# Sintx Technologies, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Sintx Technologies, Inc.](/companies/sint.md) (CIK 1269026)
- Form: 10-Q
- Filed: 2024-11-12
- Accepted by EDGAR: Nov 12, 2024, 15:50 ET
- Period: 2024-09-30
- Accession: 0001493152-24-044728
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1269026/000149315224044728/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1269026/000149315224044728/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $799.0k | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $2.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-07-01 to 2024-09-30 | $210.0k | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2024-01-01 to 2024-09-30 | $657.0k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-07-01 to 2024-09-30 | $589.0k | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-01-01 to 2024-09-30 | $1.7m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-07-01 to 2024-09-30 | $796.0k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-01-01 to 2024-09-30 | $4.5m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | −$6.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | −$12.3m | us-gaap:OperatingIncomeLoss |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | −$6.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | −$9.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | −$6.96 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | −$19.59 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | −$6.96 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | −$17.30 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 897,323 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 656,468 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | −$7.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $544.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-09-30 | $4.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $6.3m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $11.3m | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $2.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $5.7m | us-gaap:Liabilities |
| Current portion of debt | at 2024-09-30 | $134.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-09-30 | $5.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,508 characters.

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements for the year ended December 31, 2023 and the notes thereto, along with Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed separately with the U.S. Securities and Exchange Commission. This discussion and analysis contains forward-looking statements based upon current beliefs, plans, expectations, intentions and projections that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023, and any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q and in other filings with the Securities and Exchange Commission we may make from time-to-time.*

### Overview

SINTX Technologies is an advanced ceramics company formed in December 1996, focused on providing solutions in a variety of biomedical, technical, and antipathogenic applications. We have grown from focusing primarily on the research, development and commercialization of medical devices manufactured with silicon nitride to becoming an advanced ceramics company engaged in diverse fields, including biomedical, technical and antipathogenic applications. This diversification enables us to focus on our core competencies which are the manufacturing, research, and development of products comprised from advanced ceramic materials for external partners. We seek to connect with new customers, partners and manufacturers to help them realize the goal of leveraging our expertise in advanced ceramics to create new, innovative products across these sectors.

### SINTX Core Business

**Biomedical Applications:** Since its inception, SINTX has been focused on medical grade silicon nitride. SINTX biomedical products have been shown to be biocompatible, bioactive, antipathogenic, and to have superb bone affinity. Spinal implants made from SINTX silicon nitride have been successfully implanted in humans since 2008 in the US, Europe, Brazil, and Taiwan. This established use, along with its inherent resistance to bacterial adhesion and bone affinity suggests that it may also be suitable in other fusion device applications such as arthroplasty implants, foot wedges, and dental implants. Bacterial infection of any biomaterial implants is always a concern. SINTX silicon nitride has been shown to be resistant to bacterial colonization and biofilm formation, making it antibacterial. SINTX silicon nitride products can be polished to a smooth and wear-resistant surface for articulating applications, such as bearings for hip and knee replacements.

We believe that silicon nitride has a superb combination of properties that make it suited for long-term human implantation. Other biomaterials are based on bone grafts, metal alloys, and polymers- all of which have well-known practical limitations and disadvantages. In contrast, silicon nitride has a legacy of success in the most demanding and extreme industrial environments. As a human implant material, silicon nitride offers bone ingrowth, resistance to bacterial and viral infection, ease of diagnostic imaging, resistance to corrosion, and superior strength and fracture resistance, all of which claims are validated in our large and growing inventory of peer-reviewed, published literature reports. We believe that our versatile silicon nitride manufacturing expertise positions us favorably to introduce new and innovative devices in the medical and non-medical fields.

In June 2022, we acquired Technology Assessment and Transfer, Inc. (TA&T), a nearly 40-year-old business with a mission to transition advanced materials and process technologies from a laboratory environment to commercial products and services. TA&T has supplied ceramics for use in several biomedical applications. These products were made via 3D printing and include components for surgical instruments as well as conceptual and prototype dental implants.

