Q&A with Mark Cola, CEO of Sigma Labs Inc.

This Question and Answer presentation may contain forward-looking statements as defined by federal and state securities laws. Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions and other statements which are other than statements of historical facts. Forward-looking statements are only predictions that relate to future events, or our future performance, and are subject to known and unknown risks, uncertainties, assumptions, and other factors, many of which are beyond our control. As a result, we cannot guarantee future results or performance as that performance is not necessarily indicative of future results.

_____________________________________

8/16/2013

Engineering.com: Thank you Mark for taking time to talk to readers at Engineering.com about Sigma Labs Inc. (SGLB).

Can you give readers an overview of Sigma Labs, when and how it was founded, who were the key players involved, etc?

Mark Cola:

B6 Sigma, Inc., a Delaware corporation (“B6 Sigma”), was incorporated in February 2010. Two members of our current management team (myself and Dr. Vivek Dave) worked together in the Metallurgy Group at Los Alamos National Laboratory and then together at Technology Management Company, Inc., a New Mexico corporation (“TMC”), before leaving to form B6 Sigma.

On September 13, 2010 Sigma Labs, Inc., formerly named Framewaves, Inc., a Nevada corporation, entered into a share exchange agreement with B6 Sigma and the shareholders of B6 Sigma pursuant to which Framewaves acquired all of the issued and outstanding shares of B6 Sigma. Following the closing of the transactions contemplated by the share exchange agreement, B6 Sigma became our wholly owned subsidiary.

On December 31, 2011, the Company completed its acquisition of Sumner & Lawrence Limited (dba Sumner Associates) ("Sumner") a New Mexico corporation incorporated in 1985, under an Exchange Agreement and Plan of Reorganization dated as of December 10, 2011.





Engineering.com: Sigma Labs has a key product in development, the PrintRite3D® system. What is PrintRite3D®, how can it fill a need in additive manufacturing?



Mark Cola:

We believe that our primary manufacturing quality control solutions technology, which we refer to as “IPQA,” will redefine conventional manufacturing quality control practices primarily by embedding quality assurance protocols in real-time manufacturing processes, thereby reducing the need for and cost of post manufacturing quality control processes. The most promising application of IPQA to new and emerging markets is for the monitoring and control of additive manufacturing, also known as 3D printing. This is particularly true for the 3D printing of metal components for parts in aerospace, automotive, defense, biomedical, and general industrial applications.

Sigma Labs has developed a suite of applications known as PrintRite3D® to address this rapidly growing and emerging market. As we previously announced, in April 2013, we entered into a Joint Technology Development Agreement with GE Aviation, an operating component of General Electric Company, to advance and implement in-process inspection technologies for additive manufactured metal jet engine components. In addition to PrintRite3D, we have other related technologies under development to address other emergent needs of the 3D Printing metals market. PrintRite3D is described in more detail below.

Although 3D printing is a rapidly expanding and emerging market, there are significant barriers which are holding back its rapid growth of 3D printing for metals in particular. First, the quality of 3D printed metals still varies significantly from day-to-day, from machine-to-machine, and from part-to-part. Therefore, a way of assuring the quality of 3D printed metal parts is needed. Second, the geometry of 3D printed metal parts can deviate from the desired shape due to thermal distortion caused by the high temperatures required to melt and fuse metal powders in order to form a part. Thus, a way of measuring and assuring the geometry of 3D printed metal parts is needed. Third, the current speed of 3D metal printing is too slow and therefore 3D metal printing for industries like automotive may not be cost effective until a higher speed or higher productivity metal printing solution is developed. PrintRite3D addresses the quality and geometry of 3D printed metal parts by offering an in-process, real-time non-destructive inspection (NDI) by verifying part quality in real-time and part geometry in the near future. This helps to minimize the need for costly post-process inspections. We are exploring opportunities with potential partners to develop technologies to address the third barrier described above relating to the current speed of 3D metal printing.







Engineering.com: What company(s) are you testing PrintRite3D ®with currently, and what results are you seeing with the system?



Mark Cola:

Recent contract awards include a project with Honeywell Aerospace funded by the Defense Advanced Projects Agency – DARPA - on the application of our PrintRite3D to AM metal parts.

This project is ongoing and is vitally important because it provides Sigma Labs an early opportunity to demonstrate how its in-process, real-time NDI technology (i.e., PrintRite3D) will reduce unnecessary post process inspection costs and improve quality for AM of highly-critical, aerospace metal components.

