|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2011
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Sigma Labs, Inc.
|
(Exact name of registrant as specified in its charter)
|
NEVADA
|
82-0404220
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
3900 Paseo del Sol
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Santa Fe, New Mexico 87507
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(Address of principal executive offices)
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(505) 438-2576
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(Registrant’s telephone number)
|
(Former Name or Former Address, if Changed Since Last Report
|
Large accelerated filer
|
¨
|
Accelerated Filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
x
|
PART I
|
1 |
ITEM 1. FINANCIAL STATEMENTS.
|
1
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
11
|
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
15
|
ITEM 4. CONTROLS AND PROCEDURES.
|
15
|
PART II
|
16
|
ITEM 1. LEGAL PROCEEDINGS.
|
16
|
ITEM 1A. RISK FACTORS.
|
16
|
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
16
|
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
|
16
|
ITEM 4. REMOVED AND RESERVED.
|
16
|
ITEM 5. OTHER INFORMATION.
|
16
|
ITEM 6. EXHIBITS.
|
16
|
September 30, 2011
|
December 31, 2010
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 939,091 | $ | 226,268 | ||||
Accounts Receivable
|
84,960 | 180,855 | ||||||
Other Assets
|
- | 370 | ||||||
Total Current Assets
|
1,024,051 | 407,493 | ||||||
Fixed Assets (Net)
|
||||||||
Furniture and Equipment
|
37,064 | 42,778 | ||||||
Patents
|
24,223 | 25,083 | ||||||
Total Fixed Assets
|
61,287 | 67,861 | ||||||
TOTAL ASSETS
|
$ | 1,085,338 | $ | 475,354 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts Payable
|
63,651 | 44,996 | ||||||
Salaries Payable
|
29,335 | - | ||||||
Total Current Liabilities
|
92,986 | 44,996 | ||||||
TOTAL LIABILITIES
|
92,986 | 44,996 | ||||||
Stockholders' Equity
|
||||||||
Preferred Stock, $0.001 par value; 10,000,000 shares authorized;
|
- | - | ||||||
0 shares issued and outstanding
|
||||||||
Common Stock, $0.001 par value; 750,000,000 shares authorized;
|
||||||||
313,067,400 shares issued and outstanding
|
- | 313,067 | ||||||
394,667,400 shares issued and outstanding
|
394,667 | - | ||||||
Additional Paid-In Capital
|
1,983,902 | 539,237 | ||||||
Retained Earnings (Deficit)
|
(1,386,217 | ) | (421,946 | ) | ||||
Total Stockholders' Equity
|
992,352 | 430,358 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 1,085,338 | $ | 475,354 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
INCOME
|
||||||||||||||||
Services
|
$ | 369,613 | $ | 243,936 | $ | 670,126 | $ | 276,436 | ||||||||
Total Revenue
|
369,613 | 243,936 | 670,126 | 276,436 | ||||||||||||
COST OF SERVICE REVENUE
|
22,042 | 116,094 | 173,644 | 116,094 | ||||||||||||
GROSS PROFIT
|
347,571 | 127,842 | 496,482 | 160,342 | ||||||||||||
EXPENSES
|
||||||||||||||||
General & Administration
|
252,111 | 84,290 | 559,806 | 284,409 | ||||||||||||
Payroll Expense
|
132,699 | 101,359 | 501,927 | 169,022 | ||||||||||||
Non-cash Compensation
|
- | - | 400,000 | - | ||||||||||||
Total Expenses
|
384,810 | 185,649 | 1,461,733 | 453,431 | ||||||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||||||
Interest Income
|
450 | - | 980 | - | ||||||||||||
Sale of Asset
|
- | - | - | 5,000 | ||||||||||||
Interest Expense
|
- | (9,000 | ) | - | (17,000 | ) | ||||||||||
Total Other Income (Expense)
|
450 | (9,000 | ) | 980 | (12,000 | ) | ||||||||||
NET INCOME (LOSS) BEFORE INCOME TAXES
