Business context and reporting period
Filing identity discrepancy: The supplied filing is Sigma Labs, Inc.’s Form 10-Q, not a Nexttrip, Inc. filing. It covers the quarter and six months ended June 30, 2019, and was signed August 14, 2019. Sigma develops and commercializes PrintRite3D technologies for additive-manufacturing quality assurance and process control.
Financial results and position
| Metric | Q2 2019 | Q2 2018 | Six months 2019 | Six months 2018 |
|---|---|---|---|---|
| Revenue | $33,582 | $98,663 | $98,032 | $202,078 |
| Gross profit (loss) | $(27,043) | $30,095 | $(59,148) | $59,715 |
| Operating expenses | $1,569,064 | $1,422,511 | $3,076,162 | $2,599,641 |
| Net loss | $(1,593,491) | $(1,388,804) | $(3,077,603) | $(2,559,680) |
| Basic and diluted loss per share | $(0.15) | $(0.25) | $(0.31) | $(0.48) |
| Net cash used in operations | Not separately presented for the quarter | $(2,737,650) | $(1,472,519) |
At June 30, cash was $696,390, working capital was $685,409, total assets were $2.17 million, and total liabilities were $767,982. Current liabilities included $50,000 of notes payable; the convertible note was due October 18, 2019. The company also held a $79,875 note receivable, with the borrower committed to repay principal and accrued interest by September 30, 2019. No credit lines or off-balance-sheet arrangements were reported. Gross margin was negative in both 2019 periods, versus positive gross margins in the 2018 comparisons.
Material changes versus prior comparable periods
- Q2 revenue fell 66% year over year; first-half revenue fell 51%. Management attributed the decreases mainly to the absence of government work, dedicating the printer to internal R&D, and lower additive-manufacturing revenue.
- First-half operating cash use increased by $1.27 million. Management cited the higher net loss, increased inventory purchases for a finished-goods ramp, and a net decrease in accounts payable and accrued expenses.
- First-half operating expenses increased $476,521, including higher payroll, R&D, professional-services, and travel costs. Stock-based compensation decreased year over year.
- Cash declined from $1.28 million at year-end 2018 to $696,390 at June 30, 2019. First-half financing provided $2.27 million, primarily from equity offerings and warrant exercises.
- Common shares outstanding rose from 8,776,629 at December 31, 2018 to 10,937,590 at June 30, 2019. The filing reports 13,812,590 shares outstanding as of August 14, following an August offering.
Outlook, commentary, and risks
Management expected continued losses in 2019 and believed available funds, anticipated RTE engagement receipts, contract-manufacturing sales, potential loan repayments, and possible further financing would cover expenses through year-end. It cautioned that funding depended on commercial traction and potentially additional securities or borrowing; there was no assurance of obtaining funding, and a shortfall could force the company to delay, reduce, or halt commercialization or operations. The company said it expected no material increase in cash burn during the remainder of 2019.
Management described Rapid Test and Evaluation (RTE) programs as a principal route to broader adoption and future revenue, while noting delays and logistical changes in program execution; it reported no negative performance issues in test results. Announced developments included Airbus testing, a major OEM’s planned installations in two countries, and a non-binding collaboration memorandum with Materialise. The filing provides no quantified revenue guidance. Subsequent to quarter-end, an August public offering raised approximately $1.971 million net; this proceeds amount was not included in June 30 cash. Legal proceedings and risk-factor changes were reported as not applicable.
Important facts for investors to verify
- Confirm the intended issuer: the source document identifies Sigma Labs, Inc., despite the request metadata naming Nexttrip, Inc.
- Verify the timing and terms of the August 2019 offering, post-offering cash balance, and resulting share dilution.
- Assess cash runway against continuing operating losses and the company’s dependence on RTE conversions, commercial orders, loan repayments, and further financing.
- Track repayment of the $79,875 note receivable and maturity or repayment of the $50,000 convertible note payable.
- Monitor whether announced evaluations and collaborations progress to deployments, follow-on contracts, and material revenue.