GE Aviation stated in 2016 that it planned to commit $3.5 billion by 2020 to, among other things, build a metal 3D production facility to produce 3D printed metal parts for its Leap engine and other engines. Starting in September 2016 and continuing into 2017 GE Aviation spent over $1 billion buying controlling interests in AM equipment manufacturers, Concept Laser and Arcam AB, and later announced that it had invested over $300 million creating AM manufacturing capability in both the United States and India, and was an investor in a $115 million series D investment round of Desktop Metal, a metal 3D printing company. In the course of 2017, GE Additive continued with lateral growth into additive manufacturing, announcing collaborations with Oerlikon and Stryker, and then a partnership with GKN. Sigma Labs has learned from its interactionsAs evidenced in the marketplace thatin 2016 and after the pent-up demand apparent fromof GE, Airbus and others such as Airbus, to press forward into advanced 3D metal manufacturing, production are takingtook place with the assumption that highly reliable in-process quality assurance capability will no doubtwould likely emerge either from their own internal efforts or be attained through licensing, or possibly acquisition. In the meantime, CT scans and other costly post-process inspection appear to bebecame an accepted cost as initially sustainable in the startup phases of production. However, until companies that utilize 3D production facilities like GE Aviation are able to effectively verify that each part conforms to design specifications of attributes of shape, density, strength and consistency in real-time during the manufacturing process, we believe that such companies will be at risk of letting some substandard parts through and, also, be unable to improve the workflow to high quality cost-optimum yields of 3D printed metal parts. No matter how much acuity and at what cost a suite of post process inspection tools might provide 3D manufactured metal parts, it currently can only assure quality yield by rejecting fully formed parts, and, over time, applying comprehensive ‘reverse engineering’ forensic analyses of each rejected part to identify repeating quality flaws attributable to constants such as location, design, or scan strategy. Once the locations of these repeating flaws are identified, process engineers can act to make the AM equipment deliver better quality by adjusting the computer-based manufacturing instructions of AM equipment to offset the repeating flaws discovered by that deep analyses of individual rejected parts in many manufacturing runs. This prolonged post-process methodology is very costly due to the loss of material and rejected parts as well as post-process analysis labor cost and inspection cost such as CT scanning. Additionally, there still lingers the question of whether or not the post-process inspections were sufficiently granular to assure that flawed parts were not accepted and shipped.

We believe that our principal product, PrintRite3D®,PrintRite3D^® version 5.2, which is ‘agnostic’ and can be installed on all major brands of 3D metal laser powderbed printers, solves these problems by determining if each part is being made to the metallurgical quality specifications of the Design/Specification fileproduct design as each part is being made. Our software enables 3D prototyping to evolve forward into serial or production 3D manufacturing by providing a software suite with algorithm-based tools that address and overcome quality issues that are specific to 3D Metal Additive Manufacturing and that are not solved using the post-production quality methods deriveddeveloped for Subtractivesubtractive manufacturing along with and newly dependent upon CT scanning. The PrintRite3D®PrintRite3D^® suite has the potential to substantially lower operating costs and can attain higher yields by inspecting parts as they are made and providing machines and their operators actionable information that includes the options of either stopping manufacture of given part(s) while operations continue to complete parts that are in specification, thus saving time and money while raising yields or rescuing parts that are beginning to go out of design specification by adjusting the machine controls. PrintRite3D® yields.

PrintRite3D^® also gives operators information from run to runrun-to-run that enables them to ‘learn up’ quality for a given machine by using PrintRite3D®PrintRite3D^® data about machine behaviors that can then be offset by making adjustments to power settings directed at a given sector. PrintRite3D®PrintRite3D^®’s Thermal Energy Density™ (“TED”) feature supersedes and truncates the “reverse engineering” process of post process inspection described above by providing process engineers the data required to optimize individual machines as well as machines in series in days or weeks and before serial production is launched rather than months after production and rejection rates have accrued in costly quantities. PrintRite3D®PrintRite3D^®’s Thermal Energy Planck (“TEP”) feature provides machine operators and engineers with in-process real-time identification of signatures of quality anomalies as they begin to develop and permits terminating or curing a part in process.process and provides them with alerts that enable the operators to use the anomalies’ signature information to know how to adjust the machine controls to cure the problem, or in rare instances, to terminate the part if its cause is reversable.

We have filed 35 patents/patent applications pending on our In-Process Quality Assurance™ (“IPQA®”) processes and procedures for advanced manufacturing. In addition, we anticipate that our core PrintRite3D® software will enable our customers to combine their digital manufacturing technologies with our 3D manufacturing QA to achieve both cost savings and more reliable parts. We believe that certain vertical markets would benefit from our technology and software, including aerospace, defense, bio-medical, power generation, and oil & gas industries because: (1) they each stand to benefit by taking advantageThe emergence of the weight/strength/performance ratios that can often be optimized by taking advantage of 3D design; (2) they each stand to benefit by taking maximum advantage of 3D manufacturing’s material cost savings resulting from designing parts to needed tolerances while requiring less metal;Metal Printing Market and (3) there are severe consequences for quality failuresSigma’s place in some of their products. We provide our software products to customers in the form of Software as a Service (“SaaS”), as well as in custom arrangements.