|
(36,789 | ) | (66,807 | ) | (964,271 | ) | (305,089 | ) | ||||||||
Current Income Tax Expense
|
- | - | - | - | ||||||||||||
Deferred Income Tax Expense
|
- | - | - | - | ||||||||||||
Net Income (Loss)
|
$ | (36,789 | ) | $ | (66,807 | ) | $ | (964,271 | ) | $ | (305,089 | ) | ||||
Loss per Common Share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted Average Number of Shares Outstanding - Basic and Diluted
|
394,667,400 | 211,239,698 | 362,425,550 | 198,252,856 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
OPERATING ACTIVITIES
|
||||||||
Net Income (Loss)
|
$ | (964,271 | ) | $ | (305,089 | ) | ||
Adjustments to reconcile Net Income (Loss) to Net Cash used by operations:
|
||||||||
Noncash Expenses:
|
||||||||
Amortization
|
860 | 463 | ||||||
Depreciation
|
14,618 | 8,555 | ||||||
Stock Compensation
|
514,500 | - | ||||||
Change in assets and liabilities:
|
||||||||
(Increase) Decrease in Accounts Receivable
|
95,895 | (22,223 | ) | |||||
(Increase) in Other Assets
|
370 | - | ||||||
(Decrease) Increase in Accounts Payable
|
18,656 | 105,651 | ||||||
Increase In Accrued Expenses
|
29,334 | - | ||||||
NET CASH (USED) BY OPERATING ACTIVITIES
|
(290,038 | ) | (212,643 | ) | ||||
INVESTING ACTIVITIES
|
||||||||
Purchase of Furniture and Equipment
|
(8,904 | ) | (56,000 | ) | ||||
Purchase of Patent
|
- | (25,800 | ) | |||||
NET CASH (USED) BY INVESTING ACTIVITIES
|
(8,904 | ) | (81,800 | ) | ||||
FINANCING ACTIVITIES
|
||||||||
Proceeds from Sale of Common Stock
|
1,011,765 | 1,047,304 | ||||||
Cash Paid in Reorganization
|
- | (195,000 | ) | |||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
1,011,765 | 852,304 | ||||||
NET CASH INCREASE FOR PERIOD
|
712,823 | 557,861 | ||||||
CASH AT BEGINNING OF PERIOD
|
226,268 | - | ||||||
CASH AT END OF PERIOD
|
$ | 939,091 | $ | 557,861 | ||||
Supplemental Disclosure for Cash Flow Information
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | - | $ | 1,000 | ||||
Income Taxes
|
$ | - | $ | - | ||||
Supplemental Schedule of Noncash Investing and Financing Activities
|
||||||||
For the nine months ended September 30, 2011
|
||||||||
5,725,000 shares of common stock issued for consulting services at $0.02 per share
|
||||||||
20,000,000 shares of common stock issued for employee equity plan at $0.02 per share
|
||||||||
The Company issued 7,931,250 warrants valued at $158,625 as a stock offering cost.
|
||||||||
For the nine months ended September 30, 2010
|
||||||||
None
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Loss from continuing Operations available to Common stockholders
|
$ | (36,789 | ) | $ | (66,807 | ) | $ | (964,271 | ) | $ | (305,089 | ) | ||||
Weighted average number of common shares Outstanding used in loss per share during the Period
|
394,667,400 | 211,239,698 | 362,425,550 | 198,252,856 |
Furniture and Fixtures
|
$ | 64,904 | $ | 56,000 | ||||
Less: Accumulated Depreciation
|
( 27,840 | ) | (13,222 | ) | ||||
Net Property and Equipment
|
$ | 37,064 | $ | 42,778 |
Patents
|
$ | 25,800 | $ | 25,800 | ||||
Less: Accumulated Amortization
|
(1,577 | ) | (717 | ) | ||||
Net Patents
|
$ | 24,223 | $ | 25,083 |
31.1
|
Rule 13a-14(a) Certification of Principal Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Rule 13a-14(a) Certification of Principal Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Schema Document
|
101.CAL
|
XBRL Calculation Linkbase Document
|
101.DEF
|
XBRL Definition Linkbase Document
|
101.LAB
|
XBRL Labels Linkbase Document
|
101.PRE
|
XBRL Presentation Linkbase Document
|
SIGMA LABS, INC.
