sigma labs\' (sglb) ceo john rice on q4 2017 results - earnings call transcript
At 11: 00 a. m. on April 6, 2018, ETExecutivesScott Q4 2017 performance Conference Call-
President of core IRJohn Rice
Temporary ceonnette Toups-
Welcome to the annual Sigma Labs earnings conference call, which ended on December 31, 2017.
All the participants will be listening-only mode. [
After today\'s speech, there will be an opportunity to ask questions. [
Participants in the conference call were told that the audio of the conference call was being broadcast live over the Internet and was being recorded for playback.
The replay of this call will be available approximately one hour after the call ends until May 6, 2018.
I would now like to hand over the meeting to Scott Gordon, president of core IR and Corporate Investor Relations.
Please proceed, sir.
Scott GordonThank, Brian, thank you all for attending today\'s conference call to discuss Sigma labs\'s annual corporate development and financial results as of December 31, 2017.
Today we are with John Rice, the company\'s interim CEO, and Nannette Toups, the company\'s chief financial officer.
At nine o\'clock A. M. eastern time today, Sigma Labs released its quarterly and annual financial results for the year ended December 31, 2017.
If you have not received a revenue release from Sigma lab, please visit the Investor page on www. sigmalabsinc. com.
During this conference call, the company will move forward-
Look at the report.
The company reminds you that any statement that is not a statement of historical facts is forward-looking --
This includes any forecast of income, cash or other statements related to the company\'s future financial results, any statements regarding the management of the plan, strategy or objectives future operations, any statements regarding the proposed new product, any statements regarding the expected new relationship or agreement, regarding the Company\'s products in the United States. S.
And the international market, any statement about the future economic situation or performance, statement of belief, and any statement of assumptions that give up.
These statements are based on expectations and assumptions as of the date of this conference call and are subject to many risks and uncertainties that may lead to actual results as described in the future outlook
Look at the report.
Some of these risks are described in today\'s press release entitled warning notes on moving forward
In the open periodic report, the company submitted documents to the Securities and Exchange Commission.
Investors or potential investors should be aware of these risks.
Sigma Labs does not assume the obligation to update these forwarding
Forward-looking statements that reflect future events or actual results do not intend to do so.
Now I am happy to transfer this call to interim CEO John Rice. John?
Good morning, John RiceGood, welcome to our shareholders, and welcome to the attendees of our conference call today.
I am the chairman and interim CEO of your company\'s board of directors, and the purpose of this call is to report to you the company\'s financial results and company developments for the 12 months ended December 31.
Today is April 6. there is a lot of pollen in the air in Santa Fe.
So please forgive us if you hear me or nannett coughing or clearing your throat, this is the allergy season in Mexico.
So, in the past few months, I have communicated with shareholders, and the central theme of 2017 has changed.
Our market has changed, our products have changed, and our culture has changed ---
Our corporate culture, the change of our management team, the change of our operational strategy.
In the fiscal year ended December 31, 2017, we generated a total of 641,000 revenue, compared to 966,000 in the previous fiscal year.
The decrease in revenue was mainly due to the company\'s priorities and strategic restructuring of personnel in the second half of 2017.
Within four months of its successful public offering on February 2017, the company\'s new board of directors decided, transforming Sigma from a research and development company with a research and development culture to a technology development and commercial company with active marketing is a critical sales culture.
From our analysis, this necessity and many of the changes needed to implement it are not met by the R & D culture, this demonstrates the rapidly growing business needs of new and potential customers for practical solutions to the problems they are facing now.
More and more customers are not interested in 3D.
In terms of R & D, they are interested in 3D, so we continue to move forward, and the R & D culture cannot provide technical product support and education to help new users prove themselves with our help, how to use our impressive quality assurance technology to increase production and reduce costs, and the team of product development and customer service personnel in our R & D company is not close enough to customers or each other, bridge the gap between our advanced technical capabilities and the needs and expectations of our customers.
Yes, our customers are inevitably ignorant in the early stages of technology adoption.
They don\'t know-
Process quality monitoring in this niche.
Therefore, we must adjust ourselves so that they can better use, learn and understand our advanced quality technology.
Yes, two of us also found that the outstanding brains and talents of our R & D team have established our position at the board level that we were still leading at the time and today.
Process quality assurance tools on the market
3D metal printing.
It seems to us that we have the absolute right person, but perhaps in the wrong seat or in the wrong seat.
