Business Context and Reporting Period
This Form 8-K Current Report was filed by Amedica Corporation (noted as Sintx Technologies, Inc. in metadata) on April 18, 2016. The report discloses a strategic partnership entered into on April 14, 2016, to expand the company's presence in the People's Republic of China.
Key Financial Metrics and Agreements
The filing details a Distribution Agreement with Shandong Weigao Orthopedic Device Company Limited ("Weigao") for the exclusive resale of Amedica's silicon nitride spinal interbody fusion devices in China. The agreement includes specific minimum purchase commitments contingent upon obtaining Chinese Food and Drug Administration (CFDA) clearance.
| Year Post-Approval | Minimum Annual Units |
|---|---|
| Year 1 | 20,000 |
| Year 2 | 35,000 |
| Year 3 | 35,000 |
| Year 4 | 40,000 |
| Year 5 | 45,000 |
| Year 6 | 50,000 |
The filing text does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the reporting period.
Material Changes and Operational Details
- Regulatory Responsibility: Amedica is solely responsible for obtaining CFDA clearance at its own expense, including conducting required testing (mechanical, biological, clinical, etc.).
- Weigao's Role: Weigao will assist in accelerating approval by leveraging its expertise in regulatory dossiers, testing management, and clinical trial design.
- Payment Terms: If Weigao fails to meet the Annual Minimum, it must either purchase the shortfall or pay Amedica an amount equal to the net profit Amedica would have realized on those units. Amedica also retains the right to terminate the agreement for failure to meet minimums.
- Term: The agreement commences on the Effective Date and continues for ten years from the receipt of CFDA approval, with options for renewal.
Outlook, Risks, and Contingencies
The primary contingency for revenue generation under this agreement is the successful acquisition of CFDA approval. Until this approval is granted, no sales or minimum purchase obligations are triggered. Amedica may terminate the agreement with thirty days' written notice prior to CFDA approval or after the initial ten-year term expires. The filing does not provide specific forward-looking financial guidance or management commentary beyond the terms of the agreement.
Investor Verification Checklist
- Verify the current status of the CFDA clearance application for Amedica's spinal devices in China.
- Confirm the estimated timeline and costs associated with the required testing and clinical trials.
- Review the specific pricing or net profit assumptions used to calculate the shortfall payment if Weigao fails to meet minimums.
- Assess Weigao's track record in securing regulatory approvals for similar medical devices in the Territory.