**Technical Applications:** It is our belief that our silicon nitride has the best combination of mechanical, thermal, and electrical properties of any technical ceramic material. It is a high-performance technical ceramic with high strength, toughness, and hardness, and is extremely resistant to thermal shock and impact. It is also an electrically insulating ceramic material. Typically, it is used in applications where high load-bearing capacity, thermal stability, and wear resistance are required. We have obtained AS9100D certification and ITAR registration to facilitate entry into the aerospace and protective armor markets.

TA&T’s primary area of expertise is material processing and fabrication know-how for a broad spectrum of monolithic ceramic, ceramic composite, and coating materials. Primary technologies include Additive Manufacturing (3D Printing) of ceramics and metals, low-cost fabrication of fiber reinforced ceramic matrix composites (CMCs) and refractory chemical vapor deposited (CVD) coatings, transparent ceramics for ballistic armor and optical applications, and magnetron sputtered (PVD) coatings for lubrication, wear resistance and environmental barrier coatings for CMCs. TA&T also provides a host of services that include 3D printing, PVD-CVD coatings, material processing-CMCs, CIP, PS, HP, HIP, and material characterization for powders and finished parts-TGA/DSC, PSD. SA, Dilatometry, UV-VIS and FTIR transmission, haze and clarity.

**Antipathogenic Applications:** Today, there is a global need to improve protection against pathogens in everyday life. SINTX believes that by incorporating its unique composition of silicon nitride antipathogenic powder into products such as face masks, filters, and wound care devices, it is possible to manufacture surfaces that inactivate pathogens, thereby limiting the spread of infection and disease. The discovery in 2020 that SINTX silicon nitride inactivates SARS-CoV-2, the virus which causes the disease COVID-19, has opened new markets and applications for our material.

We presently manufacture advanced ceramic powders and components in our manufacturing facilities based in Salt Lake City, Utah and Millersville, Maryland.

### Components of our Results of Operations

We manage our business within one reportable segment, which is consistent with how our management reviews our business, makes investment and resource allocation decisions and assesses operating performance.

### Revenue

Our product revenue is derived from the manufacture and sale of products. These revenue sources include coatings, materials, and components for aerospace and medical device markets, toll processing services, and government contracts and grants. We generally recognize revenue from sales where control transfers at a point in time as the title and risk of loss passes to the customer, which is at the time the product is shipped. In general, our customer does not have rights of return or exchange.

We derive grant and contract revenue from awards provided by governmental agencies. The goal of these grants and contracts is ultimately to develop revenue producing products.

### Cost of Revenue

The expenses that are included in cost of revenue include all in-house manufacturing costs for the products we manufacture.

### Gross Profit

Our gross profit measures our product revenue relative to our cost of revenue.

### Research and Development Expenses

Our research and development costs are expensed as incurred. Research and development costs consist of engineering, product development, clinical trials, test-part manufacturing, testing, developing and validating the manufacturing process, manufacturing, facility and regulatory-related costs. Research and development expenses also include employee compensation, employee and non-employee stock-based compensation, supplies and materials, consultant services, and travel and facilities expenses related to research and development activities.

We expect to incur additional research and development costs as we continue to develop new medical devices, industrial and ceramic armor products, product candidates for antipathogenic applications, and other products which may increase our total research and development expenses.

### General and Administrative Expenses

General and administrative expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation for certain members of our executive team and other personnel employed in finance, compliance, administrative, information technology, customer service, executive and human resource departments. General and administrative expenses also include other expenses not part of the other cost categories mentioned above, including facility expenses and professional fees for accounting and legal services.