|
||
November 14, 2011
|
By:
|
/s/ Richard Mah
|
Richard Mah
|
||
Chief Executive Officer (Principal Executive
Officer)
|
||
November 14, 2011
|
By:
|
/s/ James Stout
|
James Stout
|
||
Chairman of the Board and Treasurer (Principal
Accounting Officer)
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sigma Labs, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 14, 2011
|
By:
|
/s/ Richard Mah
|
Name: Richard Mah
|
||
Title: Chief Executive Officer (Principal
Executive Officer)
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sigma Labs, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 14, 2011
|
By:
|
/s/ James Stout
|
Name: James Stout
|
||
Title: Treasurer (Principal Accounting Officer)
|
|
(i)
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
|
(ii)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November14, 2011
|
By:
|
/s/ Richard Mah
|
Name: Richard Mah
|
||
Title: Chief Executive Officer (Principal
Executive Officer)
|
|
(i)
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
|
(ii)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 14, 2011
|
By:
|
/s/ James Stout
|
Name: James Stout
|
||
Title: Treasurer (Principal Accounting Officer)
|
Consolidated Balance Sheets [Parenthetical] (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 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 (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, share issued | 394,667,400 | 313,067,400 |
Common stock, shares outstanding | 394,667,400 | 313,067,400 |
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
INCOME | ||||
Services | $ 369,613 | $ 243,936 | $ 670,126 | $ 276,436 |
Total Revenue | 369,613 | 243,936 | 670,126 | 276,436 |
COST OF SERVICE REVENUE | 22,042 | 116,094 | 173,644 | 116,094 |
GROSS PROFIT | 347,571 | 127,842 | 496,482 | 160,342 |
EXPENSES | ||||
General & Administration | 252,111 | 84,290 | 559,806 | 284,409 |
Payroll Expense | 132,699 | 101,359 | 501,927 | 169,022 |
Non-cash Compensation | 0 | 0 | 400,000 | 0 |
Total Expenses | 384,810 | 185,649 | 1,461,733 | 453,431 |
OTHER INCOME (EXPENSE) | ||||
Interest Income | 450 | 0 | 980 | 0 |
Sale of Asset | 0 | 0 | 0 | 5,000 |
Interest Expense | 0 | (9,000) | 0 | (17,000) |
Total Other Income (Expense) | 450 | (9,000) | 980 | (12,000) |
NET INCOME (LOSS) BEFORE INCOME TAXES | (36,789) | (66,807) | (964,271) | (305,089) |
Current Income Tax Expense | 0 | 0 | 0 | 0 |
Deferred Income Tax Expense | 0 | 0 | 0 | 0 |
Net Income (Loss) | $ (36,789) | $ (66,807) | $ (964,271) | $ (305,089) |
Loss per Common Share - Basic and Diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Number of Shares Outstanding - Basic and Diluted (in shares) | 394,667,400 | 211,239,698 | 362,425,550 | 198,252,856 |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 07, 2011 | |
Entity Registrant Name | SIGMA LABS, INC. | |
Entity Central Index Key | 0000788611 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | sglb | |
Entity Common Stock, Shares Outstanding | 394,667,400 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2011 |
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Furniture and Equipment | 9 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 6 – Furniture and Equipment
The following is a summary of property and equipment, purchased, used and depreciated over a three-year period, less accumulated depreciation, as of June 30, 2011 and December 31, 2010:
Depreciation expense on property and equipment was $14,618 and $8,555 for the period ended September 30, 2011 and 2010.
|
Capital Stock | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 2 – Capital Stock
Common Stock
The Company has authorized 750,000,000 shares of common stock, $0.001 par value.
On September 13, 2010 the Company closed a share exchange transaction (the “Reorganization”) with the shareholders of B6 Sigma, Inc., a Delaware corporation (“B6 Sigma”), which resulted in B6 Sigma becoming a wholly-owned subsidiary of the Company. Each share of B6 Sigma, Inc. common stock outstanding as at the closing of the Reorganization was exchanged for 6.67 shares of the Company’s common stock. At the closing, B6 Sigma, Inc. also acquired and cancelled 110,700,000 (post-split) shares of the Company’s common stock from three shareholders for the sum of $195,000. Upon the closing of the Reorganization, the Company ceased to be a “Shell” company (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). As a condition to the closing of the reorganization, B6 Sigma, Inc. also closed a private offering of $1,000,000 of its common stock contemporaneously with the closing of the reorganization, which included the conversion of $300,000 of previously issued convertible notes by B6 Sigma, Inc. into the private offering of common stock.
Following issuance of the reorganization shares to the B6 Sigma shareholders and the stock cancellation, the Company had 313,067,400 (post split) shares of its common stock issued and outstanding. In connection with the closing of the reorganization, the shareholders of the Company approved a 150:1 forward stock split, and a change of the name of the corporation to Sigma Labs, Inc. Additionally, following completion of the reorganization, B6 Sigma became a wholly owned subsidiary and its operations comprise the sole business activity.
On January 6, 2011, the Company issued an aggregate of 1,100,000 shares of the Company’s common stock to two consultants as noncash compensation for services rendered valued at $22,000 or $0.02 per share.
In January 2011, the Company commenced a private offering of up to 75,000,000 shares of common stock, $0.001 par value per share, at an issue price of $0.02 per share of common stock. On April 15, 2011, the Company closed the private offering, pursuant to which the Company issued 55,875,000 shares of the Company’s common stock.
