I too have traded small cap OTC stocks for decades and it is highly unusual not to see any insider open market purchases. These buys typically represent a small percentage of their total holdings, but they reassure shareholders that the management and board anticipate values to increase. In SGLB's case the Board has been way to generous in passing out free shares. Amanda Cola's grants have been particularly outrageous.
Kanya: I have been in and out of SGLB since mid 2013. At the moment I own no shares. I had sold some of my other holdings in anticipation of buying in again when I read that the Board had replaced Mark. I decided to wait until I could hear John Rice's presentation on the conference call and was so profoundly disappointed in what he had to say that I put my money elsewhere. There was no firm plan for revenue generation and without some immediate revenue this is going to be a $1.50 stock. I'm sure you don't agree with my thinking, but that's what makes a market.
"NOT TO MENTION. How about senior leadership purchase some secruities/stock in the company - AT MARKET VALUE. (No deritives, warrants, options, etc) Straight up, take a large stake in your own company! (the same way retail has to) ". This has always been a bone of contention with me. In the entire history of the company none of the senior management nor board members have ever purchased a single share on the open market. That sends a clear signal to me to stay away.
I didn't think the earnings were all that bad. I'm buying here. What am I missing?
"I hate to say to all the doubters that 'I told you so' about the America makes project... But... I told you so!!! " Yup: Mark apparently never bothered to keep the software America Makes was working with updated with the latest enhancements, hence they ended up reporting on software that was four years old at the time. Gee, one would have thought that Mark would have thought keeping the software current might have had a slightly higher priority. Then to compound the oversight when the report was finally released and Mark clearly realized why it was less than glowing he did nothing to clarify why the results were less than hoped for. A well worded clarifying press release would have eased both potential customers and shareholders minds, but was apparently too much trouble to produce.
I wonder if anyone ever takes the time to sit down with Ron Fisher and ask what sort of feedback he is getting from Sigma's test sites and customers. My bet is that he knows exactly why the product is not selling. He is the closest individual in the company to the customer base and is getting constant feedback both directly and indirectly. It may be exactly as John Rice stated, customers are still in a prototyping mode and are not ready to commit to full production. It may also be that they are not satisfied with some aspect of functionality or reliability of the Prinrite suite. It may be that pricing or terms are an issue. It may be that support is an issue. Whatever the issues are you can be assured that Fisher has heard them all. The market not being mature enough is hard to fix but the other issues are not and must be addressed if sales are to increase. It sounds simplistic but your customers are more than happy to tell you why they are not buying. I hope someone at SGLB has been smart enough to ask them.
Why shoud one have to "read between the lines"? This is a business established to make a profit. If they don't do anything different than they did in the past. It isn't going to happen. How many more quarters of "sales are just around the corner" will it take before your investment has completely evaporated? I had great hopes for John Rice and am terribly disappointed in what I heard.
Disappointed. I had hoped for a clear path forward to generate additional revenue and although Rice was pushed on this topic by more than one questioner I didn't hear any convincing answers...just more of the same. It was interesting as well that Mark was only a participant in the Q & A and not a presented. The next few months are going to take an additional toll on the stock price.
However they configure the Board they will need a majority of independents to meet the listing requirements.
It would seem that they would need to elect two additional independent directors in order to have a majority of independents. Am I missing something?
Hawks. No, I was not familiar with Rice until he was selected as a board member. This a snippet from an article he wrote on LinkedIn that I thought was pretty relevant:. He strikes me as an "action-oriented"
individual. I'm looking forward to hearing what he has to say. Here is the article:
Far and away the most frequently asked question that we hear in the turnaround business is the anguished lament, “Oh man, why didn’t I call you sooner.” This exclamation most typically occurs as we report to the Chair of the Board or the CEO, when we lay out our assessment of what’s broke and how to fix it. It is a telling bit of human behavior that the regret about not having sought help sooner to solve a problem is sometimes not expressed until the moment that it is clear that the problem can be solved. This suggests that for many businesses there comes a point when a nagging unsolved problem has festered up to the point that executives intuit or simply fear that the problem can’t be solved and thus the problem and the solving of it are delayed until an emergency of some sort arises and outside parties like us are brought in to help.
Our business advice ‘is look, think, don’t over-react, but do react at once’ as problems arise in a business. Over-caution, over-analysis, and wait-and-see-inaction often lead to over-denial. Do this, and you too will not hear yourself say to someone, “Oh man, why didn’t I call you sooner.” Act on the obvious.
I believe Jackie is correct. It is far more important to hear what our new CEO has to say about the path forward than bemoan the Q-2 revenue numbers. The CEO has a tall order. His first priority is to come across as a straight shooter. From there a workable, believable plan forward will be key. If he blows it, I believe the stock is toast for the foreseeable future. If he pulls it off I think you will see a dramatic increase in the share price.
I'm expecting a very strong Q-2 report and can't help thinking others are expecting the same. Can't understand why the stock continues to trade sub $5.00. What am I missing?
Jackie, I'll believe the revenue projections when they actually materialize. Mark has been notoriously optimistic in his projections and estimations of future revenues. The Q-2 report next week is going to be devastating once again. Our new CEO has his work cut out for him to restore some credibility and provide a credible path forward for the company.