Sintx Technologies Inc

Previous wording

The following is a tabular presentation of our unaudited condensed consolidated operating results for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following is a tabular presentation of our unaudited condensed consolidated operating results for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

For the three months ended March 31, 2024, total product revenue increase $0.1 million, or 29% as compared to the same period in 2023. During the quarter ended March 31, 2024 grant and contract revenue increase $0.1 million, or 26% as compared to the same period in 2023. The increases were primarily due to new orders for silicon nitride aerospace components and government grants and contracts in our Salt Lake City operation as well as commercial and government contract revenue in our Maryland operation.

Current wording

For the three months ended June 30, 2024, and 2023 total product revenue increases $0.1 million, or 61% as compared to the same period in 2023. During the quarter ended June 30, 2024, grant and contract revenue increased $0.2 million or 76% as compared to the same period in 2023.

Previous wording

For the three months ended March 31, 2024, cost of revenue increased $0.1 million, or 89% as compared to the same period in 2023. This increase was primarily attributable to the increase in revenue mentioned above.

Current wording

For the three months ended June 30, 2024, cost of revenue increased $0.1 million, or 115% as compared to the same period in 2023. Gross profit increased $0.2 million, or 57%, as compared to the same period in 2023. This increase was primarily attributable to the increase in revenue mentioned above.

Previous wording

For the three months ended March 31, 2024, research and development expenses decreased $0.2 million, or -8%, as compared to the same period in 2023. This decrease was primarily attributable to a decrease in patent expenses and outside consulting costs.

Current wording

For the three months ended June 30, 2024, research and development expenses decreased $0.5 million, or -22%, as compared to the same period in 2023. This decrease was primarily attributable to a decrease in patent expenses and tooling costs.

Previous wording

For the three months ended March 31, 2024, general and administrative expenses decreased $0.05 million, or -4%, as compared to the same period in 2023. This decrease is primarily due to a decrease in costs for employee recruiting.

Current wording

For the three months ended June 30, 2024, general and administrative expenses decreased $0.1 million, or -8%, as compared to the same period in 2023. This decrease is primarily due to a decrease in employee payroll and benefit costs.

Previous wording

For the three months ended March 31, 2024, sales and marketing expenses decreased $0.1 million, or -21%, as compared to the same period in 2023. This decrease was primarily attributable to an overall decrease in payroll related costs and costs for outside consulting.

Current wording

For the three months ended June 30, 2024, sales and marketing expenses decreased $0.1 million, or -17%, as compared to the same period in 2023. This decrease was primarily attributable to an overall decrease in payroll related costs and costs for outside consulting.

Previous wording

For the three months ended March 31, 2024, other income decreased $1.0 million, or -29%, as compared to the same period in 2023. This decrease was primarily due to a $1.7 million decrease in non-cash derivative expense offset by $0.8 million in offering costs associated with derivative liabilities in the prior year.

Current wording

For the six months ended June 30, 2024, other income decreased $1.5 million, or -34%, as compared to the same period in 2023. This decrease was primarily due to a $1.7 million decrease associated with the change in the fair value of the derivative liabilities, offset by a $0.2 increase in costs associated with derivative liabilities.

Previous wording

For the three months ended March 31, 2024, and 2023, the Company incurred net loss of $0.9 million and $0.3 million, respectively, and used cash in operating activities of $2.7 million and $4.9 million, respectively. The Company had an accumulated deficit of $271.6 million and $270.7 million as of March 31, 2024, and December 31, 2023, respectively.

Current wording

For the six months ended June 30, 2024, and 2023, the Company incurred net loss of $3.1 million and $2.7 million, respectively, and used cash in operating activities of $4.9 million and $8.1 million, respectively. The Company had an accumulated deficit of $273.8 million and $270.7 million as of June 30, 2024, and December 31, 2023, respectively. We will require substantial future capital in order to continue operating our business, conduct the research and development and regulatory clearance and approval activities necessary to bring our products to market, and to establish effective marketing and sales capabilities. Our existing capital resources are not sufficient to enable us to fund the completion of the development and commercialization of all of our product candidates.

Previous wording

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. We believe the publication of such data would help sales efforts as the Company approaches new prospects. The Company is also making additional changes to the sales strategy, including a focus on revenue growth by expanding the use of silicon nitride in other areas outside of spinal fusion applications. For instance, results from an independent study demonstrated the potential anti-viral properties of our silicon nitride. We believe that we may be able to apply our silicon nitride powder to personal protection products, such as face masks, gowns and gloves, resulting in inactivation of viruses that come into contact with the items.

Current wording

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. We believe the publication of such data would help sales efforts as the Company approaches new prospects. The Company is also making additional changes to the sales strategy, including a focus on revenue growth by expanding the use of silicon nitride in other areas outside of spinal fusion applications.

