0001493152-19-012287.txt : 20190814 0001493152-19-012287.hdr.sgml : 20190814 20190814060810 ACCESSION NUMBER: 0001493152-19-012287 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 65 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190814 DATE AS OF CHANGE: 20190814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Sintx Technologies, Inc. CENTRAL INDEX KEY: 0001269026 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-33624 FILM NUMBER: 191022670 BUSINESS ADDRESS: STREET 1: 1885 WEST 2100 STREET CITY: SALT LAKE CITY STATE: UT ZIP: 84119 BUSINESS PHONE: 801-839-3516 MAIL ADDRESS: STREET 1: 1885 WEST 2100 STREET CITY: SALT LAKE CITY STATE: UT ZIP: 84119 FORMER COMPANY: FORMER CONFORMED NAME: AMEDICA Corp DATE OF NAME CHANGE: 20121231 FORMER COMPANY: FORMER CONFORMED NAME: AMEDICA CORP DATE OF NAME CHANGE: 20031104 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2019

 

OR

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 001-33624

 

 

SINTX Technologies, Inc.

(previously known as “Amedica Corporation”)

(Exact name of registrant as specified in its charter)

 

 

DELAWARE   84-1375299
(State or other jurisdiction   (IRS Employer
of incorporation or organization)   Identification No.)

 

1885 West 2100 South, Salt Lake City, UT   84119
(Address of principal executive offices)   (Zip Code)

 

(801) 839-3500

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbols   Name of each exchange on which registered
Common Stock   SINT   The NASDAQ Capital Market

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files); Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer [  ] Accelerated filer [  ]
       
Non-accelerated filer [  ] Smaller reporting company [X]
       
    Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes [  ] No  [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

 

1,957,930 shares of common stock, $0.01 par value, were outstanding at August 12, 2019.

 

 

 

   
   

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

Table of Contents

 

Part I. Financial Information  
Item 1. Financial Statements  
Condensed Consolidated Balance Sheets (unaudited) 3
Condensed Consolidated Statements of Operations (unaudited) 4
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) 5
Condensed Consolidated Statements of Cash Flows (unaudited) 6
Notes to Condensed Consolidated Financial Statements (unaudited) 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 3. Quantitative and Qualitative Disclosures About Market Risk 26
Item 4. Controls and Procedures 26
Part II. Other Information  
Item 1. Legal Proceedings 27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27
Item 3. Defaults Upon Senior Securities 27
Item 4. Mine Safety Disclosures 27
Item 5. Other Information 27
Item 6. Exhibits 28
Signatures 29

 

 2 
   

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

Condensed Consolidated Balance Sheets - Unaudited

(in thousands, except share and per share data)

 

   June 30, 2019   December 31, 2018 
           
Assets          
Current assets:          
Cash and cash equivalents  $3,192   $5,447 
Trade accounts receivable, net of allowance of $6 and $56, respectively   173    263 
Prepaid expenses and other current assets   234    171 
Inventories   85    52 
Notes receivable, current portion   1,399    1,084 
Total current assets   5,083    7,017 
           
Inventories, net   596    624 
Property and equipment, net   87    124 
Intangible assets, net   44    46 
Long-term note receivable, net of current portion   2,897    3,669 
Operating lease right-of-use-asset   2,535    - 
Other long-term assets   35    35 
Total assets  $11,277   $11,515 
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable  $295   $301 
Accrued liabilities   813    838 
Derivative liabilities, current portion   454    1,062 
Current portion of operating lease liability   587    169 
Other current liabilities   23    10 
Total current liabilities   2,172    2,380 
           
Operating lease liability, net of current portion    2,050    - 
Derivative liabilities, net of current portion   502    504 
Other long-term liabilities   113    232 
Total liabilities   4,837    3,116 
           
Commitments and contingencies   -    - 
           
Stockholders’ equity:          
Convertible preferred stock, $0.01 par value, 130,000,000 shares authorized; 737 shares and 4,074 shares issued and outstanding at June 30, 2019 and December 31, 2018.   -    - 
Common stock, $0.01 par value, 250,000,000 shares authorized; 1,854,898 shares, and 726,455 shares issued and outstanding at June 30, 2019 and December 31, 2018.   19    7 
Additional paid-in capital   238,062    237,673 
Accumulated deficit   (231,641)   (229,281)
Total stockholders’ equity   6,440    8,399 
Total liabilities and stockholders’ equity  $11,277   $11,515 

 

The condensed consolidated balance sheet as of December 31, 2018, has been prepared using information from the audited consolidated balance sheet as of that date.

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 3 
   

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except share and per share data)

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2019   2018   2019   2018 
Product revenue  $167   $-   $264   $- 
Costs of revenue   133    -    212    - 
Gross profit   34    -    52    - 
Operating expenses:                    
Research and development   836    956    1,554    1,833 
General and administrative   615    935    1,586    2,242 
Sales and marketing   105    11    164    58 
Total operating expenses   1,556    1,902    3,304    4,133 
Loss from operations   (1,522)   (1,902)   (3,252)   (4,133)
Other income (expenses):                    
Interest expense   (2)   (809)   (2)   (1,284)
Interest income   115    -    237    - 
Change in fair value of derivative liabilities   631    1,209    610    2,020 
Loss on extinguishment of debt   -    -    -    (340)
Offering costs   -    (682)   -    (682)
Loss on extinguishment of derivative liabilities   -    -    -    (1,252)
Other income, net   48    3    48    5 
Total other income (expense), net   792    (279)   893    (1,533)
Net loss from continuing operations before income taxes   (730)   (2,181)   (2,359)   (5,666)
Provision for income taxes   -    -    -    - 
Loss from continuing operations   (730)   (2,181)   (2,359)   (5,666)
Loss from discontinued operations   -    (131)   -    (44)
Net loss  $(730)  $(2,312)  $(2,359)  $(5,710)
Deemed dividend related to the beneficial conversion feature and accretion of a discount on series B preferred stock   (2,358)   (7,334)   (2,358)   (7,334)
Net loss attributable to common stockholders  $(3,088)  $(9,646)  $(4,717)  $(13,044)
Net loss per share – basic and diluted                    
Basic – continuing operations  $(0.78)  $(11.19)  $(2.84)  $(36.66)
Basic – discontinued operations   -    (0.67)   -    (0.28)
Basic - deemed dividend and accretion of a discount on conversion of series B preferred stock   (2.53)   (37.62)   (2.84)   (47.46)
Basic – attributable to common stockholders  $(3.31)  $(49.48)  $(5.68)  $(84.40)
                     
Diluted – continuing operations  $(1.46)  $(12.06)  $(3.58)  $(39.01)
Diluted – discontinued operations   -    (0.42)   -    (0.28)
Diluted - deemed dividend and accretion of a discount on conversion of series B preferred stock   (2.53)   (23.33)   (2.84)   (47.46)
Diluted – attributable to common stockholders  $(3.99)  $(35.81)  $(6.42)  $(86.75)
Weighted average common shares outstanding:                    
Basic   931,859    194,933    829,724    154,545 
Diluted   931,859    314,354    829,724    154,545 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 4 
   

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

Condensed Consolidated Statements of Stockholders’ Equity - Unaudited

(in thousands, except share and per share data)

 

   Preferred Stock   Common Stock   Paid-In   Accumulated   Total 
   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Balance at December 31, 2017   -   $-    100,935   $1   $226,070   $(220,629)  $5,442 
Common stock issued from exercise of warrants   -    -    27,139    -    1,633    -    1,633 
Issuance of common stock in exchange for reduction in debt   -    -    19,348    -    1,453    -    1,453 
Issuance of preferred stock from offering, net of issuance costs   15    -    -    -    6,754    -    6,754 
Warrants issued in association with debt   -    -    -    -    98    -    98 
Loss on extinguishment of derivative liabilities   -    -    -    -    

1,040

    -    

1,040

 
Deemed dividend related to adjustment of the exercise price of warrants issued with debt   -    -    -    -    (9)   -    (9)
Accretion of change in warrant exercise price   -    -    -    -    9    -    9 
Common stock issued due to conversion of preferred stock   (4)   -    102,886    1    (1)   -    - 
Accretion of convertible preferred stock discount   -    -    -    -    7,334    -    7,334 
Deemed dividend related to the issuance of preferred stock   -    -    -    -    (7,334)   -    (7,334)
Extinguishment of derivative liabilities   -    -    -    -    565    -    565 
Stock-based compensation   -    -    -    -    34    -    34 
Net loss   -    -    -    -    -    (5,710)   (5,710)
Balance at June 30, 2018   11   $-    250,308   $

2

   $237,646   $(226,339)  $11,309 

 

   Preferred Stock   Common Stock   Paid-In   Accumulated   Total 
   Shares   Amount   Shares   Amount   Capital   Deficit   Equity 
Balance at December 31, 2018   4,074   $-    726,455   $7   $237,673   $(229,281)  $8,399 

Common stock issued from exercise of warrants

   -    -    

500

    -    1    -    1 

Common stock issued due to conversion of preferred stock

   

(3,337

)   -    983,528    10    (10)   -    - 
Stock based compensation   -    -    -    -    1    -    1 
Common stock issued for cash   -   -    144,415    1    396        

397

 
Removal of derivative liability upon exercise of warrant   -    -    -    -    1    -    1 
Net loss   -    -    -    -    -    (2,359)   (2,359)
Balance at June 30, 2019   737   $-    1,854,898   $18   $238,062   $(231,640)  $6,440 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 5 
   

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

Condensed Consolidated Statements of Cash Flows - Unaudited

(in thousands)

 

   Six Months Ended June 30, 
   2019   2018 
Cash flow from operating activities          
Net loss from continuing operations  $(2,359)  $(5,666)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation expense   52    53 
Non-cash lease expense   171    (99)
Amortization of intangible assets   2    - 
Amortization of lease incentive for tenant improvements   -    28 
Non-cash interest income   (237)   - 
Non-cash interest expense   -    812 
Loss on extinguishment of debt   -    340 
Stock based compensation   1    34 
Change in fair value of derivative liabilities   (610)   (2,020)
Loss on extinguishment of derivative liabilities   -    1,252 
Loss on disposal of equipment   -    51 
Bad debt expense   9    - 
Changes in operating assets and liabilities:          
Trade accounts receivable   79    - 
Prepaid expenses and other current assets   (63)   (76)
Inventories   (5)   - 
Accounts payable and accrued liabilities   (19)   (241)
Net cash used in operating activities - continuing operations   (2,979)   (5,532)
Net cash used in operating activities - discontinued operations   -    (402)
Net cash used in operating activities   (2,979)   (5,934)
Cash flows from investing activities          
Purchase of property and equipment   (15)   - 
Proceeds from notes receivable, net of imputed interest   695    - 
Purchase of intangible asset   -    (50)
Net cash provided by (used in) investing activities – continuing operations   680    (50)
Net cash used in investing activities – discontinued operations        (107)
Net cash used in investing activities   680    (157)
Cash flows from financing activities          
Proceeds from issuance of stock in connection with exercise of warrants, net of issuance costs   1    1,633 
Proceeds from issuance of common stock, net of fees ($131)   397    - 
Proceeds from issuance of preferred stock, net of issuance costs ($668)   -    6,754 
Proceeds from issuance of warrant derivative liabilities, net of issuance costs ($682)   -    7,577 
Payments on operating lease liability   (354)   - 
Proceeds from issuance of debt   -    705 
Payments on debt   -    (2,282)
Net cash provided by (used in) financing activities   44   14,387 
Net increase (decrease) in cash and cash equivalents   (2,255)   8,296 
Cash and cash equivalents at beginning of period   5,447    539 
Cash and cash equivalents at end of period  $3,192   $8,835 
           
Noncash investing and financing activities          
Right-of-use assets and assumption of operating lease liability  $2,704   $- 
Reduction of derivative liability due to exercise of warrants   1    - 

Hercules and MEF I, LP/Anson Investments Debt Exchange

   -    2,265 
Issuance of common stock in exchange for reduction in debt   -    1,453 
Extinguishment of derivative liabilities through exercise of warrants   -    565 
Warrants issued in association with debt   -    98 
Supplemental cash flow information          
Cash paid for interest  $2   $337 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 6 
   

 

SINTX TECHNOLOGIES, INC.

(PREVIOUSLY KNOWN AS AMEDICA CORPORATION)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Organization and Summary of Significant Accounting Policies

 

Organization

 

SINTX Technologies, Inc. (“SINTX” or “the Company”) (previously known as Amedica Corporation) was incorporated in the state of Delaware on December 10, 1996. SINTX is an OEM ceramics company that develops and commercializes silicon nitride for medical and non-medical applications. The Company believes it is the first and only manufacturer to use silicon nitride in medical applications. The Company acquired US Spine, Inc. (“US Spine”), a Delaware spinal products corporation with operations in Florida, on September 20, 2010. The Company’s products are primarily sold in the United States.

 

As further explained in Note 12, On October 1, 2018, the Company completed the sale of its retail spine business to CTL Medical, a Dallas, Texas-based privately held medical device manufacturer. As a result of the sale, CTL Medical is now the exclusive owner of SINTX’s portfolio of metal and silicon nitride spine products, which are presently sold under the brand names of Taurus, Preference, and Valeo, with access to future silicon nitride spine technologies. Manufacturing, R&D, and all intellectual property related to the core, non-spine, biomaterial technology of silicon nitride remains with the Company. The Company will serve as CTL’s exclusive OEM provider of silicon nitride products.

 

On October 30, 2018, the Company amended its Certificate of Incorporation with the State of Delaware to change its corporate name to SINTX Technologies, Inc. in order to better reflect its focus on silicon nitride science and technologies and pipeline of silicon nitride-based products in various biomedical applications. The Company also changed its trading symbol on the NASDAQ Capital Market to “SINT”. The Company also changed the name of its wholly owned subsidiary US Spine, Inc. to “ST Sub, Inc.”

 

The previous name, Amedica, has transferred to CTL Medical, which is now CTL-Amedica. The Company’s new corporate brand reflects both the Company’s core competence in the science and production of silicon nitride ceramics, as well as encouraging prospects for the future, as an OEM supplier of spine implants to CTL-Amedica, and several opportunities outside of spine. The Company will focus on developing silicon nitride in terms of product design, and future biomaterial formulations, for a variety of OEM customers.

 

As further explained in Note 14, the Company effected a 1 for 30 reverse stock split of the Company’s common stock on July 26, 2019.

 

Basis of Presentation

 

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include all assets and liabilities of the Company and its wholly owned subsidiary, ST Sub, Inc. All material intercompany transactions and balances have been eliminated in consolidation. SEC rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, so long as the statements are not misleading. In the opinion of management, these financial statements and accompanying notes contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the periods presented herein. These condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 11, 2019. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. The Company’s significant accounting policies are set forth in Note 1 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018.

 

 7 
   

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the periods then ended. Actual results could differ from those estimates. The most significant estimates relate to inventory, long-lived and intangible assets and the liability for preferred stock and common stock warrants.

 

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 do 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 six months ended June 30, 2019 and 2018, the Company incurred net losses from continuing operations of approximately $2.4 million and $5.7 million, respectively, and used cash in continuing operations of approximately $3.0 million and $5.5 million, respectively. The Company had an accumulated deficit of approximately $232 million and $229 million as of June 30, 2019 and December 31, 2018, respectively. To date, the Company’s operations have been principally financed by proceeds received from the issuance of preferred and common stock, convertible debt and bank debt 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 operating activities. The Company’s continuation as a going concern is dependent upon its ability to increase sales and/or raise additional funds through the capital markets. Whether and when the Company can attain profitability and positive cash flows from operating activities or obtain additional financing is uncertain.

 

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. The unique features of the Company’s silicon nitride material are not well known, and the Company believes that 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.

 

 8 
   

 

The Company has common stock that is publicly traded and has been able to successfully raise capital when needed since the date of the Company’s initial public offering. In March 2018, the Company closed on gross proceeds of $1.4 million, before payment of placement agent fees and costs on a warrant reprice and exercise transaction. Additionally, on May 14, 2018, the Company closed on a public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15 million, which excludes underwriting discounts and commissions and offering expenses payable by the Company. On June 4, 2019, the Company entered into an Equity Distribution Agreement, (the “Distribution Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which the Company may sell from time to time, shares of our common stock, having an aggregate offering price of up to $1.6 million through Maxim, as agent (the “ATM Offering”). Subject to the terms and conditions of the Distribution Agreement, Maxim will use its commercially reasonable efforts to sell the shares from time to time, based on the Company’s instructions. The Company has no obligation to sell any of the shares and may at any time suspend offers under the Distribution Agreement. The Offering will terminate upon the earlier of (i) the sale of Shares having an aggregate offering price of $1.6 million, (ii) the termination by either Maxim or the Company upon the provision of fifteen (15) days written notice, or (iii) June 4, 2020. The Company agrees to pay Maxim a transaction fee at a fixed rate of 4.25% of the gross sales price of shares sold under the Distribution Agreement and agreed to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended. During the three months ended June 30, 2019 the Company raised $0.397 million, net of fees through the issuance of 144,415 shares of common stock under the Distribution Agreement with Maxim. The Company is eligible to raise an additional $1.2 million under this offering. In addition, the Company converted 3,337 shares of preferred stock into 983,528 shares of common stock. The Company is engaged in discussions with investment and banking firms to examine financing alternatives, including options for a public offering of the Company’s preferred or common stock. On October 1, 2018, the Company sold the retail spine business. This sale will continue to provide cash flows from July 2019 totaling $1.4 million over the next ten months and $3.5 million for the following eighteen months. The buyer also assumed the Company’s $2.5 million related party note payable.