Hudson Valley Capital Management Corp. (“Hudson”) acted as placement agent and received a total of $105,735 in commissions. The Company also issued to Hudson in connection with the offering five year warrants to purchase up to 7,931,250 shares of the Company’s common stock. Such warrants have an exercise price of $0.025 per share and are valued at $158,625. As of September 30, 2011 none of the warrants have been exercised. The direct cost associated with the stock offering has been reflected as a reduction to Additional Paid-in-Capital. Net proceeds from the sale of stock were $1,011,765.
On March 9, 2011, our Board of Directors adopted an equity incentive plan, the 2011 Equity Incentive Plan (the “Equity Plan”). On March 31, 2011, the holders of at least a majority of the issued and outstanding shares of common stock of the Company approved the Equity Plan. Pursuant to the Equity Plan, we are authorized to grant options, restricted stock and stock appreciation rights to purchase up to 31,000,000 shares of common stock to our employees, officers, directors, consultants and advisors. The Equity Plan provides for awards of incentive stock options, non-statutory stock options, and rights to acquire restricted stock. Incentive stock options granted under the Equity Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Non-statutory stock options granted under the Equity Plan are not intended to qualify as incentive stock options under the Code.
In April 2011, the Company issued an aggregate of 3,625,000 shares of the Company’s common stock to one consultant and two professionals as noncash compensation for services rendered to the Company, which services were valued at $72,500 or $0.02 per share.
On May 16, 2011, the Company issued 1,000,000 shares of the Company’s common stock to a consultant as noncash compensation for services rendered valued at $20,000 or $0.02 per share.
During April, 2011, the Company issued to five employees an aggregate of 20,000,000 shares of the Company’s common stock, subject to restrictions, pursuant to the Equity Incentive Plan. Such shares are valued at $400,000 or $0.02 per share.
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value. As of the date of this Quarterly Report on Form 10-Q, the Company has not issued any shares of preferred stock. |
Commitments and Contingencies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 8 – Commitments and Contingencies
Operating Leases – The Company leases office space under operating leases. Expense relating to these operating leases was $15,680 for the period ended September 30, 2011. There are no future minimum lease payments required under operating leases at September 30, 2011. |
Subsequent Events | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 9 – Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined there are no items to disclose.
|
Patents | 9 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | NOTE 7 – Patents
The following is a summary of patents less accumulated amortization as of September 30, 2011 and December 31, 2010:
Amortization expense on patents was $860 and $463 for the period ended September 30, 2011 and 2010. |
Supplemental Schedule of Noncash Investing and Financing Activities (USD $) | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Shares Issued For Consulting Services (in shares) | 5,725,000 | 0 |
Shares issued for consulting services, par value (in dollars per share) | $ 0.02 | $ 0 |
Shares issued for accounting services (in shares) | 20,000,000 | 0 |
Shares issued for accounting services, par value (in dollars per share) | $ 0.02 | $ 0 |
Warrants issued | $ 7,931,250 | $ 0 |
Stock Offering Cost | $ 158,625 | $ 0 |
Going Concern | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Goin Concern Disclosure [Abstract] | |
Goin Concern Disclosure [Text Block] | NOTE 3 – Going Concern
The Company was only recently formed and has not yet achieved profitable operations. The ability of the Company to continue as a going concern is dependent on expanding income opportunities. Management anticipates that additional contracts will allow the Company to achieve profitable operations.
|
Income Taxes | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 4 – Income Taxes
The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes.” ASC Topic No. 740 requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.
The Company has available at September 30, 2011, unused operating loss carryforwards of approximately $1,316,770, which may be applied against future taxable income and which expire in various years through 2031. However, if certain substantial changes in the Company’s ownership should occur, there could be an annual limitation on the amount of net operating loss carryforward which can be utilized. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the loss carryfowards (approximately $197,515) at September 30, 2011 and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The change in the valuation allowance is approximately $145,215 for the nine months ended September 30, 2011. |
Loss Per Share | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | NOTE 5 – Loss Per Share
The following data show the amounts used in computing loss per share and the effect on income and the weighted average number of shares of dilutive potential common stock for the period ended September 30, 2011 and September 30, 2010:
|
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Summary of Significant Accounting Policies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Organization and Consolidation [Abstract] | |
Organization, Consolidation and Presentation Of Financial Statements Disclosure and Significant Accounting Policies Excluding Going Concern [Text Block] | NOTE 1 – Summary of Significant Accounting Policies
Nature of Business – On September 13, 2010 Sigma Labs, Inc., formerly named Framewaves, Inc., a Nevada corporation, acquired 100% of the shares of B6 Sigma, Inc. by exchanging 6.67 shares of Framewaves, Inc. restricted common stock for each issued and outstanding share of B6 Sigma, Inc. The acquisition has been accounted for as a “reverse purchase”, and accordingly the operations of Framewaves, Inc. prior to the date of acquisition have been eliminated.
