Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
Document and Entity Information: | ||
Entity Registrant Name | SIGMA LABS, INC. | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Trading Symbol | sglb | |
Amendment Flag | false | |
Entity Central Index Key | 788,611 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 6,267,577 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash | $ 137,702 | $ 1,539,809 |
Accounts Receivable, net | 119,599 | 280,222 |
Inventory | 84,659 | 20,129 |
Prepaid Assets | 34,097 | 38,687 |
Total Current Assets | 376,057 | 1,878,847 |
Other Assets | ||
Property and Equipment, net | 609,782 | 714,754 |
Intangible Assets, net | 222,674 | 167,644 |
Investment in Joint Venture | 500 | 9,222 |
Prepaid Stock Compensation | 208,848 | 418,547 |
Total Other Assets | 1,041,804 | 1,310,167 |
TOTAL ASSETS | 1,417,861 | 3,189,014 |
Current Liabilities | ||
Accounts Payable | 143,217 | 38,393 |
Accrued Expenses | 96,322 | 71,523 |
Total Current Liabilities | 239,539 | 109,916 |
TOTAL LIABILITIES | 239,539 | 109,916 |
Stockholders' Equity | ||
Preferred Stock, $0.001 par; 10,000,000 shares authorized; None issued and outstanding | 0 | 0 |
Common Stock, $0.001 par; 15,000,000 shares authorized; 6,267,577 and 6,239,073 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 6,268 | 6,239 |
Additional Paid-In Capital | 10,668,007 | 10,636,979 |
Accumulated Deficit | (9,495,953) | (7,564,120) |
Total Stockholders' Equity | 1,178,322 | 3,079,098 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,417,861 | $ 3,189,014 |
Balance Sheets Parentheticals
Balance Sheets Parentheticals - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Parentheticals | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 15,000,000 | 100,000,000 |
Common Stock, shares issued | 6,267,577 | 6,239,073 |
Common Stock, shares outstanding | 6,267,577 | 6,239,073 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
INCOME | ||||
Services | $ 189,951 | $ 266,566 | $ 642,230 | $ 648,515 |
Total Revenue | 189,951 | 266,566 | 642,230 | 648,515 |
COST OF SERVICE REVENUE | 69,259 | 25,250 | 207,744 | 138,379 |
GROSS PROFIT | 120,693 | 241,316 | 434,486 | 510,136 |
EXPENSES | ||||
Other General and Administration | 437,873 | 293,187 | 1,345,576 | 886,965 |
Payroll Expense | 259,011 | 191,399 | 727,494 | 338,533 |
Stock-Based Compensation | 105,630 | 221,500 | 236,554 | 478,500 |
Research and Development | 37,532 | 122,517 | 88,504 | 206,545 |
Total Expenses | 840,046 | 828,603 | 2,398,128 | 1,910,543 |
OTHER INCOME (EXPENSE) | ||||
Interest Income | 35 | 265 | 288 | 1,137 |
Other Income | 0 | 0 | 31,626 | 0 |
Loss on Investment in Joint Venture | (3) | (108) | (105) | (108) |
Total Other Income (Expense) | 32 | 157 | 31,809 | 1,029 |
LOSS BEFORE INCOME TAXES | (719,320) | (587,130) | (1,931,833) | (1,399,378) |
Provision for income Taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (719,320) | $ (587,130) | $ (1,931,833) | $ (1,399,378) |
Loss per Common Share - Basic and Diluted | $ (0.11) | $ (0.09) | $ (0.31) | $ (0.22) |
Weighted Average Number of Shares Outstanding - Basic and Diluted | 6,259,349 | 6,234,834 | 6,243,642 | 6,224,939 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (1,931,833) | $ (1,399,378) |
Noncash Expenses: | ||
Amortization | 6,526 | 1,731 |
Depreciation | 131,879 | 123,205 |
Stock Compensation | 240,756 | 478,500 |
Change in assets and liabilities: | ||
Accounts Receivable | 160,623 | (55,107) |
Allowance for Doubtful Accounts | 0 | (4,884) |
Inventory | (64,530) | (55,678) |
Prepaid Assets | 4,590 | 20,709 |
Accounts Payable | 104,824 | (227,508) |
Customer Deposits | 0 | 62,393 |
Accrued Expenses | 24,799 | 17,024 |
NET CASH USED BY OPERATING ACTIVITIES | (1,322,366) | (1,038,993) |
INVESTING ACTIVITIES | ||
Purchase of Furniture and Equipment | (26,907) | (64,334) |
Purchase of Intangible Assets | (61,556) | (11,995) |
Investment in Joint Venture | 8,617 | (10,000) |
Loss on Investment in Joint Venture | 105 | 108 |
NET CASH USED BY INVESTING ACTIVITIES | (79,741) | (86,221) |
NET CASH DECREASE FOR PERIOD | (1,402,107) | (1,125,214) |
CASH AT BEGINNING OF PERIOD | 1,539,809 | 2,962,069 |
CASH AT END OF PERIOD | 137,702 | 1,836,855 |
Cash paid during the period for: | ||
Interest | 0 | 0 |
Income Taxes | 0 | 0 |
Supplemental Schedule of Noncash Investing and Financing Activities: | ||
Issuance of Common Stock for services | $ 152,265 | $ 225,189 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies: | |