 

Although the Company is seeking to obtain additional equity and/or debt financing, such funding is not assured and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing is also not assured and, 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.

 

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

 

Significant Accounting Policies

 

Except as explained below, no material changes were made to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

Accounting Pronouncements Adopted During the Quarter Ended June 30, 2019

 

In August 2016, the FASB updated accounting guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Under prior U.S. GAAP, there was no specific guidance on the eight cash flow classification issues aforementioned. The Company adopted the new guidance effective January 1, 2019. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

 

In February 2016, the FASB updated the accounting guidance related to leases as part of a joint project with the International Accounting Standards Board (“IASB”) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the new guidance effective January 1, 2019 (see Note 13), using the modified retrospective approach. Adoption of the new guidance resulted in the Company being required to record an additional operating lease right-of-use asset totaling approximately $0.659 million and liability totaling approximately $0.946 million (with $0.659 million incremental to adoption of the new guidance) on the date of adoption. Subsequent to the initial adoption of the new standard the Company amended the lease (see Note 13). The standard did not materially impact the consolidated net loss and had no impact on cash flows.

 

In May 2014, in addition to several amendments issued during 2016, the FASB updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The Company adopted the new guidance effective January 1, 2019. The core principle of the new guidance is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are often required within the revenue recognition process than were required under prior U.S. GAAP. The Company has one primary customer (see Note 12) and related contract that has one performance obligation to which revenue is allocated. Revenue under this contract is recognized when the product is shipped to the customer. The Company generally bills its customer upon shipment of the product and invoices are generally due within 30 days. The Company does provide certain rights of return, which historically have not been significant. The Company does not anticipate incurring significant incremental costs to obtain contracts with future customers. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

 

New Accounting Pronouncements Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

 

 9 
   

 

2. Basic and Diluted Net Loss per Common Share

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period that are determined to be dilutive. Common stock equivalents are primarily comprised of preferred stock, warrants for the purchase of common stock and stock options. The Company had potentially dilutive securities, totaling approximately 0.6 million and 0.7 million as of June 30, 2019 and 2018, respectively.

 

Below are basic and diluted loss per share data for the three months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(730)  $(632)  $(1,362)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(3,088)  $(632)  $(3,720)
                
Denominator:               
Number of shares used in per common share calculations:   931,859    -    931,859 
                
Net loss per common share:               
Loss from continuing operations  $(0.78)  $-   $(1.46)
Deemed dividend and accretion of a discount   (2.53)   -    (2.53)
Net loss attributable to common stockholders  $(3.31)  $-   $(3.99)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,359)  $(609)  $(2,968)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(4,717)  $(609)  $(5,326)
                
Denominator:               
Number of shares used in per common share calculations:   829,724    -    829,724 
                
Net loss per common share:               
Loss from continuing operations  $(2.84)  $-   $(3.58)
Deemed dividend and accretion of a discount   (2.84)   -    (2.84)
Net loss attributable to common stockholders  $(5.68)  $-   $(6.42)

 

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Below are basic and diluted loss per share data for the three months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,181)  $(1,610)  $(3,791)
Income from discontinued operations   (131)   -    (131)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(9,646)  $(1,610)  $(11,256)
                
Denominator:               
Number of shares used in per common share calculations:   194,933    119,421    314,354 
                
Net loss per common share:               
Loss from continuing operations  $(11.19)  $-   $(12.06)
Loss from discontinued operations   (0.67)   -    (0.42)
Deemed dividend and accretion of a discount   (37.62)   -    (23.33)
Net loss attributable to common stockholders  $(49.48)  $-   $(35.81)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(5,666)  $(362)  $(6,028)
Income from discontinued operations   (44)   -    (44)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(13,044)  $(362)  $(13,406)
                
Denominator:               
Number of shares used in per common share calculations:   154,545    -    154,545 
                
Net loss per common share:               
Loss from continuing operations  $(36.66)  $-   $(39.01)
Loss from discontinued operations   (0.28)   -    (0.28)
Deemed dividend and accretion of a discount   (47.46)   -    (47.46)
Net loss attributable to common stockholders  $(84.40)  $-   $(86.75)

 

3. Inventories

 

Inventories consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Raw materials  $596   $624 
Intermediate goods   9    - 
WIP   76    47 
Finished goods   -    5 
   $681   $676 

 

As of June 30, 2019, inventories totaling approximately $0.08 million and $0.6 million were classified as current and long-term, respectively. Inventories classified as current represent the carrying value of inventories as of June 30, 2019, that management estimates will be sold by June 30, 2020.

 

4. Intangible Assets

 

Intangible assets consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Trademarks  $50   $50 
Less: accumulated amortization   (6)   (4)
   $44   $46 

 

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5. Fair Value Measurements

 

Financial Instruments Measured and Recorded at Fair Value on a Recurring Basis

 

The Company has issued certain warrants to purchase shares of common stock, which are considered derivative liabilities because they have registration rights which could require a cash settlement and are re-measured to fair value at each reporting period in accordance with accounting guidance. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1 - quoted market prices for identical assets or liabilities in active markets.
     
  Level 2 - observable prices that are based on inputs not quoted on active markets but corroborated by market data.
     
  Level 3 - unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

 

The Company classifies assets and liabilities measured at fair value in their entirety based on the lowest level of input that is significant to their fair value measurement. No financial assets were measured on a recurring basis as of June 30, 2019 and December 31, 2018. The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2019 and December 31, 2018:

 

   Fair Value Measurements as of June 30, 2019 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $956   $956 

 

   Fair Value Measurements as of December 31, 2018 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $1,566   $1,566 

 

The Company did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the three months ended June 30, 2019 and 2018.

 

   Common Stock
Warrants
 
Balance at December 31, 2017  $(1,357)
Issuances of warrants classified as derivatives   (7,577)
Change in fair value   2,020 
Exercise of warrants   565 
Other, net   (212)
Balance at June 30, 2018  $(6,561)
      
Balance at December 31, 2018  $(1,566)
Change in fair value   610 
Balance at June 30, 2019  $(956)

 

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Common Stock Warrants

 

The Company has issued certain warrants to purchase shares of common stock, which are considered derivative liabilities because they have registration rights which could require a cash settlement and are re-measured to fair value at each reporting period in accordance with accounting guidance. At June 30, 2019 and December 31, 2018, approximately $0.9 million of the derivative liability was calculated using the Black-Scholes-Merton valuation model. At June 30, 2019 and December 31, 2018, no significant amount of the derivative liability was calculated using the Monte Carlo Simulation valuation model.

 

The assumptions used in estimating the common stock warrant liability using the Black-Scholes-Merton valuation model as of June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   2.23%   2.51%
Weighted-average expected life (in years)   4.1    0.9 
Expected dividend yield   -%   -%
Weighted-average expected volatility   68%   157%

 

The assumptions used in estimating the common stock warrant liability using the Monte Carlo Simulation valuation model at June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   1.72%   2.46%
Weighted-average expected life (in years)   2.4    3.1 
Expected dividend yield   -%   -%
Weighted average expected volatility   64%   68%

 

In addition, if any time after the second anniversary of the issuance of the warrant, both: (1) the 30-day volume weighted average price of the Company’s stock exceeds $3.00; and (2) the average daily trading volume for such 30-day period exceeds $0.4 million, the Company may call this warrant for $0.01 per share. For those warrants that have a call provision, management believes the Monte Carlo Simulation valuation model provides a better estimate of fair value for the warrants issued during 2018 and 2017 than the Black-Scholes-Merton valuation model.

 

Other Financial Instruments

 

The Company’s recorded values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded value of notes payable approximates the fair value as the interest rate approximates market interest rates.

 

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6. Accrued Liabilities

 

Accrued liabilities consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Payroll and related expense  $413   $388 
Resterilization and repackaging costs   344    344 
Other   56    106 
   $813   $838 

 

7. Debt

 

L2 Capital Debt

 

On January 31, 2018, the Company signed a promissory note in the aggregate principal amount of up to $0.84 million (the “L2 Note”) for an aggregate purchase price of up to $0.75 million and warrants to purchase up to an aggregate of 68,257 shares of common stock (the “Warrants”) at an exercise price of $3.31 per share. The maturity date was six months from date of funding. The L2 Note’s interest rate was 8% per year and a default interest rate of 18% per year.

 

On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with L2 Capital. The total payoff was $1.1 million, with $0.7 million in principal and $0.4 million in interest.

 

Hercules and MEF I, LP/Anson Investments Debt Exchange

 

On January 3, 2018, the Company entered into an Assignment Agreement (the “Assignment Agreement”) with MEF I, LP and Anson Investments Master Fund (collectively the “Assignees” and each an “Assignee”), Hercules Technology III, L.P. (“HT III”) and Hercules Capital, Inc. (“HC” and, together with HT III, “Hercules”), pursuant to which Hercules assigned to the Assignees all amounts remaining due under the Loan and Security Agreement, dated June 30, 2014, as amended, between the Company and Hercules (the “Loan and Security Agreement”) and (2) the note (the “Hercules Note”) between the Company and Hercules evidencing the amounts due under the Loan and Security Agreement. The total amount assigned by Hercules to the Assignees in the aggregate was $2.3 million and was secured by the same collateral underlying the Loan and Security Agreement. Subsequently, the Company entered into an exchange agreement pursuant to which the Assignees agreed to exchange the Hercules Term Loan obligation acquired by them for two senior secured convertible promissory notes issued by the Company, each in the principal amount of $1.1 million for an aggregate principal amount of $2.2 million, (the “Exchange Notes”). The Exchange Notes were scheduled to mature on February 3, 2019 (the “Maturity Date”). The Exchange Notes had interest at a rate of 15% per annum. The Exchange Notes were secured by a first priority security interest in substantially all of the Company assets, including intellectual property, and contains covenants restricting payments to certain of our affiliates.

 

On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with MEF I, L.P and Anson Investments. The total payoff was $1.6 million, with $1.4 million in principal and $0.2 million in interest.

 

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North Stadium Term Loan – Related Party

 

On July 28, 2017, the Company entered into a $2.5 million term loan (the “North Stadium Loan”) with North Stadium Investments, LLC (“North Stadium”), a company owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board. The North Stadium Loan bore interest at 10% per annum and required the Company to make monthly interest only payments from September 5, 2017 through July 5, 2018. All principal and unpaid interest (if any) under the North Stadium Loan was due and payable on July 28, 2018. The North Stadium Loan was secured by substantially all of the Company’s assets but was junior to security interest in assets encumbered by the Hercules Term Loan (see below). In connection with the North Stadium Loan the Company also issued North Stadium a warrant to purchase up to 1,834 shares of the Company’s common stock at a purchase price of $151.20 per share, subject to a 5-year term. The relative estimated value of the warrants on the date of grant approximated $0.2 million, which was being amortized as interest expense over the life of the term loan.

 

On October 1, 2018, CTL Medical assumed the North Stadium Term Loan debt as part of the sale of the retail spine business. As of December 31, 2018, the Company has been released by North Stadium from any and all obligations related to this debt.

 

Hercules Term Loan

 

On June 30, 2014, the Company entered into a Loan and Security Agreement with Hercules which provided the Company with a $20.0 million term loan. The Hercules Term Loan matured on January 1, 2018. The Hercules Term Loan included a $0.2 million closing fee, which was paid to Hercules on the closing date of the loan. The closing fee was recorded as a debt discount and was being amortized to interest expense over the life of the loan. The Hercules Term Loan also included a non-refundable final payment fee of $1.7 million. The final payment fee was being accrued and recorded to interest expense over the life of the loan.

 

On January 3, 2018, the Hercules Term Loan and all amounts owing thereunder was assigned to MEF I and Anson Investments. See discussion above under “Hercules and MEF I, LP/Anson Investments Debt Exchange” for a more detailed description of that transaction.

 

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8. Equity

 

Preferred Stock Conversion

 

From July through December of 2018, Series B Convertible Preferred shareholders of the Company converted 10,926 shares of Series B Convertible Preferred Stock into 569,966 shares of common stock.

 

During May 2018 and June 2018, Series B Convertible Preferred shareholders of the Company converted a total of 4,072 shares of Series B Convertible Preferred Stock into 102,886 shares of common stock.

 

During June 2019, Series B Convertible Preferred shareholders of the Company converted 3,337 shares of Series B Convertible Preferred Stock into 983,528 shares of common stock.

 

August 2018 Warrant Exercise

 

During August 2018, pursuant to the cashless exercise provision contained in their warrant, L2 Capital exercised its warrants and was issued 8,069 shares of common stock. The L2 Capital warrant is no longer outstanding.

 

July 2018 Warrant Exercise

 

During May 2018, the Company closed on a public offering, consisting of both convertible preferred stock and warrants. During July 2018, 998 of the warrants were exercised and converted into 998 shares of common stock.

 

May 2018 Warrant Exercise (July 2016 Warrants)

 

During March 2018, the Company repriced 27,733 warrants dated July 8, 2016, from $360 to $63.75 (for further description see Warrant Reprice March 2018 below). During May 2018, an additional 4,861 of the repriced warrants were exercised resulting in gross proceeds to the Company of $0.3 million.

 

May 2018 Unit Offering

 

On May 14, 2018, the Company closed on an underwritten public offering of units (“the Units”), consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million, which excludes underwriting discounts and commissions and offering expenses payable by SINTX. The offering was priced at a public offering price of $1,000 per unit. Each unit consisted of one share of Series B Convertible Preferred Stock, with a stated value of $1,100, and warrants to purchase up to 25 shares of common stock (the “May 2018 Warrants”). The May 2018 Warrants are initially exercisable at an exercise price of $48 per share and expire 5 years from the date of issuance. The Series B Preferred Stock is convertible into shares of common stock by dividing the stated value of $1,100 by: (i) for the first 40 trading days following the closing of this offering, $43.54 (the “Conversion Price”), (ii) after 40 trading days but prior to the 81st trading day, the lesser of  (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the 41st trading day, and (iii) after 80 trading days, the lesser of  (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the date of the notice of conversion. In the case of (ii)(b) and (iii)(b) above, the share price shall not be less than $2.94 (the “Floor Price”). Each of the Conversion Price and Floor Price is subject to adjustment in certain circumstances.

 

The Company raised $15.0 million associated with the issuance of the Units, with $6.8 million, net of issuance costs of $0.6 million, allocated to the preferred stock and $6.9 million, net of issuance costs of $0.7 million, allocated to the warrants. In association with the warrants that were recorded as a derivative liability, the Company immediately expensed approximately $0.7 million of issuance costs. The 15,000 preferred shares were initially convertible into 378,997 shares of common stock and had an effective conversion rate of $43.50 per share based on the proceeds that were allocated to them. The conversion price was adjusted to $19.63, effective July 12, 2018, and was adjusted again on September 7, 2018 to $14.40. During the months ended June 30, 2019 the conversion price was adjusted down on several occasions and ultimately settled at $2.94 as of June 30, 2019.

 

Warrant Reprice March 2018

 

During the six months ended June 30, 2018 the Company entered into a warrant amendment agreement (the “Amendment Agreement”) with certain holders of previously issued Series E Common Stock Purchase Warrants (collectively, “Investors”). In connection with that certain Series E Common Stock Purchase Warrant between the Company and Investors dated July 8, 2016, the Company issued to Investors warrants to purchase up to 27,733 shares of common stock (the “Warrant Shares”) at an exercise price of $360.00 per share, (the “Investors Warrants”). Under the terms of the Amendment Agreement, in consideration of Investors exercising 22,279 of the Investors Warrants (the “Warrant Exercise”), the exercise price per share of the Investors Warrants was reduced to $63.75 per share. 22,278 of the Investors Warrants were exercised resulting in gross proceeds to the Company of $1.4 million before payment of placement agent fees and costs. In addition, and as further consideration, the Company issued to Investors new warrants to purchase up to the number of shares of common stock equal to 100% of the number of Warrant Shares issued pursuant to the Warrant Exercise at an exercise price per share equal to $60.00 per share.