About 3D Printingit

3D printing (“3DP”)(3DP) or additive manufacturing (“AM”)(AM) is changingchallenging the manufacturing world with the breadth of its technological abilities from rapid design through cost efficient manufacturing to produce complex and unique metal parts. 3D AM technology total industry sales, including all raw materials used reached $1 billion in 2007, jumped to nearly $7.3 billion in 2017, and were expected by producing complex metal parts from a computerized input. 3D printing has been appliedWohlers to hit $26.5 billion by 2021. Sectors of the manufacture of plastic parts for decades. 3D manufacturing of metal parts involves directing a laser or other energy source at a layer of powdered metalindustry have tended so far to grow in step functions as new methods, processes, and melting it. These layers become melted together frommaterials have entered the bottom up.market. Worldwide revenues attributable to 3D manufacturing for metal products were reported at $88.1 million in 2015 (Wohlers Report 2016, 3D Printing and Additive Manufacturing State of the Industry – Annual Worldwide Progress Report). By 2017, Wohlers Report stopped estimating annual 3D metal parts revenue, stating that too much of the revenue is proprietary information and unavailable from aerospace and similar high-tech sectors. Large powderedPowdered metal suppliers to the AM metal industry surveyed by Wohlers aboutfor their growth forecasts for 2017 for the raw materials used in metal AM parts manufactured averaged expectations of a 59% increase for 2017. According to Sigma’s experience in costing and pricing the manufacturing of AM metal parts, as confirmed by consultation with other service providers, the total powdered metal sales forecast for 2017 is enough raw material to produce a “retail value” of the metal parts of ~$800 million. million in 2017. Wohler estimates that the fastest growing sector of the total 3D market into the 2020s is and will be 3D metal printing at a CAGR averaging 30%.

On another vector, according to Wohlers, an estimated 1,768 metal AM machines were sold in 2017, an increase of 79% over 2016.2016, and the 2,297 AM Metal machines sold in 2018, an CAGR of 30% over 2017. As large established companies including Toshiba, HP, Lenovo, Canon and Ricoh in the course of 2016-2017 announced products or intents of entry in AM manufacturing, Electro Optical Systems (“EOS”), a well-established vendor of AM manufacturing equipment opened a new plant in January 2018 that, according to EOS, doubled its 2017 capacity to 1,000 units per year. SLM Solutions AG also reportedly expanded into a new factory during this period.

About Quality Assurance In the same period, over $1 billion growth capital and consolidation capital was invested in 3D Printing

Sigma believes that the largest future growthmetal sector. General Electric spent >$1.4 Billion in 2016-2017 acquiring Arcam and Concept Laser thus securing a source of supply for the 3D printing industry will be in metal parts, given the interest and investment being made by Fortune 100 companies, Federal government laboratories and agenciesitself as well as university-based institutions. These high-end manufacturersa new OEM capital equipment business. In the same period GE also invested >$100 Million in in Desktop Metal. In October 2018 General Electric announced that it had manufactured and technology leaders are strongly focused on helping transform analog manufacturingshipped its 30,000th 3D manufactured fuel nozzle, while Airbus was targeted to grow to taking delivery of precision, high-tolerance parts in the U.S.up to digital manufacturing encompassing automation, robotics and closed-loop process control. We believe that the future growth and success~30 tons of 3D printing for metal parts will be highly dependent upon the availability of in-process and real-time digital quality assurance tools, such as our PrintRite3D®.