Therefore, starting in the summer of 2017, the company began to sell and support single printrie3d unit sales to customers focused on R & D, but there is no material production for AM parts, so there is no proximity-
The term requires more printrie3d units.
At the same time, the company has doubled in technology.
Mark Cola, a colleague.
The founder, then CEO and president of Sigma, was appointed as Sigma Labs, CTO and president and is now doing his best.
It\'s time to create and implement the Sigma Labs technology strategy.
This change is to accelerate and strengthen the resources invested in the launch of printrie3d, and through a lot of continuous technical and sales support for customers who have already produced to meet the absolute 3D metal parts we have installed through the company.
Mike invited Darren Beckett, a new engineering director;
Senior software and business process engineers from Intel, laying the foundation for the team\'s software and business process capabilities.
In November, Coca-Cola enhanced laser technology.
The Focus team released the first product update version 3.
0, followed by 3.
01 and then 3 after a month. 02 last week.
So, take it at the same time as Cola
I was appointed interim CEO in August 1, when I was already chairman of the board.
My background is rich, and the successful operation has surged to restart and turn around, meeting Sigma\'s needs at this time.
By September 1, the company\'s strategy was almost a strict policy requiring that 100% of sales and marketing focus be placed on potential customers who have already produced metal parts made of additives in the production process, these customers are aware that some of their cases have expressed concern that they may have inadvertently shipped parts that were at least invisible to the original below specifications.
Now, while this new sales focus policy of narrow customer focus, we are committed to integrating sales and marketing more closely into product development and customers.
This effort by the customer sales, marketing and technology development team creates an integration that allows dedicated support for internal customersfield hands-
Support our products with our customers.
We are trying to define a simple generic process that enables customers to quickly understand how our printrie3d matches them and how this can be confirmed through third parties
Party A\'s laboratory partially confirms our quality inspection results.
So these fundamental changes in culture, business processes, and business strategies are a bit like working on the engine of a new mobile car, but they are a fundamental adaptation to changes in the US market, changes in AM metal manufacturing machines entering the market, which focus on production, speed and quantity and are no longer just prototypes in hand.
The increase in our sophisticated customer base, awareness of what we are starting to hear and a deeper focus on what is called 3D metal quality.
So all these changes are opportunities for Sigma, but none of them will be good --
Funded by a small R & D company.
The Sigma changes I outlined above enable our company to take advantage of these opportunities, and yes, they did lead to sales of Sigma in 2017.
When I ruthlessly push a very strong and capable vice president of business development away from customers with only R & D, they are preparing to buy printrie3d devices, however, we will take too many dedicated resources from us.
We force a transition, in which, we focus all of our people and all of our efforts on the company that is now making 3D metal parts and/or its approval of printrie3d for 3D machines in production.
We don\'t have enough technicians at all for our high potential customers and
Sales to R & D customers.
We also upgraded the CFO level from the outside. of-
A national consultant in-
Full House experience-
When CEO, lanliti Toups joined us in September, 2017, making her an experienced accounting firm as a CPA, he grew up and became a financial officer in a technology start-up that withdrew through a merger.
For external attention, we hired Frank Garofalo, a director of the company and used him as a M & A Hunter, dedicated to exploring our strategy to expand our technology, revenue and EBITDA base, especially in the strategic aspects of the integration chain-
Digital design through the link and chain of digital later
So while my strategic changes hurt revenue in the third and fourth quarters, I do believe that these changes have greatly improved the user friendliness and functional promotion of technology development products.
We withdraw 2017 from potential customers who are in closer contact than ever before and have stronger products than ever before.
We have announced a new high potential in this year.
The number of printrie3d installations for major customers includes Pratt & Whitney, a division of joint technology.
UTC serves customers in the business, aerospace, defense and construction industries and ranks among the world\'s most respected and innovative companies.
It is a good name for our company to have our customer roster and look forward to potential long-term cooperation
From the customer\'s point of view, other similar opportunities installed in 2017 are Caterpillar\'s Solar turbines, and Siemens is a manufacturer of various industrial equipment in the world and a great control company.
Each of these companies is manufacturing or buying metal parts made by additive manufacturing equipment.
So moving forward we do expect our revenue to increase over the next period of time as we take responsibility for our goals and work with them and the partially integrated team, to prove the order of our products.
This is, of course, a public company.
There is no guarantee that all the procedures will work as we wish, but what I would say is that we have confidence in our employees and we have confidence in our products, we have confidence in the market\'s demand for them.