Summary of Significant Accounting Policies | NOTE 1 Summary of Significant Accounting Policies Nature of Business B6 Sigma, Inc., incorporated February 5, 2010, was founded by a group of scientists, engineers and businessmen to develop and commercialize novel and unique manufacturing and materials technologies. The Company believes that some of these technologies will fundamentally redefine conventional quality assurance and process control practices by embedding them into the manufacturing processes in real time, enabling process intervention and ultimately leading to closed loop process control. The Company anticipates that its core technologies will allow its clientele to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve breakthrough product potential in many industries including aerospace and defense manufacturing, oil and gas and energy manufacturing, bio-medical manufacturing, automotive manufacturing, and other markets such as firearms and recreational equipment. Basis of Presentation Reclassification Loss Per Share Recently Enacted Accounting Standards Recent Accounting Standards Updates (ASU) through ASU No. 2015-01 contain technical corrections to existing guidance or affects guidance to specialized industries or situations. The Company has evaluated recently issued technical pronouncements and has determined that these updates have no current applicability to the Company or their effect on the financial statements would not have been significant. Accounting Estimates |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity {1} | |
Stockholders' Equity | NOTE 2 Stockholders Equity Common Stock Effective March 17, 2016, our Amended and Restated Articles of Incorporation were amended pursuant to a Certificate of Change Pursuant to Nevada Revised Statutes 78.209 (the Certificate of Change) filed with the Nevada Secretary of State. The Certificate of Change provided for both a reverse stock split of the outstanding shares of our common stock on a 1-for-100 basis (the Reverse Stock Split), and a corresponding decrease in the number of shares of our common stock that we are authorized to issue (the Share Decrease). As a result of the Reverse Stock Split, the number of issued and outstanding shares of our common stock decreased from 622,969,835 pre-Reverse Stock Split shares to 6,229,710 post-Reverse Stock Split shares (after adjustment for any fractional shares). Pursuant to the Share Decrease, the number of authorized shares of our common stock decreased from 750,000,000 to 7,500,000 shares of common stock. All amounts shown for common stock included in these financial statements are presented post-Reverse Stock Split. On April 28, 2016, the Company's Amended and Restated Articles of Incorporation were amended to increase the number of authorized shares of the Company's common stock from 7,500,000 to 15,000,000 shares of common stock. As of September 30, 2016, the Company had 15,000,000 shares of authorized common stock, $0.001 par value per share. In February 2016, the Company issued 625 shares of common stock to a new employee, valued at $4.82 per share, or $3,012. In March 2016, the Company issued 3,080 shares of common stock to a consultant, valued at $4.87 per share, or $14,999. In April 2016, the Company issued 3,529 shares of common stock to a consultant, valued at $4.25 per share, or $15,000. In May 2016, the Company issued 2,459 shares of common stock to a consultant, valued at $3.05 per share, or $7,499. In June 2016, the Company issued 2,515 shares of common stock to a consultant, valued at $2.982 per share, or $7,498. In July 2016, the Company issued 4,167 shares of common stock to a consultant, valued at $3.00 per share, or $12,501. In July 2016, the Company issued 31,000 shares of common stock to an employee, valued at $2.97 per share, or $91,760. As of September 30, 2016, there were 6,267,577 shares of common stock issued and outstanding, including 62,250 issued but unvested shares pursuant to the Company's 2011 Equity Incentive Plan (the 2011 Plan) and the Company's 2013 Equity Incentive Plan (the 2013 Plan). As of December 31, 2015, there were 6,239,073 shares of common stock issued and outstanding, including 12,500 and 32,500 issued but unvested shares pursuant to the 2011 Plan and the 2013 Plan. On April 28, 2016, at the Annual Meeting of Stockholders of the Company, the Company's stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company's common stock reserved for issuance under the 2013 Plan by 638,538 shares of our common stock to a total of 750,000 shares (on a post-Reverse Stock Split basis). As of September 30, 2016, an aggregate of 1,500 shares and 601,712 shares of common stock were reserved for issuance under the 2011 Plan and the 2013 Plan, respectively. Stock Options During 2016, the Company granted a total of 137,375 options to nine employees with vesting periods ranging from three to four years beginning November 17, 2016. As of September 30, 