Current methods for providing quality in 3DP are generally either (i) inaccurate due to use of procedures that do not recognize and measure the primary quality issues ofper month by December 2018. 3D metal manufacturingprinters are seeing rapid adoption, with an installed base of 11,000 globally, with 2,297 sold in 2018 alone at an ASP of $413,000. Extending data and trends reported by Wohlers above, Sigma’s possible addressable market 2021-2027 is approximately $2 billion – or due to the misusea potential $100m revenue for every 5% of non-applicable statistically based assessments, or (ii)market share. The figures in this paragraph are cost prohibitive due to the expense of laborextrapolations from Wohlers and equipment required to examine the interior of complex dense parts that 3D manufacturing can create after the parts are manufactured. After 3D-manufacture, costs are normally incurred for using non-destructive technologies such as ultrasoundSmarTech data and non-traditional CT technology on these parts, and old-fashioned visual inspection. Destructive testing of 3D parts is a mis-applied carryover from current Subtractive Manufacturing quality assurance practice, in which the great part to part consistency of traditional metal machining equipment permits quality inspectors to infer the quality of a production run by cutting up and analyzing a statistically relevant number of parts. The test resultforecasts of the partstotal available market for Sigma products; the calculation that are destroyed and analyzed have too often been, after great time and expense, statistically demonstrated to be insufficiently representative5% of the rest of the parts in the production lot. The underlying premise of quality assurance for Subtractive Manufactured partsthat total available market is that if a machine$100m is set up properly, then all parts it produces will be repeatedly the same. This simple, effective and accurate quality system does not apply to Additive Manufacturing, in which each part is built in an average single laser production lot of 5-40, and in which quality variance may occur from part to part and within any part notwithstanding that the AM machine settings are the same. Therefore, unable to rely on a traditional statistically based quality system, 3D Manufacturing’s optimum quality assurance system would evaluate the quality of each individual part. PrintRite3D®’s in-process quality inspection approach of each part individually allows a manufacturer to use AM to form a single part, suchintended as a hip replacement or one spare aircraft part needed on an aircraft carrier, or several lots of the same part, in large quality – each approved or rejected in real time and based upon complete inspection during fabrication. We offer our customers the ability to use real-time sensors to track individual scans of each layer, and our software continuously analyzes the part health so that both during and after it is finished, we can determine if it meets the production parameters of quality standard set by the customer. We believe our PrintRite3D® software could reduce inspection costs requiring CT scanning by as much as a factor of 10 and development time for new parts by 50% or more because IPQA permits factoriesmetric to make the part manufactured the constantscale of market opportunity more understandable, and the machines manufacturing them the variable. Consequently, the lower cost statistical based post-process inspection methods that work well with Subtractive Manufacturing could be successfully and economically applied to parts made with 3D Metal machines, and because utilizing PrintRite3D® for design reduces the number and iterations of development parts required to lead toit is not a final design. Also important is the ability of our software to reduce risk associated with the qualification and certification of printed parts.

By using PrintRite3D® software, a high-precision manufacturer would have the ability to offer its customers product warranties and assurances that its printed parts were produced in compliance with stringent quality requirements. Orders for our software have been received from, among others, Honeywell Aerospace, Aerojet Rocketdyne, Woodward, Siemens Turbomachinery, Pratt and Whitney, Baker Hughes, and Solar Turbines.

forecast. We believe there is potential for our PrintRite3D®PrintRite3D^® software to be incorporated into a majoritysignificant percentage of 3D metal printing devices made by companies like Additive Industries, ARCAM, Concept Laser, DMG Mori, Electro-Optical Systems (“EOS”), Additive Industries, ARCAM, Concept Lasers, Farsoon, Desktop Metal, DMG Mori, Renishaw, Sentrol, SLM, Trumpf Lasers,Industries, Farsoon, Renishaw, Sodick, and others.

Third Party Competition and Sigma’s Cloud-Based IIoT SolutionsIntellectual Property Safeguards

Sigma is engaged with large companies in several industries including aerospace, defense, oil and gas, bio-medical, and power generation because both we, and they, agree that they need a common quality standard and third party quality assurance tools for 3D metal printing that applies to all laser powderbed-made parts regardless of which machine, design, or metal was employed. To date, we are unaware of any meltpool monitoring products that compete with PrintRite3D that can meet those criteria. Sigma’s thermal data gathering, and analytical tools provide quality information metrics that correlate to measures of internal metal part design, conformity, uniformity, and characteristics such as porosity, unsintered material etc. The processprimary competition to PrintRite 3D is varying iterations of making a 3D printed part could start with our customers loading aOptical Tomography (OT). Optical Tomography develops optical data and computer aided design (“CAD”) modelanalysis thereof sometimes linked to simulation tools to predict quality. OT technology does not provide universal thermal-data based metrics of the partmetal quality that Sigma’s thermal data provides, and which are fundamental to confirming or rejecting parts based on measurable consistency of material properties.

Sigma began its investigation and research into the Cloud as shown in “A” in Figure 1. Next, computer aided engineering (“CAE”) and/or computer aided manufacturing (“CAM”) instructions are sent to the 3D printer (see “B”, as shown in Figure 1). Metal powder in the machine is then deposited onto the build platform where a laser beam, or other energy source, focused onto the build platform melts each successive layer of powder in 20-60 micron increments. Our PrintRite3D SENSORPAK® (see “C” in Figure 1) detects, records, analyzesoptical and compares the part as it is being made layer-by-layer against the CAD/CAM specificationsthermal data collection and physical reference pointsmeasurement for quality assurance during manufacturing. Our PrintRite3D INSPECT®, Version 5.02 software utilizesand intervention approximately 5 years ago and began to develop its intellectual property protection at that time also. The international IP law firm, Kilpatrick Townsend & Stockton LLP, has advised the Company on building the nets and walls of its patent portfolio, trade secrets, trademarks, etc. and filed and prosecuted patents as the Company has grown its body of intellectual property.