So I will transfer this call to our CFO, Nannette Toups, who will now discuss our financial results for the fiscal year ended December.
We will then start asking questions.
Nate, take it away.
Thank you, John.
I will now discuss the financial results for the whole of 2017.
For the fiscal year ended December 31, 2017, we recognized revenue of $641,000 compared to $942,000 in 2016.
This is a cut of $301,000 or 32%.
The decrease in revenue is mainly due to changes in the customer base, in line with the shift in the company\'s strategic focus that John just talked about.
As we moved from R & D to commercialisation, major programmatic sales in 2016 were replaced by early adopters planning and OEMs.
These have incentive pricing, which reduces our income.
Sales costs associated with 2017 were 272,000 per cent, compared to 229,000 per cent in 2016.
This figure has increased by $43,000 or 19%.
The increase is related to the cost of the equipment for the initial EAP and OEM installations that we carried out in the second half of the year.
Sigma\'s overall operating expenses for the 12 months of December 31, 2017 were 4,421,000, compared with 3,211,000 for the 12 months of fiscal 2016, an increase of 1,209,000 or 38%.
Sigma\'s operating expenses are mainly composed of sales expenses outside of internal operating and service expenses and R & D expenses.
These three types of operating expenses accounted for 1,133,000 of our total growth of $1,209,000, up 94%.
This is the three aspects that we will discuss next.
The main source of our internal operating expenses is the cost of personnel.
December month for the twelve a months of salary spending months 2017 is 1,269,000 than 1,027,000 of the same period 2016 this increase the 24%.
The increase is mainly due to salary increases related to strategic new employees, as well as the management team reorganized to achieve the goal of doubling technology.
Another important contributor to internal operating costs is our inventory-
Based on the compensation plan.
Stock compensation-related expenses for the year ended December 30, 2017 amounted to $720,000, compared to $341,000 for the same period in 2016, or stock growth of 111% per cent
This is mainly due to two factors.
First of all, Sigma granted most stock options after September 30, 2016, which to a large extent ---
This led to the four quarters of 2017 reported much more stock option home Amortization than the four quarters of 2016.
The second factor assigned to the increase in amortized costs is that, as part of a key personnel adjustment for early resolution, a large number of options were granted shorter than the standard attribution period.
Using stock and stock options to pay for services is one of the mechanisms Sigma has established, and plan to continue to use these mechanisms to motivate and reward those who make the most contribution to Sigma\'s targeted transformation, although they still keep cash.
Between 2017 and 2016, the second largest contributor to total operating expenses and growth in operating costs was external service fees.
In 2017, we paid an external service fee of $1,229,000, compared to $935,020 in 2016, an increase of $295,000, or 31%.
Each year, the service costs associated with our obligations as a SEC reporting company are slightly higher than $550,000.
However, other legal costs of 333,000 per cent were paid in 2017, compared with 127,000 per cent in 2016, an increase of 206,000 per cent, or $ 162%.
The increase in these expenses is mainly due to our public offering in February 2017, resulting in a net income of about $5,225,000.
Other external services expenditures that increased significantly in 2017 were related to advertising and trade show activities.
These amounts were 154,000 in 2017, whereas 94--
It was 95,000 per cent in 2016, up 59,000 per cent or 62% per cent.
Again, this growth is due to our shift in strategic focus to scalable business rather than programmatic business development, which requires us to look for partners and work with them in new ways.
R & D expenditure is the third reason to increase operating expenses.
In 2017, there were 302,000, compared to 121,000 in 2016.
This 181,000 or 150% increase is mainly due to the additional cost of R & D consulting resulting from our 2017 accelerated technology development efforts.
When you combine lower sales revenue, higher product costs and increased operating costs, the above will occur.
Naturally, this resulted in operating losses of 4,052,000 per cent in 2017 compared to 2,498,000 per cent in 2016.
When we were below that level, our net income and expenditure were 526,000 per cent in 2017 and 277,000 per cent in 2016.
The biggest contributor to the $2017 loss was the $545,000 hit by the revaluation of derivatives and writing.
Due to the end of the public offering on February, the debt restructuring on 2017, and our two debt conversions on December 2017, the required discounts were canceled-
Our two holders of debt instruments
In contrast, the previous year had a positive contribution of 355,000 per cent to other income and expenditure reassessed by derivatives.
