Revenue Performance - Revenue for the three months ended September 30, 2022, was $188,245, a decrease of $511,992 or 72.7% compared to $700,237 in the same period in 2021[101] - The decrease in revenue was primarily due to lower PrintRite3D® unit sales of $511,870 and a shift to subscription-based sales[101] - Revenue for the nine months ended September 30, 2022 was $476,749, a decrease of $825,776 or 63.4% compared to the same period in 2021[116] Subscription Model Transition - The company began offering a subscription option in January 2022, reducing the initial upfront cost from over $100,000 to approximately $3,000-$5,000 per month[94] - The shift to a subscription model has adversely affected near-term revenue growth but is expected to lead to more predictable and profitable revenues in the long term[95] Operating Expenses - Total operating expenses for Q3 2022 were $2,392,596, a decrease of $633,932 or 20.9% compared to Q3 2021[104] - Operating expenses for the nine months ended September 30, 2022 were $6,968,079, a decrease of $8,865 compared to the same period in 2021[118] Cost of Revenue - Cost of revenue for Q3 2022 was $79,713, a decrease of $85,053 or 51.6% compared to Q3 2021[102] Employee and Compensation Changes - The company reduced its headcount by a net of seven employees, bringing the total to twenty-five, a reduction of ten from a peak of thirty-five[96] - Salary and benefits costs increased by $5,045 or 0.4% to $1,227,805 in Q3 2022 compared to Q3 2021[105] - Salary and benefits costs for the nine months ended September 30, 2022 increased by $649,354 or 21.3% to $3,704,633 compared to the same period in 2021[119] - Stock-based compensation decreased by $384,094 or 58.2% to $275,418 in Q3 2022 compared to Q3 2021[106] - Research and development costs increased by $20,473 or 15.5% to $152,245 in Q3 2022 compared to Q3 2021[107] Financial Position and Cash Flow - As of September 30, 2022, the company had $4,800,680 in cash and working capital of $5,492,725, a decrease from $11,447,047 and $11,702,358 as of December 31, 2021[130] - Net cash used in operating activities during the nine months ended September 30, 2022 was $6,386,415, an increase of 33% compared to $4,786,590 during the same period in 2021[138] - Net cash used in investing activities during the nine months ended September 30, 2022 was $259,952, a 2% increase from $254,772 in the same period of 2021[139] - The company did not raise any capital during the nine months ended September 30, 2022, contrasting with $14,404,942 raised in the same period of 2021[140] Strategic Initiatives - Sigma is focused on building strategic partnerships and expanding its partner ecosystem to ensure customer success as they move into production[97] - The company aims to simplify the quality experience from multiple software licenses to a single integrated user experience[97] - Sigma has invested in developing a holistic in-process quality base to connect to the broader digital quality ecosystem[99] - The company is pursuing a strategic corporate investment partner to enhance market visibility and customer adoption[98] Future Outlook and Risks - The company expects to sustain operations and commercialization efforts through cash reserves and revenues from PrintRite3D® technology sales[135] - Future capital requirements will depend on factors including revenue generation from existing and future PrintRite3D contracts and potential strategic partnerships[141] - The ongoing impact of the COVID-19 epidemic may affect the company's operations, particularly due to component shortages for PrintRite3D systems[136] - The company has no lines of credit or other financing arrangements, which may limit its ability to respond to financial needs[142] - Inflation and rising interest rates have not materially affected operations over the past two fiscal years, but continued unfavorable trends may increase cash usage[142] - The company is currently identifying sources of financing, either through equity or debt, to support its operations[134]
Sigma Additive Solutions(SASI) - 2022 Q3 - Quarterly Report