Our PrintRite3D® CAI web-based software suite (see “D” in Figure 1) resides in situ and/or in the Cloud (see “A” in Figure 1) of the Industrial Internet of Things (“IIoT”). We enable manufacturing engineers to confirm the part quality, layer-by-layer, provideand usability of its software accord Sigma freedom to operate with its technology, and may be a significant barrier to entry to competitors switching over to try to pursue the technology path traveled by Sigma. Notwithstanding the foregoing, we do understand that technology development is fraught with cases of new approaches and new technologies emerging and surpassing existing intellectual property protections that looked and were powerful until a form of competition materialized; there is no assurance that such an event will not take place adversely for manufacturing statistical process control and harvest, aggregate, and analyze big data from the real-time manufacturing data collected from our PrintRite3D SENSORPAK® (see “C” in Figure 1), as well as post-process manufacturing data collected by our customers (see “E” in Figure 1).

Our specialized sensor suite (see “C” in Figure 1), known as PrintRite3D SENSORPAK®, is an edge computing device, which means that it can be operated outside of a customer’s primary computer hardware and software systems while delivering actionable information to these systems. Thus, PrintRite3D SENSORPAK® contains the modular hardware and software necessary to connect to “cyber-physical” objects (see “B” in Figure 1) living on the manufacturing floor. It allows for bi-directional information flow between the manufacturing floor and the Cloud (see “A” in Figure 1). It starts with a million-fold data reduction required to manage and analyze the very large quantities of data garnered that layer by layer monitoring +/- 30 Micron thicknesses create. It finishes with our PrintRite3D® Digital Quality Record (“DQR”) and report, which provides customers with product guarantees and assurances that parts were produced in compliance with stringent quality standards. It can collect, analyze, aggregate, filter, and then further communicate data from the manufacturing floor to the Cloud (see “A” in Figure 1) and enable links to other areas (see “F” in Figure 1) of the IIoT.Sigma.

Figure 1. Sigma’s Industrial IoT / PrintRite3D® Cloud Architecture

Business Activities and Industry Applications

Our business is currently focused on the continued development and commercialization of our PrintRite3D® suite of software applications. We are specifically focusing on the 3D Metal Printing and AM industries and further developing our contract additive manufacturing business for metal 3DP to be a customer prototype center available for cutting edge 3D challenges and a concurrent means of demonstrating and proving the merit of PrintRite3D® for customers’ parts or application. Our strategy is to continue to leverage our advanced manufacturing knowledge, experience and capabilities through the following means:

We are presently engaged with and focused primarily on the following industry sectors:

We generate revenues through PrintRite3D® hardware and CAI software licensing of our PrintRite3D® technology to customers that seek to improve their manufacturing production processes, and through ongoing annual software upgrades and maintenance fees. Additionally, we generate modest revenues from our contract manufacturing activities in metal AM. By running a small-scale contract AM services operation, we are able to understand and keep pace with the current needs and technology trends of our customers and where they are going with their next-generation product development efforts. Contract AM further allows us a means for material on-going partial self-funding of our IPQA®-enabled R&D and product development activities for CAI software. We provide our AM contract manufacturing services to customers in the form of Quality as a Service (“QaaS”). Starting with our PrintRite3D® cloud-based SaaS model, customers will contract with us for CAE, CAM and CAI services to generate and establish a Digital Quality Record (DQR) for AM built parts. Each DQR is cloud-based and allows for archiving and storage of quality data, access to our big data ANALYTICS™ software App for continuous quality monitoring and improvement, and automatic industry benchmarking while maintaining firewalls between company-specific data.

In late November 2018 at the Formnext tradeshow, we released a new version of our hardware along Version 4.0 of PrintRite3D. The Company believes that this combination of advanced new hardware and its PrintRite3D® Version 4.0 software completes the evolution of the Company’s PrintRite3D® technology from its well-stressed and tested roots in research and development, into a streamlined and hardened commercial-industrial product that is deployable into demanding serial production settings. We also launched during that period a Rapid Test and Evaluation (RTE) program for the market. The Company’s RTE program targets high technology quality sensitive companies that are already manufacturing or buying parts manufactured in production runs on AM metal machines. The program is a “try before you buy” agreement under the terms of which customers enter into an agreement pursuant to which they agree to pay the Company a fee, equivalent to a down payment, and to test protocol mutually defined to demonstrate both the Company’s technology capability in general and the measurable impact it can have on the customers’ processes, parts and yields. The Company’s goal is that successes in the RTE program will lead to increased revenues in 2020 .