And these are not
Cash adjustments are all negative, and the amount of tax benefits received from New Mexico in 2017 increased by $103,000 and an additional interest of 40,000, this is a positive contribution to the income of the bonds we issue from the funds that were publicly issued in February 2017.
However, these largely offset an increase of $122,000 in interest expenditure of $1 million, derived from the 16-year period of October 20.
At the end of the year, we had 1 million on our cash sheet--
I mean, on our balance sheet, $1,516,000 in cash and $2,657 in current capital surplus, compared to $398 in cash and 38,000 in current capital as of December 31, 2016
This improvement in the working capital and cash position was mainly due in February 2017 to increase capital and the conversion of 400,000 bills, which was not conducive to the year December 20.
At the end of 2017, the balance sheet was strong, with about three.
4 million of assets, only about 0.
With a debt of 5 million, we strongly want to strengthen our cash position to ensure that we have the acquisition and spending capabilities needed to accelerate and strengthen innovation in technology development and to implement other components of our commercial plan.
To this end, we are actively involved in negotiations and discussions to obtain these necessary funds.
This is an overview of Sigma\'s financial position in December 31.
In this way, I will transfer the phone to John.
Thank you, nannett. it\'s a good job.
So, in general, there\'s a lot going on with Sigma, most of which are good, all of which are firm and focused.
So thanks to the attention and support from Sigma Labs and operators, let\'s start asking questions. Question-and-
Ladies and gentlemen, our first question today is from Kevin May.
Please continue with your question.
My first question is about our relationship with Morf3D.
The 500,000 we lent them or the 10% of their company expired.
How about our relationship with them?
Where is that--
Where the hell is that going?
Do you think they will pay cash?
Or are they willing to give us 10%?
John ricetheir is willing to give us 10%, but they are more eager to stick to it themselves.
As a result, Morf paid off the interest of £ 500,000 on March 28.
We continue to maintain close contact with mov.
Ivan Madeira has become a good friend and I think we will ---
Our future may be combined.
They are doing an innovation center that we are really interested in the future.
So I hope that the story of Morf will continue to Morf and do something wonderful.
You did it at the last investor meeting, and I believe it was in January.
Some people say there are some internal differences in the payment structure of our software.
Did you solve it?
What is this structure like now?
John RiceI is not quite sure what you are referring to, but I will talk about this.
The current price of our software is called early adopters pricing, it is clear that it is for people to submit as early as possible, so the price is different, it is based on the value of a research project, this research project may allow us to buy someone\'s product.
It\'s not based on what is value pricing. -
What does this product contribute to an operating company that saves a lot of money.
So, the simple answer is that our pricing today is not tomorrow\'s pricing.
But this is not controversial.
This is an evolution that emerging technologies must go through.
In this conference call, you explained how you moved from R & D to production companies, and admittedly you even said it led to a decline in revenue over the last two quarters.
From the timeline, where do you see this shift and when does the production structure start to be associated with revenue?
John RiceSo, you just invited me to do the forwarding-
You look very--
It is fair to do so.
Basically, the point of what we did last year is to reposition the company so that almost all the services and customer support that the company invests in are-
If these tests go on, we think there will be a lot of motivation to buy our products.
A year ago, we were in contact with a group of good companies that did research but didn\'t do production.
So, their success is that we will call you when we start doing this.
So for us, the turning point does not guarantee the terms, but for us, the turning point is that the people who are working with us now have the ability to drive our sales by buying more.
The terms of cooperation we recently signed are unknown.
Can you work with NIST and LVN and our--
Some of our early collaborations with Materialise and 3d sim are now Ansys.
John RiceSure, Kevin, to limit you to handcuff you on this issue so that others can think about it.
But the question you asked is very good. thank you.
First of all, the NIST opportunity is exciting for us because the whole industry is working hard to get into a high quality production environment at the same time, one of the main components is the material.
How do you describe the material and how do you develop uniform standards?
Who can measure it and who can give you information about their behavior, etc?
So our software, not some kind, is a unique tool to implement this feature, and NIST is a great honest broker to do it through him.
So this is exciting.
LVN is important to us because they have a foothold-
Because their headquarters are in Europe, as one of the shareholders pointed out to me, their importance to Airbus\'s contractors and Airbus in the market is that they have announced that they expect delivery.
In this case, by December, it was extracted from 30 tons of additive metal parts per month.
So we want LVN to be a channel that our shareholders think may be a channel.
At this point, I cannot comment on the implementation other than observation.
