Sintx Technologies Inc

Company-Wide Reduction in Workforce

On August 8, 2024, the Board of Directors approved a plan to implement a Company-wide reduction in workforce. This decision is part of the Company’s ongoing strategic review of its operations aimed at improving operational efficiency and reducing costs. The reduction in force will reduce the number of employees of the Company from 40 to 23. David O’Brien’s employment as the Company’s Executive Vice President and Chief Operating Officer was terminated as part of the reduction in force. The Company is currently assessing the costs associated with this decision, including employee severance. These costs will be disclosed in the Company’s future financial statements as more information becomes available.

Cease Efforts to Make the Armor Plant Operational

On August 12, 2024, the Board of Directors of the Company approved a plan to cease efforts to make the armor plant operational. This decision was made to streamline operations and focus on core business areas that align with the Company’s long-term strategic goals. The armor plant has not been fully operational since the acquisition of the armor equipment in July 2021 and has been completely shut down since October 2023 due to the malfunctioning of the sintering furnace.

In connection with this decision the Company expects to incur an impairment charge of approximately $4.5 million. This charge primarily relates to the write-down of certain long-lived assets associated with the Armor plant to their estimated fair value. The impairment charge will be reflected in the Company’s financial statements for the quarter ended September 30, 2024. The Company is currently assessing other costs associated with this decision, including employee severance and other exit costs. These costs will be disclosed in the Company’s future financial statements as more information becomes available.

The Company’s insurance carrier has determined that a covered loss occurred when the sintering furnace malfunctioned, and coverage is available for the Company’s repair of the sintering furnace. However, the Company’s efforts to fully repair the damaged furnace continue to be delayed. Management will work with the insurance company to continue to fund the repair of the furnace. When the furnace is fully repaired, management hopes to sell the furnace, and related equipment, to a third party. However, the full repair and sale of the furnace, and related equipment, cannot be assured. Therefore, in the calculation of the $4.5 million estimated impairment charge, management has assumed no proceeds will be received from a potential sale of the furnace and related equipment.