Additionally, at the RAPID+TCT 2019 Additive Manufacturing Conference that commenced on May 21, 2019, the Company launched Version 5.0 of its PrintRite3D® platform. Before the release of PrintRite3D® Version 4.0 in November 2018, companies engaged in additive manufacturing had been hindered by the unavailability of a tool with the ability to determine and analyze the metallurgical structure of a part during the manufacturing process as well as the inability to ensure an acceptable level of part quality. PrintRite3D® Version 4.0 resolved this challenge with results confirmed and validated by CT testing. Now with the release of PrintRite3D® Version 5.0 in May 2019, machine operators using Version 5.0 with its new fast and friendly user interface can make rapid data and warning assessments and timely adjustments to assure quality. This advance provides value to both original equipment manufacturers and end-user manufacturers, and is designed to increase production yield of 3D metal manufactured parts, cut post-process quality inspection costs and reduce time to market, enabling true industrialization of metal AM.

2019 RTE Developments

Sigma entered 2019 six weeks after releasing the commercial industrial model of its technology, PrintRite3D® 4.0, wrapped in a strategy called the Rapid Test and Evaluation Program (“RTE”) to take the product to market. The RTE is a ‘drive before you buy’ approach that is aimed only at companies that meet four criteria: (1) the company must be a large recognized brand; (2) the company must be either an end-user manufacturing or buying Additive Manufacturing (AM) metal parts requiring the capacity of 20 or more AM metal machines, or the target company must be an Original Equipment Manufacturer (“OEM”) with a well-recognized brand and a significant AM metal manufacturing growth initiative in process; (3) the company must have substantial concern about the quality yields and risks of its AM metal production; and (4) the company must be willing to stipulate what PrintRite3D® 4.0 would have to prove in order to meet the company’s quality improvement and sustainability goals. Sigma Labs asserted that the way to measure RTEs in 2019 would be the number and quality of the companies that contracted with Sigma in the program, rather than the immediate revenue from the program, because ‘drive before you buy’ causes revenue to be back-end loaded.

In the first quarter of 2019, Sigma determined what would become a norm in the RTE requirement for the target companies: they would install PrintRite3D® on one of their laser powderbed AM machines and if the results were confirmed by a third party laboratory to meet their written quality needs, they would then ask Sigma to install a Phase 2 on one or two additional machines of different manufacturers than the first in order to determine if PrintRite3D® works equally effectively on multiple OEM brands, as well as multiple machines of the same brand, and finally on multiple laser machines as well. This unexpected customer enhancement to the scope of the RTE program raised the revenue potential that ultimately may be derived from the conversion of a single unit test run into a permanent license sale from a single unit followed by 2 or 3 (simultaneously) in Phase 2. This potential expansion of RTE scope commensurately increased the duration of some RTEs due to the serial nature of testing first on one machine, followed by a Phase 2 validation on multiple machines. There is a perceptible customer learning curve factor on RTEs, and we expect Phase 2 testing to benefit from this Phase 1 learning curve and be much more rapid than Phase 1 tests.

Throughout 2019, the RTE results were favorable. A leading global energy technology company for whom on-site testing began in April 2019, has ordered a Phase 2 and as stated in our November 13, 2019 press release, this is the final phase ahead of a potentially broader global rollout of the technology to their additive manufacturing machine base. The major service provider, with whom on-site testing began in March 2019, has also now begun its second RTE to start on a different OEM brand from the first RTE tests. The major OEM whose purchase order for an RTE we announced in August 2019 has only its own brand and has agreed to complete two simultaneous test units on different models and is thus on a fast track. Airbus is developing on schedule and expects to require a Phase 2 if and after the current RTE meets their needs. Materialise, a diverse AM company and an OEM for AM control systems and software, was a Sigma alpha test of the RTE program and with whom we announced in June 2019 that Sigma had entered into a non-binding Memorandum of Understanding to integrate PrintRite3D® with Materialise’s new MPC AM equipment control system. As noted below, we recently announced that Materialise has invited Sigma’s Chief Technology Officer to deliver two lectures in November 2019 in Materialise’s booth at FormNext on “Integration of PrintRite3D Melt Pool Monitoring Software with Materialise’s MPC Machine Control System for Advanced Process Control.”

Additionally, commencing in June 2019, Sigma opened a third channel to market. With the release of PrintRite3D® 5.0, Sigma brought a user-friendly version of its product to market that no longer requires substantial onsite customer support from Sigma. Therefore, the Company commenced calling on research tanks, universities, and small users to open a ‘retail’ channel.