They are very good companies. We are very interested in them. Next question?
The next question comes from Paul Tumarkin [ph].
Please continue with your question.
Good morning, John.
My question is to change from a prototype person doing research to a person looking at production.
I would like to know what kind of feedback they get as you get in touch with these companies and you show them the principles?
What kind of feedback did you get from them?
I have not directed you to ask this question, but thank you for asking this question.
It\'s really important to us.
The first part of our internal restructuring is for the company, which is a small company.
We have 13 people working in the it department, basically as a team that integrates with customers.
Therefore, we are very satisfied with the feedback from our customers, and we also have--
This is an important experience of mutual benefit.
The customer asked us and Mark actually created an education program for them. It\'s a two-
We started launching day workshops because of the companies we needed--
You have to teach us.
So we know what we\'re doing to you.
This is great because the customer asked for it.
Customers ask for this because they are fascinated by what they see and find it necessary to better understand what they see.
We found that there are a lot of companies in our field, especially OEM companies, who have probes, machines and data collection, and those who want to know what data means for production.
As far as we know Sigma is the company that is able to do this with them.
So we are pleased that we have received very good feedback.
I have to tell you that our clients are making us a better company due to this collaboration.
Unknown analyst [Indiscernible]
In the feedback, did they give you any information on why they don\'t continue, pull the trigger and order more current units?
What are they waiting?
I think the quality culture of the United States is a very powerful change in the culture of poetry.
As far as 3D printed metal parts are concerned, this is a very complex culture because those who work the most in 3D printed metal parts are doing a lot of very expensive post-processing checks, they work overtime slowly to improve the quality.
But, as we know, for those with high quality, there is a good result in this area
Technical parts seem to be in their 60 s.
So we are dealing with people who are trying to reach an unsatisfactory level.
So they are very interested in finding tools like ours that will help them do better.
They are also very resistant to rapid change because they don\'t want to mess up what they \'ve worked so hard to get.
So our solution to this problem is to have these companies work out a way forward.
What do you need to know to make you think you need our product?
What will we do together to achieve this?
So, that\'s what we do, and these companies come back and say, it looks like a six-month deal for us, and we usually say let\'s do it faster.
It\'s a bit arm wrestling.
One of the problems these companies face is the implementation of the decision to launch it. They --
At the purchasing level, the people who introduced us into the production environment are anxious to start, and the production and researchers are doing other things and have other obligations.
So, we find that the speed of the start is not as fast as we would like, and even we think they should spend less time than they think. And so --
So we\'re gone, but I think 2018 is likely to bring us a lot of light and help us cut off the process, more time than we did at the earliest.
Unconfirmed stock analysis reports have been released.
How many of their installations have taken advantage of these updates and [indiscernible]?
How much software is not available at present?
John\'s relationship is too bad.
Did you understand what he said?
Other than I think, are you asking how many installs are the latest version?
How many old versions are there?
To be precise, the analyst is unknown.
John rickennett is obviously better.
Paul, I\'m not if your phone is a speaker.
Sounds like John Ricks. -
If you are not in good health, we will send someone to find you.
The unidentified analyst is not so bad, not so bad.
You are much better now.
John RiceSo, what are we--
We\'re trying to push people to three--
Our technical team is growing rapidly and we are now able to release upgrades and improvements to new releases faster than we can install and implement on the market.
So, there\'s a little lag. But the 2.
0 is all functional sites, 2.
0 and higher are deployed.
There was nothing in the early days.
John, an unidentified analyst recently said that you will all get more
Laser machines have begun to develop software for PrintRite to work with multiple lasers.
Then, I heard your comment on the later stages of the software inspection, if there is any prediction as to when it may appear?
Did you receive it?
Nannette ToupsYes, will we be able to work on a new version of four lasers at once during development?
John RiceWe is in development
Can you provide more details?
Usually when you hear an answer like this, it means that someone likes what\'s going on, not that they don\'t like what\'s going on.
Yes, I mean what we are doing is to adapt very quickly to the development of the market, with the rapid development of production.
There is no doubt that, as you have read, the additive industry and OEM relationships with which we have a strategic relationship are multiple lasers-
There are multiple laser devices, so you might think we\'re on multiple
Next question from Mark Roop [ph].
Please continue with your question.
There are three problems with unexplained analysts. One --
I have three questions. The first one is forward.
It looks good, but the UN actually expects 2018 to be the first year Sigma Labs has announced they are selling printrie3d for the world\'s actual production operations.
