Sintx Technologies(SINT) - 2025 Q1 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements For the quarter ended March 31, 2025, SINTX Technologies reported a significant decrease in total revenue to $0.37 million from $0.69 million year-over-year, primarily due to a drop in grant revenue. The company's net loss widened to $2.3 million from $0.9 million in the prior-year period. Despite the loss, total assets and stockholders' equity increased, driven by $4.3 million in net cash from financing activities, including a $5.0 million private placement. Key strategic moves included the disposition of the TA&T subsidiary to reduce operating expenses Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $11.4 million from $9.4 million at year-end 2024, primarily due to a rise in cash and cash equivalents to $6.5 million. Total liabilities saw a slight decrease to $5.4 million. Consequently, total stockholders' equity improved significantly to $6.1 million from $3.9 million, reflecting recent financing activities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,500 | $3,598 | | Total current assets | $7,617 | $4,771 | | Total assets | $11,449 | $9,413 | | Liabilities & Equity | | | | Total current liabilities | $2,211 | $1,982 | | Total liabilities | $5,357 | $5,519 | | Total stockholders' equity | $6,092 | $3,894 | | Total liabilities and stockholders' equity | $11,449 | $9,413 | Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, total revenue decreased by 46% to $0.37 million compared to $0.69 million in the same period of 2024, mainly due to a sharp decline in grant and contract revenue. Despite a 32% reduction in total operating expenses, the net loss increased to $2.3 million from $0.9 million year-over-year, driven by a significant negative change in other income related to derivative liabilities Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total revenue | $369 | $687 | | Gross profit | $123 | $464 | | Loss from operations | $(2,383) | $(3,197) | | Net loss | $(2,292) | $(886) | | Net loss per share – basic | $(1.29) | $(10.26) | Condensed Consolidated Statements of Stockholders' Equity During the first quarter of 2025, total stockholders' equity increased from $3.9 million to $6.1 million. This was primarily driven by the issuance of common stock and pre-funded warrants for cash, which raised approximately $4.4 million net of fees, offsetting the $2.3 million net loss for the period Changes in Stockholders' Equity (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | Balance as of December 31, 2024 | $3,894 | | Common stock and prefunded warrants issued for cash, net | $4,399 | | Stock based compensation | $177 | | Purchase of common stock into Treasury | $(86) | | Net loss | $(2,292) | | Balance as of March 31, 2025 | $6,092 | Condensed Consolidated Statements of Cash Flows For the first quarter of 2025, net cash used in operating activities decreased to $1.3 million from $2.7 million in the prior-year period. The company generated $4.3 million in cash from financing activities, primarily through stock and warrant issuances. This resulted in a net increase in cash and cash equivalents of $2.9 million, ending the period with a balance of $6.5 million Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,301) | $(2,733) | | Net cash used in investing activities | $(63) | $(173) | | Net cash provided by financing activities | $4,266 | $5,328 | | Net increase in cash | $2,902 | $2,422 | Notes to Condensed Consolidated Financial Statements The notes detail the company's business as an advanced ceramics firm, its reliance on equity financing, and recent strategic actions. Key events include the February 2025 disposition of the TA&T subsidiary to reduce costs, a $5.0 million private placement in February 2025, and cost-cutting measures like a workforce reduction. Management has concluded that these actions alleviate substantial doubt about the company's ability to continue as a going concern through at least May 2026 - On February 19, 2025, the company sold its subsidiary TA&T to Tethon Corporation in exchange for Tethon assuming TA&T's outstanding liabilities. This involved disposing of $743k in assets and $719k in liabilities[52][53] - The company raised aggregate gross proceeds of $5.0 million from a private placement of common stock and warrants, which closed on February 25, 2025[34][70] - Strategic cost-saving measures include a company-wide workforce reduction in August 2024 and a decision to cease efforts to make the armor plant operational, resulting in a $4.6 million impairment charge in 2024[41][42] - Following recent financing and cost reductions, management has determined there is no significant uncertainty about the company's ability to continue as a going concern through at least