2016, stock option compensation expense of $136,787 was recognized during the nine months ended September 30, 2016 for these options and other options granted in 2015. The weighted average period over which total the compensation cost of the options of $660,500 ($327,504 in 2015) will be recognized is 3.02 years. The weighted average exercise price of all options is $4.21 and the weighted average fair value of the options on the grant dates was $3.23. The estimated fair value of the options was determined using the Black-Scholes pricing model using the following assumptions: Expected term: 5 - 10 years Volatility: 67.3 - 81.7% Dividend yield: 0.00% Risk-free interest rate: 1.13 - 2.32% Warrants As of September 30, 2016, the Company had no outstanding warrants. |
Continuing Operations
Continuing Operations | 9 Months Ended |
Sep. 30, 2016 | |
Continuing Operations: | |
Continuing Operations | NOTE 3 - Continuing Operations The Company has sustained losses and has negative cash flows from operating activities since its inception. However, the Company has had increasing revenues in recent periods. In addition, the Company has raised significant equity capital and is currently developing new product lines to increase future revenues. The Company believes it has adequate working capital and cash to fund operations through 2016, and has entered into significant revenue contracts that are expected to generate cash flow in the near term. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Loss Per Share | |
Loss Per Share | NOTE 4 Loss Per Share The following data show the amounts used in computing loss per share and the weighted average number of shares of dilutive potential common stock for the periods ended September 30, 2016 and 2015: Three Months Ending Nine Months Ending Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015 Loss from continuing Operations available to Common stockholders (numerator) $ (719,320) $ (587,130) $ (1,931,833) $ (1,399,378) Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) 6,259,349 6,234,834 6,243,642 6,224,939 Dilutive loss per share was not presented as the Company had no common equivalent shares for all periods presented that would affect the computation of diluted loss per share or its effect is anti-dilutive. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events | |
Subsequent Events | NOTE 5 Subsequent Events Effective October 17, 2016, the Company entered into a Securities Purchase Agreement with two accredited investors (the Investors) for the private placement by the Company of Secured Convertibles Notes in the aggregate principal amount of $1,000,000 (the "Notes") and warrants (the "Warrants") to purchase up to 160,000 shares (the "Warrant Shares") of the Company's common stock ("Common Stock") (subject to adjustment in certain circumstances), for aggregate gross proceeds, before expenses, to the Company of $900,000 (the Financing Transaction). The closing of the Financing Transaction (the Closing) occurred on October 19, 2016. In connection with the Financing Transaction, the Company entered into a Registration Rights Agreement, dated October 17, 2016, with the Investors (the Registration Rights Agreement), pursuant to which the Company agreed to file a registration statement related to the Financing Transaction with the Securities and Exchange Commission (SEC) covering the resale of (i) the shares of Common Stock that will be issued to the Investors upon conversion of the Notes (the "Conversion Shares"), and (ii) the Warrant Shares that will be issued to the Investors upon exercise of the Warrants. The Notes are secured by the assets of the Company pursuant to a Security Agreement, dated October 17, 2016, between the Company and the "collateral agent" (as defined in the Notes) for the benefit of itself and each of the Investors. Each Warrant has an initial exercise price equal to the lesser of (i) the final unit price of the Companys proposed public offering initially filed with the SEC on July 28, 2016, and (ii) 150% of the closing price of the Common Stock as reported by the OTC Markets Group, Inc. on the date of issuance of the Warrants (subject to adjustment as provided therein), which Warrants may be exercised on a cashless basis as provided in the Warrants. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies: | |
Nature of Business, Policy | Nature of Business |
Basis of Presentation, Policy | Basis of Presentation |
Reclassification, Policy | Reclassification |
Loss Per Share , Policy | Loss Per Share |