John RiceIt will definitely surprise me because that\'s not the case.
The unexplained analyst, set met, has been tracking additive manufacturing for six or seven years to some extent, and two things have been bothering me.
First, over the past few years, there have been some fairly sensational public announcements that wealthy entities have invested in companies pursuing power evaluation, technology for printer design, and additive manufacturing, part design, front end engineering,-
Process quality assurance.
Why isn\'t there enough value in the world for Sigma Labs and printrie3d to actually invest in it and get the technology to market?
What do you think about this?
John Mark, some aggressive forward.
Sigma was invested.
So, I think the early adopters and far-sighted are with us.
The development of metal parts manufacturing is made by a large number of high
Technology companies, mainly in the aerospace sector, will really start to push this forward.
For them, barriers to entry lead to slow progress.
First of all, the introduction of products like fuel nozzles like GE requires a lot of upfront capital investment, with each machine investing millions or more on this single laser technology.
Second, the industry is developing slowly, and you just heard about the issue of additive manufacturing metal parts I mentioned on this phone.
This problem has only started to have a label in the past eight months.
These are, of course, CMC machines, and I think people are looking forward to models of classic machine stores that are effectively manufactured.
I think it will come out if you put the machine in.
I think advanced people in the industry and in the investment community have been focusing on-
Process quality monitoring is a big deal.
But it\'s been hidden in the big-
Other issues of expanding the cost of building a brand new production line in a very capital place
This is very basic for the very small product you produced at the time.
This is a major cultural and technological shift for a company that you have seen.
Unidentified analysts, do you think that now its frontier and center may be some of the inquiries about how to invest in Sigma Labs in a more meaningful way?
I mean, you guys obviously need money to launch this product the way you think it should be.
I mean, it\'s time, are you expecting that?
Or, do you expect the potential for a massive investment in the company?
This is entirely possible and predictable.
I think you need to talk to our investment banker, Dawson James, who can take you forward.
The last question is unknown.
I have seen many references or reports about other assessments or instances
To some extent, process quality techniques are studied or developed or evaluated, none of which are Sigma Labs and printrie3d.
For example, we have just recently heard that Honeywell has designated Sintavia for AM production, but there is no mention of process quality assurance technology.
Sigma lab is not mentioned.
I think it\'s two. part question.
Does Honeywell take the path of GE airlines, miss the opportunity, or is it unsuccessful?
The second part of the problem is that other efforts and metal manufacturing that is being used or is being viewed --process?
How can they not involve printrie3d?
How is this possible?
I mean, is your patent open enough that these other efforts feel like they have a place in the patent?
Or are they just not aware of Sigma Labs and technologies?
What\'s always happening in Sigma Labs is not part of it all?
John RiceWell, Sigma Labs is part of all this, and this is obvious to many, including you at the moment.
So we \'ve actually been working closely with Honeywell for a while now and are committed to moving forward with some initiatives.
Honeywell, like Boeing, is conducting a qualification review for services like Sintavia.
When they do, they\'re not--
What they are doing is confirming that these people with quality and capabilities for both traditional manufacturers and 3D manufacturers are in the current state.
That doesn\'t mean they won\'t ask them-
Process quality monitoring, when they give them orders as part of the specification, or give them a post-process inspection procedure, the fees they have to go through can be very expensive, so that the service bureau will bear on its own in terms of process quality, accord is moving forward.
So whether it\'s pushing or pulling, we have the confidence that it will come.
A deal we haven\'t seen. -
Just like Sintavia\'s transaction, it is a preemptive or exclusion of Sigma in any case.
Thank you, sir. unidentified analyst.
John riceyou\'s question about patents is interesting.
Of course, this is not a new technology, but our advantage in the field of 3D manufacturing is intellectual property rights, patent protection is relatively new.
As a result, Sigma has applied for more than a dozen patents, but almost all of them are in the process of applying.
So our competitors don\'t know what we have because they can\'t read it until the patent is released.
So this is still a cutting edge area in the IT space.
Unidentified analysts, the fine has not yet come?
Please forgive me, John.
Unidentified analysts, then, when applying for various patents, the fine has not yet arrived?
John Ricky, of course.
Look at the company of--
A big company will consider small companies like Sigma in the future, and if they consider buying, I am equally interested in the patent protection that comes with Sigma and prevent their big competitors from infringing them, just as they were able to use Sigma\'s technology, the theory has lasting value.