 

June 2019 ATM Stock Offerings

During June 2019 the Company entered into an ATM equity distribution agreement in which the Company may sell, from time to time, shares of common stock having an aggregate offering price of up to $1.6 million. The Company sold 144,415 shares in June of 2019 raising approximately $0.4 million net of issuance cost of $0.1 million. The Company is eligible to raise an additional $1.1 million under this offering.

 

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9. Stock-Based Compensation

 

A summary of the Company’s outstanding stock option activity for the six months ended June 30, 2019 is as follows:

 

   Options  

Weighted-
Average

Exercise Price

  

Weighted-

Average
Remaining
Contractual
Life
(Years)

   Intrinsic
Value
 
As of December 31, 2018   377   $7,653    6.0   $   - 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Forfeited   -    -    -    - 
Expired   -    -    -    - 
As of June 30, 2019   377   $7,653    5.8   $- 
Exercisable as of June 30, 2019   371   $7,551    6.3   $- 
Expected to vest as of June 30, 2019   377   $7,653    5.5   $- 

 

The Company estimates the fair value of each stock option on the grant date using the Black-Scholes-Merton valuation model, which requires several estimates including an estimate of the fair value of the underlying common stock on grant date. The expected volatility was based on an average of the historical volatility of a peer group of similar companies. The expected term was calculated utilizing the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option.

 

10. Commitments and Contingencies

 

The Company has executed agreements with certain executive officers of the Company which, upon the occurrence of certain events related to a change in control, call for payments to the executives up to three times their annual salary and accelerated vesting of previously granted stock options.

 

From time to time, the Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. Management believes any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, operating results or cash flows.

 

11. Note Receivable

 

On October 1, 2018, the Company completed the sale of its spine business to CTL Medical. The sale included a $6 million noninterest bearing note receivable. The 36-month term of the note receivable requires 18 payments of $138,889 followed by 18 payments of $194,444, with maturing of the note receivable on October 1, 2021. The note receivable includes an imputed interest rate of 10%, which totaled $915,725 as of October 31, 2018, and has a 36-month amortization. As of June 30, 2019, the net carrying value of the note receivable was approximately $4.3 million.

 

12. Discontinued Operations

 

As explained in Note 1, on October 1, 2018, the Company completed the sale of its retail spine business to CTL Medical. The gain on the sale of the retail spine business is estimated to approximate $1.4 million, which was recognized during the quarter ended December 31, 2018.

 

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The Company and CTL Medical entered in an asset purchase agreement whereby CTL Medical agreed to acquire all of the Company’s commercial spine business for total consideration of $8.5 million, which includes a $6.0 million (including interest) note receivable (See Note 7) and CTL Medical’s assumption of the Company’s $2.5 million related party note payable to North Stadium (see Note 11). As a result of the closing, CTL Medical is now the exclusive owner of SINTX’s portfolio of metal and silicon nitride spine products, which are presently sold under the brand names of Taurus, Preference, and Valeo, with access to future silicon nitride spine technologies. The Company has agreed to pay the cost, if any, to re-sterilize and re-package select silicon nitride spinal inventories sold to CTL Medical if the sterilization date expires prior to CTL Medical selling the inventories to a third-party customer. This agreement extends for a total of 24 months, ending on September 30, 2020. The Company estimates the sterilization and repackaging cost to approximate $0.5 million. Manufacturing, R&D, and all intellectual property related to the core, non-spine, biomaterial technology of silicon nitride remains with the Company in Salt Lake City. The Company will serve as CTL’s exclusive OEM provider of silicon nitride products.

 

Operating results related to discontinued operations consisted of the following for the six months ended June 30, 2018:

 

    Six Months Ended  
    June 30, 2018  
Product revenue   $ 4,330  
Costs of revenue     1,045  
Gross profit     3,285  
Operating expenses:        
Research and development     717  
General and administrative     348  
Sales and marketing     2,264  
Total operating expenses     3,329  
Loss from discontinued operations   $ (44)  

 

During the three and six months ended June 30, 2018, the Company only recorded product revenues and cost of revenues related to the spine business. Because of the sale of the retail spine business to CTL Medical, all product revenues and costs of product revenues for this period has been removed from the condensed consolidated statements of operations.

 

13. Leases

 

The Company leases office, warehouse and manufacturing space under a single operating lease, which lease originally expired during 2019 (see Note 1 under Accounting Pronouncements Adopted During the Quarter Ended June 30, 2019). On June 7, 2019, the lease was amended to extend the rental period through 2024 and reduce the amount of space leased from 54,428 square feet to 29,534 square feet. The new rent is effective the earlier of January 1, 2020 or when the Company vacates the portion of the property that will not be part of the new lease. The amended lease has two five-year extension options. As of June 30, 2019, the operating lease right-of-use asset totaled approximately $2.5 million and the operating lease liability totaled approximately $2.6 million. Non-cash operating lease expense during the six months ended June 30, 2019, totaled approximately $0.171 million. As of June 30, 2019, the weighted-average discount rate for the Company’s operating lease totaled 6.5%. During the three months ended June 30, 2019, the Company recorded a loss of approximately $0.12 million in association with the lease amendment.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. The Company accounts for lease components separately from the non-lease components. The depreciable life of the assets and leasehold improvements are limited by the expected lease term.

 

Operating lease future minimum payments together with the present values as of June 30, 2019, are summarized as follows:

 

   June 30, 2019 
2019  $490 
2020   494 
2021   509 
2022   525 
2023   540 
Thereafter   556 
Total future minimum lease payments   3,114 
Less amounts representing interests   (477)
Present value of lease liability   2,637 
      
Current-portion of operating lease liability   587 
Long-term portion operating lease liability  $2,050 

 

14. Subsequent Events

 

Reverse Stock Split

 

On July 26, 2019 the Company effected a 1 for 30 reverse stock split of the Company’s common stock. The par value and the authorized shares of the common and convertible preferred stock were not adjusted as a result of the reverse stock split. All common stock shares, equivalents, and per-share amounts for all periods presented in these consolidated financial statements prior to July 26, 2019 have been adjusted retroactively to reflect the reverse stock split.

 

 18 
   

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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, 2018 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, 2018, 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, 2018, and any updates to those risk factors filed from time to time in our Quarterly Reports on Form 10-Q.

 

Overview

 

We are an OEM ceramics company that develops and commercializes silicon nitride for medical and non-medical applications. The core strength of SINTX Technologies is the manufacturing, research, and development of silicon nitride ceramics for external partners. We believe that silicon nitride has a superb combination of properties that make it ideally 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, among other advantages, 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.

 

We also believe that we are the first and only company to commercialize silicon nitride medical implants. Prior to October 1, 2018, we designed, manufactured and commercialized silicon nitride products for our own behalf in the spine implant market. Over 33,000 of our spinal implants manufactured with silicon nitride have been implanted into patients, with an excellent safety record. On October 1, 2018, we sold our spine implant business to CTL Medical and now manufacture spine implants made with silicon nitride for CTL Medical. Prior to selling our spine implant business to CTL Medical, we had received 510(k) regulatory clearance in the United States, a CE mark in Europe, ANVISA approval in Brazil, and ARTG and Prostheses approvals in Australia for a number of silicon nitride spine implant products designed for spinal fusion surgery. Spine implant products manufactured by us from silicon nitride are currently marketed and sold by CTL Medical under the Valeo® brand to surgeons and hospitals in the United States and to selected markets in Europe and South America. These implants are designed for use in cervical (neck) and thoracolumbar (lower back) spine surgery. We are collaborating with CTL Medical to establish a commercial partner in Australia and also working with other partners to obtain regulatory approval for silicon nitride implants in Japan.

 

The sale of our spine implant business to CTL Medical enables us to now focus on our core competencies. These are research and development of silicon nitride and the design and manufacture of medical and nonmedical products manufactured from silicon nitride and other ceramic materials for our own account and in collaboration with other medical device manufacturers. We are targeting original equipment manufacturer (“OEM”) – including CTL Medical - and private label partnerships in order to accelerate adoption of silicon nitride in future markets such as coating products with silicon nitride, hip and knee replacements, dental and maxillofacial implants, extremities, trauma, and sports medicine. Existing biomaterials, based on plastics, metals, and bone grafts have well-recognized limitations that we believe are addressed by silicon nitride, and we are uniquely positioned to convert existing, successful implant designs made by other companies into products manufactured with silicon nitride. OEM and private label partnerships allow us to work with a variety of partners, accelerate the adoption of silicon nitride, and realize incremental revenue at improved operating margins, when compared to the cost-intensive direct sales model.

 

We believe that silicon nitride addresses many of the biomaterial-related limitations in fields such as hip and knee replacements, dental and maxillofacial implants, sports medicine, extremities, and trauma surgery. We further believe that the inherent material properties of silicon nitride, and the ability to formulate the material in a variety of compositions, combined with precise control of the surface properties of the material, opens up a number of commercial opportunities across orthopedic surgery, neurological surgery, maxillofacial surgery, other medical disciplines, as well as commodity items such as industrial fasteners, bushings, and valves to addressing more complex demands of hypersonic missile radomes, aerospace, air-conditioning systems, beverage dispensers, touch-screen glass, and agribusiness fungicides.

 

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.

 

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Product Revenue

 

We derive our product revenue primarily from the manufacture and sale of spinal fusion products, used in the treatment of spine disorders, to CTL Medical, with whom we have a 10-year exclusive sales agreement in place. We are currently pursuing other sales opportunities for silicon nitride products outside the spinal fusion application. We generally recognize revenue from sales at the time the product is shipped. In general, our customers do not have any rights of return or exchange.

 

We believe our product revenue will increase as CTL Medical increases sales of silicon nitride spinal fusion products, as we secure other opportunities to manufacture third party products with silicon nitride, and as we continue to introduce new products into the market.

 

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. We expect our gross profit to decrease as we expand the penetration of our silicon nitride technology platform through OEM and private label partnerships, which offer additional avenues for the adoption of silicon nitride. Prior to the sale of our retail spine business, our revenues and gross profits were based on our retail sales. With the focus on OEM and private label partnerships, the margins are lower, thus causing the decrease in gross profit.

 

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 spinal fusion products, our product candidates for total joint replacements, such as our total hip replacement product candidate, and dental applications 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.

 

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RESULTS OF OPERATIONS

 

The following is a tabular presentation of our condensed consolidated operating results for the three and six months ended June 30, 2019 and 2018 (in thousands):

 

   

Three Months

Ended June 30,

    $     %     Six Months
Ended June 30,
    $     %  
    2019     2018     Change     Change     2019     2018     Change     Change  
Product revenue   $ 167     $ -     $ 167       100 %   $ 264     $ -     $ 264       100 %
Cost of revenue     133       -       133       100 %     212       -       212       100 %
Gross profit     34       -       34       100 %     52       -       52       100 %
Gross profit %     20 %     - %     20 %     100 %     20 %     0 %     20 %     100 %
                                                                 
Operating expenses:                                                                
Research and development     836       956       (120 )     -13 %     1,554       1,833       (279 )     -15 %
General and administrative     615       935       (320 )     -34 %     1,586       2,242       (656 )     -29 %
Sales and marketing     105       11       94       869 %     164       58       106       184 %
Total operating expenses     1,556       1,902       (347 )     -18 %     3,304       4,133       (829 )     -20 %
Loss from operations     (1,522 )     (1,902 )     380       -20 %     (3,252 )     (4,133 )     881       -21 %
Other income (expense)     792       (279 )     1,071       384 %     893       (1,533 )     2,426       158 %
Net loss before taxes     (730 )     (2,181 )     1,451       -67 %     (2,359 )     (5,666 )     3,307       58 %
Provision for income taxes     -       -       -               -       -       -          
Loss – continuing     (730 )     (2,181 )     1,451       -67 %     (2,359 )     (5,666 )     3,307       58 %
Loss – discontinued     -       (131 )     131       -100 %     -       (44 )     44       -100 %
Net loss   $ (730 )   $ (2,312 )   $ 1,582       68 %   $ (2,359 )   $ (5,710 )   $ 3,351       59 %

 

Product Revenue

 

For the three months ended June 30, 2019, total product revenue was $0.2 million as compared to $0.0 million in the same period 2018, an increase of $0.2 million, or 100%. This increase was due to the sale of the retail spine business in October 2018 and the related restatement of revenues for the three months ended June 30, 2018 to $0.0 million as a result of the discontinued operations.

 

For the six months ended June 30, 2019, total product revenue was $0.3 million as compared to $0.0 million in the same period 2018, an increase of $0.3 million, or 100%. This increase was due to the sale of the retail spine business in October 2018 and the related restatement of revenues for the six months ended June 30, 2018 to $0.0 million as a result of the discontinued operations.

 

Cost of Revenue and Gross Profit

 

For the three months ended June 30, 2019, our cost of revenue increased $0.1 million, or 100%, as compared to the same period in 2018. Gross profit increased $0.03 million and gross margin percentage increased by 100%. Both increases are due to the discontinued operations treatment and the related sale of the retail spine business in October 2018.

 

For the six months ended June 30, 2019, our cost of revenue increased $0.2 million, or 100%, as compared to the same period in 2018. Gross profit increased $0.05 million and gross margin percentage increased by 100%. Both increases are due to the discontinued operations treatment and the related sale of the retail spine business in October 2018.

 

 21 
   

 

Research and Development Expenses

 

For the three months ended June 30, 2019, research and development expenses decreased $0.1 million, or 13%, as compared to the same period in 2018. This decrease was primarily attributable to a decrease in payroll related expenses of $0.1 million.

 

For the six months ended June 30, 2019, research and development expenses decreased $0.3 million, or 15%, as compared to the same period in 2018. This decrease was primarily attributable to a decrease in payroll related expenses of $0.3 million.

 

General and Administrative Expenses

 

For the three months ended June 30, 2019, general and administrative expenses decreased $0.3 million, or 34%, as compared to the same period in 2018. This decrease was primarily attributable to a decrease in accounting expenses of $0.1 million, legal fees of $0.1 million, and other expenses of $0.1 million.

 

For the six months ended June 30, 2019, general and administrative expenses decreased $0.7 million, or 29%, as compared to the same period in 2018. This decrease was primarily attributable to a decrease in accounting expenses of $0.2 million, legal fees of $0.2 million and other expenses of $0.3 million.

 

Sales and Marketing Expenses

 

For the three months ended June 30, 2019, sales and marketing expenses increased $0.1 million, or 869%, as compared to the same period in 2018. This increase was primarily attributable to an increase in payroll related expenses of $0.1 million.

 

For the six months ended June 30, 2019, sales and marketing expenses increased $0.1 million, or 184%, as compared to the same period in 2018. This increase was primarily attributable to an increase in payroll related expenses of $0.1 million.

 

Other Expense, Net

 

For the three months ended June 30, 2019, other income increased $1.1 million, or 384%, as compared to the same period in 2018. This increase was primarily due to a decrease in interest expense of $0.8 million, a decrease in offering costs of $0.7 million, and increase in interest income of $0.1 million, all offset by the change in the fair value of the derivative liabilities in the amount of $0.5 million.

 

For the six months ended June 30, 2019, other income increased $2.4 million, or 158%, as compared to the same period in 2018. This increase was primarily due to a decrease in the loss on the extinguishment of derivative liabilities of $1.3 million, the decrease in interest expense of $1.3 million, the decrease in the loss on extinguishment of debt of $0.3 million and the increase in interest income of $0.1 million, , a decrease in offering costs of $0.7 million, and an increase of $0.1 million on other miscellaneous accounts, all offset by the change in the fair value of the derivative liabilities in the amount of $1.4 million.

 

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 do 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.

 

 22 
   

 

For the six months ended June 30, 2019 and 2018, the Company incurred net losses from continuing operations of approximately $2.4 million and $5.7 million, respectively, and used cash in continuing operations of approximately $3.0 million and $5.5 million, respectively. The Company had an accumulated deficit of approximately $232 million and $229 million as of June 30, 2019 and December 31, 2018, respectively. To date, the Company’s operations have been principally financed by proceeds received from the issuance of preferred and common stock, convertible debt and bank debt 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 operating activities. The Company’s continuation as a going concern is dependent upon its ability to increase sales and/or raise additional funds through the capital markets. Whether and when the Company can attain profitability and positive cash flows from operating activities or obtain additional financing is uncertain.

 

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. The unique features of the Company’s silicon nitride material are not well known, and the Company believes that 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.