Recently Enacted Accounting Standards , Policy | Recently Enacted Accounting Standards Recent Accounting Standards Updates (ASU) through ASU No. 2015-01 contain technical corrections to existing guidance or affects guidance to specialized industries or situations. The Company has evaluated recently issued technical pronouncements and has determined that these updates have no current applicability to the Company or their effect on the financial statements would not have been significant. |
Accounting Estimates , Policy | Accounting Estimates |
Schedule of Stock Options (Tabl
Schedule of Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Stock Options (Tables): | |
Schedule of Stock Options (Tables) | The estimated fair value of the options was determined using the Black-Scholes pricing model using the following assumptions: Expected term: 5 - 10 years Volatility: 67.3 - 81.7% |
Schedule of Loss Per Share (Tab
Schedule of Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of Loss Per Share (Tables): | |
Schedule of Loss Per Share (Tables) | The following data show the amounts used in computing loss per share and the weighted average number of shares of dilutive potential common stock for the periods ended September 30, 2016 and 2015: Three Months Ending Nine Months Ending Sept. 30, 2016 Sept. 30, 2015 Sept. 30, 2016 Sept. 30, 2015 Loss from continuing Operations available to Common stockholders (numerator) $ (719,320) $ (587,130) $ (1,931,833) $ (1,399,378) Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) 6,259,349 6,234,834 6,243,642 6,224,939 |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | Sep. 30, 2016 | Jul. 31, 2016 | May 31, 2016 | Apr. 30, 2016 | Apr. 28, 2016 | Mar. 31, 2016 | Mar. 17, 2016 | Feb. 28, 2016 | Dec. 31, 2015 |
Equity Details | |||||||||
Number of issued and outstanding shares of our common stock decreased | 622,969,835 | ||||||||
Reverse Stock Split shares | 6,229,710 | ||||||||
Number of authorized shares of our common stock decreased from 750,000,000 to | 7,500,000 | ||||||||
Increase the number of authorized shares of the common stock from 7,500,000 to | 15,000,000 | ||||||||
Company had shares of authorized common stock | 15,000,000 | ||||||||
Shares of authorized common stock par value | $ 0.001 | ||||||||
Company issued shares of common stock to a new employee | 31,000 | 625 | |||||||
Company issued shares of common stock to a new employee valued at | $ 91,760 | $ 3,012 | |||||||
Company issued shares of common stock to a new employee valued at per share | $ 2.97 | $ 4.82 | |||||||
Company issued shares of common stock to a new consultant | 2,515 | 4,167 | 2,459 | 3,529 | 3,080 | ||||
Company issued shares of common stock to a consultant valued at | $ 7,498 | $ 12,501 | $ 7,499 | $ 15,000 | $ 14,999 | ||||
Company issued shares of common stock to a consultant valued at per share | $ 2.98 | $ 3 | $ 3.05 | $ 4.25 | $ 4.87 | ||||
Shares of common stock issued and outstanding | 6,267,577 | 6,239,073 | |||||||
Common stock reserved for issuance under the 2013 Plan by shares | 638,538 | ||||||||
Shares of our common stock to a total of shares (on a post-Reverse Stock Split basis) | 750,000 | ||||||||
An aggregate of shares | 1,500 | ||||||||
Shares of common stock were reserved for issuance under the 2011 Plan | 601,712 |
Stock Options Valuation Assumpt
Stock Options Valuation Assumptions (Details) | Sep. 30, 2016 |
Stock Options Valuation Assumptions Details | |
Expected term Minimum (in years) | 5 |
Expected term maximum (in years) | 10 |
Volatility, Minimum | 6.73% |
Volatility, Maximum | 81.70% |
Dividend yield | 0.00% |
Risk-free interest rate, Minimum | 11.13% |
Risk-free interest rate, Maximum | 2.32% |
Stock Options (Details)
Stock Options (Details) | Sep. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) |
Stock Options Details | ||
Company granted a total of options | shares | 137,375 | |
Compensation cost of the options | $ | $ 136,787 | |
Total compensation cost of the options | $ | $ 660,500 | $ 327,504 |
Total compensation cost of the options will be recognized in years | 3.02 | |
Weighted average exercise price of the options | $ / shares | $ 4.21 | |
Weighted average fair value of the options on the dates of grant | $ / shares | $ 3.23 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Loss Per Share Details | ||||
Loss from continuing Operations available to Common stockholders (numerator) | (719,320) | (587,130) | (1,931,833) | (1,399,378) |
Weighted average number of common shares Outstanding used in loss per share during the Period (denominator) | 6,259,349 | 6,234,834 | 6,243,642 | 6,224,939 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 17, 2016USD ($)shares |
Subsequent Events Transactions | |
Company of Secured Convertibles Notes in the aggregate principal amount | $ 1,000,000 |
Warrants to purchase up to shares | shares | 160,000 |
Company's common stock for aggregate gross proceeds | $ 900,000 |