Previous wording

On March 26, 2024, the Company closed on a public offering 28,400,000 shares of the Company’s common stock, (the “Offering”). Each Share was sold at a public offering price of $0.047. The aggregate proceeds to the Company from the Offering were approximately $1.3 million before deducting placement agent fees and other estimated offering expenses payable by the Company.

Current wording

On March 26, 2024, the Company closed on a public offering 142,000 shares of the Company’s common stock, (the “Offering”). Each Share was sold at a public offering price of $9.40. The aggregate proceeds to the Company from the Offering were approximately $1.3 million before deducting placement agent fees and other estimated offering expenses payable by the Company.

Previous wording

On February 2, 2024, the Company closed on a public offering of 16,000,000 units, with each unit consisting of one share of its common stock, or one pre-funded warrant to purchase one share of its common stock, one Class E Warrant with each warrant to purchase one share of common stock, and one Class F Warrant with each warrant to purchase one share of common stock. Each unit was sold at a public offering price of $0.25. The Class E and Class F Warrants in the units are immediately exercisable at a price of $0.25 per share. The Class E Warrants will expire five years from the date of issuance and the Class F Warrants will expire eighteen months from the date of issuance. Gross proceeds, before deducting placement agent fees and other offering expenses, are approximately $4.0 million.

Current wording

On February 2, 2024, the Company closed on a public offering of 80,000 units, with each unit consisting of one share of its common stock, or one pre-funded warrant to purchase one share of its common stock, one Class E Warrant with each warrant to purchase one share of common stock, and one Class F Warrant with each warrant to purchase one share of common stock. Each unit was sold at a public offering price of $50.00. The Class E and Class F Warrants in the units are immediately exercisable at a price of $50.00 per share. The Class E Warrants will expire five years from the date of issuance and the Class F Warrants will expire eighteen months from the date of issuance. Gross proceeds, before deducting placement agent fees and other offering expenses, are approximately $4.0 million.

Previous wording

On February 10, 2023, the Company closed on a public offering of 2,150,000 units, with each unit consisting of one share of common stock, or one pre-funded warrant to purchase one share of its common stock, one Class C Warrant to purchase one share of common stock, and one half of one Class D Warrant with each whole Class D Warrant entitling the holder to purchase one share of common stock. Gross proceeds, before deducting offering expenses, totaled approximately $12.0 million. Of the $12.0 million of gross proceeds, approximately $5.4 million were allocated to common stock and prefunded warrants ($4.8 million net of offering costs) and approximately $6.7 million were allocated to derivative liabilities (with approximately $0.7 million of cash offering costs and $0.1 million of agent warrant offering costs recorded as derivative expense).

Current wording

On February 10, 2023, the Company closed on a public offering of 10,750 units, with each unit consisting of one share of common stock, or one pre-funded warrant to purchase one share of its common stock, one Class C Warrant to purchase one share of common stock, and one half of one Class D Warrant with each whole Class D Warrant entitling the holder to purchase one share of common stock. Gross proceeds, before deducting offering expenses, totaled approximately $12.0 million. Of the $12.0 million of gross proceeds, approximately $5.4 million were allocated to common stock and prefunded warrants ($4.8 million net of offering costs) and approximately $6.7 million were allocated to derivative liabilities (with approximately $0.7 million of cash offering costs and $0.1 million of agent warrant offering costs recorded as derivative expense).

Previous wording

On February 25, 2021, the Company entered into an Equity Distribution Agreement with Maxim Group LLC (“Maxim”), which was subsequently amended on October 12, 2023 (as amended, the “2021 Distribution Agreement”), pursuant to which the Company may sell from time to time, shares of the Company’s common stock having an aggregate offering price of up to $1.1 million through Maxim, as agent. As of March 1, 2024, there have been 2,471,949 shares of common stock sold under the 2021 Distribution Agreement for gross proceeds of $1.0 million. In connection with the February 2024 offering, the Company agreed to not make any sales of securities under the ATM for a period of six months from the date of closing the offering, February 2, 2024, until August 2, 2024.

Current wording

On February 25, 2021, the Company entered into an Equity Distribution Agreement with Maxim Group LLC (“Maxim”), which was subsequently amended on October 12, 2023 (as amended, the “2021 Distribution Agreement”), pursuant to which the Company may sell from time to time, shares of the Company’s common stock having an aggregate offering price of up to $1.1 million through Maxim, as agent.