 

The Company has common stock that is publicly traded and has been able to successfully raise capital when needed since the date of the Company’s initial public offering. In March 2018, the Company closed on gross proceeds of $1.4 million, before payment of placement agent fees and costs on a warrant reprice and exercise transaction. Additionally, on May 14, 2018, the Company closed on a public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15 million, which excludes underwriting discounts and commissions and offering expenses payable by the Company. On June 4, 2019, we entered into an Equity Distribution Agreement, (the “Distribution Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which we may sell from time to time, shares of our common stock, having an aggregate offering price of up to $1.6 million through Maxim, as agent (the “ATM Offering”). Subject to the terms and conditions of the Distribution Agreement, Maxim will use its commercially reasonable efforts to sell the shares from time to time, based on our instructions. We have no obligation to sell any of the shares and may at any time suspend offers under the Distribution Agreement. The Offering will terminate upon the earlier of (i) the sale of Shares having an aggregate offering price of $1.6 million, (ii) the termination by either Maxim or us upon the provision of fifteen (15) days written notice, or (iii) June 4, 2020. We agreed to pay Maxim a transaction fee at a fixed rate of 4.25% of the gross sales price of shares sold under the Distribution Agreement and agreed to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended. During the three months ended June 30, 2019 the Company raised $0.4 million, net of fees through the issuance of 144,415 shares of common stock under the Distribution Agreement with Maxim. The Company is eligible to raise an additional $1.1 million under this offering. In addition, the Company converted 3,337 shares of preferred stock into 983,528 shares of common stock. The Company is engaged in discussions with investment and banking firms to examine financing alternatives, including options for a public offering of the Company’s preferred or common stock. On October 1, 2018, the Company sold the retail spine business. This sale will continue to provide cash flows from July 2019 totaling $1.4 million over the next ten months and $3.5 million for the following eighteen months. The buyer also assumed the Company’s $2.5 million related party note payable.

 

Although the Company is seeking to obtain additional equity and/or debt financing, such funding is not assured and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing is also not assured and, 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.

 

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

 

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Cash Flows

 

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

 

    Six Months Ended June 30,  
    2019     2018  
Net cash used in operating activities – continuing operations   $ (2,979 )   $ (5,532 )
Net cash used in operating activities – discontinued operations     -       (402 )
Net cash used in operating activities     (2,979 )     (5,934 )
Net cash provided by (used in) investing activities – continuing operations     680       (50 )
Net cash used in investing activities – discontinued operations     -       (107 )
Net cash provided by (used in) investing activities     680       (157 )
Net cash provided by (used in) financing activities     44     14,386  
Net decrease in cash used   $ (2,255 )   $ 8,295  

 

Net Cash Used in Operating Activities

 

Net cash used in operating activities – continuing operations decreased $2.6 million to $3.0 million during the three months ended June 30, 2019, as compared to $5.5 million for the same period in 2018. The decrease in net cash used in operating activities – continuing operations is due to the decrease in the net loss and related non-cash add backs to the net loss during the six months ended June 30, 2019 as compared to the same period in 2018.

 

Net Cash Provided by Investing Activities

 

Net cash provided by investing activities – continuing operations increased $0.7 million to $0.7 million during the six months ended June 30, 2019, compared to net cash used in investing activities – continuing operations of $0.05 million for the same period in 2018. The increase in cash provided by investing activities – continuing operations during 2019 was primarily due to a $0.7 million increase in proceeds from notes receivable.

 

Net Cash Used in Financing Activities

 

Net cash provided by financing activities was $0.04 million during the six months ended June 30, 2019, compared to net cash provided by financing activities of $14.4 million during the same period in 2018. The $14.3 million decrease was primarily attributable to the $1.6 million net decrease in proceeds received from the exercise of common stock warrants, a decrease in proceeds from the issuance of debt of $0.7 million, a decrease in proceeds from capital offerings of $14.0 million, a $0.4 million increase in the payments of operating lease obligations, all offset by and a $2.3 million increase in payments for debt extinguishments.

 

Indebtedness

 

L2 Capital Debt

 

On January 31, 2018, the Company signed a promissory note in the aggregate principal amount of up to $0.84 million (the “L2 Note”) for an aggregate purchase price of up to $0.75 million and warrants to purchase up to an aggregate of 68,257 shares of common stock (the “Warrants”) at an exercise price of $3.31 per share. The maturity date was six months from date of funding. The L2 Note’s interest rate was 8% per year and a default interest rate of 18% per year. On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with L2 Capital. The total payoff was $1.1 million, with $0.7 million in principal and $0.4 million in interest.

 

 24 
   

 

Hercules and MEF I, LP/Anson Investments Debt Exchange

 

On January 3, 2018, the Company entered into an Assignment Agreement (the “Assignment Agreement”) with MEF I, LP and Anson Investments Master Fund (collectively the “Assignees” and each an “Assignee”), Hercules Technology III, L.P. (“HT III”) and Hercules Capital, Inc. (“HC” and, together with HT III, “Hercules”), pursuant to which Hercules assigned to the Assignees all amounts remaining due under the Loan and Security Agreement, dated June 30, 2014, as amended, between the Company and Hercules (the “Loan and Security Agreement”) and (2) the note (the “Hercules Note”) between the Company and Hercules evidencing the amounts due under the Loan and Security Agreement. The total amount assigned by Hercules to the Assignees in the aggregate was $2.3 million and was secured by the same collateral underlying the Loan and Security Agreement. Subsequently, the Company entered into an exchange agreement pursuant to which the Assignees agreed to exchange the Hercules Term Loan obligation acquired by them for two senior secured convertible promissory notes issued by the Company, each in the principal amount of $1.1 million for an aggregate principal amount of $2.2 million, (the “Exchange Notes”). The Exchange Notes were scheduled to mature on February 3, 2019 (the “Maturity Date”). The Exchange Notes had interest at a rate of 15% per annum. Prior to the Maturity Date, principal and interest accrued under the Exchange Notes was payable in cash or, if certain conditions were met, payable in shares of our common stock. The Exchange Notes were secured by a first priority security interest in substantially all of the Company assets, including intellectual property, and contains covenants restricting payments to certain of our affiliates.

 

On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with MEF I, L.P and Anson Investments. The total payoff was $1.6 million, with $1.4 million in principal and $0.2 million in interest.

 

North Stadium Term Loan – Related Party

 

On July 28, 2017, the Company entered into a $2.5 million term loan (the “North Stadium Loan”) with North Stadium Investments, LLC (“North Stadium”), a company owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board. The North Stadium Loan bore interest at 10% per annum and required the Company to make monthly interest only payments from September 5, 2017 through July 5, 2018. All principal and unpaid interest (if any) under the North Stadium Loan was due and payable on July 28, 2018. The North Stadium Loan was secured by substantially all of the Company’s assets but was junior to security interest in assets encumbered by the Hercules Term Loan (see below). In connection with the North Stadium Loan the Company also issued North Stadium a warrant to purchase up to 1,834 shares of the Company’s common stock at a purchase price of $151.20 per share, subject to a 5-year term. The relative estimated value of the warrants on the date of grant approximated $0.2 million, which was being amortized as interest expense over the life of the term loan.

 

On October 1, 2018, CTL Medical assumed the North Stadium Term Loan debt as part of the sale of the retail spine business. As of December 31, 2018, the Company has been released by North Stadium from any and all obligations related to this debt.

 

Hercules Term Loan

 

On June 30, 2014, the Company entered into a Loan and Security Agreement with Hercules which provided the Company with a $20.0 million term loan. The Hercules Term Loan matured on January 1, 2018. The Hercules Term Loan included a $0.2 million closing fee, which was paid to Hercules on the closing date of the loan. The closing fee was recorded as a debt discount and was being amortized to interest expense over the life of the loan. The Hercules Term Loan also included a non-refundable final payment fee of $1.7 million. The final payment fee was being accrued and recorded to interest expense over the life of the loan.

 

On January 3, 2018, the Hercules Term Loan and all amounts owing thereunder was assigned to MEF I and Anson Investments. See discussion above under the heading “Hercules and MEF I, LP/Anson Investments Debt Exchange”

for a more detailed description of that transaction.

 

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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, 2018. Except as referenced in New Accounting Pronouncements below, no material changes to significant accounting policies were made during the six months ended June 30, 2019. The preparation of the 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 financial statements.

 

New Accounting Pronouncements

 

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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

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 June 30, 2019. Based on this evaluation, the Chief Executive Officer concluded that our disclosure controls and procedures were effective as of June 30, 2019, the end of the period covered by this Quarterly Report on Form 10-Q.

 

As defined in SEC Regulation S-X, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Based on this assessment, management determined that, as of December 31, 2018, our internal control over financial reporting was not effective because of the material weaknesses described below.

The design and operating effectiveness of our controls were inadequate to ensure that complex accounting matters are always properly accounted for and reviewed in a timely manner, as outlined below:

Control Activities – The Company did not always have adequate control activities that were designed and operating effectively, including timely management review controls and controls to verify the completeness and adequacy of information prior to presentation of the information to the independent auditors.

Monitoring Activities – The Company did not always maintain effective monitoring controls related to the financial reporting process.

Our Chief Executive Officer continues with a review of our controls relating to complex accounting matters. Although our analysis is not complete, we have added additional resources with expertise in accounting for complex accounting matters. We are also considering redesigning controls to add additional layers of review and approval whenever entering into or subsequently converting, exercising, amending, repricing, exiting or otherwise experiencing changes in or to complex financial instruments.

Notwithstanding the identified material weaknesses, the Company believes the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with accounting principles generally accepted in the United States of America.

 

 26 
   

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the second quarter of 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

We are not aware of any pending or threatened legal proceeding against us that could have a material adverse effect on our business, operating results or financial condition. The medical device industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. As a result, we may be involved in various additional legal proceedings from time to time.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 27 
   

 

ITEM 6. EXHIBITS

 

Exhibit
Number
  Exhibit Description   Filed Herewith   Incorporated by Reference
herein from
Form or
Schedule
  Filing
Date
 

SEC File/

Reg. Number

10.1   Equity Distribution Agreement, dated as of June 4, 2019, by and between SINTX Technologies, Inc and Maxim Group LLC      

Form 8-K

(Exhibit 10.1)

  06/04/19   001-33624
                     
10.2   Amendment to Centrepointe Business Park Lease Agreement, dated June 7, 2019, between SINTX Technologies, Inc. and Centrepointe Properties, LLC.      

Form 8-K

(Exhibit 10.1)

  06/10/19   001-33624
                     
31.1   Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X            
                     
31.2   Certificate of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   X            
                     
32   Certifications of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   X            
                     
101.INS   XBRL Instance Document   X            
                     
101.SCH   XBRL Taxonomy Extension Schema Document   X            
                     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document   X            
                     
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document   X            
                     
101.LAB   XBRL Taxonomy Extension Label Linkbase Document   X            
                     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document   X            

 

 28 
   

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

SINTX Technologies, Inc.

(previously known as Amedica Corporation)

   
Date: August 13, 2019 /s/ B. Sonny Bal
  B. Sonny Bal
  Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)

 

 29 
   

 

EX-31.1 2 ex31-1.htm

 

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, B. Sonny Bal, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of SINTX Technologies, Inc. (previously known as Amedica Corporation);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 13, 2019 By: /s/ B. Sonny Bal
    B. Sonny Bal
    Chief Executive Officer

 

   
 

 

EX-31.2 3 ex31-2.htm

 

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, B. Sonny Bal, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of SINTX Technologies, Inc. (previously known as Amedica Corporation);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 13, 2019 By: /s/ B. Sonny Bal
    B. Sonny Bal
    Chief Executive Officer and Principal Financial Officer

 

   
 

 

EX-32 4 ex32.htm

 

Exhibit 32

 

CERTIFICATIONS UNDER SECTION 906

 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of SINTX Technologies, Inc. (previously known as Amedica Corporation), a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

 

The quarterly report for the quarter ended June 30, 2019 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 13, 2019 By: /s/ B. Sonny Bal
    B. Sonny Bal
    Chief Executive Officer
     
  By: /s/ B. Sonny Bal
    B. Sonny Bal
    Principal Financial Officer

 

   
 

 

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2019
Aug. 12, 2019
Document And Entity Information    
Entity Registrant Name Sintx Technologies, Inc.  
Entity Central Index Key 0001269026  
Document Type 10-Q  
Document Period End Date Jun. 30, 2019  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company false  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   1,957,930
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2019  
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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 3,192 $ 5,447
Trade accounts receivable, net of allowance of $6 and $56, respectively 173 263
Prepaid expenses and other current assets 234 171
Inventories 85 52
Notes receivable, current portion 1,399 1,084
Total current assets 5,083 7,017
Inventories, net 596 624
Property and equipment, net 87 124
Intangible assets, net 44 46
Long-term note receivable, net of current portion 2,897 3,669
Operating lease right-of-use-asset 2,535
Other long-term assets 35 35
Total assets 11,277 11,515
Current liabilities:    
Accounts payable 295 301
Accrued liabilities 813 838
Derivative liabilities, current portion 454 1,062
Current portion of operating lease liability 587 169
Other current liabilities 23 10
Total current liabilities 2,172 2,380
Operating lease liability, net of current portion 2,050
Derivative liabilities, net of current portion 502 504
Other long-term liabilities 113 232
Total liabilities 4,837 3,116
Commitments and contingencies
Stockholders' equity:    
Convertible preferred stock, $0.01 par value, 130,000,000 shares authorized; 737 shares and 4,074 shares issued and outstanding at June 30, 2019 and December 31, 2018.
Common stock, $0.01 par value, 250,000,000 shares authorized; 1,854,898 shares, and 726,455 shares issued and outstanding at June 30, 2019 and December 31, 2018. 19 7
Additional paid-in capital 238,062 237,673
Accumulated deficit (231,641) (229,281)
Total stockholders' equity 6,440 8,399
Total liabilities and stockholders' equity $ 11,277 $ 11,515
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Allowance of trade accounts receivable $ 6 $ 56
Convertible preferred stock, par value $ 0.01 $ 0.01
Convertible preferred stock, shares authorized 130,000,000 130,000,000
Convertible preferred stock, shares issued 737 4,074
Convertible preferred stock, shares outstanding 737 4,074
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares issued 1,854,898 726,455
Common stock, shares outstanding 1,854,898 726,455
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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Income Statement [Abstract]        
Product revenue $ 167 $ 264
Costs of revenue 133 212
Gross profit 34 52
Operating expenses:        
Research and development 836 956 1,554 1,833
General and administrative 615 935 1,586 2,242
Sales and marketing 105 11 164 58
Total operating expenses 1,556 1,902 3,304 4,133
Loss from operations (1,522) (1,902) (3,252) (4,133)
Other income (expenses):        
Interest expense (2) (809) (2) (1,284)
Interest income 115 237
Change in fair value of derivative liabilities 631 1,209 610 2,020
Loss on extinguishment of debt (340)
Offering costs (682) (682)
Loss on extinguishment of derivative liabilities (1,252)
Other income, net 48 3 48 5
Total other income (expense), net 792 (279) 893 (1,533)
Net loss from continuing operations before income taxes (730) (2,181) (2,359) (5,666)
Provision for income taxes
Loss from continuing operations (730) (2,181) (2,359) (5,666)
Loss from discontinued operations (131) (44)
Net loss (730) (2,312) (2,359) (5,710)
Deemed dividend related to the beneficial conversion feature and accretion of a discount on series B preferred stock (2,358) (7,334) (2,358) (7,334)
Net loss attributable to common stockholders $ (3,088) $ (9,646) $ (4,717) $ (13,044)
Net loss per share - basic and diluted        
Basic - continuing operations $ (0.78) $ (11.19) $ (2.84) $ (36.66)
Basic - discontinued operations (0.67) (0.28)
Basic - deemed dividend and accretion of a discount on conversion of series B preferred stock (2.53) (37.62) (2.84) (47.46)
Basic - attributable to common stockholders (3.31) (49.48) (5.68) (84.40)
Diluted - continuing operations (1.46) (12.06) (3.58) (39.01)
Diluted - discontinued operations (0.42) (0.28)
Diluted - deemed dividend and accretion of a discount on conversion of series B preferred stock (2.53) (23.33) (2.84) (47.46)
Diluted - attributable to common stockholders $ (3.99) $ (35.81) $ (6.42) $ (86.75)
Weighted average common shares outstanding:        
Basic 931,859 194,933 829,724 154,545
Diluted 931,859 314,354 829,724 154,545
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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2017 $ 1 $ 226,070 $ (220,629) $ 5,442
Balance, shares at Dec. 31, 2017 100,935      
Common stock issued from exercise of warrants 1,633 1,633
Common stock issued from exercise of warrants, shares 27,139      
Issuance of common stock in exchange for reduction in debt 1,453 1,453
Issuance of common stock in exchange for reduction in debt, shares 19,348      
Issuance of preferred stock from offering, net of issuance costs 6,754 6,754
Issuance of preferred stock from offering, net of issuance costs, shares 15      
Warrants issued in association with debt 98 98
Loss on extinguishment of derivative liabilities 1,040 1,040
Deemed dividend related to adjustment of the exercise price of warrants issued with debt (9) (9)
Accretion of change in warrant exercise price 9 9
Common stock issued due to conversion of preferred stock $ 1 (1)
Common stock issued due to conversion of preferred stock, shares (4) 102,886      
Accretion of convertible preferred stock discount 7,334 7,334
Deemed dividend related to the issuance of preferred stock (7,334) (7,334)
Extinguishment of derivative liabilities 565 565
Stock-based compensation 34 34
Net loss (5,711) (5,710)
Balance at Jun. 30, 2018 $ 2 237,646 (226,339) 11,309
Balance, shares at Jun. 30, 2018 11 250,308      
Balance at Dec. 31, 2018 $ 7 237,673 (229,281) 8,399
Balance, shares at Dec. 31, 2018 4,074 726,455      
Common stock issued from exercise of warrants 1 1
Common stock issued from exercise of warrants, shares 500      
Issuance of common stock in exchange for reduction in debt        
Common stock issued due to conversion of preferred stock $ 10 (10)
Common stock issued due to conversion of preferred stock, shares (3,337) 983,528      
Stock-based compensation 1 1
Common Stock Issued for Cash $ 1 396 397
Common Stock Issued for Cash, shares 144,415      
Removal of derivative liability upon Exercise of warrant 1 1
Net loss (2,359) (2,359)
Balance at Jun. 30, 2019 $ 18 $ 238,062 $ (231,640) $ 6,440
Balance, shares at Jun. 30, 2019 737 1,854,898      
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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Cash flow from operating activities    
Net loss from continuing operations $ (2,359) $ (5,666)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 52 53
Non-cash lease expense 171 (99)
Amortization of intangible assets 2
Amortization of lease incentive for tenant improvements 28
Non-cash interest income (237)
Non-cash interest expense 812
Loss on extinguishment of debt 340
Stock based compensation 1 34
Change in fair value of derivative liabilities (610) (2,020)
Loss on extinguishment of derivative liabilities 1,252
Loss on disposal of equipment 51
Bad debt expense 9
Changes in operating assets and liabilities:    
Trade accounts receivable 79
Prepaid expenses and other current assets (63) (76)
Inventories (5)
Accounts payable and accrued liabilities (19) (241)
Net cash used in operating activities - continuing operations (2,979) (5,532)
Net cash used in operating activities - discontinued operations (402)
Net cash used in operating activities (2,979) (5,934)
Cash flows from investing activities    
Purchase of property and equipment (15)
Proceeds from notes receivable, net of imputed interest 695
Purchase of intangible asset (50)
Net cash provided by (used in) investing activities - continuing operations 680 (50)
Net cash used in investing activities - discontinued operations   (107)
Net cash used in investing activities 680 (157)
Cash flows from financing activities    
Proceeds from issuance of stock in connection with exercise of warrants, net of issuance costs 1 1,633
Proceeds from issuance of common stock, net of fees ($131) 397
Proceeds from issuance of preferred stock, net of issuance costs ($668) 6,754
Proceeds from issuance of warrant derivative liabilities, net of issuance costs ($682) 7,577
Payments on operating lease liability (354)
Proceeds from issuance of debt 705
Payments on debt (2,282)
Net cash provided by (used in) financing activities 44 14,387
Net increase (decrease) in cash and cash equivalents (2,255) 8,296
Cash and cash equivalents at beginning of period 5,447 539
Cash and cash equivalents at end of period 3,192 8,835
Noncash investing and financing activities    
Right-of-use assets and assumption of operating lease liability 2,704
Reduction of derivative liability due to exercise of warrants 1
Hercules and MEF I, LP/Anson Investments Debt Exchange 2,265
Issuance of common stock in exchange for reduction in debt 1,453
Extinguishment of derivative liabilities through exercise of warrants 565
Warrants issued in association with debt 98
Supplemental cash flow information    
Cash paid for interest $ 2 $ 337
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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Common Stock [Member]    
Fee & issuance costs $ 131  
Preferred Stock [Member]    
Fee & issuance costs   $ 668
Warrant Derivative [Member]    
Fee & issuance costs   $ 682
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Organization and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