Our preliminary results have indicated the ability to differentiate between different processing conditions. We are working with OEMs like HW to determine how best to integrate PrintRite3D Quality data into existing production standards and acceptance criteria.





Engineering.com: Does Sigma Labs have any patents or patent applications for PrintRite3D® ?

Mark Cola:

In a December 12, 2012 announcement we indicated that we were awarded a U.S. Patent with respect to our IPQA technology involving the monitoring and control of fusion processes including those found in Additive Metal Manufacturing (AMM) and 3D printing. In addition, we've filed a new patent application pertaining to our IPQA technology and rapid qualification of additive manufacturing/3D Printing for metal parts.





Engineering.com: I know you probably can’t be too specific, but when do you hope to begin commercialization of PrintRite3D® and what commercialization options are you looking at?



Mark Cola:

We expect that our continued development of our IPQA technology (including PrintRite3D) will enable us to commercialize this technology during fiscal 2014.





Engineering.com: An article was published in several online locations, including here at Engineering.com that made a connection between Sigma Labs and Boeing. The article speculated that Sigma Labs may be working with Boeing currently based on an article published in the Albuquerque Business Journal in March. Can you verify that as current/ongoing work, or was this something in the past?



Mark Cola:

Sigma Labs has history with Boeing Aerospace and helped them as part of their program development team to demonstrate our in-process NDI technology for use on linear friction welding of Ti-tailored blanks to cost-effectively replace expensive Ti-forgings. Although we believe our PrintRite3D technology would be applicable to their current 3D metal printing efforts, Sigma does not currently have contracts with Boeing.





Engineering.com: You recently announced that Sigma Labs raised $1.2M in a private placement. Can you explain how the pricing of the placement was arrived at and when the placement discussions were taking place?



Mark Cola:

The company was seeking capital as far back as September 2012. We were unsuccessful in generating interest at $0.02/sh. The Board of Directors decided because of the necessity for working capital and shortness of time, a decision was made to accept an offer of $0.01/sh. On July 18, 2013, we closed a private placement of our common stock, pursuant to which we received $1,200,000 from the sale of 120,000,000 shares of restricted stock at $0.01 per share.



Engineering.com: In the news of the $1.2M in funding, it was mentioned Sigma labs is beginning design work for “Metal3DX”, a high-productivity 3D metal printing machine. Can you add a little color to what Metal3DX is and where you hope to be in 2 years with the concept?

Mark Cola:

Metal3DX this is only a concept at this time, we are exploring opportunities with potential partners to develop technologies to address the productivity barrier as related to the current speed of 3D metal printing.





Engineering.com: There is mention of the Sigma Labs web site that you’ve been invited to attend the Additive/Aerospace Summit this fall. What is the purpose of the summit and what role will Sigma Labs have in it?



Mark Cola:

We were invited to the Additive Aerospace Summit Conference being held October 16-18, 2013 in Los Angeles, CA and to participate on the panel discussion, titled "Building a Supply Chain for High Performance Aerospace Manufacturing". The panel is being asked to explore the future of Additive Manufacturing or 3D Printing in the Aerospace industry. The conference is also expected to cover many other topics, such as current 3D Printing technologies.

Sigma Labs will outline the challenges and opportunities associated with metal 3D Printing, and will provide guidance on how to address such challenges and opportunities so that metal printing can grow at a more rapid pace.

To be invited to participate in this high level event further demonstrates that Sigma Labs continues to be recognized within the industry as an important contributor to the future of the rapidly expanding 3D Printing and Additive Manufacturing arena, especially for high performance, high reliability metal products.





Engineering.com: Is there anything you would like to add as we conclude the interview?



Mark Cola:

The addition of funding will help us carry out our planned programs that without the offering we would have not otherwise been able to do so.

The recent press release announcing an MOU with Los Alamos National Laboratory should allow us to identify existing technologies at Los Alamos that are not currently under exclusive license or otherwise encumbered that may be of significant commercial value in the domain of additive manufacturing or 3D printing, especially for metals. With the addition of recent funding, we can now seek licensing of such technologies once they are identified.

Also, the recent press release announcing the MOU with Burke E. Porter Machinery Co. is further evidence of our intent to collaborate with commercialization partners for the further development, marketing and sales of products related to metal-based additive manufacturing/3D printing, e.g., PrintRite3D and Metal3DX.



Engineering.com: Thank you Mark, for keeping readers at Engineering.com informed on Sigma Labs and the company's future plans.