January 2020 Private PlacementOffering

On January 27, 2020, the Company entered into a Securities Purchase Agreement (the “SPA”“January SPA”) with certain institutional investors.investors who are also the selling stockholders under this Prospectus. Pursuant to the January SPA, on January 28, 2020 the Company issued and sold (the “January Offering”) 1,640 shares of the Company’s Series D Convertible Preferred Stock (the “Series D Preferred Stock”) under a certificate of designations (the “Certificate of Designations”), warrants to purchase 7,796,000779,600 shares of the Company’s Common Stock (the “Common“January Warrants”) and warrants to purchase 6,156 shares of the Series D Preferred Stock (the “Preferred Warrants”) for a total gross purchase price of $1,600,000.

Certificate To the date of Designations

Underthis Prospectus, the Certificateinvestors have exercised Preferred Warrants to purchase 2,196 shares of Designations for the Series D Preferred Stock the Series D Preferred Stock has an initial stated valuein a cumulative gross amount of $1,000 per share (the “Stated Value”) and the following provisions:$2,141,100.

DividendsApril 2020 Offering

Dividends accrue atOn April 2, 2020, the Company entered into a dividend ratesecurities purchase agreement (the “April SPA”) with certain institutional investors, who are the selling stockholders under this Prospectus. Pursuant to the April SPA, on April 6, 2020 the Company issued and sold to the investors (the “April Offering”) (a) 493,027 shares of 9% per annum (subjectCompany’s Common Stock and Pre-Funded Warrants (the “Pre-Funded Warrants”) to increase uponpurchase up to 22,438 shares of Company’s Common Stock pursuant to the occurrence (and during the continuance)Company’s existing Registration Statement on Form S-3, and (b) Placement Warrants to purchase an aggregate of certain triggering events described therein) will accrue and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series D Preferred Shares by said amount.

Conversion

The holders of the Series D Preferred Shares will have the right at any time to convert all or a portion of the Series D Preferred Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third anniversary of the closing date) into515,465 shares of the Company’s Common Stock at the conversion price then in effect, which initially is $1.00 (subjectpursuant to adjustment for stock splits, dividends, recapitalizations and similar events and full ratchet price protection). In addition, a holder may at any time, alternatively, convert all, or any part, of its Series D Preferred Shares at an alternative conversion price, which equals the lower of the applicable conversion price then in effect, and the greater of (x) $0.18 and (y) 85% of the average volume weighted average price (“VWAP”) of the Common Stock for a five (5) trading day period prior to such conversion.private placement.

Triggering EventsPlacement Warrants

Upon the occurrence of certain triggering events, described in the Certificate of Designations, including, but not limited to payment defaults, breaches of transaction documents, failure to maintain listingEach Placement Warrant is exercisable on the Nasdaq Capital Market, and other defaults set forth therein, the Series D Preferred Shares would become subject to redemption, at the option of a holder, at a 125% premium to the underlying value of the Series D Preferred Shares being redeemed.

Limitation on Issuance

The Certificate of Designations contains a prohibition on the issuance of any shares of Common Stock upon conversion of the Series D Preferred Shares in excess of the amount set forth in NASDAQ Listing Rule 5635(d) (20% or more of the outstanding shares of common stock) until the Company obtains shareholder approval for issuance of shares of Common Stock in excess of such amount. In the Institutional SPA, the Company has agreed to promptly obtain such shareholder approval and amend its articles of incorporation and/or effect a reverse split in order to have sufficient shares of Common Stock available to allow the holders of the Series D Preferred Shares to convert in full the Series D Preferred Shares and exercise in full the Institutional Common Warrants. The Certificate of Designations prohibits a conversion of Series D Preferred Shares if and to the extent that, after the conversion, the holder would beneficially own more than 4.99% of the shares of Common Stock outstanding immediately after giving effect to the conversion.

Common Warrants

The Common Warrants are not exercisable until the six month and one day anniversary of the closing,issuance date, expires five years from the date of issuance and at such time, are initially exercisable into 7,796,000 shares of Common Stock, withhas an additional 1,000 shares of Common Stock becoming exercisable upon each exercise of a Preferred Warrant for a Preferred Share, The Common Warrants have a term of 5½ years. The initial exercise price is $1.00 and isof $2.50 per share of our Common Stock. Each holder of the Placement Warrants will be prohibited, subject to adjustment for stock splits, dividends, recapitalizations and similar events. The initial exercise price is also subject to full ratchet antidilution price protection, which unless shareholder approval is obtained by the Company, is subject to a floor of $0.95. The Commoncertain exceptions, from exercising Placement Warrants prohibit an exercise of the Common Warrants if and to the extent that immediately prior to or after thegiving effect to such exercise, the holder, together with its affiliates and other attribution parties, would beneficially own more than 4.99% or 9.99% (which percentage is elected at each holder’s discretion prior to the issuance of the Placement Warrant) of the total number of shares of Common Stockour common stock then issued and outstanding, immediately after giving effectwhich percentage may be changed by the holder’s elections to the exercise.