 

Organization

 

SINTX Technologies, Inc. (“SINTX” or “the Company”) (previously known as Amedica Corporation) was incorporated in the state of Delaware on December 10, 1996. SINTX is an OEM ceramics company that develops and commercializes silicon nitride for medical and non-medical applications. The Company believes it is the first and only manufacturer to use silicon nitride in medical applications. The Company acquired US Spine, Inc. (“US Spine”), a Delaware spinal products corporation with operations in Florida, on September 20, 2010. The Company’s products are primarily sold in the United States.

 

As further explained in Note 12, On October 1, 2018, the Company completed the sale of its retail spine business to CTL Medical, a Dallas, Texas-based privately held medical device manufacturer. As a result of the sale, CTL Medical is now the exclusive owner of SINTX’s portfolio of metal and silicon nitride spine products, which are presently sold under the brand names of Taurus, Preference, and Valeo, with access to future silicon nitride spine technologies. Manufacturing, R&D, and all intellectual property related to the core, non-spine, biomaterial technology of silicon nitride remains with the Company. The Company will serve as CTL’s exclusive OEM provider of silicon nitride products.

 

On October 30, 2018, the Company amended its Certificate of Incorporation with the State of Delaware to change its corporate name to SINTX Technologies, Inc. in order to better reflect its focus on silicon nitride science and technologies and pipeline of silicon nitride-based products in various biomedical applications. The Company also changed its trading symbol on the NASDAQ Capital Market to “SINT”. The Company also changed the name of its wholly owned subsidiary US Spine, Inc. to “ST Sub, Inc.”

 

The previous name, Amedica, has transferred to CTL Medical, which is now CTL-Amedica. The Company’s new corporate brand reflects both the Company’s core competence in the science and production of silicon nitride ceramics, as well as encouraging prospects for the future, as an OEM supplier of spine implants to CTL-Amedica, and several opportunities outside of spine. The Company will focus on developing silicon nitride in terms of product design, and future biomaterial formulations, for a variety of OEM customers.

 

As further explained in Note 14, the Company effected a 1 for 30 reverse stock split of the Company’s common stock on July 26, 2019.

 

Basis of Presentation

 

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include all assets and liabilities of the Company and its wholly owned subsidiary, ST Sub, Inc. All material intercompany transactions and balances have been eliminated in consolidation. SEC rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, so long as the statements are not misleading. In the opinion of management, these financial statements and accompanying notes contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the periods presented herein. These condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 11, 2019. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. The Company’s significant accounting policies are set forth in Note 1 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the periods then ended. Actual results could differ from those estimates. The most significant estimates relate to inventory, long-lived and intangible assets and the liability for preferred stock and common stock warrants.

 

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 do 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 six months ended June 30, 2019 and 2018, the Company incurred net losses from continuing operations of approximately $2.4 million and $5.7 million, respectively, and used cash in continuing operations of approximately $3.0 million and $5.5 million, respectively. The Company had an accumulated deficit of approximately $232 million and $229 million as of June 30, 2019 and December 31, 2018, respectively. To date, the Company’s operations have been principally financed by proceeds received from the issuance of preferred and common stock, convertible debt and bank debt 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 operating activities. The Company’s continuation as a going concern is dependent upon its ability to increase sales and/or raise additional funds through the capital markets. Whether and when the Company can attain profitability and positive cash flows from operating activities or obtain additional financing is uncertain.

 

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. The unique features of the Company’s silicon nitride material are not well known, and the Company believes that 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.

 

The Company has common stock that is publicly traded and has been able to successfully raise capital when needed since the date of the Company’s initial public offering. In March 2018, the Company closed on gross proceeds of $1.4 million, before payment of placement agent fees and costs on a warrant reprice and exercise transaction. Additionally, on May 14, 2018, the Company closed on a public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15 million, which excludes underwriting discounts and commissions and offering expenses payable by the Company. On June 4, 2019, the Company entered into an Equity Distribution Agreement, (the “Distribution Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which the Company may sell from time to time, shares of our common stock, having an aggregate offering price of up to $1.6 million through Maxim, as agent (the “ATM Offering”). Subject to the terms and conditions of the Distribution Agreement, Maxim will use its commercially reasonable efforts to sell the shares from time to time, based on the Company’s instructions. The Company has no obligation to sell any of the shares and may at any time suspend offers under the Distribution Agreement. The Offering will terminate upon the earlier of (i) the sale of Shares having an aggregate offering price of $1.6 million, (ii) the termination by either Maxim or the Company upon the provision of fifteen (15) days written notice, or (iii) June 4, 2020. The Company agrees to pay Maxim a transaction fee at a fixed rate of 4.25% of the gross sales price of shares sold under the Distribution Agreement and agreed to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended. During the three months ended June 30, 2019 the Company raised $0.397 million, net of fees through the issuance of 144,415 shares of common stock under the Distribution Agreement with Maxim. The Company is eligible to raise an additional $1.2 million under this offering. In addition, the Company converted 3,337 shares of preferred stock into 983,528 shares of common stock. The Company is engaged in discussions with investment and banking firms to examine financing alternatives, including options for a public offering of the Company’s preferred or common stock. On October 1, 2018, the Company sold the retail spine business. This sale will continue to provide cash flows from July 2019 totaling $1.4 million over the next ten months and $3.5 million for the following eighteen months. The buyer also assumed the Company’s $2.5 million related party note payable.

 

Although the Company is seeking to obtain additional equity and/or debt financing, such funding is not assured and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing is also not assured and, 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.

 

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

 

Significant Accounting Policies

 

Except as explained below, no material changes were made to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

Accounting Pronouncements Adopted During the Quarter Ended June 30, 2019

 

In August 2016, the FASB updated accounting guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Under prior U.S. GAAP, there was no specific guidance on the eight cash flow classification issues aforementioned. The Company adopted the new guidance effective January 1, 2019. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

 

In February 2016, the FASB updated the accounting guidance related to leases as part of a joint project with the International Accounting Standards Board (“IASB”) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the new guidance effective January 1, 2019 (see Note 13), using the modified retrospective approach. Adoption of the new guidance resulted in the Company being required to record an additional operating lease right-of-use asset totaling approximately $0.659 million and liability totaling approximately $0.946 million (with $0.659 million incremental to adoption of the new guidance) on the date of adoption. Subsequent to the initial adoption of the new standard the Company amended the lease (see Note 13). The standard did not materially impact the consolidated net loss and had no impact on cash flows.

 

In May 2014, in addition to several amendments issued during 2016, the FASB updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The Company adopted the new guidance effective January 1, 2019. The core principle of the new guidance is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are often required within the revenue recognition process than were required under prior U.S. GAAP. The Company has one primary customer (see Note 12) and related contract that has one performance obligation to which revenue is allocated. Revenue under this contract is recognized when the product is shipped to the customer. The Company generally bills its customer upon shipment of the product and invoices are generally due within 30 days. The Company does provide certain rights of return, which historically have not been significant. The Company does not anticipate incurring significant incremental costs to obtain contracts with future customers. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

 

New Accounting Pronouncements Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.19.2
Basic and Diluted Net Loss Per Common Share
6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
Basic and Diluted Net Loss Per Common Share

2. Basic and Diluted Net Loss per Common Share

 

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period that are determined to be dilutive. Common stock equivalents are primarily comprised of preferred stock, warrants for the purchase of common stock and stock options. The Company had potentially dilutive securities, totaling approximately 0.6 million and 0.7 million as of June 30, 2019 and 2018, respectively.

 

Below are basic and diluted loss per share data for the three months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(730)  $(632)  $(1,362)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(3,088)  $(632)  $(3,720)
                
Denominator:               
Number of shares used in per common share calculations:   931,859    -    931,859 
                
Net loss per common share:               
Loss from continuing operations  $(0.78)  $-   $(1.46)
Deemed dividend and accretion of a discount   (2.53)   -    (2.53)
Net loss attributable to common stockholders  $(3.31)  $-   $(3.99)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,359)  $(609)  $(2,968)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(4,717)  $(609)  $(5,326)
                
Denominator:               
Number of shares used in per common share calculations:   829,724    -    829,724 
                
Net loss per common share:               
Loss from continuing operations  $(2.84)  $-   $(3.58)
Deemed dividend and accretion of a discount   (2.84)   -    (2.84)
Net loss attributable to common stockholders  $(5.68)  $-   $(6.42)

 

Below are basic and diluted loss per share data for the three months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,181)  $(1,610)  $(3,791)
Income from discontinued operations   (131)   -    (131)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(9,646)  $(1,610)  $(11,256)
                
Denominator:               
Number of shares used in per common share calculations:   194,933    119,421    314,354 
                
Net loss per common share:               
Loss from continuing operations  $(11.19)  $-   $(12.06)
Loss from discontinued operations   (0.67)   -    (0.42)
Deemed dividend and accretion of a discount   (37.62)   -    (23.33)
Net loss attributable to common stockholders  $(49.48)  $-   $(35.81)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(5,666)  $(362)  $(6,028)
Income from discontinued operations   (44)   -    (44)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(13,044)  $(362)  $(13,406)
                
Denominator:               
Number of shares used in per common share calculations:   154,545    -    154,545 
                
Net loss per common share:               
Loss from continuing operations  $(36.66)  $-   $(39.01)
Loss from discontinued operations   (0.28)   -    (0.28)
Deemed dividend and accretion of a discount   (47.46)   -    (47.46)
Net loss attributable to common stockholders  $(84.40)  $-   $(86.75)
XML 20 R10.htm IDEA: XBRL DOCUMENT v3.19.2
Inventories
6 Months Ended
Jun. 30, 2019
Inventory Disclosure [Abstract]  
Inventories

3. Inventories

 

Inventories consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Raw materials  $596   $624 
Intermediate goods   9    - 
WIP   76    47 
Finished goods   -    5 
   $681   $676 

 

As of June 30, 2019, inventories totaling approximately $0.08 million and $0.6 million were classified as current and long-term, respectively. Inventories classified as current represent the carrying value of inventories as of June 30, 2019, that management estimates will be sold by June 30, 2020.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.19.2
Intangible Assets
6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

4. Intangible Assets

 

Intangible assets consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Trademarks  $50   $50 
Less: accumulated amortization   (6)   (4)
   $44   $46 
XML 22 R12.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements
6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements

5. Fair Value Measurements

 

Financial Instruments Measured and Recorded at Fair Value on a Recurring Basis

 

The Company has issued certain warrants to purchase shares of common stock, which are considered derivative liabilities because they have registration rights which could require a cash settlement and are re-measured to fair value at each reporting period in accordance with accounting guidance. Fair value is based on the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1 - quoted market prices for identical assets or liabilities in active markets.
     
  Level 2 - observable prices that are based on inputs not quoted on active markets but corroborated by market data.
     
  Level 3 - unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

 

The Company classifies assets and liabilities measured at fair value in their entirety based on the lowest level of input that is significant to their fair value measurement. No financial assets were measured on a recurring basis as of June 30, 2019 and December 31, 2018. The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2019 and December 31, 2018:

 

   Fair Value Measurements as of June 30, 2019 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $956   $956 

 

   Fair Value Measurements as of December 31, 2018 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $1,566   $1,566 

 

The Company did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the three months ended June 30, 2019 and 2018.

 

   Common Stock
Warrants
 
Balance at December 31, 2017  $(1,357)
Issuances of warrants classified as derivatives   (7,577)
Change in fair value   2,020 
Exercise of warrants   565 
Other, net   (212)
Balance at June 30, 2018  $(6,561)
      
Balance at December 31, 2018  $(1,566)
Change in fair value   610 
Balance at June 30, 2019  $(956)

 

Common Stock Warrants

 

The Company has issued certain warrants to purchase shares of common stock, which are considered derivative liabilities because they have registration rights which could require a cash settlement and are re-measured to fair value at each reporting period in accordance with accounting guidance. At June 30, 2019 and December 31, 2018, approximately $0.9 million of the derivative liability was calculated using the Black-Scholes-Merton valuation model. At June 30, 2019 and December 31, 2018, no significant amount of the derivative liability was calculated using the Monte Carlo Simulation valuation model.

