According to this lawsuit, Anson and its related funds go after companies with valuable assets... This explains why SINT is so undervalued as its been after Sintx IP for going on a decade. IP thats destined to take over the ortho industry according to one study linked at the bottom of this post.
Their playbook is simple: they find a promising company like Nano that has attracted significant investment, furtively acquire a large position, and then seek to dismantle the company and distribute its cash for Defendants’ own benefit.
EX-99.3
So Lets examine the value of Sintx and its IP here from a few angles. This should show exactly why Anson's family of funds would be trying to take over Sintx through hostile means. It represents alot of potential money for them if they can succeed. A work in progress.
Transitive Property:
In 2003, Zimmer acquired a materials company for $232m with $108m of it upfront and the remaining $124m coming over the next two years based on sales milestones. Before announcing its partnership with Zimmer, Implex had revenue about the same as Sintx should achieve this year. Its material Hydrocel, Trabecular Metal, could be used for multiple orthopedic implants. Spine, dental, hip, shoulder, and i think knee. That said, Trabecular metal cannot be used as a coating or imbued in materials like silicon nitride can to bring those materials its beneficial enhancements. Thus its market potential in the ortho/dental markets was smaller.
Thus Sintx valuation should be at minimum based on what similar companies are worth: $232m
Accumulated Deficit and Tax Write-off
Sintx Accumulated Deficit = $271.6m. For an acquiring company to utilize this for tax write off purposes Sintx IP would have to be valuable enough to bring in sufficient revenue. However as the cost to acquire Sintx would cost millions between accounting audits, lawyers, golden parachutes, etc.. Sintx accumulated Deficit would likely represent about the same value as what Implex was acquired for to an acquiring company. That is only if Sintx IP couldnt generate more revenue than Sintx deficit. The following will show that it can easily.
Also, acquiring Sintx for that amount would increase goodwill which is an asset the acquiring company can depreciate and thus provide additional tax benefit as well as increase its assets.
Potential Market Size
One particular thing about Sintx is its current sales represents a fraction of 1% of its potential revenue because it has not actually transitioned into the commercialization phase yet. The 99% of its products remain in R&D stage. Sort of like a pharma company.
Silicon Nitride increases osteointrgration, improves imaging, and is antimicrobial (antiviral, antibacterial, antifungal) while being bioactive and biodegradable. That means as it corrodes the material breaks down into materials the body can use. For instance in an aqueous solution, Si3N4 turns into orthosilicic acid which the body utilizes for bone growth. Unlike other materials used in orthopeadic implants, Si3N4 shouldnt accumulate in the body as it can be excreted. Meanwhile Titanium, Trabecular Metal, PEEK, ZTA, all accumulate in the tissue, blood and/or organs. Metals seem to spread through the body while other ceramics and plastics mostly accumulate locally. This is all important to understand when you consider that Si3n4 is destined to replace current materials used in the $64 billion ortho implant industry. As Si3n4 can be used as a coating for metal implants and can be imbued in PEEK materials, it could and should capture almost the entire ortho industry but only though partnerships and licensing.
Markets Si3n4 can be used in (not comprehensive)
Otho Market = $64 billion
Personal Protective Equipment market = $79.53 billion
Global Catheter market = $55bn
Antibacterial market = $44.5bn
Wound Care market = $22.25bn
Biosensors Market = $28.9bn
Condom Market = $11.6bn
Dental Implant market = $4.99bn
Armor Materials Market = $13.59bn
Total = $324.36bn
Its honestly overwhelming the size of the markets Sintx material can be used in. Hypothetical scenario using 5% market penetration with a 5% licensing fee equates to $811m in yearly licensing revenue. Thus Si3N4 is worth at least $800m in potential yearly revenue for an acquiring company through licensing revenue according to this scenario. Its ability to penetrate the above markets will vary but Ortho & Catheter markets are markets that Si3N4 should significantly penetrate; with Wound Care & Dental being up there as well. Condom market is more hypothetical based on Si3N4 ability to kill Herpes and possibly other STI. However would need to be studied further to ensure it doesnt impact the delicate microbe balance inside a vaginal canal. A new patent was awarded Sintx for the use of Si3n4 against funguses that impact the wine industry providing yet another market it can tap into. This could be a market that they could break into sooner than some of the others listed above but it wouldnt be as lucrative.
