Business Context and Reporting Period
This Form 8-K Current Report is filed by Amedica Corporation (not Sintx Technologies, Inc.) for the period ending April 27, 2016. The filing details a series of debt assignments and debt-to-equity exchange transactions involving the Company's Term Loan with Hercules Capital, Inc. and Riverside Merchant Partners, LLC.
Key Financial Metrics and Transactions
- Debt Assignment: Riverside Merchant Partners, LLC purchased an additional $2,000,000 in principal amount of the Term Loan from Hercules Capital, Inc. in two tranches ($1,000,000 on April 18 and $1,000,000 on April 27).
- Debt Exchange: The Company exchanged a total of $3,000,000 of Term Loan principal for subordinated convertible promissory notes and warrants:
- First Exchange (April 4): $1,000,000 loan principal exchanged for a $1,000,000 note and a warrant for 100,000 shares at $1.62/share.
- Second Exchange (April 18): $1,000,000 loan principal exchanged for a $1,000,000 note.
- Third Exchange (April 27): $1,000,000 loan principal exchanged for a $1,000,000 note and a warrant for 100,000 shares at $1.66/share.
- Outstanding Debt: Following the Third Exchange Note issuance, the aggregate principal amount outstanding under the Term Loan was approximately $11.6 million.
- True-Up Provisions: The Third Exchange Note includes a provision for 140,000 "True-Up Shares" if the stock price remains below the conversion price during the measurement period ending May 20, 2016.
Material Changes Versus Prior Period
The filing does not provide comparative financial statements or revenue/profit metrics for the prior period. The material change reported is the restructuring of the Company's debt obligations, specifically the conversion of $3,000,000 of senior term loan debt into subordinated convertible notes and the issuance of new equity warrants.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, revenue outlook, or management commentary regarding future operations. The primary risk disclosed relates to potential dilution through the issuance of warrants and the "True-Up Shares" contingent on the Company's stock price performance relative to the conversion price.
Investor Verification Checklist
- Verify the total outstanding principal of the Term Loan ($11.6 million) and the specific interest rates applicable to the remaining debt.
- Confirm the exact terms of the subordinated convertible notes, including maturity dates and conversion prices.
- Monitor the Company's stock price through May 20, 2016, to determine if the 140,000 True-Up Shares will be issued.
- Review the full text of the Assignment Agreement (Exhibit 10.1) and Exchange Agreement (Exhibit 10.2) for covenants and default provisions.
- Clarify the discrepancy between the requested company name (Sintx Technologies) and the filing registrant (Amedica Corporation).