The next question comes from David Robertson [ph].
Please continue with your question.
David Robertson John, Sigma investors have had some discussions recently specifically on competing products, and I actually think this is where the last person on the phone is asking questions.
In particular, we are hearing and reading about EOS technologies or products, which I believe are called EOS status annotation tools, and there are also some concerns and discussions on large-scale on-site technologies, to delay people\'s time, just like myself and everyone else.
When we read the descriptions, I think they seem to be very similar to printrie3d. What can you --
How can you help us understand and master our hands better than ourselves?
The difference is that you people, I think, have said that as far as you know, this is the most important thing.
As far as you know, how can our technology be ahead of these other projects?
Yes, thank you for getting my tipto on the toes.
As you know, if you imagine looking in the windows of metal and manufacturing machines.
Actually, there\'s not a lot going on there.
What you see is the bright light of the laser, the powder bed and the melting pool.
So the question is, how much can you learn in this simple environment.
As has been the case in the past few years, more and more equipment manufacturers have been placing probes there to monitor the melting pools.
There are various statements about what their products have done.
From Sigma\'s point of view, the bottom line is that none of these people seem to know how to handle the collected data, and you can see that data can be collected visually or in a hot way in many ways.
But the question is what is actionable data, and the question is do you know the meaning of what you are looking?
As far as we know, this is an obstacle between where Sigma is and where they are.
They can show you a picture of the melting pool and they can tell you that it is melting, but they don\'t seem to understand what information they can take away and take action.
An unidentified analyst, then John will--
So to be fair, in terms of my point of view, our strengths can be described as one of the expert knowledge, not our superior technology.
If you can think about it, I asked this question in the context of an existing patent application.
If our advantage is to tell people how to process information, not the technology to collect it, can you help us understand it? How can you --
What does this have to do with patents that we apply for and are hopeful about?
John RiceNow, my point is correct, not just the tip of the toe.
Okay, so the effort we\'re doing with patents is basically focusing on process or method patents.
So far, the difference between Sigma and what we know about the product, and don\'t know some details of everything you name there, the difference is, the competitive products are mainly composed of sensors and software, and the science here is crucial to metallurgy.
And our colleague, Mark Cola.
The founder and chief technology officer is a metallurgical scientist and his colleagues are also
Also the founder of this skill field.
So knowing what you see, what it means, and how to deal with it is In-
This is our advantage.
The unexplained analyst is a conceptual problem. do you know how to deal with it?
I guess it\'s a bit foreign than me, I\'m not a guide to intellectual property, but do I know how to deal with a patentable concept or something that is patentable?
John RiceYes, if someone else doesn\'t, it\'s usually patented at first.
The unexplained analyst, that\'s what we know, I think you just used the term process patent, and that\'s what we\'re talking about?
John Rich often says that I really have to be careful in this regard.
You have to go this way to the company.
Intellectual property is the core of our value. It\'s not --
So, I want to help you understand it, but I don\'t want to help you understand it too well.
Of course, you believe that our position on the possibility of granting these basic patents is high and is increasing?
John RiceI can\'t answer this question in the terms you ask, but I can answer that.
The company\'s patent company is Kilpatrick Townsend, one of the world\'s top patent companies.
They are an excellent, very professional team with an excellent record of success in this field.
Will these people convince you that they think we are in a good position?
We will not apply for a patent.
We don\'t think there\'s anything you have here and we don\'t waste our money disagreements.
Therefore, everything we do about them is based on their belief that they have the right and proper things to try to apply for a patent and have a reasonable chance of success.
A reasonable opportunity to succeed in one field is expensive. 50 area.
From the financing point of view, unidentified analyst John needs additional funds, whether there is as much money ---
Do you guys take private equity funds seriously as an alternative to additional public offerings? John RiceYes. Operator[
Ladies and gentlemen, I have no other questions.
This is the end of today\'s problem. and-answer session.
I want to hand over the end of the conference call to John Rice.
John RiceWell, I want to thank everyone who joined us.
We are very grateful for the way people are interested in our company.
We understand how serious a group of people you are and how curious you are and how helpful it is for us that you support the company.
It is very helpful for us that you challenge us and ask questions.
So, thank you for being here, thank you for your request and persistence, keep pushing us and we will try to prove that.
Thank you all for having a great day.
Ladies and gentlemen, the meeting is now over.
Thank you for attending today\'s speech.
You may not be able to disconnect the line.