### RESULTS OF OPERATIONS

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

|  | Three Months Ended September 30, 2024 | 2023 | $% Change | Change | Nine Months Ended September 30, 2024 | 2023 | $% Change | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Product revenue | $367 | $168 | $199 | 118% | $1,054 | $643 | $411 | 64% |
| Grant and contract revenue | 432 | 510 | (78) | -15% | 1,291 | 1,082 | 209 | 19% |
| Total revenue | 799 | 678 | 121 | 18% | 2,345 | 1,725 | 620 | 36% |
| Cost of revenue | 210 | 117 | 93 | 79% | 657 | 339 | 318 | 94% |
| Gross profit | 589 | 561 | 28 | 5% | 1,688 | 1,386 | 302 | 22% |
| Operating expenses: |  |  |  |  |  |  |  |  |
| Research and development | 796 | 2,525 | (1,729) | -68% | 4,492 | 6,889 | (2,397) | -35% |
| General and administrative | 802 | 990 | (188) | -19% | 2,997 | 3,313 | (316) | -10% |
| Sales and marketing | 87 | 259 | (172) | -66% | 589 | 877 | (288) | -33% |
| Armor exit costs | 4,457 | - | 4,457 | 100% | 4,457 | - | 4,457 | 100% |
| Reduction in force | 407 | - | 407 | 100% | 407 | - | 407 | 100% |
| Grant and contract expenses | 448 | 401 | 47 | 12% | 1,061 | 942 | 119 | 13% |
| Total operating expenses | 6,997 | 4,175 | 2,822 | 68% | 14,003 | 12,021 | 1,982 | 16% |
| Loss from operations | (6,408) | (3,614) | (2,794) | 77% | (12,315) | (10,635) | (1,680 | 16% |
| Other income (expense) | 169 | 424 | (255) | -60% | 2,986 | 4,697 | (1,711) | -36% |
| Net loss before taxes | (6,239) | (3,190) | (3,049) | 96% | (9,329) | (5,938) | (3,391) | 57% |
| Provision for income taxes | - | - | - |  | - | - | - |  |
| Net loss | $(6,239) | $(3,190) | $(3,049) | 96% | $(9,329) | $(5,938) | $(3,391) | 57% |

22

#### Revenue

For the three months ended September 30, 2024, and 2023 total product revenue increased $0.2 million, or 118% as compared to the same period in 2023. During the quarter ended September 30, 2024, grant and contract revenue decreased $0.1 million or -15% as compared to the same period in 2023.

For the nine months ended September 30, 2024, total product revenue increased $0.4 million, or 64% as compared to the same period in 2023. During the nine months ended September 30, 2024, grant and contract revenue increased $0.2 million, or 19% 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.

#### Cost of Revenue and Gross Profit

For the three months ended September 30, 2024, cost of revenue increased $0.1 million, or 79% as compared to the same period in 2023. This increase was primarily attributable to the increase in revenue mentioned above.

For the nine months ended September 30, 2024, cost of revenue increased $0.3 million, or 94% as compared to the same period in 2023. Gross profit increased $0.3 million, or 22%, as compared to the same period in 2023. This increase was primarily attributed to the increase in revenue mentioned above.

#### Research and Development Expenses

For the three months ended September 30, 2024, research and development expenses decreased $1.7 million, or -68%, as compared to the same period in 2023. This decrease was primarily attributable to a decrease in payroll and benefit costs, consulting and contracting, patent expenses and tooling costs.

For the nine months ended September 30, 2024, research and development expenses decreased $2.4 million, or -35%, as compared to the same period in 2023. This decrease was primarily attributable to a decrease in payroll and benefit costs, consulting and contracting, rent expense, patent expenses and tooling costs.

#### General and Administrative Expenses

For the three months ended September 30, 2024, general and administrative expenses decreased $0.2 million, or -19%, as compared to the same period in 2023. This decrease is primarily due to a decrease in employee payroll and benefit costs and employee recruiting expenses.

For the nine months ended September 30, 2024, general and administrative expenses decreased $0.3 million, or -10%, as compared to the same period in 2023. This decrease is primarily due to a decrease in employee payroll and benefit costs, costs for computer software and employee recruiting expenses.

#### Sales and Marketing Expenses

For the three months ended September 30, 2024, sales and marketing expenses decreased $0.2 million, or -66%, as compared to the same period in 2023. This decrease was primarily attributable to an overall decrease in payroll related costs, travel costs, and costs for outside consulting.