 

The assumptions used in estimating the common stock warrant liability using the Black-Scholes-Merton valuation model as of June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   2.23%   2.51%
Weighted-average expected life (in years)   4.1    0.9 
Expected dividend yield   -%   -%
Weighted-average expected volatility   68%   157%

 

The assumptions used in estimating the common stock warrant liability using the Monte Carlo Simulation valuation model at June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   1.72%   2.46%
Weighted-average expected life (in years)   2.4    3.1 
Expected dividend yield   -%   -%
Weighted average expected volatility   64%   68%

 

In addition, if any time after the second anniversary of the issuance of the warrant, both: (1) the 30-day volume weighted average price of the Company’s stock exceeds $3.00; and (2) the average daily trading volume for such 30-day period exceeds $0.4 million, the Company may call this warrant for $0.01 per share. For those warrants that have a call provision, management believes the Monte Carlo Simulation valuation model provides a better estimate of fair value for the warrants issued during 2018 and 2017 than the Black-Scholes-Merton valuation model.

 

Other Financial Instruments

 

The Company’s recorded values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values based on their short-term nature. The recorded value of notes payable approximates the fair value as the interest rate approximates market interest rates.

XML 23 R13.htm IDEA: XBRL DOCUMENT v3.19.2
Accrued Liabilities
6 Months Ended
Jun. 30, 2019
Payables and Accruals [Abstract]  
Accrued Liabilities

6. Accrued Liabilities

 

Accrued liabilities consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Payroll and related expense  $413   $388 
Resterilization and repackaging costs   344    344 
Other   56    106 
   $813   $838 
XML 24 R14.htm IDEA: XBRL DOCUMENT v3.19.2
Debt
6 Months Ended
Jun. 30, 2019
Debt Disclosure [Abstract]  
Debt

7. Debt

 

L2 Capital Debt

 

On January 31, 2018, the Company signed a promissory note in the aggregate principal amount of up to $0.84 million (the “L2 Note”) for an aggregate purchase price of up to $0.75 million and warrants to purchase up to an aggregate of 68,257 shares of common stock (the “Warrants”) at an exercise price of $3.31 per share. The maturity date was six months from date of funding. The L2 Note’s interest rate was 8% per year and a default interest rate of 18% per year.

 

On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with L2 Capital. The total payoff was $1.1 million, with $0.7 million in principal and $0.4 million in interest.

 

Hercules and MEF I, LP/Anson Investments Debt Exchange

 

On January 3, 2018, the Company entered into an Assignment Agreement (the “Assignment Agreement”) with MEF I, LP and Anson Investments Master Fund (collectively the “Assignees” and each an “Assignee”), Hercules Technology III, L.P. (“HT III”) and Hercules Capital, Inc. (“HC” and, together with HT III, “Hercules”), pursuant to which Hercules assigned to the Assignees all amounts remaining due under the Loan and Security Agreement, dated June 30, 2014, as amended, between the Company and Hercules (the “Loan and Security Agreement”) and (2) the note (the “Hercules Note”) between the Company and Hercules evidencing the amounts due under the Loan and Security Agreement. The total amount assigned by Hercules to the Assignees in the aggregate was $2.3 million and was secured by the same collateral underlying the Loan and Security Agreement. Subsequently, the Company entered into an exchange agreement pursuant to which the Assignees agreed to exchange the Hercules Term Loan obligation acquired by them for two senior secured convertible promissory notes issued by the Company, each in the principal amount of $1.1 million for an aggregate principal amount of $2.2 million, (the “Exchange Notes”). The Exchange Notes were scheduled to mature on February 3, 2019 (the “Maturity Date”). The Exchange Notes had interest at a rate of 15% per annum. The Exchange Notes were secured by a first priority security interest in substantially all of the Company assets, including intellectual property, and contains covenants restricting payments to certain of our affiliates.

 

On May 14, 2018, the Company closed on an underwritten public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million. Part of the proceeds from this offering were used to pay off the outstanding debt with MEF I, L.P and Anson Investments. The total payoff was $1.6 million, with $1.4 million in principal and $0.2 million in interest.

 

North Stadium Term Loan – Related Party

 

On July 28, 2017, the Company entered into a $2.5 million term loan (the “North Stadium Loan”) with North Stadium Investments, LLC (“North Stadium”), a company owned and controlled by the Company’s Chief Executive Officer and Chairman of the Board. The North Stadium Loan bore interest at 10% per annum and required the Company to make monthly interest only payments from September 5, 2017 through July 5, 2018. All principal and unpaid interest (if any) under the North Stadium Loan was due and payable on July 28, 2018. The North Stadium Loan was secured by substantially all of the Company’s assets but was junior to security interest in assets encumbered by the Hercules Term Loan (see below). In connection with the North Stadium Loan the Company also issued North Stadium a warrant to purchase up to 1,834 shares of the Company’s common stock at a purchase price of $151.20 per share, subject to a 5-year term. The relative estimated value of the warrants on the date of grant approximated $0.2 million, which was being amortized as interest expense over the life of the term loan.

 

On October 1, 2018, CTL Medical assumed the North Stadium Term Loan debt as part of the sale of the retail spine business. As of December 31, 2018, the Company has been released by North Stadium from any and all obligations related to this debt.

 

Hercules Term Loan

 

On June 30, 2014, the Company entered into a Loan and Security Agreement with Hercules which provided the Company with a $20.0 million term loan. The Hercules Term Loan matured on January 1, 2018. The Hercules Term Loan included a $0.2 million closing fee, which was paid to Hercules on the closing date of the loan. The closing fee was recorded as a debt discount and was being amortized to interest expense over the life of the loan. The Hercules Term Loan also included a non-refundable final payment fee of $1.7 million. The final payment fee was being accrued and recorded to interest expense over the life of the loan.

 

On January 3, 2018, the Hercules Term Loan and all amounts owing thereunder was assigned to MEF I and Anson Investments. See discussion above under “Hercules and MEF I, LP/Anson Investments Debt Exchange” for a more detailed description of that transaction.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.19.2
Equity
6 Months Ended
Jun. 30, 2019
Equity [Abstract]  
Equity

8. Equity

 

Preferred Stock Conversion

 

From July through December of 2018, Series B Convertible Preferred shareholders of the Company converted 10,926 shares of Series B Convertible Preferred Stock into 569,966 shares of common stock.

 

During May 2018 and June 2018, Series B Convertible Preferred shareholders of the Company converted a total of 4,072 shares of Series B Convertible Preferred Stock into 102,886 shares of common stock.

 

During June 2019, Series B Convertible Preferred shareholders of the Company converted 3,337 shares of Series B Convertible Preferred Stock into 983,528 shares of common stock.

 

August 2018 Warrant Exercise

 

During August 2018, pursuant to the cashless exercise provision contained in their warrant, L2 Capital exercised its warrants and was issued 8,069 shares of common stock. The L2 Capital warrant is no longer outstanding.

 

July 2018 Warrant Exercise

 

During May 2018, the Company closed on a public offering, consisting of both convertible preferred stock and warrants. During July 2018, 998 of the warrants were exercised and converted into 998 shares of common stock.

 

May 2018 Warrant Exercise (July 2016 Warrants)

 

During March 2018, the Company repriced 27,733 warrants dated July 8, 2016, from $360 to $63.75 (for further description see Warrant Reprice March 2018 below). During May 2018, an additional 4,861 of the repriced warrants were exercised resulting in gross proceeds to the Company of $0.3 million.

 

May 2018 Unit Offering

 

On May 14, 2018, the Company closed on an underwritten public offering of units (“the Units”), consisting of convertible preferred stock and warrants, for gross proceeds of $15.0 million, which excludes underwriting discounts and commissions and offering expenses payable by SINTX. The offering was priced at a public offering price of $1,000 per unit. Each unit consisted of one share of Series B Convertible Preferred Stock, with a stated value of $1,100, and warrants to purchase up to 25 shares of common stock (the “May 2018 Warrants”). The May 2018 Warrants are initially exercisable at an exercise price of $48 per share and expire 5 years from the date of issuance. The Series B Preferred Stock is convertible into shares of common stock by dividing the stated value of $1,100 by: (i) for the first 40 trading days following the closing of this offering, $43.54 (the “Conversion Price”), (ii) after 40 trading days but prior to the 81st trading day, the lesser of  (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the 41st trading day, and (iii) after 80 trading days, the lesser of  (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the date of the notice of conversion. In the case of (ii)(b) and (iii)(b) above, the share price shall not be less than $2.94 (the “Floor Price”). Each of the Conversion Price and Floor Price is subject to adjustment in certain circumstances.

 

The Company raised $15.0 million associated with the issuance of the Units, with $6.8 million, net of issuance costs of $0.6 million, allocated to the preferred stock and $6.9 million, net of issuance costs of $0.7 million, allocated to the warrants. In association with the warrants that were recorded as a derivative liability, the Company immediately expensed approximately $0.7 million of issuance costs. The 15,000 preferred shares were initially convertible into 378,997 shares of common stock and had an effective conversion rate of $43.50 per share based on the proceeds that were allocated to them. The conversion price was adjusted to $19.63, effective July 12, 2018, and was adjusted again on September 7, 2018 to $14.40. During the months ended June 30, 2019 the conversion price was adjusted down on several occasions and ultimately settled at $2.94 as of June 30, 2019.

 

Warrant Reprice March 2018

 

During the six months ended June 30, 2018 the Company entered into a warrant amendment agreement (the “Amendment Agreement”) with certain holders of previously issued Series E Common Stock Purchase Warrants (collectively, “Investors”). In connection with that certain Series E Common Stock Purchase Warrant between the Company and Investors dated July 8, 2016, the Company issued to Investors warrants to purchase up to 27,733 shares of common stock (the “Warrant Shares”) at an exercise price of $360.00 per share, (the “Investors Warrants”). Under the terms of the Amendment Agreement, in consideration of Investors exercising 22,279 of the Investors Warrants (the “Warrant Exercise”), the exercise price per share of the Investors Warrants was reduced to $63.75 per share. 22,278 of the Investors Warrants were exercised resulting in gross proceeds to the Company of $1.4 million before payment of placement agent fees and costs. In addition, and as further consideration, the Company issued to Investors new warrants to purchase up to the number of shares of common stock equal to 100% of the number of Warrant Shares issued pursuant to the Warrant Exercise at an exercise price per share equal to $60.00 per share.

 

June 2019 ATM Stock Offerings

During June 2019 the Company entered into an ATM equity distribution agreement in which the Company may sell, from time to time, shares of common stock having an aggregate offering price of up to $1.6 million. The Company sold 144,415 shares in June of 2019 raising approximately $0.4 million net of issuance cost of $0.1 million. The Company is eligible to raise an additional $1.1 million under this offering.

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.19.2
Stock-Based Compensation
6 Months Ended
Jun. 30, 2019
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation

9. Stock-Based Compensation

 

A summary of the Company’s outstanding stock option activity for the six months ended June 30, 2019 is as follows:

 

   Options  

Weighted-
Average

Exercise Price

  

Weighted-

Average
Remaining
Contractual
Life
(Years)

   Intrinsic
Value
 
As of December 31, 2018   377   $7,653    6.0   $   - 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Forfeited   -    -    -    - 
Expired   -    -    -    - 
As of June 30, 2019   377   $7,653    5.8   $- 
Exercisable as of June 30, 2019   371   $7,551    6.3   $- 
Expected to vest as of June 30, 2019   377   $7,653    5.5   $- 

 

The Company estimates the fair value of each stock option on the grant date using the Black-Scholes-Merton valuation model, which requires several estimates including an estimate of the fair value of the underlying common stock on grant date. The expected volatility was based on an average of the historical volatility of a peer group of similar companies. The expected term was calculated utilizing the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.19.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

10. Commitments and Contingencies

 

The Company has executed agreements with certain executive officers of the Company which, upon the occurrence of certain events related to a change in control, call for payments to the executives up to three times their annual salary and accelerated vesting of previously granted stock options.

 

From time to time, the Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. Management believes any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, operating results or cash flows.

XML 28 R18.htm IDEA: XBRL DOCUMENT v3.19.2
Note Receivable
6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Note Receivable

11. Note Receivable

 

On October 1, 2018, the Company completed the sale of its spine business to CTL Medical. The sale included a $6 million noninterest bearing note receivable. The 36-month term of the note receivable requires 18 payments of $138,889 followed by 18 payments of $194,444, with maturing of the note receivable on October 1, 2021. The note receivable includes an imputed interest rate of 10%, which totaled $915,725 as of October 31, 2018, and has a 36-month amortization. As of June 30, 2019, the net carrying value of the note receivable was approximately $4.3 million.

XML 29 R19.htm IDEA: XBRL DOCUMENT v3.19.2
Discontinued Operations
6 Months Ended
Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

12. Discontinued Operations

 

As explained in Note 1, on October 1, 2018, the Company completed the sale of its retail spine business to CTL Medical. The gain on the sale of the retail spine business is estimated to approximate $1.4 million, which was recognized during the quarter ended December 31, 2018.

 

The Company and CTL Medical entered in an asset purchase agreement whereby CTL Medical agreed to acquire all of the Company’s commercial spine business for total consideration of $8.5 million, which includes a $6.0 million (including interest) note receivable (See Note 7) and CTL Medical’s assumption of the Company’s $2.5 million related party note payable to North Stadium (see Note 11). As a result of the closing, CTL Medical is now the exclusive owner of SINTX’s portfolio of metal and silicon nitride spine products, which are presently sold under the brand names of Taurus, Preference, and Valeo, with access to future silicon nitride spine technologies. The Company has agreed to pay the cost, if any, to re-sterilize and re-package select silicon nitride spinal inventories sold to CTL Medical if the sterilization date expires prior to CTL Medical selling the inventories to a third-party customer. This agreement extends for a total of 24 months, ending on September 30, 2020. The Company estimates the sterilization and repackaging cost to approximate $0.5 million. Manufacturing, R&D, and all intellectual property related to the core, non-spine, biomaterial technology of silicon nitride remains with the Company in Salt Lake City. The Company will serve as CTL’s exclusive OEM provider of silicon nitride products.

 

Operating results related to discontinued operations consisted of the following for the six months ended June 30, 2018:

 

    Six Months Ended  
    June 30, 2018  
Product revenue   $ 4,330  
Costs of revenue     1,045  
Gross profit     3,285  
Operating expenses:        
Research and development     717  
General and administrative     348  
Sales and marketing     2,264  
Total operating expenses     3,329  
Loss from discontinued operations   $ (44)  

 

During the three and six months ended June 30, 2018, the Company only recorded product revenues and cost of revenues related to the spine business. Because of the sale of the retail spine business to CTL Medical, all product revenues and costs of product revenues for this period has been removed from the condensed consolidated statements of operations.

XML 30 R20.htm IDEA: XBRL DOCUMENT v3.19.2
Leases
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Leases

13. Leases

 

The Company leases office, warehouse and manufacturing space under a single operating lease, which lease originally expired during 2019 (see Note 1 under Accounting Pronouncements Adopted During the Quarter Ended June 30, 2019). On June 7, 2019, the lease was amended to extend the rental period through 2024 and reduce the amount of space leased from 54,428 square feet to 29,534 square feet. The new rent is effective the earlier of January 1, 2020 or when the Company vacates the portion of the property that will not be part of the new lease. The amended lease has two five-year extension options. As of June 30, 2019, the operating lease right-of-use asset totaled approximately $2.5 million and the operating lease liability totaled approximately $2.6 million. Non-cash operating lease expense during the six months ended June 30, 2019, totaled approximately $0.171 million. As of June 30, 2019, the weighted-average discount rate for the Company’s operating lease totaled 6.5%. During the three months ended June 30, 2019, the Company recorded a loss of approximately $0.12 million in association with the lease amendment.

 

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. The Company accounts for lease components separately from the non-lease components. The depreciable life of the assets and leasehold improvements are limited by the expected lease term.

 

Operating lease future minimum payments together with the present values as of June 30, 2019, are summarized as follows:

 

   June 30, 2019 
2019  $490 
2020   494 
2021   509 
2022   525 
2023   540 
Thereafter   556 
Total future minimum lease payments   3,114 
Less amounts representing interests   (477)
Present value of lease liability   2,637 
      
Current-portion of operating lease liability   587 
Long-term portion operating lease liability  $2,050 
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.19.2
Subsequent Events
6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events

14. Subsequent Events

 

Reverse Stock Split

 

On July 26, 2019 the Company effected a 1 for 30 reverse stock split of the Company’s common stock. The par value and the authorized shares of the common and convertible preferred stock were not adjusted as a result of the reverse stock split. All common stock shares, equivalents, and per-share amounts for all periods presented in these consolidated financial statements prior to July 26, 2019 have been adjusted retroactively to reflect the reverse stock split.

XML 32 R22.htm IDEA: XBRL DOCUMENT v3.19.2
Organization and Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2019
Accounting Policies [Abstract]  
Organization

Organization

 

SINTX Technologies, Inc. (“SINTX” or “the Company”) (previously known as Amedica Corporation) was incorporated in the state of Delaware on December 10, 1996. SINTX is an OEM ceramics company that develops and commercializes silicon nitride for medical and non-medical applications. The Company believes it is the first and only manufacturer to use silicon nitride in medical applications. The Company acquired US Spine, Inc. (“US Spine”), a Delaware spinal products corporation with operations in Florida, on September 20, 2010. The Company’s products are primarily sold in the United States.