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. A Company trademark, In Process Quality Assurance (IPQA®), is a technology that management believes will fundamentally redefine manufacturing practices by embedding quality assurance in the manufacturing processes in real time. Management also anticipates that the Company’s core competencies will allow its clientele to combine advanced manufacturing with novel material to achieve breakthrough product potential in many industries including aerospace, defense, oil and gas, prosthetic implants, sporting goods, and power generation.
Basis of Presentation – The accompanying financial statements have been prepared by the Company in accordance with Article 8 of U.S. Securities and Exchange Commission Regulation S-X. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2011 and 2010 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Management suggests these condensed financial statements be read in conjunction with the December 31, 2010 audited financial statements and notes thereto included in the Company’s Form 10-K. The results of operations for the periods ended September 30, 2011 and 2010 are not necessarily indicative of the operating results for the full year.
Reclassification – Certain amounts in prior-period financial statements have been reclassified for comparative purposes to conform to presentation in the current-period financial statements.
Principles of Consolidation – The consolidated financial statements for September 30, 2011 include the accounts of Sigma Labs, Inc. and B6 Sigma, Inc. All significant intercompany balances and transactions have been eliminated.
Property and Equipment – Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated life has been determined to be three years unless a unique circumstance exists, which is then fully documented as an exception to the policy.
Fair Value of Financial Instruments – The Company estimates that the fair value of all financial instruments does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying consolidated balance sheets.
Income Taxes – The Company accounts for income taxes in accordance with ASC Topic No. 740, “Accounting for Income Taxes.”
The Company adopted the provisions of ASC Topic No. 740, “Accounting for Income Taxes,” at the date of inception on February 5, 2010. As a result of the implementation of ASC Topic No. 740, the Company recognized no increase in the liability for unrecognized tax benefits.
The Company has no tax positions at September 30, 2011 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the period ended September 30, 2011, the Company recognized no interest and penalties. The Company had no accruals for interest and penalties at September 30, 2011. All tax years starting with 2010 are open for examination.
Loss Per Share – The computation of loss per share is based on the weighted average number of shares outstanding during the period in accordance with ASC Topic No. 260, “Earnings Per Share.”
Allowance for Doubtful Accounts - The Company establishes an allowance for doubtful accounts to ensure accounts receivables are not overstated due to uncollectibility. Bad debt reserves are maintained based on a variety of factors, including the length of time receivables are past due and a detailed review of certain individual customer accounts. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. The allowance for doubtful accounts at September 30, 2011 is $0.
Intangible Assets – Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets, and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.
Recently Enacted Accounting Standards – In June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.
Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU NO. 2011-09 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less at date of purchase to be cash equivalents.
Organization Expenditures – Organizational expenditures are expensed as incurred for Securities Exchange Commission (SEC) filings, but capitalized and amortized for income tax purposes.
Amortization - Utility patents are amortized over a 17 year period.
Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimated by management.
Revenue Recognition – The Company’s revenue is derived primarily from providing services under contractual agreements. Revenue is recognized when a project is completed. |
Consolidated Balance Sheets (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
ASSETS | ||
Cash | $ 939,091 | $ 226,268 |
Accounts Receivable | 84,960 | 180,855 |
Other Assets | 0 | 370 |
Total Current Assets | 1,024,051 | 407,493 |
Fixed Assets (Net) | ||
Furniture and Equipment | 37,064 | 42,778 |
Patents | 24,223 | 25,083 |
Total Fixed Assets | 61,287 | 67,861 |
TOTAL ASSETS | 1,085,338 | 475,354 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts Payable | 63,651 | 44,996 |
Salaries Payable | 29,335 | 0 |
Total Current Liabilities | 92,986 | 44,996 |
TOTAL LIABILITIES | 92,986 | 44,996 |
Stockholders' Equity | ||
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | 0 | 0 |
Common Stock, $0.001 par value; 750,000,000 shares authorized; 313,067,400 shares issued and outstanding 394,667,400 shares issued and outstanding | 394,667 | 313,067 |
Additional Paid-In Capital | 1,983,902 | 539,237 |
Retained Earnings (Deficit) | (1,386,217) | (421,946) |
Total Stockholders' Equity | 992,352 | 430,358 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,085,338 | $ 475,354 |