Preferred Warrants

The Preferred Warrants have a termhigher or lower percentage not in excess of one year from the date that the securities referenced in the Institutional SPA become fully tradeable (whether by registration with the SEC of such securities or the expiration of the requisite holding period under Rule 144 of the Securities Act of 1933, as amended). The Company has the right to force the exercise of up to 512 Preferred Warrants subject to certain equity conditions, which would result in gross proceeds9.99% upon 61 days’ notice to the Company of approximately $500,000. The initial exercise price for the Preferred Warrants is $975 per share, which is subject to adjustment for stock splits, dividends, recapitalizations and similar events.the terms of the Placement Warrant. The Placement Warrants prohibit us from entering into specified transactions involving a change of control, unless the successor entity assumes all of our obligations under the Placement Warrants under a written agreement before the transaction is completed. The Placement Warrants are also subject to redemption by the Company in cash upon a fundamental transaction at the Black-Scholes value of Placement Warrants.

Registration Rights Agreement

Pursuant to a Registration Rights Agreement, the Company has agreed to prepare and, as soon as practicable, file with the Securities and Exchange Commission a registration statement covering the resale of all the shares issuable upon conversion of the Series D Preferred Shares, and the shares issuable upon exercise of the Common Warrants. This prospectus pertains to the registration of those securities.

Corporate Information

We were incorporated as Messidor Limited in Nevada on December 23, 1985 and changed our name to Framewaves Inc. in 2001. On September 27, 2010, we changed our name from Framewaves Inc. to Sigma Labs, Inc. We commenced our current business operations in 2010.

Our principal executive offices are located at 3900 Paseo del Sol, Santa Fe, New Mexico 87507, and our telephone number is (505) 438-2576. Our website address is www.sigmalabsinc.com, although the information on our website is not deemed to be part of this prospectus.

The Offering

(1) Consists of (i) 23,142,222 shares of our common stock consisting of 200% of common shares issuable upon conversion of the shares of the Company’s Series D Convertible Preferred Stock currently outstanding (the “Initial Preferred Shares”) based on a conversion price equal to the floor price of such Initial Preferred Shares of $0.18 per share, (ii) 11,694,000515,465 shares of common stock consisting of 150% of the common shares issuable upon the exercise of outstanding Common Warrants, and (iii) 86,868,000 shares of our common stock consisting of 200% of common shares issuable upon conversion of the additional preferred shares issuable upon exercise of the Preferred Warrants (the “Additional Preferred Shares”) based on a conversion price of such additional preferred shares at the floor price of $0.18 per share. The number of common shares issuable upon conversion of the Initial Preferred Shares and the Additional Preferred Shares includes accrued dividends on such shares through January 28, 2023.Placement Warrants.

(2) As of February 3 ,June 30, 2020, and does not include (i) a total of 5,842,1482,324,622 shares of common stock issuable upon the exercise of outstanding options (with exercise prices ranging from $0.52$2.28 to $12.30$130.00 per share) and warrants including the January Warrants and Placement Warrants (with exercise prices ranging from $.01$0.10 to $4.00)$40.00), (ii)(iii) 2,147,277 shares of common stock issuable upon conversion of the additional preferred shares issuable upon exercise of the Preferred Warrants; (iv) a total of 620,43861,651 shares issuable upon the conversion of all of the shares of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Shares”), based on a conversion price of $1.03,$10.30, and (iii) 25,000 shares to be issued on or before February 15, 2020 for services rendered.(v) 22,438 issuable upon the exercise of the Pre-Funded Warrants.

(3) Assumes the conversion of the Initial Preferred Shares and Additional Preferred Shares and the exercise of all of the CommonPlacement Warrants by the selling stockholders at the initial conversion price of $1.00 and the initial exercise price of $1.00, respectively, and the sale of the shares issued upon such conversion and exercise, but does not include the 5,842,148 shares of common stock issuable upon the exercise of outstanding options and other warrants and 620,438 shares of common stock issuable upon conversion of the Series E Preferred Shares.exercise.

RISK FACTORS

Investing in our common stock involves certain risks. Before you decide whether to purchase any shares of our common stock, in addition to the other information in this prospectus, you should carefully consider the risks described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, which are incorporated by reference into this prospectus, as such risk factors may be updated from time to time by our future filings with the SEC. If one or more of these risks materializes, our business, financial condition and results of operations may be adversely affected. In that event, the value of our common stock could decline. The risks that are described in this prospectus or in any document that is incorporated by reference into this prospectus are not the only risks that we face. Additional risks not presently known to us or that we currently believe to be immaterial may also adversely affect our business, financial condition and results of operations.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained or incorporated by reference in this prospectus may include forward-looking statements that reflect our current views with respect to our research and development activities, business strategy, business plan, financial performance and other future events. These statements include forward-looking statements both with respect to us, specifically, and our industry sector, in general. We make these statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “estimate,” “may,” “should,” “anticipate,” “will” and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.