For the nine months ended September 30, 2024, sales and marketing expenses decreased $0.3 million, or -33%, 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.

#### Armor Exit Costs

For the three months ended September 30, 2024, Armor exit costs increased $4.5 million, or 100%, as compared to the same period in 2023. This increase was primarily attributable to an increase in asset impairment costs at the SINTX Armor facility.

For the nine months ended September 30, 2024, Armor exit costs increased $4.5 million, or 100%, as compared to the same period in 2023. This increase was primarily attributable to an increase in asset impairment costs at the SINTX Armor facility.

#### Reduction in Force Expenses

For the three months ended September 30, 2024, reduction in force expenses increased $0.4 million, or 100%, as compared to the same period in 2023. This increase was primarily attributable to payroll expenses related to severance and accrued vacation payouts.

For the nine months ended September 30, 2024, reduction in force expenses increased $0.4 million, or 100%, as compared to the same period in 2023. This increase was primarily attributable to payroll expenses related to severance and accrued vacation payouts.

#### Grant Expenses

For the three months ended September 30, 2024, grant and contract expenses remained primarily unchanged.

For the nine months ended September 30, 2024, grant and contract expenses increased by $0.1 million, or 13%, as compared to the same period in 2023. This increase was primarily attributable to a general increase in grant and contract revenue when compared to the prior year.

#### Other Income, Net

For the three months ended September 30, 2024, other income decreased $0.2 million, or -60%, as compared to the same period in 2023. This decrease was primarily due to a $0.2 million decrease associated with the change in the fair value of the derivative liabilities.

For the nine months ended September 30, 2024, other income decreased $1.7 million, or -36%, as compared to the same period in 2023. This decrease was primarily due to a $1.9 million decrease associated with the change in the fair value of the derivative liabilities, offset by a $0.2 million increase in costs associated with derivative liabilities.

#### Liquidity and Capital Resources

The condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern within one year from the date of issuance of these condensed consolidated financial statements.

For the nine months ended September 30, 2024 and 2023, the Company incurred a net loss of $9.3 million and $5.9 million, respectively, and used cash in operating activities of $7.5 million and $11.0 million, respectively. The Company had an accumulated deficit of $280.0 million and $270.7 million as of September 30, 2024, and December 31, 2023, respectively. We will require substantial future capital in order to continue operating our business, conduct 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 our product candidates.

To date, the Company’s operations have been principally financed from proceeds from the issuance of preferred and common stock and, to a lesser extent, cash generated from product sales. It is anticipated that the Company will continue to generate operating losses and use cash in operations. The Company’s continuation as a going concern is dependent upon its ability to increase sales, decrease expenses and raise additional funding. Whether and when the Company can attain profitability and positive cash flows from operations or obtain additional financing is uncertain.

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).

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 entitled to purchase one share of common stock, and one Class F Warrant with each warrant entitled to purchase one share of common stock. Each unit was sold at a public offering price of $50.00 resulting in gross proceeds to the Company of $4 million before deducting offering fees and expenses. The Class E and Class F Warrants were immediately exercisable at a price of $50.00 per share. The Class E Warrants expire five years from the date of issuance and the Class F Warrants expire eighteen months from the date of issuance. Of the $4.0 million of gross proceeds, approximately $0.6 million were allocated to common stock and prefunded warrants ($0.5 million net of offering costs) and approximately $3.4 million were allocated to derivative liabilities (with approximately $0.5 million of cash offering costs and $0.1 million of agent warrant offering costs recorded as derivative expense).

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

On April 5, 2024, the Company closed on a public offering of 358,000 shares of the Company’s common stock, (the “April 5 Offering”). Each Share was sold at a public offering price of $4.20. The aggregate proceeds to the Company from the April 5 Offering were approximately $1.5 million before deducting placement agent fees and other offering expenses payable by the Company.