May 15, 2026[45] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 46% year-over-year revenue decline in Q1 2025, driven by the disposition of its TA&T subsidiary, which eliminated most grant revenue. Operating loss narrowed due to cost-cutting in R&D and other areas. The company's liquidity has been bolstered by a $5.0 million private placement in February 2025. These measures, combined with a workforce reduction, have led management to conclude there is no uncertainty about its ability to continue as a going concern through at least March 2026 Results of Operations Total revenue for Q1 2025 decreased by $0.3 million (46%) compared to Q1 2024, primarily due to a 79% drop in grant and contract revenue following the disposition of TA&T. Operating expenses fell by $1.2 million (32%), with significant decreases in R&D (-45%) and grant-related expenses (-81%). Despite a lower operating loss, net loss increased by 159% to $2.3 million, mainly because of a $2.2 million negative swing in other income related to the change in fair value of derivative liabilities Q1 2025 vs Q1 2024 Operating Results (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $ 369 | $ 687 | $ (318) | -46% | | Grant and contract revenue | $ 78 | $ 378 | $ (300) | -79% | | Gross profit | $ 123 | $ 464 | $ (341) | -73% | | Research and development | $ 1,116 | $ 2,019 | $ (903) | -45% | | Loss from operations | $ (2,383) | $ (3,197) | $ 814 | -25% | | Net loss | $ (2,292) | $ (886) | $ (1,406) | 159% | Liquidity and Capital Resources The company has historically relied on equity financing to fund its operations. In Q1 2025, net cash used in operations was $1.3 million, a significant improvement from $2.7 million in Q1 2024. The company's cash position was strengthened by a $5.0 million private placement in February 2025, resulting in $4.3 million of net cash from financing activities. Following this capital raise and cost reductions, management believes it can fund operations through at least March 31, 2026 - The company's continuation as a going concern is dependent on increasing sales, decreasing expenses, and raising additional funds[115] - In February 2025, the company raised $5.0 million in gross proceeds from a private placement transaction[117] - The company sold its subsidiary TA&T on February 19, 2025, in exchange for the assumption of its liabilities[122] - Management has determined there is no uncertainty of the Company's ability to continue as a going concern through at least March 31, 2026[123] Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $ (1,301) | $ (2,733) | | Net cash provided by financing activities | $ 4,266 | $ 5,328 | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the company - Not applicable[138] Item 4. Controls and Procedures Based on an evaluation conducted by management, including the CEO, the company's disclosure controls and procedures were deemed effective as of March 31, 2025. There were no material changes to internal controls over financial reporting during the first quarter of 2025 - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[141] - No material changes in internal control over financial reporting occurred during the first quarter of 2025[142] Part II. Other Information Item 1. Legal Proceedings The company reports that it is not aware of any pending or threatened legal proceedings that would have a material adverse effect on its business, financial condition, or operating results - The company is not aware of any pending or threatened legal proceeding against it that could have a material adverse effect on its business[143] Item 1A. Risk Factors There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K[144] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company completed a private placement on February 20, 2025, for aggregate gross proceeds of $5.0 million. Additionally, under its share repurchase program, the company purchased 29,665 shares in March 2025 at an average price of $2.91 per share, leaving approximately $414,000 available for future repurchases - On February 20, 2025, the Company entered into a private placement transaction for aggregate gross proceeds of $5.0 million[145] Share Repurchase Activity (Q1 2025) | Period | Shares Purchased | Average Price Paid | Max Value Remaining | | :--- | :--- | :--- | :--- | | 03/01/25 – 03/31/25 | 29,665 | $2.91 | $413,736.72 | Item 3. Defaults Upon Senior Securities None reported - None[148] Item 4. Mine Safety Disclosures Not applicable - Not applicable[149] Item 5. Other Information None reported - None[150] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Entity Acquisition Agreement for the TA&T sale, forms of warrants and securities purchase agreements from recent financings, and certifications by the CEO and PFO