Sigma Labs Inc (OTCMKTS:SGLB) Picking Up The Pieces
On June 26 Gary Anderson, an analyst of 3D printing companies, published an article on Sigma Labs Inc (OTCMKTS:SGLB). It appeared on his website 3dprintingstock [dot] com as well as a few other portals and reading through his coverage, we can see that Mr. Anderson does seem genuinely excited about the opportunities presented by SGLB. This, in turn, created quite a lot of buzz among investors and a newsletter called Tomorrow in Review sent out an email on July 8 just to make sure that the word is properly spread around.
Truth be told, the ticker needed some awareness since, before Mr. Anderson’s coverage, it was standing around $0.03 per share and trading was pretty uneventful. When people learned about SGLB and their In Process Quality Assurance (IPQA) technology, however, everything changed.
The volumes picked up and so did the price. SGLB broke through the $0.10 per share barrier with ease and reached its 52-week high of $0.135 on July 19. Unfortunately, it didn’t manage to withstand the pressure and soon it started sliding heavily. On August 2, it plummeted below $0.04 and while it has managed to recover somewhat over the past couple of weeks, people who jumped in while the excitement was at its peak are still looking at some considerable losses. The million-dollar question now is: “What does the future hold for SGLB?”.
Well, they published their financial report covering the second quarter of 2013 and if you have just a quick look at it, you’ll see that it looks a lot better when compared to the filings of lots of other small cap ventures. Here are the most important figures found in the 10-Q:
- cash: $463 thousand
- current assets: $634 thousand
- current liabilities: $470 thousand
- revenue: $307 thousand
- net loss: $122 thousand
While it’s not huge, there is some working capital (and it has improved, as we’ll explain in a minute) and the net loss is not that scary but when you compare the current 10-Q with the one covering the same period of 2012, you’ll see that things really are looking good. The expenses year-over-year have decreased by a whopping 67% and this is particularly impressive when you consider that the revenues for the second quarter of 2012 amounted to around a third of the current figures. All great stuff, but is it all good news?
Well, we mentioned that the working capital has improved and they did it through a private placement executed in July. The problem is, 120,000,000 shares were sold at just $0.01 and we can’t imagine that the shareholders were particularly amused.
Still, you’re thinking, with the increasing revenues and the shrinking net loss, the company is on its way to making it big time, which means that dilution shouldn’t be too much of a bother in the long run. Not to mention the fact that the addition of $1.2 million to the balance sheet will make it look even better. Indeed, we are seeing some progress but, as always, there’s a catch.
As Mr. Gary Anderson says in his coverage on SGLB, so far, the company has managed to generate revenues only through consulting services. They aren’t actually ready with the IPQA and the rest of the 3D printing-related technology, and, as Mr. Anderson also mentions, when they were publishing the 10-Q for the first quarter of 2013, SGLB thought that they’ll be ready with the commercialization process by the end of the year. Unfortunately, things seem to have changed since then.
The latest filing says that the technology will not be ready before 2014, which puts things into a rather different perspective. It also suggests that not everything is going quite according to plan at the moment, which is definitely something you should have in mind while making your investment decision.
If SGLB manage to carry out their business plan eventually, they will probably be able to make an impact. At the moment, however, it’s still uncertain how long it will take them to do it and, in the meantime, it’s obvious that a potential surge of increased interest like the one witnessed in July could, once again wreak havoc with the price. Which, by the way is valid for virtually every penny stock out there, as demonstrated by Eco-Tek Group Inc (OTCMKTS:ETEK)’s chart.