In Summary, you can see that Sintx has extremely valuable IP that can be used in markets that are cumulatively in the hundreds of billions in size. That is why Anson and the other family of funds its connected to would want to get their hands onto that IP. Like Nano, it looks like this conspiracy of funds was getting ready to make a move before I exposed them with three of the funds accumulating a position this year. However recent offerings by management seems to have helped in diluting their positions to prevent a similar situation to Nano as shown in the first of these three posts.
Because Sonny has employed several methods of protection to protect Sintx IP from hostile entities, their only option to get the IP is hope they can drive Sintx into bankruptcy as Sonny has setup crown jewels defense in the event this group attempts a hostile takeover. As Sintx has no debt, Sonny and then board cannot be forced into selling the IP to a particular entity. Upside to Sintx not having loans and likely a big reason it has not obtained one so since Hercules loan in 2014.
4/01/2024 L1 Capital Global Opportunities Master Fund, Ltd.
EDGAR Filing Documents for 0001079973-24-000472
Notice that on April 1st, L1 filed its 13G indicating it had 8.8% of outstanding stock. Two days later, Sintx announces an offering at 2.1 cents adding 71m shares of stock.
(2) Based on 51,080,139 shares of Common Stock outstanding as reported in the Issuer’s filings with the Securities and Exchange Commission.
Once this offering completed, L1 stake in Sintx became 3.6%.
This indicates that Sonny is not simply raising funds, but that hes preventing these funds from accumulating too large of a position (Poison Pill type offering?). Thus this game of massive dilution and reverse splits seems to be a game of Sonny defending Sintx from this group of hostile funds as well as raising needed funds. As long as this group of funds continue to attempt to take over Sintx through hostile means, we can expect this to continue. However with Nasdaq putting Sintx on probation for a year, it's limited on its ability to raise funds while diluting this groups position as it must stay over $1. This has likely prompted the recent new of Sintx exploring strategic opportunities.
Sources:
https://web.archive.org/web/2024040...ogger.blogspot.com/2011/05/whos-next.html?m=1
https://orthospinenews.com/2021/01/...y-2025-as-acquisitions-surge-says-globaldata/
https://www.grandviewresearch.com/industry-analysis/personal-protective-equipment-ppe-market
https://www.grandviewresearch.com/industry-analysis/catheters-market-analysis
https://www.grandviewresearch.com/industry-analysis/wound-care-market
https://www.grandviewresearch.com/industry-analysis/biosensors-market
https://www.grandviewresearch.com/industry-analysis/condom-market
https://www.mordorintelligence.com/industry-reports/armor-materials-market
https://www.grandviewresearch.com/industry-analysis/dental-implants-market
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Here are all the anti-takeover provisions employed at Sintx.
1. Poison pill aka Shareholder Rights Plan
2. Staggered Board
3. Shark Repellant - requiring supermajority vote
4. Golden Parachute for management
5. Crown Jewel Defense - CTL has first rights to acquire Sintx IP.
6. CTL is setup as a White Knight via its first rights to acquire Sintx IP.
7. If Sintx sold its main IP to CTL thats effectively scorched earth as Sintx has little value, in comparison, without its patent portfolio. Sintx would still have TA&T & Sintx Armor for value in the event it had to sell its core Si3n4 IP to CTL, even if for a short time.
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Silicon Nitride, a Close to Ideal Ceramic Material for Medical Application
examples of their medical applications that relate to spinal, orthopedic and dental implants, bone grafts and scaffolds, platforms for intelligent synthetic neural circuits, antibacterial and antiviral particles and coatings, optical biosensors, and nano-photonic waveguides for sophisticated medical diagnostic devices are all covered in the research reviewed herein. The examples provided convincingly show that silicon nitride is destined to become a leader to replace titanium and other entrenched biomaterials in many fields of medicine.
https://www.mdpi.com/2571-6131/4/2/16/htm