On February 25, 2021, the Company, entered into an Equity Distribution Agreement (the “ATM Agreement”) with Maxim Group LLC (the “Agent”), as sales agent, as amended on January 10, 2023 and October 12, 2023, pursuant to which the Company could offer and sell shares of the Company’s common stock, par value $0.01 per share (the “Shares”), initially up to an aggregate offering price of $15,000,000, from time to time in an at-the-market public offering. On March 22, 2024, the Company suspended sales under the ATM Agreement and terminated the continuous offering. On July 11, 2024, the Company filed a Prospectus Supplement with the SEC adjusting the amount available for sale under the ATM Agreement to $3.1 million and shortly thereafter begin offering and selling Shares under the ATM Agreement to the public. During the three months ended September 2024, 595,560 Shares were sold under the ATM Agreement for gross proceeds of approximately $3.1 million. During the nine months ended September 30, 2024, 602,357 Shares were sold under the ATM Agreement for gross proceeds of approximately $3.7 million. Because the Company is subject to General Instruction I.B.6 of Form S-3, it is restricted from selling securities in a public primary offering with a value exceeding one-third of its public float (the market value of our common stock held by our non-affiliates) in any 12-month period so long as its public float remains below $75.0 million. As of September 30, 2024, there was no capacity to offer and sell Shares under the ATM Agreement.

On June 11, 2024, the Company received formal notice from The Nasdaq Stock Market LLC (“Nasdaq”) that the Company has evidenced compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). The Company remains subject to a “Mandatory Panel Monitor,” as that term is defined in Listing Rule 5815(d)(4)(B), for a period of one year from June 11, 2024. If, within the one-year period, the Company fails to satisfy the minimum $1.00 closing bid price threshold for 30 consecutive business days, Nasdaq will issue a delist determination rather than provide the Company with a grace period to regain compliance with the Bid Price Rule. In that event, the Company would have the opportunity to request a new hearing to address the deficiency.

We are actively seeking opportunities to raise additional equity and/or debt financing. However, such funding is not guaranteed and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing, if available to the Company, will most likely be dilutive to its current stockholders. If the Company is not able to obtain additional debt or equity financing on a timely basis, the impact on the Company will be material and adverse.

The Board of Directors, together with management, is performing an ongoing evaluation of the Company’s business strategy and focus. On August 1, 2024, the board of directors appointed Eric Olson to the office of Chief Executive Officer and President to lead the evaluation process. The Board of Directors also entered into an engagement agreement with Ascendiant Partners to evaluate strategic transactions including, but not limited to, acquisitions, strategic partnerships, sell of business divisions, and reverse merger opportunities.

An option being evaluated is a change in strategic emphasis to advancements in the medical device sector. Historically engaged in both industrial and biomedical applications, SINTX would prioritize the development and commercialization of innovative medical devices, leveraging our expertise in advanced ceramics and biomaterials. Such a renewed focus would align with a commitment to improving patient outcomes through the creation of products designed for surgical, orthopedic, and other specialized medical applications. We would concentrate our resources on high-growth areas within the healthcare sector where our proprietary materials and technologies—such as silicon nitride—provide a distinct competitive advantage due to their unique strength, durability, and biocompatibility.

Through this transformation, SINTX’s aim would be to deliver meaningful innovations to the medical community. Our current research and development pipeline is centered on medical-grade devices that incorporate antimicrobial properties, enhanced imaging capabilities, and durability under physiological conditions, which are critical for orthopedic implants, spinal fusion devices, and other surgical tools. If we transition away from industrial applications, we anticipate this strategic shift will enable us to better serve the medical sector, address critical unmet needs, and position SINTX as a leading provider in the medical device market. By focusing on partnerships and collaborations with healthcare institutions and industry leaders, SINTX is positioned to expand its footprint in the medical device sector and drive shareholder value through sustainable, high-impact innovations, however, such a transition has not been approved by the Board of Directors, nor can such approval or successful transition be assured.

