Business Context and Reporting Period
This Form 8-K, dated October 1, 2018, reports on Amedica Corporation (noting the input metadata references Sintx Technologies, Inc., but the filing text identifies the registrant as Amedica Corporation). The Company consummated the sale of certain assets related to its spinal implant business to CTL Medical Corporation ("CTL"). The transaction involved the transfer of assets and liabilities related to silicon nitride, metal-based, and PEEK spinal implant products, biologics, and the "Amedica" name.
Key Financial Metrics and Transaction Terms
- Total Purchase Price: Approximately $10.0 million.
- Promissory Note: CTL issued a note to the Company with a principal amount of $6,000,000. It bears no interest prior to maturity if no default occurs.
- Payment Schedule:
- Monthly payments of $138,888.88 from November 1, 2018, to April 1, 2020.
- Monthly payments of $194,444.44 from May 1, 2020, to October 1, 2021.
- Remaining balance due October 1, 2021.
- Debt Assumption: CTL assumed the Company's obligations under a $2,500,000 note held by North Stadium Investments, LLC (controlled by the Company's CEO).
- Earn-out: Potential additional payment of up to $1.5 million contingent on CTL achieving specific sales revenues over three years.
- Collateral: The Note and debt assumption are secured by a security interest in the assets acquired by CTL.
Material Changes and Operational Impact
The Company has divested its core spinal implant business assets. Post-closing, Amedica Corporation will:
- Enter into an exclusive manufacturing arrangement to produce silicon nitride spinal implants for CTL for ten years.
- Retain rights to manufacture and own patents for silicon nitride products for non-spinal biomedical applications.
- Change its corporate name to one that does not include "Amedica" within 30 days of closing.
Outlook, Risks, and Contingencies
Contingencies: The Company covenanted to deliver a lien release regarding a USPTO filing by December 1, 2018. Failure to deliver this by November 1, 2018, will toll payments on the Promissory Note until the release is filed. Failure to deliver by December 1, 2018, allows CTL to declare the Purchase Agreement null and void.
Risks: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to risks outlined in previous 10-Q and 10-K filings. The Company does not undertake an obligation to update these statements.
Management Commentary: The filing focuses on the execution of the asset sale and the terms of the financing instruments rather than providing general business outlook commentary.
Investor Verification Checklist
- Verify the status of the USPTO lien release filing deadline (November 1, 2018, for payment tolling; December 1, 2018, for agreement validity).
- Confirm the timeline for the Company's name change from "Amedica Corporation."
- Monitor the first scheduled payment of $138,888.88 due November 1, 2018.
- Review the specific sales revenue targets required to trigger the $1.5 million earn-out payment.
- Clarify the discrepancy between the input metadata company name (Sintx Technologies, Inc.) and the filing registrant (Amedica Corporation).