Previous wording

Net cash used in operating activities was $2.7 million during the three months ended March 31, 2024, compared to $4.9 million used during the three months ended March 31, 2023, a decrease of $2.2 million. The decrease in the net loss from operations, and related non-cash add backs to the net loss, was $0.6 million from 2024 when compared to 2023. The decrease in cash used for operating activities during 2024 was primarily due to the $0.6 million mentioned above plus changes in the movement of working capital items during 2024 as compared to the same period in 2023 as follows: a $0.7 million decrease in cash used in prepaid expenses, a $0.3 million decrease in cash used in other liabilities, a $0.3 million decrease in accounts receivable, a $0.2 million increase in cash used in accounts payable, a $0.1 million decrease in cash used for payments on operating lease liability.

Current wording

Net cash used in operating activities was $4.9 million during the six months ended June 30, 2024, compared to $8.0 million used during the six months ended June 30, 2023, a decrease of $3.1 million. The decrease in the net loss from operations, and related non-cash add backs to the net loss, was $1.2 million from 2024 when compared to 2023. The decrease in cash used for operating activities during 2024 was primarily due to the $1.2 million mentioned above plus changes in the movement of working capital items during 2024 as compared to the same period in 2023 as follows: a $0.9 million decrease in cash used in prepaid expenses, a $0.4 million decrease in cash used in other liabilities, a $0.3 million decrease in cash used for inventory, a $0.3 million decrease in accounts receivable

Previous wording

Net cash used in investing activities was $0.2 million during the three months ended March 31, 2024 and 2023, remaining primarily unchanged.

Current wording

Net cash used in investing activities was $0.2 million during the six months ended June 30, 2024, compared to $0.3 million used during the six months ended June 30, 2023, a decrease of $0.1 million. The decrease in cash used for investing activities during 2024 was primarily due to a $0.3 million increase in proceeds from notes receivable, offset by a $0.2 increase in the purchase of property and equipment.

Previous wording

There was $5.3 million in cash provided by financing activities during the three months ended March 31, 2024, compared to $11.5 million in cash provided by financing activities during the same period in 2023. The $6.2 million decrease to net cash provided by financing activities was primarily attributable to a decrease in proceeds from issuance of warrant derivative liabilities of $3.3 million and a decrease in proceeds from issuance of common stock of $2.8 million, offset by a $0.1 million increase in payments on debt.

Current wording

There was $6.3 million in cash provided by financing activities during the six months ended June 30, 2024, compared to $11.5 million in cash provided by financing activities during the same period in 2023. The $5.2 million decrease to net cash provided by financing activities was primarily attributable to a decrease in proceeds from issuance of warrant derivative liabilities of $3.3 million and a decrease in proceeds from issuance of common stock of $1.7 million, and a $0.2 million increase in payments on debt.

Previous wording

TA&T is obligated to repay certain personal loans made by the founders of TA&T to TA&T prior to SINTX’s acquisition of TA&T (the “Personal Loans”). The total amount of the Personal Loans at September 30, 2022 was approximately $350,000. The Company agreed to repay the outstanding balance of the Personal Loans in (i) 24 equal monthly installments beginning September 1, 2022 and each month thereafter until paid in full as one prior owner’s portion of the Personal Loans totaling $157,000, and (ii) for the other owner’s portion of the Personal Loans totaling $193,000. As of March 31, 2024, the related party debt had an outstanding balance of $26,000. The outstanding balance is being paid in monthly installments ending August 1, 2024. The related party debt is not collateralized and has no interest rate.

Current wording

TA&T is obligated to repay certain personal loans made by the founders of TA&T to TA&T prior to SINTX’s acquisition of TA&T (the “Personal Loans”). The total amount of the Personal Loans at June 30, 2022, was approximately $350,000. The Company agreed to repay the outstanding balance of the Personal Loans in (i) 24 equal monthly installments beginning September 1, 2022, and each month thereafter until paid in full as one prior owner’s portion of the Personal Loans totaling $157,000, and (ii) for the other owner’s portion of the Personal Loans totaling $193,000. As of June 30, 2024, the related party debt had an outstanding balance of $7,000. The outstanding balance is being paid in monthly installments ending August 1, 2024. The related party debt is not collateralized and has no interest rate.

Previous wording

A summary of our significant accounting policies and estimates is discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to those policies for the three months ended March 31, 2024. The preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty that require judgments, estimates and assumptions include the accounting for income taxes and other contingencies as well as valuation of derivative liabilities, asset impairment and collectability of accounts receivable. We use historical and other information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our condensed consolidated financial statements.

Current wording

A summary of our significant accounting policies and estimates is discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to those policies for the six months ended June 30, 2024. The preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty that require judgments, estimates and assumptions include the accounting for income taxes and other contingencies as well as valuation of derivative liabilities, asset impairment and collectability of accounts receivable. We use historical and other information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our condensed consolidated financial statements.