All forward-looking statements involve inherent risks and uncertainties, and there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, those factors set forth in the “Risk Factors” section of this prospectus, all of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read this prospectus and the accompanying prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materializes, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we anticipate. All subsequent written and oral forward-looking statements attributable to us or to individuals acting on our behalf are expressly qualified in their entirety by this Note. Before purchasing any of our securities, you should consider carefully all of the factors set forth or referred to in this prospectus that could cause actual results to differ.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the common stock by the selling stockholders pursuant to this prospectus. All proceeds from the sale of the shares will be for the account of the selling stockholders. The selling stockholders may sell these shares on The NASDAQ Capital Market or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing market price, or at negotiated prices. However, we will receive proceeds upon the cash exercise of the Common Warrants and Preferred Warrants held by the selling stockholders.Placement Warrants. If all of the CommonPlacement Warrants are exercised at the initial exercise price of $1.00$2.50 per share (as to 7,796,000 shares) and the Preferred Warrants at an initial exercise price of $975 per share (as to 6,156515,465 shares), then we will receive gross proceeds of approximately $13,798,100$1,288,662.50 to the extent the Warrants are exercised on a cash basis. Any such proceeds will be used for working capital and general corporate purposes. No assurance can be given, however, that all or any portion of such Warrants will be exercised for cash or otherwise.

The selling stockholders will pay any underwriting discounts and commissions and expenses incurred by the selling stockholders for brokerage or legal services or any other expenses incurred by the selling stockholders in disposing of the shares included in this prospectus. We will bear all other costs, fees and expenses incurred in effecting the registration of the shares covered by this prospectus, including all registration and filing fees and fees and expenses of our counsel and accountants.

SELLING STOCKHOLDERS

Selling Stockholders Table

The shares of common stock being offered by the selling stockholders are those issuable to the selling stockholders upon exercise of the Common Warrants and conversion of the Initial Preferred Shares and Additional Preferred Shares.Placement Warrants. We are registering the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of our securities issued pursuant toin the Securities Purchase Agreement,January Offering and April Offering, the selling stockholders have not had any material relationship with us within the past three years.

The table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based on their respective ownership of shares of common stock and preferred shares, as of February 3,June 30, 2020, assuming conversion of the InitialSeries D Preferred Shares and Additional Preferred SharesStock (collectively, the “Preferred Shares”) and exercise of the CommonJanuary Warrants, Placement Warrants and Pre-Funded Warrants held by each such selling stockholder on that date but taking account of any limitations on conversion in the certificate of designations and limitations on exercise set forth in the CommonPlacement Warrants. The third column lists the shares of common stock being offered by this prospectus by the selling stockholders and does not take in account any limitations on (i) conversion of the preferred stock set forth in the certificate of designations or (ii) exercise of the common warrantsPlacement Warrants set forth therein. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

In accordance with the terms of a registration rights agreement with the holders of the preferred shares, this prospectus generally covers the resale of 200% of the maximum number of shares of common stock issued or issuable pursuant to Certificate of Designations and 150% of the maximum number of shares of common stock issued or issuable pursuant to the common warrants, including payment of dividends on the preferred shares through January 28, 2023, in each case, determined as if the outstanding Preferred Shares (including dividends on the Preferred Shares through January 28, 2023) were converted in full (without regard to any limitations on conversion contained therein solely for the purpose of such calculation) at the floor price of $0.18. Because the conversion price of the preferred shares and exercise price of the Common Warrants may be adjusted, the number of shares of common stock that will actually be issued may be more or less than the number of shares of common stock being offered by this prospectus.

Under the terms of the Preferred Shares and the common warrants,Placement Warrants, a selling stockholder may not convert the preferred shares or exercise the common warrants, as applicable,Placement Warrants, to the extent (but only to the extent) such selling stockholder or any of its affiliates would beneficially own a number of shares of our common stock which would exceed 4.99% of the outstanding shares of the Company. The number of shares of common stock in the second column in the second table reflects these limitations. The selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

The Certificate of Designations for the Series D Preferred Stock also contains a prohibition on the issuance of any shares of common stock upon conversion of the Preferred Shares in excess of the amount set forth in NASDAQ Listing Rule 5635(d) (20% or more of the outstanding shares of common stock) until we obtain shareholder approval for issuance of shares of common stock in excess of such amount. For the purpose of these tables we have disregarded this limitation. We have agreed to promptly obtain such shareholder approval and amend our articles of incorporation to increase the number of authorized shares of our common stock and/or effect a reverse split, if required, to allow the holders of the Preferred Shares to convert in full the Preferred Shares and exercise in full the Common Warrants.