SINTX Technologies (SINT) Stock Sees Gains On Lease Renewal

SINTX Technologies SINT Stock News

SINTX Technologies Inc (NASDAQ: SINT) is running in the market this morning with early gains of more than 30%. The gains come following the company’s announcement that it has renewed a lease for a location where it has called home since 2009. Here’s what’s happening:

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What Is SINTX Technologies?

Trading under the stock symbol SINT, SINTX Technologies is an OEM ceramics company. The company is focused on developing and commercializing silicon nitride for use in biomedical applications. The company’s silicon nitride is most commonly used in spine and dental implants.

The brunt of the company’s revenue comes from its research and development of medical-grade silicone nitride ceramics for external partners. Currently, the company manufactures silicon nitride for spinal implants for CTL-Amedica, the exclusive retail channel for silicon nitride spinal implants.

The company’s manufacturing process takes place at its FDA registered and ISO 13485 certified manufacturing facility, a facility that is the center of today’s news.

SINTX Technologies Renews Lease For 5 Years

The news that seems to be moving the stock this morning has to do with a lease renewal of the company’s facility. The company announced in a press release this morning that it has renewed its lease with Portfolio Investments at Centrepointe Business Park in Salt Lake City, Utah.

This is important for the company as it has operated at this location since 2009. However, with a plan to set a new footprint following the sale of its retail spine business and re-branding, the company didn’t need as much space as it did before. Investors were concerned that this would lead to the company having to move its operations, taking on expenses and delays as a result.

However, In the press release, SINT said that it will be leasing a smaller section of the building consistent with these changes. In a statement, Dr. Sonny Bal, President and CEO at SINT, had the following to offer:

This is a milestone for SINTX. We have right-sized our operations, and the significant cost savings from the building lease will allow SINTX to focus on scaling up our manufacturing, and invest further in R&D activities.

We are excited to remain in Salt Lake City, a technology hub. The company was founded here in 1996. Our first silicon nitride spinal device was implanted at the University of Utah in 2008. We have long-standing relationships with the University’s Bone & Joint Laboratory and Nanofab facility. We look forward to growing our company in Utah.

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Consider The Risks

While the news today proved to be positive, leading to gains, SINT looks to me like an incredibly risky play. Here’s why:

  • Minimal Revenue – In 2018, the company boasted a 100% revenue growth rate. However, that’s because SINTX Technologies generated absolutely no revenue in 2017. So, even if the company only produced a single dollar, the growth rate would be strong. In the year 2018, the company reported revenue of about $95 thousand dollars. Of course, this is nowhere near enough money to keep a publicly traded company afloat, which brings us to our next point.
  • Expanding Losses – While the company generated absolutely no revenue in 2017, it lost over $9 million. In 2018, revenue came in on a minimal basis, but losses climbed dramatically. In fact, in the year 2018, SINT reported net losses attributable to common shareholders in the amount of $22.552 million, more than double the loss reported in 2017.
  • Need For Funding – Finally, at the close of the last quarter, the company only had just over $7 million in current assets. Considering the fact that it is burning through losses of more than $22 million per year, this is enough money to get through about a quarter. As a result, there’s a clear need for funding. So, a dilutive transaction may be on the horizons.

What Do You Think?

Where do you think SINT stock is headed moving forward? Join the discussion in the comments below!

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