 

As further explained in Note 12, On October 1, 2018, the Company completed the sale of its retail spine business to CTL Medical, a Dallas, Texas-based privately held medical device manufacturer. As a result of the sale, CTL Medical is now the exclusive owner of SINTX’s portfolio of metal and silicon nitride spine products, which are presently sold under the brand names of Taurus, Preference, and Valeo, with access to future silicon nitride spine technologies. Manufacturing, R&D, and all intellectual property related to the core, non-spine, biomaterial technology of silicon nitride remains with the Company. The Company will serve as CTL’s exclusive OEM provider of silicon nitride products.

 

On October 30, 2018, the Company amended its Certificate of Incorporation with the State of Delaware to change its corporate name to SINTX Technologies, Inc. in order to better reflect its focus on silicon nitride science and technologies and pipeline of silicon nitride-based products in various biomedical applications. The Company also changed its trading symbol on the NASDAQ Capital Market to “SINT”. The Company also changed the name of its wholly owned subsidiary US Spine, Inc. to “ST Sub, Inc.”

 

The previous name, Amedica, has transferred to CTL Medical, which is now CTL-Amedica. The Company’s new corporate brand reflects both the Company’s core competence in the science and production of silicon nitride ceramics, as well as encouraging prospects for the future, as an OEM supplier of spine implants to CTL-Amedica, and several opportunities outside of spine. The Company will focus on developing silicon nitride in terms of product design, and future biomaterial formulations, for a variety of OEM customers.

 

As further explained in Note 14, the Company effected a 1 for 30 reverse stock split of the Company’s common stock on July 26, 2019.

Basis of Presentation

Basis of Presentation

 

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) and include all assets and liabilities of the Company and its wholly owned subsidiary, ST Sub, Inc. All material intercompany transactions and balances have been eliminated in consolidation. SEC rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, so long as the statements are not misleading. In the opinion of management, these financial statements and accompanying notes contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the periods presented herein. These condensed consolidated financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 11, 2019. The results of operations for the six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. The Company’s significant accounting policies are set forth in Note 1 to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the periods then ended. Actual results could differ from those estimates. The most significant estimates relate to inventory, long-lived and intangible assets and the liability for preferred stock and common stock warrants.

Liquidity and Capital Resources

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 do 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 six months ended June 30, 2019 and 2018, the Company incurred net losses from continuing operations of approximately $2.4 million and $5.7 million, respectively, and used cash in continuing operations of approximately $3.0 million and $5.5 million, respectively. The Company had an accumulated deficit of approximately $232 million and $229 million as of June 30, 2019 and December 31, 2018, respectively. To date, the Company’s operations have been principally financed by proceeds received from the issuance of preferred and common stock, convertible debt and bank debt 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 operating activities. The Company’s continuation as a going concern is dependent upon its ability to increase sales and/or raise additional funds through the capital markets. Whether and when the Company can attain profitability and positive cash flows from operating activities or obtain additional financing is uncertain.

 

The Company is actively generating additional scientific and clinical data to have it published in leading industry publications. The unique features of the Company’s silicon nitride material are not well known, and the Company believes that 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.

 

The Company has common stock that is publicly traded and has been able to successfully raise capital when needed since the date of the Company’s initial public offering. In March 2018, the Company closed on gross proceeds of $1.4 million, before payment of placement agent fees and costs on a warrant reprice and exercise transaction. Additionally, on May 14, 2018, the Company closed on a public offering of units, consisting of convertible preferred stock and warrants, for gross proceeds of $15 million, which excludes underwriting discounts and commissions and offering expenses payable by the Company. On June 4, 2019, the Company entered into an Equity Distribution Agreement, (the “Distribution Agreement”), with Maxim Group LLC (“Maxim”), pursuant to which the Company may sell from time to time, shares of our common stock, having an aggregate offering price of up to $1.6 million through Maxim, as agent (the “ATM Offering”). Subject to the terms and conditions of the Distribution Agreement, Maxim will use its commercially reasonable efforts to sell the shares from time to time, based on the Company’s instructions. The Company has no obligation to sell any of the shares and may at any time suspend offers under the Distribution Agreement. The Offering will terminate upon the earlier of (i) the sale of Shares having an aggregate offering price of $1.6 million, (ii) the termination by either Maxim or the Company upon the provision of fifteen (15) days written notice, or (iii) June 4, 2020. The Company agrees to pay Maxim a transaction fee at a fixed rate of 4.25% of the gross sales price of shares sold under the Distribution Agreement and agreed to provide indemnification and contribution to Maxim with respect to certain liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended. During the three months ended June 30, 2019 the Company raised $0.397 million, net of fees through the issuance of 144,415 shares of common stock under the Distribution Agreement with Maxim. The Company is eligible to raise an additional $1.2 million under this offering. In addition, the Company converted 3,337 shares of preferred stock into 983,528 shares of common stock. The Company is engaged in discussions with investment and banking firms to examine financing alternatives, including options for a public offering of the Company’s preferred or common stock. On October 1, 2018, the Company sold the retail spine business. This sale will continue to provide cash flows from July 2019 totaling $1.4 million over the next ten months and $3.5 million for the following eighteen months. The buyer also assumed the Company’s $2.5 million related party note payable.

 

Although the Company is seeking to obtain additional equity and/or debt financing, such funding is not assured and may not be available to the Company on favorable or acceptable terms and may involve significant restrictive covenants. Any additional equity financing is also not assured and, 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.

 

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

Significant Accounting Policies

Significant Accounting Policies

 

Except as explained below, no material changes were made to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Accounting Pronouncements Adopted During the Quarter Ended March 31, 2019

Accounting Pronouncements Adopted During the Quarter Ended June 30, 2019

 

In August 2016, the FASB updated accounting guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Under prior U.S. GAAP, there was no specific guidance on the eight cash flow classification issues aforementioned. The Company adopted the new guidance effective January 1, 2019. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

 

In February 2016, the FASB updated the accounting guidance related to leases as part of a joint project with the International Accounting Standards Board (“IASB”) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted the new guidance effective January 1, 2019 (see Note 13), using the modified retrospective approach. Adoption of the new guidance resulted in the Company being required to record an additional operating lease right-of-use asset totaling approximately $0.659 million and liability totaling approximately $0.946 million (with $0.659 million incremental to adoption of the new guidance) on the date of adoption. Subsequent to the initial adoption of the new standard the Company amended the lease (see Note 13). The standard did not materially impact the consolidated net loss and had no impact on cash flows.

 

In May 2014, in addition to several amendments issued during 2016, the FASB updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The Company adopted the new guidance effective January 1, 2019. The core principle of the new guidance is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates are often required within the revenue recognition process than were required under prior U.S. GAAP. The Company has one primary customer (see Note 12) and related contract that has one performance obligation to which revenue is allocated. Revenue under this contract is recognized when the product is shipped to the customer. The Company generally bills its customer upon shipment of the product and invoices are generally due within 30 days. The Company does provide certain rights of return, which historically have not been significant. The Company does not anticipate incurring significant incremental costs to obtain contracts with future customers. The guidance in this standard did not have a material impact on the financial statements of the Company upon adoption.

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

 

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

XML 33 R23.htm IDEA: XBRL DOCUMENT v3.19.2
Basic and Diluted Net Loss Per Common Share (Tables)
6 Months Ended
Jun. 30, 2019
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Loss Per Share

Below are basic and diluted loss per share data for the three months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(730)  $(632)  $(1,362)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(3,088)  $(632)  $(3,720)
                
Denominator:               
Number of shares used in per common share calculations:   931,859    -    931,859 
                
Net loss per common share:               
Loss from continuing operations  $(0.78)  $-   $(1.46)
Deemed dividend and accretion of a discount   (2.53)   -    (2.53)
Net loss attributable to common stockholders  $(3.31)  $-   $(3.99)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2019, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,359)  $(609)  $(2,968)
Deemed dividend and accretion of a discount   (2,358)   -    (2,358)
Net loss attributable to common stockholders  $(4,717)  $(609)  $(5,326)
                
Denominator:               
Number of shares used in per common share calculations:   829,724    -    829,724 
                
Net loss per common share:               
Loss from continuing operations  $(2.84)  $-   $(3.58)
Deemed dividend and accretion of a discount   (2.84)   -    (2.84)
Net loss attributable to common stockholders  $(5.68)  $-   $(6.42)

 

Below are basic and diluted loss per share data for the three months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(2,181)  $(1,610)  $(3,791)
Income from discontinued operations   (131)   -    (131)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(9,646)  $(1,610)  $(11,256)
                
Denominator:               
Number of shares used in per common share calculations:   194,933    119,421    314,354 
                
Net loss per common share:               
Loss from continuing operations  $(11.19)  $-   $(12.06)
Loss from discontinued operations   (0.67)   -    (0.42)
Deemed dividend and accretion of a discount   (37.62)   -    (23.33)
Net loss attributable to common stockholders  $(49.48)  $-   $(35.81)

 

Below are basic and diluted loss per share data for the six months ended June 30, 2018, which are in thousands except for share and per share data:

 

   Basic Calculation   Effect of Dilutive Warrant Securities   Diluted Calculation 
Numerator:               
Loss from continuing operations  $(5,666)  $(362)  $(6,028)
Income from discontinued operations   (44)   -    (44)
Deemed dividend and accretion of a discount   (7,334)   -    (7,334)
Net loss attributable to common stockholders  $(13,044)  $(362)  $(13,406)
                
Denominator:               
Number of shares used in per common share calculations:   154,545    -    154,545 
                
Net loss per common share:               
Loss from continuing operations  $(36.66)  $-   $(39.01)
Loss from discontinued operations   (0.28)   -    (0.28)
Deemed dividend and accretion of a discount   (47.46)   -    (47.46)
Net loss attributable to common stockholders  $(84.40)  $-   $(86.75)
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.19.2
Inventories (Tables)
6 Months Ended
Jun. 30, 2019
Inventory Disclosure [Abstract]  
Schedule of Components of Inventory

Inventories consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Raw materials  $596   $624 
Intermediate goods   9    - 
WIP   76    47 
Finished goods   -    5 
   $681   $676 
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.19.2
Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Trademarks  $50   $50 
Less: accumulated amortization   (6)   (4)
   $44   $46 
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2019
Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis by Level Within Fair Value Hierarchy

The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2019 and December 31, 2018:

 

   Fair Value Measurements as of June 30, 2019 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $956   $956 

 

   Fair Value Measurements as of December 31, 2018 
Description  Level 1   Level 2   Level 3   Total 
Derivative liability                    
Common stock warrants  $-   $-   $1,566   $1,566 
Schedule of Fair Value Measurement Hierarchy of Derivative Liability

The Company did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the three months ended June 30, 2019 and 2018.

 

   Common Stock
Warrants
 
Balance at December 31, 2017  $(1,357)
Issuances of warrants classified as derivatives   (7,577)
Change in fair value   2,020 
Exercise of warrants   565 
Other, net   (212)
Balance at June 30, 2018  $(6,561)
      
Balance at December 31, 2018  $(1,566)
Change in fair value   610 
Balance at June 30, 2019  $(956)
Black-Scholes-Merton Valuation Model [Member]  
Schedule of Assumptions Used in Estimating Fair Value

The assumptions used in estimating the common stock warrant liability using the Black-Scholes-Merton valuation model as of June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   2.23%   2.51%
Weighted-average expected life (in years)   4.1    0.9 
Expected dividend yield   -%   -%
Weighted-average expected volatility   68%   157%
Monte Carlo Simulation Valuation Model [Member]  
Schedule of Assumptions Used in Estimating Fair Value

The assumptions used in estimating the common stock warrant liability using the Monte Carlo Simulation valuation model at June 30, 2019 and December 31, 2018 were as follows:

 

   June 30, 2019   December 31, 2018 
Weighted-average risk-free interest rate   1.72%   2.46%
Weighted-average expected life (in years)   2.4    3.1 
Expected dividend yield   -%   -%
Weighted average expected volatility   64%   68%
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.19.2
Accrued Liabilities (Tables)
6 Months Ended
Jun. 30, 2019
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

 

   June 30, 2019   December 31, 2018 
Payroll and related expense  $413   $388 
Resterilization and repackaging costs   344    344 
Other   56    106 
   $813   $838 
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.19.2
Stock-Based Compensation (Tables)
6 Months Ended
Jun. 30, 2019
Share-based Payment Arrangement [Abstract]  
Summary of Stock Option Activity

A summary of the Company’s outstanding stock option activity for the six months ended June 30, 2019 is as follows:

 

   Options  

Weighted-
Average

Exercise Price

  

Weighted-

Average
Remaining
Contractual
Life
(Years)

   Intrinsic
Value
 
As of December 31, 2018   377   $7,653    6.0   $   - 
Granted   -    -    -    - 
Exercised   -    -    -    - 
Forfeited   -    -    -    - 
Expired   -    -    -    - 
As of June 30, 2019   377   $7,653    5.8   $- 
Exercisable as of June 30, 2019   371   $7,551    6.3   $- 
Expected to vest as of June 30, 2019   377   $7,653    5.5   $- 
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.19.2
Discontinued Operations (Tables)
6 Months Ended
Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Discontinued Operations

Operating results related to discontinued operations consisted of the following for the six months ended June 30, 2018:

 

    Six Months Ended  
    June 30, 2018  
Product revenue   $ 4,330  
Costs of revenue     1,045  
Gross profit     3,285  
Operating expenses:        
Research and development     717  
General and administrative     348  
Sales and marketing     2,264  
Total operating expenses     3,329  
Loss from discontinued operations   $ (44)  
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.19.2
Leases (Tables)
6 Months Ended
Jun. 30, 2019
Leases [Abstract]  
Schedule of Operating Lease Future Minimum Payments

Operating lease future minimum payments together with the present values as of June 30, 2019, are summarized as follows:

 

   June 30, 2019 
2019  $490 
2020   494 
2021   509 
2022   525 
2023   540 
Thereafter   556 
Total future minimum lease payments   3,114 
Less amounts representing interests   (477)
Present value of lease liability   2,637 
      