SINTX Technologies has initiated discussions with the leaseholder for our Centerpointe location in Salt Lake City, Utah to explore options for reducing the Company’s overall lease liability. This action aligns with our broader strategy to streamline operating expenses and the option to reallocate resources towards growth initiatives in the medical device sector. While these discussions reflect our commitment to financial optimization, there can be no assurance that negotiations will lead to a reduction in the existing lease liability. The outcome of these discussions remains uncertain, and SINTX will continue to evaluate additional measures to manage long-term obligations in alignment with our strategic objectives.

On August 8, 2024, the Board of Directors approved a plan to implement a Company-wide reduction in the 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 reduced the number of employees of the Company from 40 to 23. During the three months ended September 30, 2024, the Company recorded expenses of approximately $407,000 associated with the reduction in workforce.

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 incurred an impairment charge of approximately $4.5 million during the three months ended September 30, 2024. This charge primarily relates to the write-down of certain long-lived assets associated with the armor plant to their estimated fair value.

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 intends 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.

These uncertainties raise substantial doubt about our ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

### Cash Flows

The following table summarizes, for the periods indicated, cash flows from operating, investing and financing activities (in thousands) – unaudited:

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash used in operating activities | $(7,518) | $(10,987) |
| Net cash used in investing activities | (204) | (439) |
| Net cash provided by financing activities | 9,196 | 11,400 |
| Net increase (decrease) in cash | $1,474 | $(26) |

26

#### Net Cash Used in Operating Activities

Net cash used in operating activities was $7.5 million during the nine months ended September 30, 2024, compared to $11.0 million used during the nine months ended September 30, 2023, a decrease of $3.5 million. The decrease in the net loss from operations, and related non-cash add backs to the net loss, was $2.6 million from 2024 when compared to 2023. The decrease in cash used for operating activities during 2024 was primarily due to the $2.6 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 $0.5 million decrease in cash used for inventory, a $0.5 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 accounts receivable, a $0.2 million decrease in payments on operating lease liability, all offset by a $1.0 million increase in cash used in accounts payable and accrued liabilities.

#### Net Cash Used in Investing Activities

Net cash used in investing activities was $0.2 million during the nine months ended September 30, 2024, compared to $0.4 million used during the nine months ended September 30, 2023, a decrease of $0.2 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 $0.1 increase in the purchase of property and equipment.

#### Net Cash Provided by Financing Activities

There was $9.2 million in cash provided by financing activities during the nine months ended September 30, 2024, compared to $11.4 million in cash provided by financing activities during the same period in 2023. The $2.2 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 a $0.1 million increase in payments on debt offset by an increase in proceeds from issuance of common stock of $1.2 million.

### Indebtedness

#### Business Loan

On July 20, 2021, TA&T, entered into a Loan Authorization and Agreement in the amount of approximately $350,000 (the “Business Loan”). The Company made a one-time $35,000 buy down payment when acquiring the loan. The Business Loan bore interest at a rate of 3.75% per annum. The Business Loan was secured by a general security interest in all of the assets of TA&T. The Business Loan contained other standard provisions that are customary of loans of this type. The business loan was paid in full during the first quarter of 2023 and there was no outstanding balance at September 30, 2024.

#### Related Party Debt

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. The related party debt was paid in full during the third quarter of 2024 and there was no outstanding balance at September 30, 2024.

#### Wells Fargo Line of Credit

Prior to SINTX’s acquisition of TA&T, TA&T entered into a revolving line of credit with Wells Fargo. As of September 30, 2024, the line of credit with Wells Fargo had no outstanding balance and the account has been closed.

#### Insurance Premium Finance Arrangements

In March 2024, in connection with securing Director and Officer professional liability insurance, the Company entered into a Premium Finance Arrangement to extend the premium payment out for a period of 10 months. The Company paid a total of $40,000 up front toward the insurance premium and financed approximately $239,000. The Company will make 10 equal payments under the terms of the Premium Finance Agreement. The Premium Finance Agreement bears interest at an annual percentage rate of 8.510%. As of September 30, 2024, there was an outstanding balance of $70,000.

