Revenue Performance - Revenue for the three months ended September 30, 2023, was $141,988, a decrease of $46,257, or 25%, compared to $188,245 in the same period in 2022[112]. - Revenue for the nine months ended September 30, 2023 was $369,188, a decrease of $107,561 or 23% compared to the same period in 2022[126]. Cost of Revenue - Cost of revenue increased to $176,116 for the three months ended September 30, 2023, up $96,403, or 121%, from $79,713 in the same period in 2022[114]. - The increase in cost of revenue was primarily due to the cost of a new quad laser sold at a discounted price in the third quarter of 2023[114]. Operating Expenses - Total operating expenses for Q3 2023 were $866,199, a decrease of $1,526,757 or 64% compared to Q3 2022[115]. - Total operating expenses for the nine months ended September 30, 2023 were $4,078,912, a decrease of $2,889,167 or 42% compared to the same period in 2022[128]. - Salary and benefits costs decreased by $938,911 or 77% to $288,894 in Q3 2023, primarily due to furloughed and terminated employees[116]. - Stock-based compensation fell by $191,340 or 70% to $84,078 in Q3 2023, mainly due to forfeitures of unvested options[117]. Net Loss - Net loss applicable to common stockholders for Q3 2023 was $882,348, a decrease of $1,424,180 or 62% from Q3 2022[125]. Cash and Working Capital - Cash and working capital as of September 30, 2023, were $556,087 and $564,386 respectively, down from $2,845,931 and $3,644,522 as of December 31, 2022[141]. - Net cash used in operating activities for the nine months ended September 30, 2023 was $2,586,884, a decrease of $3,799,531 or 59.5% from the same period in 2022[143]. - For the nine months ended September 30, 2023, the net cash used in operating activities was $3,931,455, a decrease from $6,746,873 in the same period of 2022, reflecting an improvement of $2,815,418 or 41.7%[144][145]. Changes in Working Capital - Changes in working capital for 2023 included a decrease in accounts receivable by $312,620 and a decrease in inventory by $175,877, indicating improved cash collection and reduced manufacturing activity[144]. Financing Activities - The company raised $772,468 in net proceeds by selling 128,887 common shares on October 13, 2023, to fund scaled-back operations[142]. - The company raised $364,555 in net proceeds through its ATM Agreement in Q3 2023, with an additional $772,468 raised in October 2023[147]. - There were no warrant exercises during the nine months ended September 30, 2023, or September 30, 2022, indicating stable financing activity[147]. Strategic Initiatives - The company began offering its PrintRite3D platform on a subscription basis, reducing the initial cost from over $100,000 to approximately $3,000-$5,000 per month[101]. - An Asset Purchase Agreement was entered into with Divergent Technologies for a purchase price of $1,626,242, expected to close after the acquisition of NextTrip Holdings, Inc.[103]. - A Share Exchange Agreement was signed with NextTrip Holdings, Inc., where NextTrip will become a wholly owned subsidiary of Sigma, with shareholders receiving shares equal to 19.99% of Sigma's outstanding shares[105][106]. - The maximum contingent shares issuable under the Share Exchange Agreement will not exceed 6,000,000 shares, potentially reducing Sigma shareholders' ownership to approximately 9.8% post-issuance[108]. - The company is focusing on building strategic partnerships and expanding its partner ecosystem to enhance customer success[101]. Allowance for Doubtful Accounts - The company has established an allowance for doubtful accounts of $115,000 as of September 30, 2023, compared to $0 in the same period in 2022[94]. Non-Cash Expenses - The company reported non-cash expenses of $511,763 in 2023, which included $466,244 for stock-based compensation[144]. Other Financial Metrics - Preferred dividends for the nine months ended September 30, 2023 were $33,122, down from $42,660 in the same period in 2022[139]. - Net cash used in investing activities decreased to $67,515 in 2023 from $259,952 in 2022, a reduction of $192,437 or 74.0%[146]. - The decrease in accounts payable and accrued expenses in 2022 was $141,192, primarily due to incentive bonus payments[145]. - The company experienced no material effects from inflation, changing prices, or rising interest rates over the last two fiscal years[147]. - The decrease in deferred revenue in 2022 was $19,166, reflecting changes in customer contracts and sales[145]. - The company has no off-balance sheet arrangements as defined in Item 303(a) of Regulation S-K[148].
Sigma Additive Solutions(SASI) - 2023 Q3 - Quarterly Report