Current-portion of operating lease liability   587 
Long-term portion operating lease liability  $2,050 
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.19.2
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($)
$ in Thousands
1 Months Ended 3 Months Ended 6 Months Ended
Jul. 26, 2019
Jun. 04, 2019
Jan. 02, 2019
Oct. 02, 2018
May 14, 2018
Jul. 31, 2019
Mar. 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Loss from continuing operations               $ (730) $ (2,181) $ (2,359) $ (5,666)  
Net cash used in operating activities                   (2,979) (5,532)  
Accumulated deficit               (231,641)   (231,641)   $ (229,281)
Proceeds from issuance of private placement             $ 1,400          
Proceeds from issuance of public offering         $ 15,000              
Common stock issued for cash               $ 397   397    
Common stock issued for cash, shares               144,415        
Operating lease asset     $ 659         $ 2,535   2,535  
Operating lease liability     946         $ 2,637   2,637    
Right-of-use assets and assumption of operating lease liability     $ 659             2,704  
Retail Spine Business [Member]                        
Related party note payable assumed amount       $ 2,500                
Preferred Stock [Member]                        
Common stock issued for cash                      
Common stock issued for cash, shares                      
Issuance of common stock due to conversion of preferred stock, shares               3,337   (3,337) (4)  
Common Stock [Member]                        
Common stock issued for cash                   $ 1    
Common stock issued for cash, shares                   144,415    
Issuance of common stock due to conversion of preferred stock, shares               983,528   983,528 102,886  
Equity Distribution Agreement [Member]                        
Percentage of maximum transaction fee   4.25%                    
Equity Distribution Agreement [Member] | Maximum [Member]                        
Common stock offering price   $ 1,600                    
Subsequent Event [Member]                        
Reverse stock split, description 1 for 30 reverse stock split                      
Subsequent Event [Member] | Retail Spine Business [Member] | Next Ten Months [Member]                        
Proceeds from sales of business           $ 1,400            
Subsequent Event [Member] | Retail Spine Business [Member] | Following Eighteen Months [Member]                        
Proceeds from sales of business           $ 3,500            
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.19.2
Basic and Diluted Net Loss Per Common Share (Details Narrative) - shares
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Earnings Per Share [Abstract]    
Potentially dilutive securities 600,000 700,000
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.19.2
Basic and Diluted Net Loss Per Common Share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Jun. 30, 2019
Jun. 30, 2018
Earnings Per Share [Abstract]        
Loss from continuing operations, basic calculation $ (730) $ (2,181) $ (2,359) $ (5,666)
Income from discontinued operations   (131)   (44)
Deemed dividend and accretion of a discount, basic calculation (2,358) (7,334) (2,358) (7,334)
Net loss attributable to common stockholders, basic calculation (3,088) (9,646) (4,717) (13,044)
Loss from continuing operations, effect of dilutive warrant securities (632) (1,610) (609) (362)
Net loss attributable to common stockholders, effect of dilutive warrant securities (632) (1,610) (609) (362)
Loss from continuing operations, diluted calculation (1,362) (3,791) (2,968) (6,028)
Income from discontinued operations, diluted calculation   (131)   (44)
Deemed dividend and accretion of a discount, diluted calculation (2,358) (7,334) (2,358) (7,334)
Net loss attributable to common stockholders, diluted calculation $ (3,720) $ (11,256) $ (5,326) $ (13,406)
Number of shares used in per common share calculations, basic calculation 931,859 194,933 829,724 154,545
Number of shares used in per common share calculations, effect of dilutive warrant securities 119,421
Number of shares used in per common share calculations, diluted calculation 931,859 314,354 829,724 154,545
Loss from continuing operations, basic calculation $ (0.78) $ (11.19) $ (2.84) $ (36.66)
Loss from discontinued operations, basic calculation   (0.67)   (0.28)
Deemed dividend and accretion of a discount, basic calculation (2.53) (37.62) (2.84) (47.46)
Net loss attributable to common stockholders, basic calculation (3.31) (49.48) (5.68) (84.40)
Loss from continuing operations, diluted calculation (1.46) (12.06) (3.58) (39.01)
Loss from discontinued operations, diluted calculation   (0.42)   (0.28)
Deemed dividend and accretion of a discount, diluted calculation (2.53) (23.33) (2.84) (47.46)
Net loss attributable to common stockholders, diluted calculation $ (3.99) $ (35.81) $ (6.42) $ (86.75)
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.19.2
Inventories (Details Narrative) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Inventories, current $ 85 $ 52
Inventories, non - current $ 600  
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.19.2
Inventories - Schedule of Components of Inventory (Details) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Inventory Disclosure [Abstract]    
Raw materials $ 596 $ 624
Intermediate goods 9
WIP 76 47
Finished goods 5
Inventory $ 596 $ 624
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.19.2
Intangible Assets - Schedule of Intangible Assets (Details) - Trademarks [Member] - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]    
Intangible assets, gross $ 50 $ 50
Less accumulated amortization (6) (4)
Intangible assets, net $ 44 $ 46
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Weighted average price stock exceeds $ 3.00  
Average daily trading value $ 400  
Warrants [Member]    
Weighted average price stock exceeds $ 0.01  
Black-Scholes-Merton Valuation Model [Member]    
Derivative liability $ 900 $ 900
Monte Carlo Simulation Valuation Model [Member]    
Derivative liability
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements - Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis by Level within Fair Value Hierarchy (Details) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability $ 502 $ 504
Fair Value, Measurements, Recurring [Member] | Common Stock Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability 956 1,566
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative liability $ 956 $ 1,566
XML 49 R39.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements - Schedule of Fair Value Measurement Hierarchy of Derivative Liability (Details) - Common Stock Warrants [Member] - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2019
Jun. 30, 2018
Beginning balance $ (1,566) $ (1,357)
Issuances of warrants classified as derivatives   (7,577)
Change in fair value 610 2,020
Exercise of warrants   565
Other, net   (212)
Ending balance $ (956) $ (6,561)
XML 50 R40.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements - Schedule of Assumptions Used in Estimating Fair Value (Details) - Common Stock Warrants [Member]
6 Months Ended 12 Months Ended
Jun. 30, 2019
Dec. 31, 2018
Black-Scholes-Merton Valuation Model [Member] | Weighted-Average Risk-Free Interest Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.0223 0.0251
Black-Scholes-Merton Valuation Model [Member] | Weighted-Average Expected Life [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, term 4 years 1 month 6 days 10 months 25 days
Black-Scholes-Merton Valuation Model [Member] | Expected Dividend Yield [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.00 0.00
Black-Scholes-Merton Valuation Model [Member] | Weighted-Average Expected Volatility [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.68 1.57
Monte Carlo Simulation Valuation Model [Member] | Weighted-Average Risk-Free Interest Rate [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.0172 0.0246
Monte Carlo Simulation Valuation Model [Member] | Weighted-Average Expected Life [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, term 2 years 4 months 24 days 3 years 1 month 6 days
Monte Carlo Simulation Valuation Model [Member] | Expected Dividend Yield [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.00 0.00
Monte Carlo Simulation Valuation Model [Member] | Weighted-Average Expected Volatility [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Fair value assumptions, measurement input, percentages 0.64 0.68
XML 51 R41.htm IDEA: XBRL DOCUMENT v3.19.2
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2019
Dec. 31, 2018
Payables and Accruals [Abstract]    
Payroll and related expense $ 413 $ 388
Resterilization and repackaging costs 344 344
Other 56 106
Total accrued liabilities $ 813 $ 838
XML 52 R42.htm IDEA: XBRL DOCUMENT v3.19.2
Debt (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
6 Months Ended
May 14, 2018
Jan. 03, 2018
Jul. 28, 2017
Jun. 30, 2014
Jun. 30, 2019
Jun. 30, 2018
Oct. 31, 2018
Jan. 31, 2018
Percentage of loan bear interest rate             10.00%  
Total payoff amount         $ 2,282    
Debt maturity date         Oct. 01, 2021      
North Stadium Investments, LLC [Member]                
Debt principal amount     $ 2,500          
Warrant to purchase shares of common stock     1,834          
Warrant exercise price per share     $ 151.20          
Percentage of loan bear interest rate     10.00%          
Debt maturity date     Jul. 28, 2018          
Warrant term     5 years          
Fair value of warrants     $ 200          
Hercules Technology Capital, Inc. [Member] | Loan and Security Agreement [Member]                
Debt principal amount       $ 20,000        
Debt maturity date       Jan. 01, 2018        
L2 Capital Debt [Member]                
Debt principal amount $ 700             $ 840
Debt purchase price               $ 750
Warrant to purchase shares of common stock               68,257
Warrant exercise price per share               $ 3.31
Percentage of loan bear interest rate               8.00%
Percentage of default interest rate               18.00%
Gross proceeds of convertible preferred stock and warrants 15,000              
Total payoff amount 1,100              
Interest amount 400              
Hercules Term Loan [Member]                
Debt principal amount   $ 2,300            
Hercules Term Loan [Member] | Closing Date [Member]                
Term loan fee amount       $ 200        
Final payment fee for debt       $ 1,700        
Hercules Term Loan [Member] | Senior Secured Convertible Promissory Notes One [Member]                
Debt principal amount   1,100            
Hercules Term Loan [Member] | Senior Secured Convertible Promissory Notes Two [Member]                
Debt principal amount   $ 2,200            
Exchange Notes [Member]                
Percentage of loan bear interest rate   15.00%            
Debt maturity date   Feb. 03, 2019            
MEF I, L.P. and Anson Investments [Member]                
Debt principal amount 1,400              
Gross proceeds of convertible preferred stock and warrants 15,000              
Total payoff amount 1,600              
Interest amount $ 200              
XML 53 R43.htm IDEA: XBRL DOCUMENT v3.19.2
Equity (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 6 Months Ended
May 14, 2018
Aug. 31, 2018
Jul. 31, 2018
May 31, 2018
Jun. 30, 2019
Jun. 30, 2018
Dec. 31, 2018
Sep. 07, 2018
Mar. 31, 2018
Gross proceeds of warrants         $ 7,577      
Proceeds from public offering $ 15,000                
Preferred stock stated value         $ 0.01   $ 0.01    
Common stock state value         0.01   0.01    
Conversion price per share $ 43.50       2.94     $ 14.40  
Share price         $ 3.00        
Proceeds from issuance of units $ 6,800       $ 6,754      
Preferred stock issuance costs $ 600                
ATM Equity Distribution Agreement [Member]                  
Sale of stock, shares         144,415        
Sale of stock value         $ 400        
Payments of stock issuance costs         100        
Additional offering value         $ 1,100        
July 12, 2018 [Member]                  
Conversion price per share         $ 19.63        
Maximum [Member] | ATM Equity Distribution Agreement [Member]                  
Common stock offering price         $ 1,600        
Public Offering [Member]                  
Stock issued price per shares $ 1,000                
Debt conversion, description The Series B Preferred Stock is convertible into shares of common stock by dividing the stated value of $1,100 by: (i) for the first 40 trading days following the closing of this offering, $43.54 (the "Conversion Price"), (ii) after 40 trading days but prior to the 81st trading day, the lesser of (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the 41st trading day, and (iii) after 80 trading days, the lesser of (a) the Conversion Price and (b) 87.5% of the lowest volume weighted average price for our Common Stock as reported at the close of trading on the market reporting trade prices for the Common Stock during the five trading days prior to the date of the notice of conversion. In the case of (ii)(b) and (iii)(b) above, the share price shall not be less than $2.94 (the "Floor Price"). Each of the Conversion Price and Floor Price is subject to adjustment in certain circumstances.                
Conversion price per share $ 43.54                
Debt instrument trading percentage 87.50%                
Share price $ 2.94                
August 2018 Warrant Exercise [Member] | Secondary Offering [Member]                  
Warrants converted into shares of common stock   8,069              
July 2018 Warrant Exercise [Member] | Public Offering [Member]                  
Warrants converted into shares of common stock     998            
Warrant exercise     998            
May 2018 Warrant Exercise (July 2016 Warrants) [Member]                  
Warrants to purchase of common stock shares       4,861         27,733
Gross proceeds of warrants       $ 300          
May 2018 Warrant Exercise (July 2016 Warrants) [Member] | Minimum [Member]                  
Warrants exercise price                 $ 360
May 2018 Warrant Exercise (July 2016 Warrants) [Member] | Maximum [Member]                  
Warrants exercise price                 $ 63.75
Convertible Preferred Stock and Warrants [Member]                  
Proceeds from public offering $ 15,000                
Warrants [Member]                  
Warrants to purchase of common stock shares 25                
Warrants exercise price $ 48                
Warrant term 5 years                
Share price         $ 0.01        
Number of warrants issued 6,900                
Warrants issuance cost $ 700                
Series E Common Stock Purchase Warrant [Member]                  
Warrant exercise           22,279      
Warrants to purchase of common stock shares           27,733      
Warrants exercise price           $ 360.00 $ 63.75    
Gross proceeds of warrants           $ 1,400      
New Warrants [Member]                  
Warrants exercise price           $ 60.00      
Percentage of warrant shares issued for new warrants           100.00%      
Series B Convertible Preferred Stock [Member]                  
Convertible preferred stock shares conversion       4,072 3,337 4,072      
Preferred stock stated value $ 1,100                
Common stock state value $ 1,100                
Common Stock [Member]                  
Convertible preferred stock shares conversion 378,997     102,886 983,528 102,886      
Preferred Stock [Member]                  
Convertible preferred stock shares conversion 15,000                
July Through December of 2018 [Member] | Series B Convertible Preferred Stock [Member]                  
Convertible preferred stock shares conversion         10,926        
July Through December of 2018 [Member] | Common Stock [Member]                  
Convertible preferred stock shares conversion         569,966        
XML 54 R44.htm IDEA: XBRL DOCUMENT v3.19.2
Stock-Based Compensation - Summary of Stock Option Activity (Details)
6 Months Ended
Jun. 30, 2019
USD ($)
$ / shares
shares
Share-based Payment Arrangement [Abstract]  
Options, Outstanding at beginning of period | shares 377
Options, Granted | shares
Options, Exercised | shares
Options, Forfeited | shares
Options, Expired | shares
Options, Outstanding at end of period | shares 377
Options, Exercisable at end of period | shares 371
Options, Expected to vest at end of period | shares 377
Weighted Average Exercise Price, Outstanding at beginning of period | $ / shares $ 7,653
Weighted Average Exercise Price, Granted | $ / shares
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Forfeited | $ / shares
Weighted Average Exercise Price, Expired | $ / shares
Weighted Average Exercise Price, Outstanding at end of period | $ / shares 7,653
Weighted Average Exercise Price, Exercisable at end of period | $ / shares 7,551
Weighted Average Exercise Price, Expected to vest at end of period | $ / shares $ 7,653
Weighted Average Remaining Contractual Terms (Years), Outstanding at beginning 6 years
Weighted Average Remaining Contractual Terms (Years), Outstanding at ending 5 years 9 months 18 days
Weighted Average Remaining Contractual Terms (Years), Exercisable 6 years 3 months 19 days
Weighted Average Remaining Contractual Terms (years), Expected to vest 5 years 6 months
Intrinsic Value, Outstanding at beginning of period | $
Intrinsic Value, Outstanding at end of period | $
Intrinsic Value, Exercisable at end of period | $
Intrinsic Value, Expected to vest at end of period | $
XML 55 R45.htm IDEA: XBRL DOCUMENT v3.19.2
Note Receivable (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended
Oct. 02, 2018
Oct. 31, 2018
Jun. 30, 2019
Non interest note receivable $ 6,000,000    
Debt description The 36-month term of the note receivable requires 18 payments of $138,889 followed by 18 payments of $194,444, with maturing of the note receivable on October 1, 2021.    
Payments of notes receivable $ 138,889   $ 194,444
Maturity date of note receivable     Oct. 01, 2021
Debt instrument imputed interest percentage   10.00%  
Imputed interest   $ 915,725  
Imputed interest, description   The note receivable includes an imputed interest rate of 10%, which totaled $915,725 as of October 31, 2018, and has a 36-month amortization. As of June 30, 2019, the net carrying value of the note receivable was approximately $4.3 million.  
Discontinued Operations, Spine Business [Member]      
Non interest note receivable     $ 4,300,000
XML 56 R46.htm IDEA: XBRL DOCUMENT v3.19.2
Discontinued Operations (Details Narrative) - USD ($)
$ in Thousands
3 Months Ended
Oct. 02, 2018
Dec. 31, 2018
Asset Purchase Agreement [Member]    
Total consideration $ 8,500  
Agreement extension description This agreement extends for a total of 24 months, ending on September 30, 2020.  
Asset Purchase Agreement [Member] | Related Party Note Payable [Member]    
Total consideration $ 2,500  
Sterilization and repackaging cost 500  
Asset Purchase Agreement [Member] | Interest Note Receivable [Member]    
Total consideration $ 6,000  
Retail Spine Business [Member]    
Gain on the sale of business   $ 1,400
XML 57 R47.htm IDEA: XBRL DOCUMENT v3.19.2
Discontinued Operations - Schedule of Discontinued Operations (Details)
$ in Thousands
6 Months Ended
Jun. 30, 2018
USD ($)
Discontinued Operations and Disposal Groups [Abstract]  
Product revenue $ 4,330
Costs of revenue 1,045
Gross profit 3,285
Research and development 717
General and administrative 348
Sales and marketing 2,264
Total operating expenses 3,329
Loss from discontinued operations $ (44)
XML 58 R48.htm IDEA: XBRL DOCUMENT v3.19.2
Leases (Details Narrative)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 07, 2019
ft²
Jun. 30, 2019
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2018
USD ($)
Jan. 02, 2019
USD ($)
Dec. 31, 2018
USD ($)
Leases [Abstract]            
Lease expired, description     The Company leases office, warehouse and manufacturing space under a single operating lease, which lease originally expired during 2019      
Lease extended period, description On June 7, 2019, the lease was amended to extend the rental period through 2024   The amended lease has two five-year extension options.      
Area of lease | ft² 54,428          
Reduction of lease area | ft² 29,534          
Operating lease right-of-use asset   $ 2,535 $ 2,535   $ 659
Operating lease liability   $ 2,637 2,637   $ 946  
Non-cash lease expense     $ 171 $ (99)    
Operating lease weighted-average discount rate   6.50% 6.50%      
Loss on amendment lease   $ 120        
XML 59 R49.htm IDEA: XBRL DOCUMENT v3.19.2
Leases - Schedule of Operating Lease Future Minimum Payments (Details) - USD ($)
$ in Thousands
Jun. 30, 2019
Jan. 02, 2019
Dec. 31, 2018
Leases [Abstract]      
2019 $ 490    
2020 494    
2021 509    
2022 525    
2023 540    
Thereafter 556    
Total future minimum lease payments 3,114    
Less amounts representing interests (477)    
Present value of lease liability 2,637 $ 946  
Current-portion of operating lease liability 587   $ 169
Long-term portion operating lease liability $ 2,050  
XML 60 R50.htm IDEA: XBRL DOCUMENT v3.19.2
Subsequent Events (Details Narrative)
Jul. 26, 2019
Subsequent Event [Member]  
Reverse stock split, description 1 for 30 reverse stock split
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