In June 2024, in connection with securing commercial liability insurance, the Company entered into a Premium Finance Arrangement to extend the premium payment out for a period of 10 months. The Company paid a total of $26,000 up front toward the insurance premium and financed approximately $117,000. The Company will make 10 equal payments under the terms of the Premium Finance Agreement. The Premium Finance Agreement bears interest at an annual percentage rate of 8.75%. As of September 30, 2024, there was an outstanding balance of $64,000.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined in Item 303(a)(4) of Regulation S-K.

### Critical Accounting Policies and Estimates

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 nine months ended September 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.

### New Accounting Pronouncements Not Yet Adopted

See discussion under Note 1, Organization and Summary of Significant Accounting Policies, to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q, for information on new accounting pronouncements.

## Controls and procedures

As filed, 1,951 characters.

This Report includes the certifications of our Chief Executive Officer and Principal Financial Officer required by Rule 13a-14 of the Securities Exchange Act of 1934 (the “Exchange Act”). See Exhibits 31.1 and 31.2. This Item 4 includes information concerning the controls and control evaluations referred to in those certifications.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are properly recorded, processed, summarized and reported within the time periods required by the Commission’s rules and forms.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer and principal financial officer), of the effectiveness of the design and operation of these disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of September 30, 2024. Based on this evaluation, the Chief Executive Officer concluded that our disclosure controls and procedures were effective as of September 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q.

There were no changes in our internal control over financial reporting that occurred during the third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 3,577 characters.

### The Company may not be successful in its efforts to transition it focus to advancements in the medical device sector

The Company is focusing its strategic efforts to emphasize advancements in the medical device sector. SINTX is now prioritizing the development and commercialization of innovative medical devices, leveraging our expertise in advanced ceramics and biomaterials. There can be no assurance that SINTX will be successful in these efforts. If we fail in any of these endeavors or experience delays in pursuing them, we will not generate revenues as planned and will need to curtail operations or seek additional financing earlier than otherwise anticipated.

***Our success will depend on our acquiring revenue generating assets. We may not be successful in acquiring revenue generating assets which will impact our ability fund operations.***

To accelerate this transformation, SINTX is also actively exploring the acquisition of revenue-generating assets that will strengthen our position in the medical device field. These acquisitions are aimed at diversifying our product offerings, expanding market reach, Further, Ascendiant Capital Markets, LLC was retained to assist in identifying strategic business opportunities that align with our renewed focus on the medical device sector. If we fail in any of these endeavors or experience delays in pursuing them, we will not generate revenues as planned and will need to curtail operations or seek additional financing earlier than otherwise anticipated.

***The delay in the divesture of our armor, aerospace and defense segments could delay development of our medical device focus resulting in a delay in future revenue.***

We are pursuing the sale of our armor, aerospace, and defense segments, Divesting these industrial applications will allow us to reallocate resources and capital toward the high-growth medical device sector. Any delay in such divestitures will impact adversely on our reallocation of resources and capital toward the medical device sector. If we fail in any of these endeavors or experience delays in pursuing them, we will not generate revenues as planned and will need to curtail operations or seek additional financing earlier than otherwise anticipated.

***The August 8, 2024 reduction in force may result in the Company not having the necessary personnel to pursue its strategic objectives.***

On August 8, 2024, the Board of Directors approved a plan to implement a Company-wide reduction in the 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 reduced the number of employees of the Company from 40 to 23. As a result we may not have sufficient personnel to effectuate our business strategy. The members of our current senior management team may not be able to successfully implement our strategy. There are no assurances that the services of any of these individuals will be available to us for any specified period of time. The successful integration of our senior management team, the loss of members of our senior management team, engineering team and key external advisors, or our inability to attract or retain other qualified personnel or advisors could have a material adverse effect on our business, financial condition and results of operations.

**Additional information regarding risk factors appears in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 27, 2024.**

Filed Nov 12, 2024.
Source: SEC EDGAR, the filing index for accession 0001493152-24-044728. Last ingested by Listed: Nov 5, 2026, 16:36 ET. No prices; not investment advice.